Friday open thread

Some happy thoughts to bring us into the weekend, maybe?
The Independent has an excerpt from Jeremy Leggett's book today:

What they don't want you to know about the coming oil crisis

Doesn't exactly qualify as good news, though.  

Food for thought.

Below I give a list of seven european countries that have one thing in common. They consumed in 2004 less oil than in 1994. And no, they are not east european countries and they have not experienced some kind of economic collapse. The numbers are in thousand barrels per day and you can check for yourself the BP's Statistical Review of World Energy 2005 at

Denmark: 209/189
Germany: 2880/2665
Italy: 1920/1871
Norway: 212/209
Sweden: 354/319
Switzerland: 272/258
United Kingdom: 1777/1756

Those countries not have experienced economic collapse, but at least Italy and Germany have much worse economic situation now than in 1994. Also lot of Europe has switched to russian gas during last ten years.
Additionally, a lot of energy intensive manufacturing has been shut down in the last 10-12 years and has been replaced by service jobs (or unemployment). For example there is virtually no more auto industry in UK.  Even beyond that, in the case of Germany one has to see that in 1994 some ex-Communist industries were still running in the Eastern part. Germany has seen huge CO2 and consumption reductions just by switching off ex-Communist industry in the 1990s.
(saying that the situation is much worse in Germany than 1994 however is an exaggeration - the main problem is that it just never gets better)
So, among economic stagnation, moving traditionally energy intensive manufacturing to China, switching off Commie factories, and moving to Russian gas, this reduction is not any kind of policy achievement.
Also it should be remembered that several of these factors also make it quite easy for certain European nations to fulfill Kyoto requirements, without taking any 'courageous and daring' measures.
German total energy consumption has been essentially flat during that timeframe, so has Norwegian, and Swiss. Italian consumption has grown nearly 20%, UK by 5%. Denmark has gone down. So mainly it is explicable by fuel substitution and quite slow economic growth. Heavy, energy-intensive industry has also moved away from Western Europe. Notice that we speak here  about the total energy, not only about oil.
Happy news?

The Aptera - 330MPG diesel/hybrid car.
Cost less than $ 20,000.
0 to 60 mph in 11 seconds.

Yeah, this one has been making the rounds over the past couple of days.

On the surface it looks kind of cool.

The downside is that they haven't even built a prototype yet.   For that matter, the design itself isn't even complete.   The company doing this says they have made breakthroughs in building things out of composite, but as best I can tell they don't have any automotive experience.  They are still looking for 'angel investors' to help pay for the prototype.

They plan to use off-the-shelf components (so they won't be building engines themselves), and I am sure there are many other parts they can just buy as well.

I guess my point though is that there may be subleties to things like getting the suspension and steering working so that it feels right, and these are things that they probably won't be able to buy.

It is classified as a motorcycle - this helps evade much of the crash safety testing requirements.  

Interesting to see how it holds up to a Stepford wife in a chevy suburban or a F-350 4x4 crew cab dually!
They have no investment, and no experienced business people listed as executives on the web site.  Hence they are at an extremely early stage - much too early to be issuing press releases - they clearly don't know how to raise money.  Not very credible at this point.
Perhaps - I wonder if the point of the press release was to help raise funds.  I gather that the venture capital people are all eager to fund alternative energy types of things right now.

They aren't the only people thinking along these lines, however.  Volkswagen had a similar project - they had a turbodiesel two-seater with a carbon fiber body.  Theirs was only rated for ~260 mpg, and this was something that they did build and field test.  They didn't have any hybrid technology in there though.

They called it the '1-liter' car, meaning it would burn one liter of fuel to go 100 km.  They did unfortunately abandon the project:

The problem for VW was the cost:

But Volkswagen now says that it could not produce an ultra-economical car for less than €20,000 ($25,900)--too expensive for its target market.

I gather that the carbon fiber was the deal-killer here.  You need it to make the vehicle lightweight, but the stuff is expensive.

Now if this company (Accelerated Composites) has come up with a way to reduce the cost of making carbon fiber components, there could be value here if they were to simply license the technology to someone like VW who has sufficient experience to make an entire car.

That may be part of the venture capital play - get your name up in lights now, while the demand for fuel efficient cars is rising, and cause a big player to buy you out. This is common enough in other industries so I don't see why such a play could not be expected in the auto industry as well.
A press release is not how you raise venture capital.
I apologize for the poor quality of the website, and the limited renderings. It will improve as resources permit. In the interim, the bio of the team members is available in .pdf format.

 Judging by the lack of content on the website, it's understandable that our project doesn't seem further along than it is.  Lots more photos, photos of our destructive composites testing, our white papers, simulations (CFD, FEA, et al), status of our patent applications, and more recent pictures of the prototype will be posted as time permits.

Thanks for all of the input.


very good article on the proposed iranian oil bourse and an articulate explanation of how selling oil in dollars keeps the american empire propped up.

Hey Jack are you out there?

This article is very good. There's something here very important to note, if a country wants to dump dollars, it'll buy another foreign currency and not trade it to it's own. That way an unwanted appreciation of self currency is avoided.

Petrov says that a part of the dumping may occur overnight. I'm not convinced of that, I believe in a more slow change, were a country buys commodities with dollars and sells other goods accepting only euros (or other non-dollar foreign currency).

The most important issue raised by Petrov is the impossiblity of a long term cohabitation of two currency standards (gold and dollar). If true, we're really headed to a hard road.

Also note that the Federal Reserve announced in Nov. 05 that it will no longer be publishing data for the M3 money supply.  This will take effect in March of 2006.

Even another twist for an interesting March is the Israeli preparation for an attack on Iran...

Dec 11, 05,,2089-1920074,00.html

Excerpts from the article:

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 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.

"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."

They say there is no such thing as coincidence!
Sorry for so many posts on the same issue, but Econbrowser has just addressed this issue directly (citing Petrov's "excited" article) in a post titled: Strange ideas about the Iranian oil bourse

One highlight:
"...the notion that the U.S. dollar is currently "backed by oil" is so nonsensical that it is difficult even to fathom what that phrase is intended to convey."

Or a combination of the two.  I've followed both Petrov and your slow change method.  I dumped 60% USD overnight (@ 0.8215) then slowly bought other stuff with the remaining 40% USD (until 1.0425), meanwhile collecting on invoices in Euros, until ... no more USD.  <Not making any claims to brilliance, mostly just a feeling that the Euro wouldn't drop any lower .. and tonnes of dumb luck.. at least so far.>  Cohabitation of the two currencies doesn't seem to be a good fit and it did supercomplicate the bookkeeping figuring day to day equivalencies.  At one time I had accounts in Riyals, USD, Euros, Pounds, Swedish K and Colombian Pesos.  MSMoney lost it.  Doing things slowly helps you gain confidence as you go, rather than getting heartburn from the putting all your eggs in one basket  syndrome.  On a central bank level slow would prevent large changes from being noticed and causing a panic, so it could protect your remaining account balance as you continue to unload, provided the cat stays out of sight.  The only disadvantage of making a permanent change is, without selling Euros and changing back into dollars, there is no chance of "realizing the profit".  
Hi lads - I just printed the Petrov article and will let you know my thoughts soon.  

The Petrov article is an excellent platform for discussing the Iran Bourse - both because it is the most careful documentation of the argument and because the author makes no bones about his claim that it is among the primary threats to US power. Petrov calls the IOB the ultimate "nuclear" weapon, says it will "precipitate the demise of the dollar" and cause the US to take drastic actions that could include sabotage, launching coups, unilateral nuclear strikes and unilateral total war.

