DrumBeat: November 17, 2006

[Update by Leanan on 11/17/06 at 1:28 PM EDT]

Global oil production – "Rate of Conversion" is the key

We should all be aware that the "rate of conversion" might be reaching a peak irrespective of demand, price, netback, crude quality and the speculated global endowment of resources. This "peak" has already occurred in many oil and gas productive basins which have had an historical transparency in term of access, ready markets, favorable fiscal terms, security and perceived political risk.

Oil tumbles to lowest level since June 2005

LONDON (Reuters) - Oil briefly dropped below $55 Friday to its lowest level since mid-2005 amid fund selling across commodity markets on worries of an economic slowdown in the world's largest energy consumer, the United States.

High U.S. oil inventories heading into winter, and selling pressure ahead of the expiry of the front-month U.S. crude contract at the close of trading Friday, fueled the selling.

Russia Vows to Develop New Markets, Deepen Energy Security

Russia flexed its economic muscles on the eve of a meeting of Pacific Rim leaders in Hanoi Friday, pledging to seek out new export markets in the region and use its vast reserves of oil and gas to contribute to the region's energy security.

Peak Oil is Simple: Gristmill gives TOD props, but points out that, "Our choice is far closer to binary than most oil geeks are willing to acknowledge."

Now, it is the nature of engineers, data nerds, lefty wonks, and other too-smart-for-their-own-good types to have a somewhat naive view of politics. They tend to think that the main determinant of political action is the established empirical facts. Establish the facts; policy ensues. That's why winning the empirical argument is so overwhelmingly important for them.

Of course, it's not so. The range of possibilities in the political world -- the real world, not the world of policy wonkery -- is, at least most of the time, much narrower than the range of possible oil production scenarios.

Byron W. King: Association for the Debunking of Peak Oil, part 2

But if you do not want to send your bucks to CERA, I will provide a summary of some of CERA’s previous statements on Peak Oil. This is purely in the spirit of allowing CERA to have a forum that includes its nonpaying clients. I will offer here some other details on what CERA has said about Peak Oil in the past.

Attempt to discredit theory falls short of making its case

The CERA study uses extremely optimistic projections of conventional oil still to be discovered. It assumes technological leaps will occur to develop unconventional petroleum sources. It does project that a peak will occur, but not for another 25 years or so.

Abiotic oil lives on... Oil: Off the Deep End - "Running out of oil might be a less rational fear than running out of air to burn it with."

Richard Heinberg: Fifty Million Farmers

There was a time not so long ago when famine was an expected, if not accepted, part of life. Until the 19th century—whether in China, France, India or Britain—food came almost entirely from local sources and harvests were variable. In good years, there was plenty—enough for seasonal feasts and for storage in anticipation of winter and hard times to come; in bad years, starvation cut down the poorest and the weakest—the very young, the old, and the sickly. Sometimes bad years followed one upon another, reducing the size of the population by several percent. This was the normal condition of life in pre-industrial societies, and it persisted for thousands of years.

Congress seen passing price-gouging law

The head of the Federal Trade Commission predicted Thursday that Congress would pass a gasoline price-gouging law despite her warnings that the country doesn't need one and it might cause fuel shortages.

Ford expects to keep doubling China sales

Emergence of a gas OPEC remains unlikely despite NATO warning

Warnings from NATO that Russia is seeking to create a gas version of OPEC seem to be an overblown fear. While Russia has the necessary large resources base to exert some influence over price through production programming, market dynamics and the practicalities involved make this a highly unlikely development.

BP next in line as Kremlin targets Western oil companies

MOSCOW - BP PLC, which entered the Russian energy market three years ago with the blessing of President Vladimir Putin, has become the latest foreign producer to feel the icy power of the Kremlin as the state increases its control of oil resources.

The company's joint venture TNK-BP, Russia's third-biggest oil and gas producer, has been hit with back-tax bills, threatened with license annulments and last week prosecutors opened a criminal investigation against a TNK-BP executive.

Lukoil to Spend $27 Billion to Boost Overseas Output

Lukoil, based in Moscow, expects to raise non-Russian production of crude and natural gas to the equivalent of 800,000 barrels a day by 2017, Lukoil Overseas Holding Ltd. chief Andrei Kuzyaev said at an energy conference in Moscow today. The company pumps about 110,000 barrels a day outside Russia now.

Annan Faults 'Frightening Lack of Leadership' for Global Warming

Secretary General Kofi Annan on Wednesday put the blame for global warming on “a frightening lack of leadership,” saying the poorest people in the world, who do not even create much pollution, bear the brunt of rising temperatures.

Gore: The truth? 'Nuclear is not the answer'

British Energy Ousts Head of Nuclear Operations; Output Reduced

British Energy Group Plc, the country's largest power producer, ousted the head of nuclear operations and said production will miss forecasts by at least 8.2 percent a year because of faulty reactors.

Israel - Ministry won’t meet alternative energy target: Actual production will be 0.14% - 15 Megawatt, instead of the 2007 target of 214 MW.

Biofuel plant to boost UK wheat prices

Senate backs India nuclear deal

The US Senate has overwhelmingly voted to pass a controversial deal to share civilian nuclear technology with India.

Happy Birthday, JODI!

Newfoundland projects $39.8-million deficit after Terra Nova shutdown

Newfoundland is running a $39.8-million deficit, Finance Minister Loyola Sullivan said Thursday, presenting a contrast from the rosier picture the government portrayed in its spring budget. Not even peak oil prices this summer could have offset the drop, largely driven by Terra Nova's delay in resuming production, Sullivan said.

Alternative Energy, Part 2: The Perfect Storm

The overall energy supply and demand balance has fundamentally changed, Jeff Lipton, managing director of investment banking at Jefferies & Co., told TechNewsWorld. "The demand picture is dramatically different, with countries like China and India now becoming significant consumers of energy and commodities -- and their growth is only going to continue."

From Discover magazine: Can Coal Come Clean? How to survive the return of the world's dirtiest fossil fuel

"Solving the climate problem altogether—completely rebuilding our energy infrastructure—is something like a $400-billion-a-year program. The U.S. share is maybe $100 billion. That's not that much compared with defense outlays. It's small compared to Iraq. If we really got scared, we could do a lot in a hurry."
Russian Export Analysis
An analysis fo Russian exports is still not an answer to what you promised my 4-year old. Please define "soon" .


Nice work, btw.

@ nth. If you're reading, PO & GW are not "beliefs, because they are theories" . The broader scientific community has already ambraced these events as FACTS.