It not going to surprised anyone that I am going to escalate my own argument by calling the IOB the greatest conspiracy theory of the year. Below is an atttempt to deal with the issue at the level of first pricipals, since an fairly elaborate structure has been build on what I feel is a shaky foundation.

Petrov's article contains in near equal measure bold assertions that I disagree with, underlying economic concepts that I do agree with, and utter speculation about the future, which I'll leave alone.

Because the "bold assertions" recur and underpin the ongoing argument, let me start my stating my interpretation of the foundation of the "IOB as kryptonite" argument and where I differ. Fundamentally, whether you can accept the IOB premise seems to depend on whether you can accept the three claims below:

1. The foundation of US economic growth and strength is "extraction" or taxation of others, rather than creating value.

The belief that the US has a productive economy that has been growing near 3% a year because of high levels of productivity is fairly well documented. Greenspan and the US Fed focus intensely on measuring the growth in the productivity rate in the US economy because this is the key factor underlying the continuing strength of the economy. There is no tracking of "extraction rates", "taxation of economically subject nations" or trends in theft.

The extraction claim seem only to be supported by a circular argument that the US economy is based on taxing others, which is proven by the claim that the dollar as trade currency enforces it, which is in turned proven by the extraction argument. But maybe I am wrong and someone provide a factual basis for the claim that US economic strength is based on extraction of value from others by force. I am waiting.

2. The US dollar price is not only a requirement that currency be paid in dollars, but that this requirement is the primary reason why countries hold dollars

As discussed before the dollar price of oil is just a price tag. If an EU country wants to buy Iranian oil and Iran wants to hold Euros, they currently have two ways to make this happen:

a. First the EU country exchanges Euros for dollars, then transfer dollars to Iran for oil, finally Iran exchanges back into dollars. This can essentially occur instantaneously, so the time that the assets are held in dollars is so brief as to be meaningless. The beneficiaries are currency exchanges who gain a commission on both side of the deal - although the Euro/$ bid-ask spread is very small.

b. Just make the transfer in Euros at the rate based the Euro dollar exchange rate. If this is really done - as I suspect - this argument alone proves the Petrov point is wrong.

Both of these methods are no different than if I sold you a car, which I had priced at $1000. If you had Euros, you could convert to them to dollars five minutes before we met, then hand them over. I could then convert into Euros five minutes later if I wanted. In this case, it would be easier for me to just accept your Euros at the exchange rate times the price.

The IOB arguments seems to claim that the dollar police would come and hit me on the head, or blow up the cars, but again, I feel this is utter speculation. Since this is such a crucial assumption of the IOB argument, I think someone needs to document how these transactions take place. If the second method I describe above can be done, what is the use of the IOB. If it can not be done - why not?

A counter argument to this could be that by converting at the time of the transaction - rather than holding dollars - the buyer bears currency risk. But this is not really accurate. First, the same risk would exist if the transaction were conducted over an exchange such as the IOB. Second, the oil price fluctuations take into account the trade weighted average of the currencies it is procured in. There is no advantage that can accrue based on the currency oil is purchased in that can not be gained by mere speculative holdings of the same currencies.

I think it has been clearly established that there can only be one price for oil and that the IOB can only translate that price into Euros. If there are two different prices, everyone would only buy from the cheaper provider until prices equalized. If anyone disagree with this let me know.

3. Role of the US dollar is key component of US strength and the ability of the US to protect itself is economic distress by inflation.

I have no dispute with this line of argument. In fact I have used it myself in showing that the US is far less at risk from its overseas debt that it appears. I do think that if foreign economies stop sell or stop buying US dollar assets, the US can and will inflate itself out of the problem. It is not nice and does hurt the US too. But is a powerful tool and an economic reality.

However, my claim, which I have laid out in my entertaining earlier discussion with lads on the same topic ( [scroll down]) is that this has nothing (or very little) to with prices tags or the currency used in transactions. The foundation for the predominance of the dollar is the long term holdings of dollar denominated assets, which is done voluntarily as part of a strategy of managing returns and exchange rates.


My impression is that Petrov and his conspirators have started with a conviction that the US is an empire based on extraction of resources from others enforced by military might. The IOB argument is an attempt to reverse engineer reality to explain how it all works.

He ignores two key facts:
1.    The US economy creates value rather than steal it
2.    Other economies voluntarily hold US dollars because they also benefit

I contend that the position that one takes on these two points determines whether they will see the IOB as kryptonite or conspiracy.

Finally, one point that I find very strange. Iran has a real weapon that can harm or destroy the world economy: energy. Why try to trace such as convoluted path trying to believe they have a different one?

Thanks very much for this analysis, Jack. It makes sense to me. Nice to see a rational look at the situation.
Heres a different spin -- Countries bought US assets to hold long term to ensure their access to oil, since (until anybody can show otherwise) oil has to be bought for USD. Look, you say that they can accept euros if they want, but thats hooey, Iraq started going that and just look what happened. Best out of any all the BS reasons to invade Iraq is that Saddam started favoring Euros. The idea is that you get a better price if you buy in Euros because they dont want dollars any more. They are still trying to figure out how to get rid of their USD assets but if they can get as many Euros as quickly as possible then at least they wont be wiped out by the demise of the USD they all see coming. Why do you think China unpegged the Yuan? Why do you think the Fed is going to hide the M3? And Saddam converting oilforfood assets into Euros? I think they all know the days of the dollar as world champion currency are numbered.

I dont think anyone can truly say whether the IOB will matter until after it begins operation. But if I was an Iran who wanted Euros over Dollars I'd make sure people got a better deal by giving me my desired currency. And when you get a better deal with Euros over Dollars for the worlds number one commodity, well, who needs dollars anymore. Of course the US administration knows of this possibility, and truthfully, what other reason to set up a Euro denominated exchange? Just for the fun of it? No -- its to say FU USA.

And I think its pretty speculative to say that USA actually increased productivity. Comes off more like USA corporations improved productivity on paper by becoming even better externalizers than yesterday. I dont think real Americans are any better off. More in debt and less savings than ever.

Alas, it's not my field, and I have no data.  But I believe US corporations increased productivity for about a 10-15yr period due to the widespread implementation of computers and automation tools.  I think this revolution is now largely complete.  Things will continue to advance, but not the step-change improvement we've just been through.  OTOH, Europe and some other parts of the world also got an improvement due to the same reasons - probably not to the same extent - so it's an advantage to the US only to the extent that we got a bigger part of it.  And in the future that advantage may swing to others.

And I also agree that some part of what is measured as increased productivity is just on paper - due to outsourcing and the like.  So I guess I'm doubtful that the increase in worker productivity really makes other countries want to hold USD.

I'm with Jack on this one. To Anonymoose's point, if all my assets were in, say, yen, and I wanted to buy oil, why would I need to buy U.S. assets first? Why not simply trade enough yen for dollars right before I wanted to buy my oil?

The Econbrowser piece Jack recommends is worth a read. I especially enjoyed Prof. Hamilton's conclusion:

Which is also my explanation for the prevalence of these theories on the internet-- there is a demand for a deeply conspiratorial interpretation of world events, and always someone willing to supply such.

A non-conspiratorial reason why there is so much global demand for U.S. government debt is that you can get a better interest rate compared with other governments' debt.

Yes and no, Jack.

I agree with your central point: the IOB will not directly cause huge problems for the US $ or economy.

But when it comes to whether it might be a perceived reason for an attack on Iran it is difficult to know if the US regime thinks so. After all, their logic seems to be pretty flawed at times. Ultimately it is their perception that matters.

I do think it will undermine holdings of US$. Although any currency can be converted at time of oil purchase there is a logic in holding stocks of $ if you know you are going to need them in future to buy oil. That's hedging for you, in its most basic form. I don't expect this to be a significant effect, in the short term at least.

My belief is that US GDP figures are artificially high, mostly due to the way inflation is treated. I would say that real US GDP growth is between 1.5% and 2% lower than is stated in the official statistics. US manufacturing is certainly a pale shadow of what it was 20 and more years ago, how useful or robust the majority of the US economy will be when contraction begins we will soon find out.

If you look at the oil price in detail over the last couple of years you would see that it is surprisingly insensitive to changes in the $ value in relation to other currencies. The IOB is likely to contribute to a decoupling of $ and oil and hence, if the $ declines - as I expect soon, the $ price of oil is likely to rise more than other currencies' price of oil.

While these effects are likely to be relatively small they will probably reduce the demand for holdings of US treasury debt. That will be problematic for the US while its trade deficit remains so high, and climbing, and will climb further as the $ price of oil increases.

Do you not see the possibility of vicious circles here?

Thanks for framing your analysis in such clear terms Jack. You've made me put my thinking cap on, which I appreciate. I agree that the three noted assumptions are indeed the key to the debate. Please forgive me for the fact that some of the following is a mental work-in-progress based on an on-going learning process.

1) The first assumption: "The foundation of US economic growth and strength is "extraction" or taxation of others, rather than creating value."

I would say that the point of capitalism in practice is to concentrate wealth at the centre at the expense of the perifery, either at small scale (urban vs rural) or large scale (rich countries versus poor countries), as efficiently as possible. As the system develops, its wealth permits its reach to spread in a virtuous circle of positive feedback (from the point of view of those at the centre), bringing more periferal regions into its shpere of influence in order to accumulate wealth transfered from larger and larger areas.

The growing perifery typically provides relatively low value inputs which are then subject to value-added processes at the centre where most of the profit is therefore made and retained. At this point, the centre is truly productive and growth is real. The greater the degree to which the perifery can be expanded (ie the more local economies which can be brought within its sphere of influence on its own terms), the greater the potential for the concentration of wealth (and power) at the centre.

However, the cost of doing business at the centre also rises over time as wealth, and therefore bagaining power, trickles down the socio-economic scale and leads to the formation of a middle class. As the efficient accumulation of capital comes with a social price to pay in terms of friction due to growing socio-economic disparity, the efficiency of capital accumulation may be limited initially by political constraints due to the temporary bargaining power of the middle classes, but those political constraints can eventually be weakened as the power of the centre continues to grow relative to the middle class. At this point, the positive feedback process can be expected to accelerate.

A post-mature capitalist centre is hollowed out (devouring its own middle class in the process) as the value-added aspects of the economy migrate away from the centre. This process can sow the seeds for the rise of new centres, altering the balance of power. The original centre can, however, sustain itself and continue to accumulate wealth so long as it maintains some control over the means of extracting and repatriating profits made from those value-added processes, wherever they are physically located.

At this point the growth of the centre could be described as virtual as it has little substance from the point of view of most of those who would previously have expected to benefit from being part of the centre (ie the middle classes). The original centre's control over wealth accumulation becomes increasing tenuous. (I would argue that the US is currently in this position.) This is analogous to the operation of a pyramid scheme, and destined to end the same way in my view - with the implosion of the centre.

The implosion of the original centre has an adverse impact on the rise of new centres for a time, but those new centres can subsequently go on to develop and compete for supremacy. If a new hegemonic power becomes dominant (I think it will be China), the cycle begins again (access to energy supplies permitting as the whole process of projecting power at a distance is energy intensive).

2) The second assumption: "The US dollar price is not only a requirement that currency be paid in dollars, but that this requirement is the primary reason why countries hold dollars."

I agree with you that countries do not hold dollars primarily in order to pay for oil and that the importance of the dollar as global reserve currency is based on the long-term ownership of dollar-denominated assets. Whether or not that ownership will continue to be long-term is the issue for the future of the dollar in my view. I would argue that it will not be as the US ceases to provide profitable investment opportunities for foreign-held dollars (see the Dollar Crisis by Richard Duncan), and the role of consumer of last resort is eventually reliquinshed (thereby killing the export markets that sent so many dollars overseas in the first place).

I agree with you that the Iranian bourse is likely to charge a dollar-based price merely converted into euros, at least initially. At some point, however, this type of construct could be used to shift to a euro-based price if the dollar implodes, which I would expect it to in the not-too distant future. This potential seems to be ringing alarm bells.

3) The third assumption: "Role of the US dollar is key component of US strength and the ability of the US to protect itself is economic distress by inflation."

I agree that the dollar is a key to US hegemonic power.

What do you think the response of the bond market would be if the US deliberately and persistently attempted to debase its currency by printing dollars? For a nation so dependent on being bankrolled by foreigners, I would have thought this a very dangerous strategy. Who would chose to hold dollar-denominated assets for the long-term, which you recognize as important, under those circumstances?

Hi lads,

I realized that I did not address this point: "if a country wants to dump dollars, it'll buy another foreign currency and not trade it to its own. That way an unwanted appreciation of self currency is avoided."

I do not think this is accurate. Say, country A sells country B's currency and buys country C's. It currency will go up against B and down against C. You could say that there is no net appreciation of the currency (ie. against B + C), however this is not relevant in most cases.

Turning to the real world, if China is country A, the US is B and Europe is C. You may be able to make the argument that China's currency is stable against the US and Europe. But there is no doubt that the Yuan will appreciate against the dollar. Since China's primary customer is the US consumer, the dollar exchange rate is paramount.

Whether the transaction is done by going from Dollars to Yuan to Euros or just from dollars to Euro, doesn't make much difference.

On another point, I think Petrov's treatment of the US exit from the gold standard is flawed and self-serving. The classical gold standard ended with WWI. The US returned to the gold standard in 1919 with GB, Switzerland, France and Scandinavian countries restoring it by 1928. However this was a facade version of the standard, which collapsed in 1931. After WWII Bretton Woods was convened to create exchange rate stability. It created a "Gold-exchange standard" in which the US dollar was marked to gold and all other currencies to the dollar. This was fated to fail as claimed by Robert Triffin's "Triffin Paradox", which said that this would force the US to run a balance of payments deficit.

It seems he was right and the Bretton Woods system struggled with France trying to cash out in the early sixties, the US and IMF making a series of adjustments and finally the US expansionary monetary policy, which made the whole thing untenable. Nixon did end the standard in 1971. This did benefit the US by reducing its obligation. However, Petrov's comparison with bankruptcy is overstated. A "haircut" or debt reduction would be more accurate.

I do agree that the current US monetary position resembles that of 1971 and that a comparison of the current prospects of inflating out of debt with the 1971 refusal to honor the gold standard is apt. However, the background is far more complex and the actors involved far more broad-based than Petrov would have you believe.

My source for this is a textbook International Financial Management, Eun/Resnick, McGraw Hill. However it is fairly standard stuff. You can also see:

Thanks Jack, a bit of an answer:

Turning to the real world, if China is country A, the US is B and Europe is C. You may be able to make the argument that China's currency is stable against the US and Europe. But there is no doubt that the Yuan will appreciate against the dollar.

Allow me to disagree. The euro would appreciate against the dollar, but not the Yuan. Since the Yuan is pegged to a bundle of other currencies it might appreciate a bit, otherwise the amounts of Dollar and Yuan available would stay the same.

As for Petrov's article, I think that his first premise is a bit forced, that foreign taxing is a somewhat flawed. But remember that what drives economic growth is energy consumption.

I do not agree with you on the last point. Foreign countries benefit from holding dollars in the sense of mantaining energy purchase power. This need generates a world demand for dollars, that in the long run benefits those who buy it.