Kind of like the "theory" of evolution, right?
Paulus -

I ran out on you the other day, but not your little monkey. I never abandon four year olds. And I never will.

Trust me. I need some down time. I try to hide, but it is getting harder. I need to sleep. My friends are good. But I run so much. It is killimg me. I am not long for this world.

Obviously when I'm dead I can't prove it. I can taste the salt im my tears.Count it between what CERA says and what Dave says. Running average. If I'm alive I'll talk. Nobody knows. They just guess. You know that.

The safest place for Paulus P junior and all his sisters is an island called Mykonos. Paris Hilton and all the smartest people in the world know that. That's why they all congrregate there.

OK, take your time OilCEO. IMO an island can never be the safest place for overshoot reasons. Especially a dry, overpopulated,  mediteranian island which is likely to be hit by various tropical diseases like malaria in the not too distant future.
Those people there have survived everything. The Sun God was born there. When you see those rocks you will understand. Imagine your only light kerosene on Delos. And all you have is marble. Give me some time.
Sure. But it's just to hot for us Dutch there.

Once again, take your time.

The Dutch from my experience are generally hot. Or usually hot. History confirms this. This is a good thing. I appreciate your patience. Since you are one of three confirmed readers, you can rest assured that your comments move mountains.
Interesting find... but is this because the "missing barrels" could be acocunted for in other ways?  Inter-European trade or something?  Or could it be export of refined products?  Looks like the capacity of the refinery could easily handle the additional barrels...

Please let me know as I don't have a clue to the answer.

I don't have an answer. I just post the numbers. I just post what I see. I don't know.
The answer is simple.
Russia is beginning to softly co-ordinate its export policy with OPEC.
An official SPR in Russia doesn't exist yet. But you have to take into account the fact that a pipe has a volume. The existing oil pipeline system is the best SPR.
A 1000 km pipe with 1m diameter has a volume of around 5 million barrels. Some abandoned parts of the system (for example the line to Lithuania) could be used to store excessive supply. So, OAO Transneft can fill in its system with marginal oil for a long time. This is so called technical oil.
By reducing the export of oil to the `near abroad' - Lithuania, Belarus and Ukraine - Russia achieves two goals simultaneously: to exert political and economic pressure onto not-fully-loyal countries and to synchronize the export policy with OPEC.
You may be correct. And NO, there is no simple answer. Look at it again. At best you are falling back on a defensive posture. This is bad for your position. You need to fall way back and dig some new trenches. Look at March 1918.
WOW. This thing is big. 1.5 mln bpd just seem to be missing, and nobody cares??

Let me speculate a little bit. Since I am from Eastern Europe, I've seen this many times and I think I know what it is. 1.5 mln bpd missing? What's the problem really? These countries are full of people officially earning $200/month who are driving BMW's to their cottages. Most likely this oil is simply stolen or unaccounted one way or the other - somewhere down the pipeline some people are earning good money to shut their eyes for the oil which is being sent with overnight trains to China or Kazahstan (to be reexported within some very clever and tricky schema) or, in a refined form is simply drained down who knows where by who knows whom. Now if you think that such a yelling discrepancy should be ringing someones bells you would be wrong again. Even those that are not corrupted at the upper level know everything about it and also know they can not possibly fight it.

I like your hypothesis. It feels good. It's appealing in many ways. It fits much of what I know about how the world works.
Problem is without a serious prosecutorial investigation it's only a hunch. No way to verify. We may never know.
But I do trust the Oily One to keep on top of this.
I say this because you have been extremely correct about a bunch of things lately. I actually trust you. Which is a really scary concept we should probably not delve into at this point.

I don't even have any hunches. I just don't know. I presented data that was freely available. According to what I saw, there are no "missing barrels" - I mean within a certain believable margin of error. I just presented what I thought was a missing  "buffer of credibility." Clearly certain people never looked at the actual data. Those certain people will have to come forth and clear their names. Then they will have have to clear mine. I realize it will be painful. I can guarrantee the alternatives will be worse.

I think the missing barrels LevinK sees are because he failed to add in exported products, which are refined products. Add the 3 numbers together - internal consumption, exported crude, and exported products - and they come very close to the daily production. Any discrepancy is, as Oil CEO said, within a reasonable margin of error for those numbers.
I'm not at all sure what it is I've been correct about lately, but count me out on this one. I just like Levin's hunch.

I can pipe in that when you've got a big enough chart it is just not going to justify and balance in all directions and little errors will echo.
This looks like it could be bigger than that but...

The big commodities in world trade are guns, drugs, oil, and coffee. I don't even think the coffee numbers are always believable.

Stealing of oil and oil products from the pipeline system is a large criminal business in Russia: not so long ago there was a whole illegal fleet of small primitive distilleries in the south of Russia - Chechnya, Ingushetia, and Dagestan. (Though after the war the majority of them were eliminated.)
But stealing is a constant. It can't alter the volume of export, at least not in millions of barrels.
Interesting, Oil CEO. This is BP data?
How could you tell, the Green? I've even adopted the scheme for my own work - with variations, of course.

Yes, Sorry, GZ. I didn't attribute anything, did I? Everything is BP numbers. From The last two - 2006(2005) and 2005(2004). I just went through it and verified.

The 4% was something I added. I looked at consumption the last four years (on right) and saw an average and a high (2.5%) and threw in 4% as a gift. More on that later. Should we call that liberal?

I've developed a preference for yearly historical numbers vs. revision-prone monthly's - although I do dabble a bit.

I try hard not to fall into the C+C trap. In the end I don't think it matters much.

This was not something I threw together. I worked on this for a long time. I'm going back to my history books, my family, and my DVDs. I particulary like "The Prize" and this British copy of 24 - MI5.

I've deliberately not commented on what this means for several reasons. Most of which I will probably never elaborate on. But for now suffice it to say I am glad you read this. Ask and you shall receive.

The Saudi line on capacity doesn't come in order. I got them at five, there, I think, it is more like 10 or 20. I put them there for effect. The top four are correct in order. I rarely do that. But I always post without footnotes. Hehe. Caught it bfore you did.
OC, thanks for this. Do you trust the Bloomberg numbers? What do you think is happening to the missing barrels? (into a Russian SPR?). Is Russia exporting less crude + products? (Bloomberg doesn't address products...)