If in the long run the dollar won't rise you're not benefiting. I see the IOB more like the trigger, than the cause of a serious dollar fall.

P.S.: Sorry for this delayed answer, I don't have internet at home, so over weekend I can't read TOD.

Thanks very much.  
My kid brother <ie. smartest living guy in the world (MBA London School of Economics) and 200,000+/- air miles racked up between SFO and PEK in 2005> ... is 89.9% convinced, but he also believes in the existance of "economic dark matter".  They see the effects in the unexplained resilience of the USD, but can't quite exactly put their finger on its magnitude or from where it originates.  This article may begin to explain where that "dark matter" comes from, but I'll have to ask him about that.
Here is a good summary of the dark matter argument from the current Economist:

It starts with this ...

STARE at something long and hard enough, and it will begin to swim before your eyes. Economists have been scrutinising America's current-account deficit for years now, and they are no closer to agreeing on what they are looking at. Now two economists at Harvard doubt whether the deficit even exists. Ricardo Hausmann and Frederico Sturzenegger first put this claim in a working paper* released last November. Your correspondent has blinked twice since then, but the claim has not gone away. On the contrary, it is gathering moss†.

Economic Dark Matter

This is great.
This is wonderful.
We Americans now have increased proved reserves in returns on foreign investments.

I just knew the Invisible Hand would come up with a new wave of itself and by itself to disprove what even our lying accountants have been telling us, namely, that America is running a huge trade deficit.

One just has to have faith in the Invisible Hand.
It always provides the answer.

This Economic Dark Matter answer sounds too good to be true and therefore it must be true.

Why heck, that's sound logic, pure and simple.

He said, "NO", and that, "I DON'T get it."  I didn't understand anything after that except for the parts about  buying CHF and how eliminating M3 will make it impossible to ever find out if the dark matter effect is increasing or decreasing in magnitude.  Your ball.
Probably others have seen this before, but I found the link to this start up last night.
I found this picture particularly convincing:
They are making solar look easy, it's even possible to imagine these things getting made and sold.  Heres hoping for a better battery to go with it.
This Sunball looks like an interesting product for small domestic applications.

It also illustrates a fundamental trade-off when dealing with solar, wind, or wave power. The trade-off essentially boils down to high collection efficiency coupled with high complexity and high cost, versus low collection efficiency coupled with relative simplicity and low cost.

The Sunball  clearly falls into the former category, as it provides high collection efficiency via concentration of the sunlight into a more intense beam and also has a tracking feature that allows it to maintain an optimal orientation to the sun at all times.  The opposite approach would be to simply attach fixed flat solar panels to your more or less south-facing roof.

Which is better?  Well that depends on the relative cost, operability, and long-term reliability.  Where space constraints are not an issue, and if the costs were the same, I'd be inclined to favor the physically larger, simpler, but lower efficiency system.  It is well to remember that efficiency and cost-effectiveness are not the same thing.

A similar device is coming out this year, Bill Gross's (of Idealabs) Sunflower. See this Wired Magazine article,

and here is the site which is going to sell them:

I went to college with this guy, Bill Gross, although I didn't really know him. He used to make stereo speakers in those days and a lot of the kids in the dorms had his designs. Real sharp guy, net worth in the 9 figures these days I'd guess.

I have to say that the Sunflower looks a little more polished:

The SunBall looks like a wash tub to me:

I gather that the SunBall rotates the whole thing to follow the sun, while the Sunflower has a patented mechanical linkage so all the mirrors turn in unison using only two motors. I'm not sure the Sunflower can meet the SunBall's $825 price though.

I don't believe it.  330 watts from 1 sq. meter?  That from 1kW solar thermal energy, going thru a fresnel lens that is maybe 85% efficient and hitting a PV that puts out DC and then has to be fussed with somehow to get it to a useful load?  No way.   Maybe in Australia the sun is stronger?  Maybe the PV is real smart and uses the entire bandwidth of sunlight instead of a few slivers of it?  Maybe the PV does not degrade with heat?

I will still put my bets on the good old stirling, go to NASA  and see why they like it for space power.  Very good efficiency, very good life (if and only if it is a free piston with gas bearings) and basically just iron and hence cheap if made for real people instead of NASA.

So you put the stirling on a  glass mirror, use it during the day to put out high voltage AC, and then at night you cook it with a burner and keep it going all the time.  Lots more juice for the buck. The burner is of course burning switchgrass.

Yeah, it is really smart. You can stack thin films on silicon crystal to use all the spectrum and the cost is irrelevant because you are concentrating at 100 to 1, so it doesn't matter if the three layers cost six times as much, because then the stacked solar cells represent a whopping six percent of cost, less than the sales tax.
OK, we are saved!  No need to worry about energy any more.  When can I buy it?-----(translation--TGTBT).
They are my competitors. I do central station solar power (line focus, not point focus) so I want to avoid slanging them, but they need to ramp up to mass production to be practical.
This may happen. If the units sold for the manufacturing cost (like they were made in China), then they would represent some kind of competition.
Look at a price point of 100$ each to be a threat to me.
Good for you, Wkwillis.  I owe you a more reasoned remark.  I recently attended a lecture by a man proclaiming some expertise in the details of PV  ( I myself know from nothing).  I asked him about these very high efficiency cells and his response was something like:

  1. They are at present very expensive per watt, even tho they don't need to be very big, main reason is the manufacturing yield is not so good- too many of them come out bad.

  2. They don't stand high temps at all well.  By hIgh I think  he meant maybe 80C, which is what can happen under a 400 concentration as Sunball is talking about- unless the cooling is very reliable and the ambient is not too hot.

  3. They tend to degrade over time anyhow, for complex reasons, much faster than the old 12% PV's.

Of course none of this is scribed in stone.  Time and chance governeth all.  May the best widget win. And we-uns in the race should stay nimble of mind and fast to admit mistakes.  Let's go for  it.

As for my horse- solar stirlings, I would be very happy indeed to think I could put out 300 watts for 100 bucks.  Just maybe 300 watts for 200 bucks, if all the stars were in alignment and the wind was right.

My are silicon crystal and they are pretty stable. While it is true that thin film has quality control and stability and thermal shock problems, that is for now. More money will solve a lot of those problems in a few years and since I am selling central station power to utility companies (that is, when I start selling them, and I just applied for the patent and haven't been granted it yet) and utility companies depreciate stuff over thirty years, it's not just today's competitors that I have to worry about.
On the other hand a photovoltaic plastic shingle you could just nail on a roof would make the world a better place, even if it did cause financial problems for me. It's pretty much a wash from my point of view. All the money in the world doesn't do much for you if the banking system goes down.
Speaking of Iran...they've apparently cut natural gas supplied to Turkey.

Iran has reduced on Thursday the amount of natural gas to Turkey to six million cubic meters giving "cold weather" as a reason.

By agreement, Iran has to pump 20 million cubic meters of gas a day to Turkey.

This latest development has alarmed the Turkish Ministry of Energy and Natural Resources.

Next week will be very hard for Turkey since natural gas is mostly used for heating purposes, especially in houses rather than in industrial areas.

Oil & gas: the new language of diplomacy?

Am I being overly suspicious to speculate that this might be a not-so-subtle way of Iran telling Turkey that siding with  US/Israel in a future attack on Iran might not be in Turkey's best interest?  

I wondered that myself.  20 million to 6 million is a big cut.  Is it really that cold?  Or is Iran "reminding" Turkey that nuclear energy for Iran is a good thing for Turkey?
Tehran 30-39F
Ankara 11-26F

I think I know who needs gas more to stay warm.

In 2002 Ankara was usually colder than Moscow.  Turkey is a thin coastline where the temperatures are moderate; most everywhere else being 1000-1500 meters elev, reaching in 2 central mountain ranges to 2800 meters, with Mt. Ararat topping out at 5,165 metres (16,945 FT).. it is COLD up there.  While NG is used in some areas, most residential customers rely on lower grade coal burning, a bit of gasoil and NGLs.  <Good but cold skiing 45 min west of Erzincan, but flights on only 3 days a week>
That's how I'd read it!
On the New York Mercantile Exchange this week, contracts as far out as 2012 hit record levels and monthly contracts from August 2006 to June 2007 have risen above $69. Reuters through Yahoo

Frankly, I don't hold out much hope of the US government doing anything about peaking except for war to secure supplies. So, like climate change, it looks like it's up to more forward-looking governments and the market to change things. While I don't expect either of these to solve the problem, enlightened governments can help their own people, and if the market signals come early and strong enough, they will help reduce the damage.

So, I see these rising futures contracts as a good sign. Sometimes it takes a 2x4 upside the head for Americans to see a problem. It will be less bad if energy prices hit hard and soon than if we have to wait for fast depletion rates post-peak.

Warning:  Repeated from earlier thread...nobody answered there.

I see "50% of Qt" all the time on The Oil Drum.  For people like me that are not in the industry (or just ignorant), what is Qt?

I tried searching for it on this website...but only received references to it.  I found something about P5 plus P50 reserves.  But, that leads to the question...what is P5 and P50?

So, a nice simple definition would be great, if somebody would be so kind.

Maybe somebody could expand the FAQ to include definitions for the common abbreviations and math formulas that are used on The Oil Drum.

Thanks in advance,

Qt is the expected ultimately recoverable oil as estimated by a Hubbert Linearization graph. It is the location where the fitted line meets the x-axis. If you look at his post Projecting US Oil Production, Start estimates Qt (after a revision) as 218 +/- 8 Gb (gigabarrels = billion barrels). One can speak of 50% of Qt because the fitted line based on the (P/Q)/Q has settled down into a linear regime and may then be extrapolated to it's ultimate value = the Qt.

P95 reserves are proven reserves with a 95% chance of being ultimately recovered. P50 reserves are probable reserves with a 50% chance of being ultimately recoverable, etc. A P5 reserve estimate is really like saying the oil is basically "undiscovered" and was thought to be there by the action of a divining rod or by use of a Quiga Board. Look here.
Reserves are generally classified as proved, probable, or possible; where these, usually, are seen as additive, so the largest amount of reserves judged reasonably likely are the (proved + probable + possible) reserves. Alternatively, one can quote reserves as 95% likely (P95); 50% likely (P50) or 5% likely (P5). Here we use P50 reserves and (proved & probable) reserves as synonymous; this correspondence may not be strictly correct, but given the uncertainty in real-world reserves quantities (see text), appears justified. (See the text, also, for the extraordinary unreliability of published `proved' reserves.)
Estimating reserves is a lot like voodoo. Use of a Pn number is an attempt to lend scientific validity to these estimates.
To make a minor correction -- when I say P95 reserves have "a 95% chance of being ultimately recovered", what I should have said is that there is a 95% chance that the estimated reserves do, in fact, exist. This is what I meant but on second thought I realized that I had stated it in a misleading way. As to how much of that oil will be actually recovered, this depends on many factors including the economics of the find, its geological characteristics, what technologies can effectively & profitably be applied to the find, etc.

I will never post again until I've had I first cup of coffee...
I think you were right the first time. P95 oil is the amount for which there is a 95% chance that it can and will be economically recovered. As the quote you include in a later posting notes, this is generally an underestimate in the early days of a field; actually recovered oil often turns out to be closer to the much larger P50 estimate. So you were right to say that P95 reserves have "a 95% chance of being ultimately recovered". This estimate already takes into consideration the points you list regarding economics, geology, technology etc.

Also, Qt is not defined based on Hubbert linearization as your parent post suggests, it is defined simply as the total amount of oil which will be recovered. Hubbert linearization provides a method to estimate Qt before the field is exhausted.

Well, I don't like to nitpick but I did say that "the Qt is the expected ultimately recoverable oil as estimated by a Hubbert Linearization graph". So I did not say it was defined or as others (eg. OPEC NOCs) do, simply asserted. I said it was estimated based on the line fit. Speaking of "asserted" and the recent revelation out of Kuwait, this give me a Gratuitous Photo Opportunity.

OPEC President Sheikh
Ahmad Al-Fahad Al-Sabah

Allahu Akbar!

best, Dave
In Chapter Three of Kenneth Deffeyes' book, "Beyond Oil," he outlined a simplified method for predicting total cumulative recoverable oil production for a given region (Qt).  You simply plot annual production (P) as a percentage of cumulative production to date (Q) on the vertical axis, versus Q on the horizontal axis.  With time, P is close enough to zero that production is negligible, which makes P/Q effectively zero.   At that point in time, you will effectively be at Qt.  I call this the Hubbert/Deffeyes Method.

Initially the plot is pretty noisy, but with time the data points fall into a linear progression and you can extrapolate the data in a straight line to where P and therefore P/Q is effectively zero.  The premise is that production peaks at around 50% of Qt.  

I've done P/Q plots for the Texas and the North Sea, and I took a Lower 48 plot off the Wolf at the Door website and did my own Qt estimate.   Based on my extrapolations, the Lower 48 peaked at 48% of Qt, Texas at 54% and the North Sea at 52%.  Furthermore, the P/Q intercept gives one at least a qualitative estimate  of the decline rate.  The P/Q intercept for the North Sea accurately predicted that the North Sea would have a steeper decline rate than the Lower 48 and Texas.  

My contention is that the best Hubbert/Deffeyes models are the ones that:  (1) have reasonable geographic limits; (2)  have decades of serious production and (3)  have a Qt of at least 50 Gb (billion barrels).  

Today, Saudi Arabia is at 55% of Qt, and the world is at 50%.  

Texas peaked at 54% of Qt, and the Lower 48 peaked at 48% of Qt.

I believe that Texas (the former swing producer) is to the Lower 48 as Saudi Arabia (the current, and perhaps also former swing producer) is to the world.  

From Jeremy Leggett's article in the Independent article (link above):

<<An anonymous informer talking to Dr Colin Campbell of the Association for the Study of Peak Oil goes further. His conclusion is that Saudi Arabia would have gone over its peak of production in the last quarter of 2004. This person speaks with front-line inside knowledge. "Saudi has at various times put 19 fields into production," he says. "Of these, eight are 'stars', being highly productive fields that produce around 90 per cent of the country's production. All the others are 'dogs' that have never worked well and probably never will. Recovery rates of up to 50 per cent may be appropriate for the 'stars'. For the 'dogs', 10, 15 or 20 per cent would be more appropriate. Make this adjustment and Saudi has depleted more than 50 per cent of its realistically recoverable reserves.">>

Estimated remaining recoverable reserves for various countries/regions, based on Hubbert/Deffeyes method:

Saudi Arabia--80 Gb
Iran--60 Gb
Lower 48--25 Gb
North Sea--18 Gb
Texas--6 Gb

Qt= URR (Ultimate Recoverable Reserve)= P50 (probable reserve) + P90 (proven reserve)

P90 reserve= 90% of confidence that we can recover economically that volume given the current economic context (price).

And this is where we get directly to the ways in which these numbers get used and revised. From this nice paper Future world oil supply published over at the site.
First of all, in financial context, the reserve of a given field is given as "proved reserve" which usually has a probability of 80 - 90 percent that the field has at least the stated size. But experience shows that mature oil fields turn out in reality to be around the size which was originally estimated as their "proved and probable reserve" - an estimate which has equal probabilities that the field will ultimately turn out to be smaller or greater. In technical terms this is called the P50 reserve (50 percent probability). During the lifetime of a producing field the initially estimated "proved reserve" is re-evaluated several times and is finally very close to the value which in the beginning was internally known as P50-reserve.
Thanks everybody for the answers.  The light is going on.