[a minor point: the TOD image linked to your blog and not the .png file]

I trust nothing and nobody. Especially not numbers. This comes from years of being tortured in the Lyubyanka and various Chinese institutions. Reading Matthew Simmons hasn't helped. But I did stay in a Quality Inn Express last night.

My blog is a mess. I crucified myself on the post-and-see-your-right column stuff go down bottom - cross yesterday. I can fix it. I'm just too lazy. I wanna read some more TOD instead.

The "other charts" link on right hits my Flickr account. I'll update that when I think of it next. Thanks for reading.

I guess they call this blog-whoring. But I don't do ads. In my private life I have multi-millionaires asking my advice on promoting their websites. I never tell them. I think it is bad enough somebody gave them Blackberries and Nuclear weapons. WTF? I gotta save the world myself?

Tell Roger Connor to start his own blog. It's free. It's easy. :p
Roger's cool. His problem is me. I'll fix that. I'm wondering if you will join us. Don't answer. Just keep it in mind.
Most curious.
What? Which? Don't leave me hanging.
When I see intriguing and ambiguous data like this it definately catches my interest. I let it settle and digest awhile. The "missing barrels," whether from corruption, secret storage, poor data or flat out lies are absolutely non-trivial. They are enough to upset the overall world oil balance. In many ways, Russia's status as a producer and exporter can direct the short-term fate of world oil supplies. I always knew information is generally suspect, but this shows how bad it is (at minimum). The exports for 2006 show decline ala westexas, but the missing barrels make it impossible to decide what significance to give this.

I'm not sure what will emerge when I'm done digesting.

Good. You see what I see. I needed confirmation. Thanks. Cheated the noose again. How do I always do that?

[it's not you, dummy]

intriguing and ambiguous data

As a huge fan of popular culture, I cannot help but bring up one of my favorite TV shows. True it is not really TV, or a show. It's HBO, and high drama.

Eschylus would be proud. 'Deadwood' is truly entertaining. It is really fucking good. And when I say fucking good. I mean fucking good.

I can't decide which is better. Deadwood or MI5. These writers. They have my applause.

Back to the ambiguous part. I would hope you would apply the same logic to Westexas' oft repeated numbers. Intriguing is a good word.

Thanksgiving is my favorite day. Christmas used to be. My birthday before that. Thanksgiving stands the test of time. And I can actually change it. My family and my friends. We are hardcore.

Wait, wait... what are we talking about.
(next time I take 2nd look before commenting - promise!)

What you call "Missing barrels" corresponds neatly with "Product exports" which you have just 2 cells below. The "missing barrels" are simply the input for the refinaries for products that go for exports.

Well that was my point. There are no missing barrels. At least from these numbers. I'm psyched you took a second look. You  usually don't read my stuff. I'm really grateful. I mean that.

Take a third look. I'm not making this up.

The barrels are product not oil. But they are the same thing, yet nobody counts them that way.

The only question left - if you buy my (BP's)numbers - is why.


Oil CEO,

I don't really see where are you headed with those little games you're playing. If your goal was to test the critical thinking of the people here, I suggest you think again. This forum is already pretty much established and basically we (or at least I) assume that if somebody is posting something it does not contain little traps, tests or puzzles.

Now if you are willing to get down to us the mortals, and express in a normal and understandable language the problem that is bothering there is a slight chance that you may also find the correct answers. Some people call it discussion. Otherwise it is Garbage In Garbage Out you know.

What the missing barrels?

Production=Internal consumption + Crude export + Product export.

CEO - first of all its midday in Aberdeen, the sun is shining, and I am listening to Chopin - actualy my son playing Chopin.

I read some of your Thats it I'm out piece - so was that written by you or Roger?  At any rate at 4500 words - a bit long to read in a oner- so I copied it for future reference.

Now returning to your table here.  Would you like to explain what you see going on.  Bringing product exports into the equation - obviously crucial - are you saying these have been overlooked before?

And whats all the stuff with BP?  And 1347, 5374 5093 1702 etc appearing all over the table.  Sorry, I may be in moron mode here - some explanation please.

And you were asking questions about the very near future - not sure if those were dirceted at me or not.  I have three comments about our near future:

  1.  Our politicians will say anything on climate and energy to get re-elected.
  2.  Our lives will probably continue as before for a fair while yet - whilst poor folks and poor countries all over the world plunge into energy poverty
  3.  Our markets and energy supplies are IMO metastable - may be knocked over, with huge consequences, by the actions of one person?

Here's a great picture from a presentation by Chris Smith - contrails above the N Sea coalsecing to form high altitude cirus clouds that force global warming.


Now, all our politiciancs support expansion of all airports in the UK - even the guys who claim to be green - all in the interest of future HC based expansion of our economy.  I've tried to convey reasonable arguments to these people - no luck so far though.

OK - so  I hadn't read all the comments - you don't know what the numbers mean.

I spent about 6 hours yesterday tryig to reconcile BP UK oil production figures with those quoted by the DTI. I had just spent the whole of the previous day making a stacked oil production chart for UK off shore fields and was somewhat dismayed to see that the 1999 total was 2.5 million bpd and not 2.9 - which we all know was the peak.

Some of this is due to on-shore production.  The DTI were really helpful in getting to the bottom of this.  Apparently there are thousands of tons of liquids arrive onshore every day from the gas pipelines and these are not attibutable to any field.  These are recorded in the DTI's Brown Book but not on their web site.

Also, the DTI quote figures in M3 and tonnes - I always use the M3 on the basis that most of us here work in bbls - but of course in working with liquids mass is a much safer footing.  Converting from mass to volume requires knowledge of density - and this of course varies enormously depending on the liquid and temperature.  Using the DTI tonnes figures, and data from the Brown Book you get to the exact figures quoted by BP for oil in 1999.  It is much more difficult to reconcile the figures using the M3 data.

So what am I saying?  We have to be wary of getting too bogged down in detail when it is the big picture that counts.

Another effect would be relection of incoming solar back to outer space.  That would cause a significant thermal reduction in the areas covered offsetting the thermal blanket effect.

What is the relative strength of each of these effects?

As far as viewing while flying it is amazing how many of the jet trails...I mean roads of the sky, are everywhere.

My understanding is that the blanket effect outweighs the reflection effect - leading to forcing - not even taking into account the CO2.
reflectiom of sunlight to outer space
We often get superior looks from people when we tell them we burn anthracite coal. All they hear is the "coal" part. There's no central heat on the farm, so it's all wood and coal. I haven't researched it thoroughly, but I understand anthracite is relatively "clean" burning. I have to disavow (with the quotation marks) any association of the word "clean" with coal.

We go through at least 3 tons per year, closer to 5, but it heats part of the house and we use the range for all our cooking and hot water.

When coal gets too expensive for us to use, I don't know what we'll do except burn even more firewood.

You are correct about anthracite being the cleanest burning coal, but unfortunately it is also in the shortest supply. AFAIK USA is way past "peak anthracite", which is now being found mostly at the Apalachian mountains. In the West they are burning mostly lower-quality lignite.
If you look at the announced expansion of the Texas coal-burning capacity, it is to use local lignite and sub-bituminous coals, in so far as I can tell.

Here's what a strip mine in Bremond, Texas looks like from space:


The link does not show. Could it be this view?

Google Maps has a button "Link this page" on the upper right corner.


Thanks, Levin, for showing me how to do this.

Via your link, I believe the mine cutting face is a bit to the East.  Your photo looks like the tailings pile.  Back out and you can view the whole complex.

There are lots more - Google "Texas coal mines" and you get a list from the state.  I'll bet the Powder River Basin has some doozies.

Trivia question: Who is the world's largest distributor of bio-fuels? I saw a claim to this in a news release yesterday, and I am still trying to figure out if it is correct.
Probably Heineken.
Hello PaulusP,

Damn, now you made me thirsty for a Nectar of the Gods!

Don't forget to shoutout Peakoil when your mug reaches half-empty!

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

That stuff always tasted like it used rainwater from roof run off and then stored in a cistern.
Biofuel accounts for about 1% of the world transportation market.

factlet from World Watch Institute:

The World Bank reports that biofuel industries require about 100 times more workers per unit of energy produced than the fossil fuel industry. The ethanol industry is credited with providing more than 200,000 jobs in the United States and half a million direct jobs in Brazil.


What is a `distributor'?  A company I suppose, pardon my ignorance?  The biggest buyer and thus hopefully seller?  

By definition it will be the biggest company active in this area, probably Shell (but what do I know, that was just a guess from Europe..both publicity and some press articles stress their commitment, see link below about the Biopact)

The interesting thing would be to know what they buy from where and what happens next...


By definition it will be the biggest company active in this area, probably Shell (but what do I know, that was just a guess from Europe..both publicity and some press articles stress their commitment, see link below about the Biopact)

That's the one I was talking about. In the announcement yesterday, the statement was made: Shell has been involved in developing bio-fuels for more than 30 years, and believes it is the world's largest distributor of transport bio-fuels today.

It said that Shell sells 800 million gallons per year of biofuels, but I know that ADM makes about a billion gallons, so I would call them the largest distributor. But Vinod Khosla has argued that oil companies are doing nothing in the area of alternative energy. Shell is heavily involved here, and BP is certainly heavily involved in solar.

But it's like I have said before. If oil companies are involved, it is put down as an insincere or token effort. If they are not involved, then they are blocking progress. It's a lose-lose.

Exxon-Mobil funds the Global Warming (oops) Climate Change deniers industry.

Chevron-Texaco was the key to blowing up Jack #2 from a 1 inch article in the WSJ to headlines accross the country.

Texaco decided not to reinject produced water and just dump it into the local river in Ecuador.  Nigeria and Shell are unspeakable.

And some of us remember the GM-Standard Oil NJ-Firestone joint venture to destroy streetcars.

Oil company hands are not completely clean.

I think that the individual oil companies that do good things should be recognized and appreciated and "collective punishment/guilt by association" is unwarranted.  But many oil companies are the dregs of capitalism !

Best Hopes for Good Corporate Behavior


Oil company hands are not completely clean.

No doubt, and that's not my implication. I have no love lost for XOM. But there is a fairly large portion of the population who don't appreciate anything that oil companies do, and who don't seem to realize that if the oil companies didn't do what they do, they couldn't live out in the burbs and drive 40 miles to work. Not that I am defending that practice; I just note the irony.

BP also owns 20% of Green Mountain Energy, the largest distributor of wind power in Texas. Green Mountain was founded by Sam Wiley, whose grandpa the geologist Ray Wiley got rich in the East Texas field. Sam Wiley also owns Michael's stores.
  BP is a little schizophrenic. They also own the refinery at Texas City which was #1 in toxic waste release in the country, plus had two huge explosions in the last couple of years as well as their Alaskan pipeline fiasco.
Robert  Rapier wrote: But it's like I have said before. If oil companies are involved, it is put down as an insincere or token effort. If they are not involved, then they are blocking progress. It's a lose-lose.

People feel constrained and tied. They HAVE to pay for an essential commodity, the prices vary, change, it all costs, they don't understand how that happens, and blame the seller, the evil companies who make profits, while adhering to the capitalist or free market system themselves. When it concerns Barbie dolls, plastic widgets, mohair sweaters, baby veggies, waterskis, etc. they think it is cool.

If they have to shell (sic!) out for something they can't live without, in a climate of uncertainty, they become dependent and helpless, and thus resentful, angry;  those who sell them that stuff for a price they are obliged to pay and over which they have no control, are scoundrels to be blamed.  Whatever else they, the sellers, the oil companies, do is seen as frill and propaganda to make the bitter pill more palatable.  

Populist politicians making cheap hay  - "Stop price gouging!" - don't help.

Regarding Clean Coal. IGCC (Integrated gasification combined cycle) mentioned favorably here.
CEPS: http://www.ceps.be/wAbout.php?article_id=1
has just released a study on cost effectiveness of 10 different Global warming mitigation technologies in an European perspective.  
Full Study can be downloaded here.

From the perspective of a social cost-benefit analysis, five options
stand out as offering the best cost-benefit ratio when taking externalities
into account, at least those that can be quantified:

* Insulation is highly cost-effective from the end-user point of
view in reducing the emissions of GHGs and has some ancillary
benefits for energy security and air quality, although the overall
scale for achieving reductions is only medium if compared to
supply side options.
* Integrated gasification combined cycle (IGCC) power plants
have medium costs but contribute significantly to the (prob
able) long-term goal of applying carbon capture and storage
(CCS) in such and other coal-fired plants.
* Bio-fuels for transportation have medium to high implementation
costs and high benefits for energy security, but there may
be scale limitations.
* The cost of combined heat and power (CHP) is probably low
(with high uncertainty), while having both a large potential to
reduce emissions of GHGs, and medium ancillary energy supply
security and air pollution benefits.
* Nuclear power appears to be cost-effective and has significant
benefits regarding avoided air pollution and energy supply security.
Yet its suitability needs to be assessed based on political
acceptability and proliferation risks, and including all the costs,
such as the cost of the final storage of used fuel and the risk of

regards/ And1

Two takeaways from the Discover article:

Of 75 coal-fired plants planned for construction over the next decade, only nine are slated to be IGCC, largely because an IGCC plant costs about $1 billion, 15 to 20 percent more than a conventional one. "The biggest obstacle is simple economics," says Holdren. "There is no incentive for capturing carbon in the United States, India, or China.