So, can 100% of P90 be recovered (assuming that it is actually there)?   Or, only a percentage?  Dave talks above this about being able to recover only some of it.

In other words, I understand that 100% of the oil can never be taken out.

Does P90 take that into consideration?

It depends how the initial P90 numbers was established, reserves (P90, P50) are always updated according to the field production history, etc.  Also, when Enhanced Recovery Methods are used some of the P50 moves into the P90.
But yes, the expectation is that with 90% probability, you will get 100% of the P90 amount. And probably you'll get quite a bit more.
Something, really, really out of left field from Urban Survival (an interesting, but kind of off the wall website), but it does make one think.  

It basically fits my thesis that an attack on Iran would be to World War III as Germany's attack on Poland was to World War II.  Guess who's playing the role of Germany this time?

From Urban Survival:

France: Further Thoughts

A couple of well placed sources have advised me that the US is escalating military security measures today on the report about France.  Some sources tell us that the French threat to nuke terrorist states is not directed at the general Muslim world, but may have been directed at the U.S.  That would explained the heightened military posture by the US today. This certainly would tie in with the US moving ships and marines out over the past few weeks that we reported on earlier.

Some sources tell us that the French threat to nuke terrorist states is not directed at the general Muslim world, but may have been directed at the U.S.  That would explained the heightened military posture by the US today. This certainly would tie in with the US moving ships and marines out over the past few weeks that we reported on earlier.
Are you kidding? I think American agencies are getting paranoiac. 37

Excerpt of article:

Jacques Chirac, France's president, has threatened to use nuclear weapons against any state that supported terrorism against his country or considered using weapons of mass destruction.

"The leaders of states who use terrorist means against us, as well as those who would consider using, in one way or another, weapons of mass destruction, must understand that they would lay themselves open to a firm and adapted response on our part," he said. "This response could be a conventional one. It could also be of a different kind."

Kenneth Deffeyes said that we would see a war for remaining oil reserves, he just hoped that it would be fought with dollars--and not nuclear weapons.  
I'm aware of France's recent comment about nuking terrorist states, but I don't quite understand how this can be viewed as being directed toward the US.

Are these sources saying that France is  hinting that it would go along with the US on  a pre-emptive nuclear attack on Iran?  Or initiate one itself?

Surely they're not implying that the US might initiate a clandestine terrorist attack against France and that France would relatiate against the US using nuclear weapons?  That seems totally far-fetched to me. I'm confused.

I find it also highly puzzling why France, who has traditionally been quite subtle in its diplomatic relations, would come out with such an uncharacteristically blatent and provocative statement at this particular time.

What's up?

We have seen regional production peaks--the Lower 48, the North Sea, etc.--but we have never been at the peak of world oil production before.  

Going forward, in my opinion there is only one true form of capital--BTU's.   The Fed can inflate the money supply from here to the moon, but that won't create a single BTU of energy.   Energy can be drilled to (oil & gas), mined (coal & uranium) and gathered (wind), but it cannot be created.

What if France views a U.S. seizure of the Iranian oil fields as a threat to France's national interest?

Lot of terror and Iran stuff lately.  Iran is moving money out of Europe (part of the reason for the big stock decline today, 1/20) and the move to cut gas to Turkey is clearly to send a message to Ankara.

A couple points. France is not thinking about nuking the USA and Iranian oil and its loss will not bring France to its knees. Actually, in someways they are better off than other parts of Europe since they have so many nuclear power plants.

One thing driving their train is that they need to justify spending 10% of their military budget on nuclear weapons. The French budget needs trtimming to stay within the 3% overage and the EU wants them to trim it. And Chirac is a conservative. Beyond figuring out who or what they would drop a nuclear weapon on, it is a threat to nations that support terrorism.

The Middle East is not just about oil. While obviously important, this whole terror/religion (too much of that)/Jew/Muslim/tribes stuff just makes it more complicated. We would certainly care a lot less about the Middle East if it had carrots instead of oil.

But we would still be involved there if you have Muslim nuts who want to convert Spain back to a Muslim nation and return their society to 800 A.D. I think we sometimes forget that most people in the Middle East are sensible to one degree or another.

I was reading recently that Lawrence and his Arab buddies raised the flag of revolt because the Young Turks in 1912 said that one vote for a woman equalled one vote for a man (Just one of their reasons to go into revolt). The Koran clearly stated to them that it was 2 votes to one. - This is from lineage of the royal family that now runs Jordan.

In 1973, the Soviet Union invited the U.S. to join them in intervening in the 1973 Arab/Israeli War (the one that triggered the Embargo).   If we did not join them, the Soviet Union told us that they would intervene unilaterally.   Nixon responded with a worldwide military alert--and basically threatened nuclear retaliation if the Soviet Union moved troops into the Middle East.  

Our concern was what would happen if the Soviet Union had a permanent military force in the Middle East--threatening our Middle Eastern oil supplies.  Kissinger saved the day when he convinced Israel that if they destroyed the Egyptian Third Army, they would trigger World War III.  (I am doing this from memory, but I think I have all the facts basically right).

So, here we are 32 years later, with similar oil price shocks.   The question is how should Russia, France, China and the other nuclear powers--especially those dependent on Middle Eastern oil supplies--view the possibility of the U.S. attacking Iran and/or occupying key portions of the country, i.e, the oil fields.  

Or let me put it this way, why is okay for us to threaten nuclear retaliation if we perceive our oil supplies to be threatened, but it is not okay--or realistic--for other nuclear powers to do the same thing?


First, France is the first nation this year to say that Nukes are ON the table.

Second, and I may be wrong, but I do not think we/USA have any intention of occupying Iran's oil fields. I think we will do a three day bombing run on Iran's nuclear facilities (of all types) and we will WANT it over. The goal will be to set Iran back 10, but we will settle for five, years in the drive for Nukes. Some argue that Iran is closer and there is no way to KNOW. Iran will have to do some stuff to maintain her dignity. Sink a few tankers, get lucky and sink a USA sub or destroyer, if she is real good a hit on a carrier. Bonus dollars after that.

But my point again, this is not ALL about oil. If Iran threatens Israel;  either Israel, or the USA, MUST to do something.Or they/us/them will appear wimpy. So much is a game of chicken in life.

And if a nuclear bomb goes off in Tel Aviv, killing thousands of people of all faiths, all bets are off.

(Consider Iran in light of the following article on Iraq).

Published on 10 Jan 2006 by Mail and Guardian. Archived on 21 Jan 2006.

Iraqi oil production choked for years
by Miriam Amie


"Iraqi public opinion is strongly opposed to handing control over oil development to foreign companies," said a November report entitled "Crude Designs: the rip-off of Iraq's oil wealth" from the independent British-based social activist organisation Platform.

"But," the reports continues, "with the active involvement of the US and British governments, a group of powerful Iraqi politicians and technocrats is pushing for a system of long-term contracts with foreign oil companies which will be beyond the reach of Iraqi courts, public scrutiny, or democratic control".

Platform's economic projections show that the oil development model currently being proposed by those in power would "cost Iraq hundreds of billions of dollars in lost revenues, while providing foreign companies with enormous profit", and would leave the Iraqi government to control only the 17 fields already in production, out of the estimated 80 known fields in the country.

The so-called production sharing agreements (PSAs) being promoted under this model would represent a radical change and redesign of Iraq's oil industry -- shifting it from public into private ownership.