Implementation of a CO2 emissions trading scheme would permit "dirty" producers to subsidize construction of IGCC plants and remove or reduce the 15 to 20% economic differential between IGCC and conventional plants.

Second thought is that CO2 recovery may provide backloads for LNG marine transport. LNG tankers ship cargo from Algeria to US Gulf Coast. After discharge they backload CO2 cargo for transport to ALgeria for CO2 sequestration.

I cannot comment on the technical feasibility of such a transport cycle (can an LNG tanker be configured to load and discharge CO2?) but from an economic perspective this transport cycle makes a great deal of sense. If feasible then we can see the possibility of China importing Australian liquid fuels and backloading CO2 for sequestration in those same fields.

This transport cycle would also have an impact on oil production as CO2 injection may result in increased rates of recovery from older wells. KSA sells oil and LNG to USA. USA sells CO2 back to KSA where is is used to assist in the production of additional oil.


It makes sense, and maybe it will help solve the problem, but for some reason the overall article left me feeling kind of depressed about our prospects.  With all those coal power plants going up, if they don't have CO2 sequestration built in, we're going to turn the world into a furnace.  I don't know which is going to hurt us more Peak Oil or Global Warming.  If Peak Oil results in burning more coal for energy then maybe it will be both.  
I don't know which is going to hurt us more Peak Oil or Global Warming.

IMO GW will hurt while PO will just itch. At some places both will bleed, but GW will be bleeding more and more subtly - watch the numbers of people that died because of malnutrition, increased deseases etc.

I've been thinking about this a lot...seems to me that the more I do this, the more I see the interrelation, especially with the nasty impact of refining tar sands, CTL, etc.  If we turn to good old coal because of peak oil and further degrade the quality of the world...
PO can be handled more or less well within our current arrangement. There are enough alternatives both on the demand and supply sides. Actually looking at the potential alternatives - we are awash in energy, compared to what we obtain from oil.

GW envolves massive externalities which will be eventually paid mostly by people which have little to do with causing the problem at the first place: the third world, our kids and grandkids etc. It is also much more subtle - I'm horrified by the fact that the CO2 released today takes 20 years to show its full impact on the climate. Now that we are still in business as usual world, if we implemented a crash program starting from tomorrow to stabilize emissions by 2040 it will be 2060 when this program will show any effect if at all.

GW can be dealt with too, if we wanted to.
It's a new technology called mirrors. We turn the Sahara into a mirror and live in the shade.
Remember, "the desert is a cold, cold land, where the sun shines hot"! The earth will then cool back down.
On a more practical issue, it should be mandated that all houses have white top roofs.  Imagine how much solar radiation would be reflected worldwide if they were. "Chortle"
but then you have to convince some national government to make it law before anyone does it.

It would probably work in Germany...

Just saw Inconvenient Truth last night and one of the things that struck me is that unmelted ice reflects 90% of solar energy away from  Earth; melted ice however absorbs 90% of solar energy, heating the oceans. So, any thing that reflects solar energy would seem like a good idea, right?

[Obviously better to halt/reduce CO2 emissions so the ice doesn't melt in the first place]

Actually the earth radiates 100% of the energy directed at it, The atmosphere and the surface reflection ratio controls radiation rate or sets the Earth's temperature. The radiation rate must equal the energy directed at it. The heavier the blanket the warmer the Earth.
Actually, the Earth radiates 104% of the incident energy.

The difference is from the nuclear decay of thorium and uranium within the Earth.

That's why we have earthquakes and volcanos.

Aw Shucks Here I thought all along it was the fluid state of the outer core that caused earthquakes and volcanoes.
Is the admonition "dig deeper" too punny?

One way to look at our planet is as dimly glowing ember of supernova ash.  That ash includes heavy,unstable nuclei created by the supernova explosion - read "Curve of Binding Energy" by McPhee.  Eventually the remaining unstable elements turn into lead (Pb) although the nucleus with the lowest binding energy per nucleon is iron.

The decay of the heavy, unstable isotopes creates internal heat that keeps the outer core fluid and moving as convection currents.  Those deep currents move continents that float as a thin crust on top. The currents move continents, raise mountains, and carve oceans.

That same nuclear heat also cooks trapped organic matter into natural gas and petroleum.

Nuclear forces shape our world and our universe.  Nuclear power plants (and geothermal) just tap into a bit of those huge forces.

I'm no sure how well it will work. For example we can cover Sahara with aluminium foil, but Sahara is just 1% of the Earth surface and has already pretty high albedo. Out of the box if it costs 1$/m3 to put the foil in, it will cost us $5 trillion to do it. The end effect I can not estimate but will be marginal.

I have a counter proposal - start irrigating the desert and slowly turning it into a forest during this century. It will cost us the same money and will also have a cooling and carbon-sequestering effect. From Wikipedia:


Studies by the Hadley Centre have investigated the relative (generally warming) effect of albedo change and (cooling) effect of carbon sequestration on planting forests. They found that new forests in tropical and midlatitude areas tended to cool; new forests in high latitudes (e.g. Siberia) were neutral or perhaps warming [1].
I had previously considered how to irrigate the desert, tough with limited water resource. However, using PV farms to provide solar power to desalinate seawater for irrigation purposes would work (at what cost?).  A crop like Jatropha which grows well in marginal soils could then be sown to sequester carbon and be a useful source of biodiesel...

Chance of this happening, probably less than nothing.

I know they use wind turbines to desalinate water in the Canary islands, which is pretty close to the sahara. The locals would probably divert all the water for drinking and cut down the trees for firewood though. So not really much chance of this happening.
Jatropha seed pods burn readily so no need to use the trees for firewood. However the water theft part would almost certainly happen
I've been thinking about this a lot...seems to me that the more I do this, the more I see the interrelation, especially with the nasty impact of refining tar sands, CTL, etc.
It never ceases to amaze me how few people see the interrelation between PO and GW.  There are many Peak Oilers who give GW little more than a passing mention (e.g. Robert Hirsch), but there are many more people who are very concerned about GW who don't see PO as a problem (e.g. George Monbiot) or worse, think PO will actually have a positive effect on GHG emissions!

Here's a GWer who thinks PO will be a good thing, and here's a POer who doesn't take GW or Kyoto seriously.

Why rely on a carbon tax, since the mere existence of a carbon tax will not guarantee the building of an IGCC plant. There is a bill introduced in 2005 in Congress, the Climate Stewardship Act (H.R. 759), that provides a scheme to implement a carbon allowance trading scheme by 2010.  Even that, however, may have no impact on coal plants as it does not specifically address coal plants. Besides, by 2010, how many plants will already be under construction, and also, if and when this act is passed, they will have to move the implementation date to at least 2011.  There may be other bills introduced or to be introduced in congress that have more ambitious goals. Anyone aware of these, please post here so I (we?) can get behind them.

In the mean time, new coal plants that don't sequester carbon should be banned or at least put in moratorium status until this technology can be implemented.

A 15 to 20% premium for IGCC seems like a bargain.  But what would be the premium, including sequestration minus the economic value of any carbon sold.

If CO2 is used to increase recovery rates, would that additional oil represent an additional co2 burden that, otherwise would not occur?

I agree that, regardless, we still need a carbon trading scheme within the context of a co2 cap with yearly reductions until we reach at least a 60% reduction in co2.

On a related note, I see politicians and others proposing things like 25% renewable energy by a certain date, say 2025. Well, that sounds cool, except the efficacy of that approach depends upon the mix of renewables, their EROEI,  their net emissions and the total quantity of energy consumption that the 25% relates to.  If energy consumption increases at a certain rate, then at some point the 25% renewable figure just means we are running in place.

When we see politicians propose setting a renewable energy percentage, we need to tell them that this needs to be done within the context of a decreasing cap. Otherwise, we will largely be engaging in a political exercise that does not necessarily do anything meaningful with respect to energy consumption or global warming.


A 20% cost adder for carbon sequestion seems too low.

There are three approaches to my knowledge, all energy and capital intensive.

One can start by removing all the nitrogen and reacting the coal in a near-pure oxygen environment.  That ain't cheap but has the advantage that all the combustion gases are carbon dioxide.

The second approach uses air but now has to deal with dilute carbon dioxide with 80% inert gases.  One has to separate the CO2 there.

The third mixes coal, water and air to make "producer gas" - carbon monoxide, hydrogen, and nitrogen.  The first two are exothermically reactive.  You still wind up with inert gas in the exhaust.

Someone with more specific expertise may correct or expand on this.

I see that our publication responding to CERA did not have the desired effect on the oil price.

It was work still worth doing, Dave.  Price of oil is more affected by politics, marketing, and psychology than geologic facts.


I suspect recent oil prices are a market anomaly due to the fact contracts expire today and traders either need to dispose of the contract or make arrangement for delivery.

If you are playing the commodities markets from home and are unable to make room for 50,000 bbls in the garage then you exit the contract on whatever terms you can arrange.

The result is a downward blip in prices.


And then of course there is sentiment about the direction of demand from the world's largest consumer:

"U.S. housing construction plunges in October
Associated Press

WASHINGTON -- Housing construction plunged to the lowest level in more than six years in October as the nation's once-booming housing market slowed further.

The Commerce Department reported on Friday that construction of new single-family homes and apartments dropped to an annual rate of 1.486 million units last month, down a sharp 14.6 per cent from the September level.

The decline, bigger than had been expected, was the largest percentage decline in 19 months and pushed total activity down to the lowest level since July 2000. ..."


The January 2007 contract had about 10 times the trading volume of the December contract today and closed up $0.29 at $58.86, over $3 more than the December contract, down $0.45 at $55.81. So the new front month contract is essentially $59, smack in the middle of the $57-$61 trading range I've been reading about lately. We'll see what happens next week.
I saw the January contract (NYMEX Ligth Crude)was up .40 to 58.97 today, Nov 07 up .81 to 66.36 and everything in 2008 and out up over 1.00 at around 67+. And the press talks about oil declining because of the current month contract. People often see only what they want to see.
I find it difficult to care about the price of oil on a day to day basis.  The market has problems understanding long term issues, which peak oil is.  The market is just like people, we understand the difficulties which face us in the present, it is a gift from our primative mind.  Like if you don't run that lion is going to get you.  But given an abstract issue like PO or GW, the urgency is just not there to make us react, and if people don't react, neither will markets.

This morning's St. Helena Independent reports:

On Tuesday of this week, the Panamanian owners of the oilrig P21 `Turtle', which stranded on Tristan da Cunha since June, were given authorisation to scuttle the rig in deep water outside Tristan. Environmental concerns have made it an important issue to remove the rig `sooner rather than later, said the Governor's Staff Officer, Amias Moores to the Independent yesterday afternoon. As the rig stranded in June, when the waters around Tristan are very cold, the crustaceans and other invertebrates on the legs and pontoons of the rig have, hopefully, not had the chance to breed but the rig needs to be removed before the waters warm up. Therefore, after extensive consultation, His Excellency the Governor has decided to give authorisation to scuttle the rig outside Tristan on a depth of 3,500 metres, where none of the animals attached to the rig can survive.

Best Hopes,


What's the big deal about the invertebrates on the rig?
Not native to the area.

The daily lease rate on this rig is around $300,000.


You on St. Helena?
Heh heh heh, if your Yat washes up in St. Helena, scuttle 'im before 'e can breed...
ASPO-USA recently estimated that Shell's in situ electric heater oil shale demo project would (if proven successful) require a dedicated 1,200 MW electrical generation plant to produce 100,000 bopd. If this power plant is a coal burner (and leaving aside all other input costs), how would this work out as far as Btus in (coal) and Btus out (oil)? Also, while Shell's test output of this shale oil recovery technique allegedly delivered a "high quality" and "light" product, since it is kerogen based, does the "oil" produced need to be hydrogenated?
1 bpd ~ 70 KW (on per joule basis).
100 000 bpd = 7000 MW

The input energy is 1200MW / 0.40 (coal PP efficienty) = 3000 MW gross thermal input from coal.

So we use 3 GW of coal to get 7 GW of oil or we have 133% energy gain. Still makes sense much more than ethanol or CTL. If we used CTL at 60% efficiency we would be getting 1.8 GW diesel out, or almost 4 times less energy.