"The strategic drivers for this are the US/UK push for 'energy security' in a constrained market and the multinational oil companies' need to 'book' new reserves to secure future growth," the Platform report said. - Sapa-DPA

by Jim Willie CB
January 13, 2006


A global energy war has begun, which will involve oil as its center and conflict over it both regionally and globally. The war will forge two-way and three-way partnerships. In the course of securing relationships built upon sales & supply contracts, large construction, production, and exploration contracts will guarantee and lock up the sale of output as a reward. Enormous capital requirements are outlined. Furthermore, risks abound, as some new prospective energy properties might contain large risks on cost assessment and time estimations. The extreme risk is for the USA to be locked out of all new marginal supply from East Asia to West Asia as far as to West Africa, and even to lose some of the current supply reaching the market. Over the course of the next two years, a global battle will surely erupt to secure the energy deposits, and to control shipping lanes. It will be a miracle if military conflict is averted in the battle for progressively more scarce energy supplies. In 2006, the severity and seriousness of the conflict will come front & center to the geopolitical stage.


Very good points. But we do NOT have the forces available to occupy Iran. We could take Iran down, but we do not have the numbers to occupy Iran. I'd like to think somebody at the Pentagon has figured that out.

Also remember, and I know it is a GLOBAL commodity, but we have never, in the USA, taken a substantial of a % of oil from Iraq or Iran, or even S. Arabia.

I have been advocating a call for volunteers (aka the American Civil War and a Republican named Lincoln) but President Bush for some reason had not accepted my suggestion. It is amazing to me the high % of re-enlistments (who have been there and done that), and the low number of enlistments in the army.

Chirac's comment was issued with Iran prominently on the front pages with it's nuclear amibitions.  Since Iran is not exactly unfriendly with a number of terrorist organizations, I think it's fairly obvious where Chirac's comments were aimed.  

The idea that those comments were aimed at the US, or that the US might somehow attack France is profound lunacy.

Personally, I am not even clear that anybody will attack Iran.  

I wouldn't be surprised to see an 'accident' at one of their nuclear facilities though.

Nymex crude for December '06 hit $70 today...

Also heard a rumour that military leave has been cancelled in Iraq from May onwards. What gives?

could be the opening of the iranian oil bourse in march, they will be trading in euros, good for europe bad for usa..

see earlier post on iranian oil bourse, all oil is traded in dollars, the last country to try and sell in another currency was Iraq...

Does anyone have any experience with ground source (geothermal) heat pumps?  I did not find much searching TOD.  There was an interesting New Year's Day article in the New York Times (, but you must be a TimesSelect member to read the article).  Also, Tom Whipple mentions them in his most recent column (  The NYT article mentions that President Bush has one, presumably at his Crawford ranch.
Ask the same question on <pump chat>.  I haven't seen geothermal come up there, but there'll be a good chance to catch any lurking experts to get you on the right track.
we have been using a ground source heat pump in our house in the northern rockies for 12 years....any thing i might be able to answer, calorie?
There have been a few discussions of geothermal here recently, primarily between myself, George from Vermont, and apsmith. The last one was probably from an open thread in the last couple of weeks. I have a geothermal system, but it's an old an inefficient one that came with the house. I don't use it much as it consumes a lot of electricity. There are far better designs on the market now.
The black goo is a little pricey today heh?
Yeah. A little. I think Goldman Sachs is right. There is a slight, extremely remote possibility that oil could hit $70 by October.</snark>
This will no doubt call for comments from TOD luminaries :


    LONDON, Jan 20 (Reuters) - OPEC producer Kuwait's oil reserves are only half those officially stated, according to internal Kuwaiti records seen by industry newsletter Petroleum Intelligence Weekly (PIW).
    "PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records," the weekly PIW reported on Friday.
    It said that according to data circulated in Kuwait Oil Co (KOC), the upstream arm of state Kuwait Petroleum Corp, Kuwait's remaining proven and non-proven oil reserves are about 48 billion barrels.
    Officials from KOC were not immediately available for comment to Reuters.
    PIW said the official public Kuwaiti figures do not distinguish between proven, probable and possible reserves.
    But it said the data it had seen show that of the current remaining 48 billion barrels of proven and non-proven reserves, only about 24 billion barrels are so far fully proven -- 15 billion in its biggest oilfield Burgan.
    Kuwait has been adding up to 500 million barrels a year at Burgan which means the remaining non-proven reserves of some 5.3 billion barrels will likely be upgraded to proven, according to PIW.

What kind of publication is PIW?  Is it reliable?
PIW is one of the top five or six newsletters.

Sure seems like this supports what Deffeyes, Simmons, etc., have been saying all along.

But do you think this report will make a real difference?  Or will everyone forget all about it by next week?

I think this is going to be big. Imagine if it leads to an avalanch of stories like this as the spotlight turns to other OPEC nations with those funny late '80s reserve jumps.
When I was doing my undergrad oil policy research, it was considered to be very reliable.  A subscription back then (about 10 years ago) cost roughly ~$700 per year.  

Fortunately, the University of Texas had about five subscriptions, so I could always find what I needed.

Found a brief story here.

London Brent crude futures rose $2 on Friday to its highest level since early September after a report that Kuwait's oil reserves are only half those officialy stated.

March Brent rose $2.01 to $67.24 a barrel after industry newsletter Petroleum Intelligence Weekly (PIW) reported it had seen internal Kuwaiti records showing that Kuwait's reserves were about 48 billion barrels, compared to the officially stated 99 billion barrels.

Ahead of the report, Brent had already gained $1.50 on mounting concern about supply from Iran and Nigeria had already fuelled a rally of $1.50.

Kuwait has been adding up to 500 million barrels a year at Burgan which means the remaining non-proven reserves of some 5.3 billion barrels will likely be upgraded to proven, according to PIW.

What exactly does this part of it mean?

Only 24 of 48 GBarrels are proven reserves. The second 24 GB are only probable.
Proven reserves are conservative estimate, bot Burgan field they normally encrease proven reserved by 500 million barrels a year. So for Burgan field we may expect grows of proven reserve by 5 GB in 10 years.
No surprise!  Shell makes mistakes.  Mideast statistics always have political components.  Just increase your probable error margin bands.  I just finished making the same comment about SA oil statistics (somewhere).  My comment was based on general knowledge of how KSA statistics <never> add up in my experience during examination of 10 years of refined products distribution records.  <NIGHTMARE... DAMNED IF YOU DO, DAMNED IF YOU DONT>
arrggh! minute to midnight!!....TOD's are foolish, foolish people...this from the independent:
As Nansen Saleri, Manager of Reservoir Management at Saudi Aramco, puts it: "... we have lots of oil, not only for our grandchildren but for the grandchildren of our grandchildren.", are you reassured?

This is major news if true which effects all the OPEC members who posted the large gains in the late '80s.

I've written it up here:
Kuwaiti Reserve Reverse

Does anyone know if the Deffeyes estimate of 2.1 trillion barrels of URR accepts Kuwaits' and the rest of OPEC's stated reserves?
Or does Deffeyes assume lower OPEC reserves such as those stated above?
Deffeyes never believed those sudden increases.  That's one reason he predicted a peak in 2005 (earlier than most peak oilers, even).
I'm in a hurry, but look at this!!!!!!:

Iran seeks 1 mln bpd OPEC quota cut from April

Yesterday I said here that we might be at "Two minutes to Midnight". Today it seem almost like Midnight.

Whith the few information available, I'd risk to say that Peak Oil happened May 2005.

I'm usually not one to make connections where they do not exist, but we seem to be having a convergence of some rather troubling developments.  Here's a partial list right off the top of my head:

- Isreali threats to attack Iran if they persist with their uranium enrichment program.