In addition we can have wind or nuclear generate the electricity, elimitating the CO2 emissions for the energy inputs.

It takes a day to produce a 100,000 barrels. Is the input of 1200 mw correct for a whole day of input?  Or should this 1200 mw be required for just an hour of production?
I was assuming it is continuous 24/7 energy requirement.
This is consistent with the nature of the technology - the rock must be constantly heated even after oil has begun to flow, because of the thermal losses in the environment.
For those who want some details, and an independent confirmation of the calculation:  A "barrel" is 42 US gallons, or 159 L roughly.  Wikipedia gives the energy density of crude oil as 37 MJ/L.  So one barrel of oil has a chemical energy of 5880 MJ, or 5.88 GJ.  Multiply by 100 000 to get
588 000 GJ in 100 000 barrels of crude oil.  This is extracted each day, so that's 588 000 GJ per day.  There are 60*60*24 seconds per day, so that's 6.8 GJ per second, or 6.8 GW (close enough to 7000 MW to count as the same result).

If the 0.40 efficiency of coal generation is correct then it is indeed 3 GW worth of coal to generate 6.8 GW of crude oil.  We're not home free on the EROEI calculation yet, however, because the coal doesn't just magically appear at the power plant.  What's the overhead for the operation of the coal mines and transportation of the coal?  Keep in mind that the coal will more than likely be transported by train, trains powered by diesel-electric locomotives!

... or we could stop wasting so much energy, and build a lot of renewable generation...

Sorry, just to be pedantic, the way I worded "3 GW worth of coal" is wrong, it should be "3 GJ worth of coal to generate 6.8 GJ of crude oil (every second)".
There seem to be slight differences for the energy content of oil depending on the source and hence the slight difference in the end result. This calculator gives 6,119 MJ/barrel which was the basis for my result (6,119 MJ / 60*60*24 ~ 70,800 joule/sec = 70.8 KW).

As for the coal energy usage overhead, I think coal EROEI is estimated between 20 to 50, so we can safely ignore it for the time being. Besides if we examine the alternatives - coal will have to be mined and transported both to the CTL or ethanol plants, potentially with higher energy losses. Overall it looks like the technology is "good enough" for a green light, maybe a bit worse than tar sands but a lot better than most other alternatives.

There seem to be slight differences for the energy content of oil depending on the source

Yes, I've found quite a discrepancy between some sources on the question of the energy content of gasoline, for example.  I would think crude oil is even trickier, as there are many different grades.  Given the rather low precision of the back-of-the-envelope calculation here, however, it doesn't make a big difference.

It's interesting to hear your EROEI figure for coal, it's much higher than I would have guessed if it includes transportation.  I can't find any figures on the web that address this, but as a very very extremely rough back-of-the-envelope calculation assume 100 tonnes of coal per car and a 100-car train - that's 10,000 tonnes of coal.  Assume three 4000 horsepower locomotives, and let's suppose for sake of argument they need to run continuously at 75% power, ergo total power 9000 horsepower.  1 hp is 746 W, so 9000 hp is 6.7 MW.  Ah, but the thermal efficiency of a diesel is about 1/3, so in terms of the energy in the diesel fuel that's about 20 MW.  Suppose the train travels for 100K seconds (a little over a day), that's a total of 2,000 GJ of energy to transport 10,000 tonnes of coal.

The energy density of coal is given as 24 MJ/kg.  1 tonne is 1000 kg, so that's 24 GJ/tonne.  Ergo 10,000 tonnes would be 240,000 GJ.  That's 120 times as much as the energy lost burning the diesel fuel.

I hope I got that right (to within an order of magnitude)... I guess coal trains are actually pretty efficient.  Still, 2000 GJ of energy is a lot!  It's the same as the entire output from a large nuclear reactor for half an hour!

Somewhat amusingly the reference I found for 3 4000 hp locomotives pulling a 100-car coal train was:


Less amusingly, the use of a cellphone for a personal call was a likely cause of this collision.

If we suppose the energy to mine, clean and transport the coal to the points of loading/unloading from the rail carts takes another 2000 GJ and we are still left with 60:1 EROEI. Great EROEI makes sense, you can not run a civilisation on a low EROEI energy source.

Probably for underground mining the EROEI will be lower but will also be definately above the teens.

It seems to me that most loaded coal trains go downhill.

Powder River Basin is high plains, about 3200 ft elevation.

Most of the demand is lower - Chicago is 600 ft for example.

Likewise, the Appalachian Mountain coal province is higher than power plants in New York or Virginia.

The energy to move coal uphill must be a hugh factor.

Nice that a lot of it goes down river on barges.  That's a factor in Florida on the Intracoastal Waterway. Ocean transport is a growing trade too and water is the lowest energy transport.

Here is what Walter Younquist has to say about Shale oil.  Hydrogen does have to be added.


Shale Oil

The production of oil from oil shale has been attempted at various times for nearly 100 years. So far, no venture has proved successful. One problem is that there is no oil in oil shale. It is a material called kerogen. The shale has to be mined, transported, heated to about 900 degrees F, and have hydrogen added to the kerogen to make it flow. The shale pops like popcorn when heated so the resulting volume of shale after the kerogen is taken out is larger than when it was first mined. The disposal problem is large. Net energy recovery would be low at best. It also takes several barrels of water to produce one barrel of oil. The largest shale oil deposits in the world are in the Colorado Plateau, a markedly water poor region. So far shale oil is, as the saying goes: "The fuel of the future and always will be." Fleay (1995) states: "Shale oil is like a mirage that retreats as it is approached." Shale oil will not replace oil.

One problem is that there is no oil in oil shale.

This can be viewed either as a problem, or as a potential a solution to peak oil. There is also no oil in oil nimbostratus clouds; for that matter there is no kerogen either and that means oil nimbostratus does not share the disposal problems associated with oil shale. Once the oil has been extracted from the oil nimbostratus clouds then the by-products simply float away on the wind.

In another recent thread there was an invitation to attend an oil shale investors conference in Colorado. I think we should put together a proposal, attend, and seek investors for oil nimbostratus recovery. The sky is the limit!!

It wasn't oil shale.
"Shale oil will not replace oil."

....but snake oil always does...

Take a look at: Israel sees shale replacing oil
By LEAH KRAUSS    http://www.upi.com/Energy/view.php?StoryID=20061107-070924-5161r

Is this real- that this "Hom Tov" process generates oil from poor oil shale  at $17 per barrel???  Seems pie in the sky, but I have no idea.