- Iran's defiant posture regarding same.

- US increasingly intense sabre rattling towards Iran.

-  Iran's inflammatory remarks regarding Israel.

- Iran withdrawing billions from European banks as protection against assets being frozen in the event of sanctions.

- Iran's movement toward more alignment with China and Asia.

- The opening of the Iranian OIl Bourse come March.

- The Fed's plan to  discontinue posting the size of the M3 money supply come March.

-  Chirac's recent public statement about nuking terrorist states.

- Iran's reduction in gas shipments to Turkey.

- Iran's call to OPEC to curtail production by 1 mbd.

Coincidence? Perhaps.  But I'm beginning to see a bad moon rising.

Oh, and in my haste I forgot one of the most important ones: the most recent taped message from Osama, who seems to have a way of conveniently showing up whenever the Bush regime feels the American people need an attitude adjustment re the terrorist threat.  
Oil settled at $68.35 Friday for Feb 2006 contracts, but the real story is further down the list.

Contracts from Oct 2006 to May 2007 all closed above $70 a barrel with Jan 2007 contracts going for $70.16 a barrel.

Am I the only one who thinks that paying this much for crude that hasn't even been pumped from the ground yet is stupid? This is a perfect example of the speculation and greed that are destroying this planet.

But as long as the idiots, including me, in this country keep letting these assholes take the cash from our pockets, nothing will ever change. But the kicker is that there is no alternative. If we are going to get to work and make the cash that we must give to butt munches like Iran, we have to buy oil.

And until the auto makers start building true Hybrid Powered cars that get 100 MPG or more, there is nothing that will change having to stop and fill that gas tank. That is unless the oil actually stops, then all hell breaks loose.

People better pull the ass cheeks from their eyes and see that the asses they are kissing are not only killing us, but the planet we live on. And if we kill the Earth, what do you think will happen to us?

The longer we drag our feet and ignore the signs, the longer it will take to repair the damage. We must start NOW to eradicate ALL Fossil Fuels from our World.

There is an Alternative to Fossil Fuels.
This Untapped and Unlimited Resource is available TODAY!!!!

Only ignorance and greed keep it from being utilized. If we started today with my plan, we could have Domestic production of Clean and Safe product ready to replace Dirty and Destructive Oil within 2-4 months. And TOTAL replacement of ALL Fossil Fuels in use in this country within 18-24 months.

But that is just the tip of the iceberg as the support industry for this Resource would eclipse any that has come before, and do it in a few short months, not years. I am talking about a Revenue stream that once this new industry reaches full production could approach 1 Trillion Dollars a Year. There is nothing that stands in the way of this except for the people in charge of this country, and the Fossil Fuel industry itself.

But if we continue to follow bullshit rhetoric that we cannot change things where the Environment is concerned because it will cost too much and hurt our Economy, we are as guilty as the ones actually committing the crimes against God and Nature.

To be continued...

Yay!  We're saved!  The suspense is killing me.
In past comments, MikeGordon has advocated hemp as the solution to all our woes.  No doubt smoking lots of it will be the peak option of choice for some, but as a biofuel feedstock I imagine it's productivity will be similar to other fast-growing crop-plants.
Hes talking about Browngas or something. Or garage sonofusion? OR is this direct matter to energy conversion, the holy grail or all our energy needs despite that big .. umm, giant burning gas ball out there. no its a vertical axis wind turbine. no its 5% efficient nano-solar pv on a roll that costs 10 cents per square foot. or a home geothermal kit. magic aether sucking ZPE overunity doohicky. or what I dont know. I am anxious to know when this product is going to hit the market.
Saudi Arabian production dipped by 50,000 b/d to 9.5-mil b/d and Iranian and Kuwaiti production slipped by 20,000 b/d and 10,000 b/d to 3.93-mil b/d and 2.54-mil b/d respectively. Other members kept their volumes around November levels, with a small 10,000 b/d increase in UAE output.

At its December 12 meeting in Kuwait, OPEC decided to keep the official ceiling and quotas unchanged but fixed an extraordinary meeting for Jan 31 and hinted that it might be necessary to rein in production early in 2006 to deal with any drop in demand after the winter.

Uh, quotas are unchanged but SA production dipped by 50,000 bpd? I thought they (SA) were producing at full speed, also note the Kuwati production drop.


Interesting take by Israel's defense chief on Iran:

Iran Faces 'Destruction' - Israel Warns

Martin Walker, Monsters & Critics:
Israeli Defense Minister Shaul Mofaz warned the Iranian people Saturday that they faced 'destruction' unless they managed to restrain their new President Mahmoud Ahmadinejad. 'Look at the fate of others who sought the destruction of the Jewish people. They only brought havoc and destruction to the own people,' Mofaz said.

'I know that a large part of the people of Iran do not support his policies but his despicable acts could bring destruction to all of you. You understand what must be done to prevent this,' Mofaz added, directly addressing the Iranian people. READ MORE

It was the toughest statement of Israel`s determination to block Iran`s nuclear ambitions since the stroke that felled Israeli Prime Minister Ariel Sharon two weeks ago, and it came just two days before the next scheduled international inspection of Iran`s nuclear research facilities.

Mofaz`s speech to an international conference of security experts in Herzliya, an exclusive resort just north of Tel Aviv, contained a clear warning that Israel if the United Nations and the international community failed to act, Israel would do so.

'Israel has to be able to defend itself,' Mofaz said. 'This we can do, and we are working on it now.'

The Mofaz speech was intended not only for Iran and an international audience but also for Israeli voters, who go to the polls in March in a general election that seems likely to elect a new government led by the new Kadima party, founded by Sharon, to which Mofaz has rallied along with the acting Prime Minister Ehud Olmert. With the prospect of a nuclear-armed Iran looming heavily over the Israeli elections, Mofaz`s speech was aimed to reassure the voters that Israel`s security would be safe in Kadima`s hands.

Iran`s nuclear development program is 'an existential risk to the entire world, not just Israel,' Mofaz went on, and said that Ahmadinejad led 'an extremist regime that denies the existence of Israel and calls for its obliteration.'

'I believe everyone present here understands the extent to which the combination of an extremist regime with long-range ballistic capability, ongoing effort to obtain nuclear weapons and support in terror constitutes a danger not only to Israel, but to the entire world,' Mofaz added.

Mofaz, formerly chief of staff of Israeli defense forces, told the annual Herzliya Conference on the Israel`s national security that in addition to Tehran`s nuclear ambitions, Iran was directly sponsoring the Hizbollah terrorist organization to the tune of $100 million a year.

'Money is the fuel for terror,' Mofaz said. 'The financial assistance Iran transfers to Hizbollah totals some 100 million dollars each year. Some of these funds are funneled from Hizbollah to Palestinian terror groups. In addition, Iran is the main sponsor of the Islamic Jihad, which carried out most suicide attacks in Israel last year, including the attack in Tel Aviv`s central bus station.'

He added that Islamic Jihad cells in the West Bank received about 10 million dollars from Hizbullah in 2005, compared to just 5 million dollars in 2004.

In his combative speech, Mofaz described last week`s Damascus meeting between Ahmadinejad and Syrian President Bashar Assad as 'the summit of terror,' and called the two leaders 'representatives of the past.'

But Mofaz made it clear that while Israel could act alone of it had to, the Jewish state was also wary of being isolated diplomatically, and would work hard to build regional alliances and cooperate with the international community.

'In the coming years we need to boost the strategic coordination with the U.S. and Europe, as well as with the peaceful countries Egypt and Jordan. Jihad draws near to us, and so we must combine efforts with the countries of the West,' the defense minister said.