Re the Discovery article.

I heard, And I beleive it is correct that (like the picture of the rail cars loaded with coal)  a 1 mile long coal train will power a powerplant for only 8 hours worth of energy production.


A large scale program for replacing coal with nuclear power plants will also have the positive effect of relieving our overloaded rail infrastructure from the coal burden.

This will contribute a great deal to the Alan's plan for moving goods transportation to rail. Which on the other hand will save a lot of oil and will greatly reduce traffic and road wear which will additionaly save a lot of oil etc.etc.

The positive effects are so huge that if we had a sane leadership we'd start doing it starting from tomorrow.

The routes taken by coal overlap marginally with that for trucking.

Some rail routes are 90+% coal, others none.  I was told that we had the world's busiest railroad bridge in New Orleans (massive, the replacement cost for it alone would rival the cost of decent levees for those that think we should just move upstream).  I have never seen a coal car here.

Montana/Wyoming south to Texas is VERY busy with coal.  A lot east from MO/Wy as well.  Some movement out of Kentucky, West VA, Illinois but not on the same scale.

Trucking flows are much more diverse but tend to flow to and from the major ports and cross-country (E-W).

Today, the Panama Canal is maxed out and Asian (China #1) trade to the East is flowing through Los Angeles/Long Beach.

The railroads are expanding capacity. One (BN&SF ?) is 96% double tracked from LA to Chicago and working on the last 4%.  Union Pacific is double tracking from LA to El Paso (3 single tracks from there).  Recent major improvement in a joint RR effort outside Kansas City.  A 9000' double track RR bridge was built to grade seperate E-W tracks from N-S tracks, eliminating a central bottleneck but not cheap.  Better signals, improved grades, etc.

All good, especially when the Panama Canal expansion comes on-line !

Lowest cost & energy for Asian goods bound for the MidWest (Northeast is uncertain) is to bypass LA/LB for New Orleans.  Six Class I railroads with spare capacity in every direction.  Barges north, east & west.  Northeast US bound goods may be better shipped to the East Coast or to New Orleans.

This will create (IMHO) excess railroad capacity coming out of LA all the way to the Mississippi River.  Faster, more efficient rail shipping west of the Ms River.

The Panama Canal will help create more space capacity for former truck cargoes than will reducing coal shipments IMHO.  A recession will also free up capacity and help a modal shift from truck to rail.  But we need to use less coal anyway !

Best Hopes,


The routes taken by coal overlap marginally with that for trucking.

I think that for the timeframe we are talking about this will certainly change. History is showing that businesses follow infrastructure as well as vice versa. New links will emerge for new routes which we can not even envision now. Of course the infrastructure that serves specifically coal mines will become underutilised, but the lost capital will be far outweighted by the benefits.

It all depends on the point that trucking becomes so much more expensive compared to rail that the government will be forced to take the appropriate steps. Currently a great deal of the trucking expenses are externalised - road wear, traffic, pollution etc. If we simply calculated them in the price we are paying as a society, this point of time would have been decades ago. But obviously it comes again to trading the long term for the short term - as we are mostly tending to do in this country.

Most current railroad coal hopper cars carry between 100 and 120 tons with an average length of 56 feet. A mile long coal train would have about 85 such cars (plus engines).

The plant in the article burns 100 tons an hour to generate 250 MW, so a mile long train would provide about 85 hours of electricity production.

A 1,400 MW generating plant near here burns 550 tons an hour and would burn up a mile-long train load of coal in a bit over 15 hours.

Compare that to a 4600-acre solar thermal plant that produces 1,400 MW (using the land/power ratio demonstrated by the SEGS plant in Barstow, CA). How many acres of land are mined to obtain 85,000 tons of coal, every 15 hours?
I wanted to post this Econ graph on Housing start index and some trend lines (50 & 200 MAVG) superimposed over it.  It's startling to look at.

Basically since 1991 until 2006 permits have been increasing every single year until 1/06.  They are CRASHING!  We are now at the same level as roughly 1996/7.  We have retraced almost 10 years in 10 months!


Not looking too good.  
I read in a Ducth newspaper an article that the entire world is closely watching the slowdown (if that's the correct word) of the US housing market, as it is being widely recognized as a danger to the world economy as a whole.

I once wrote a mail to JHK in which I defended the point of view that we in Europe depend not only on FF directly, but we also depend on the US' dependence of FF for our economic well-being.

On the contrary, this is good news. We must stop growing!
Always a silver lining.
maybe in the long run, but this is the don of an enormous economic slowdown which is going to wrench to world..
Yes - precisely what "ending growth" means. It can happen now, or it can happen later. Might as well start planning for it on the personnal level now.

Does this mean I might lose my job? Damn sure does. My job is especially vulnerable to economic slow downs. But, its going to happen eventually anyway.

To my mind the catastrophe is if we somehow manage to mitigate the impact of PO in the short term. Another couple generations of our current direction and there won't be anything worth saving.

Well said!  

Peakniks and environmentalists need to take sustainability models to their logical conclusions and be prepared for the consequences.  Anything else is myopic.  

A lot of growth is just nonsense, though, so not all of it really requires more resources.  I don't think we need to stop growing, what we need to do is stop using more energy.  If we can become more energy efficient and move to alternatives I see no reason why we can't keep "growing" our economy.  The problem is we need to address our energy dependence and also population growth (especially in Africa and other poor areas which really cannot afford the extra population).  

I guess maybe it depends on what we're referring to as growth.  As I stated before the capitalistic idea of growth is largely crap, but at the same time we can have growth in quality of life.  I don't think that's an unreasonable goal for the future.  

Yes, indeed...and if you have the ability to go back further on your Bloomberg you will find that typical boom-bust housing construction cycles last 6-7 years, trough to trough. But the last cycle started in 1991 and is only now turning down.

It still has alot more room to go, however: take a look at housing unit completions and units still under construction. They are still very near all time records, i.e. supply is still coming in and adds to inventory at a time when sales are also going down. Care to guess what will happen to prices?

I suspect real estate will be the dotcom crash of this era.

D...D....De....Def....Deflation....we should all hope the helicopter parks over our heads before dropping the paper.
The tinfoil disperses it. Little-known fact.
Good News for us in New Orleans as the ramp up to repair and rebuild is just starting.

Lower costs for materials are just around the corner (despite Chinese demand).  Unemployed contruction workers will begin to filter in (as housing for them becomes available).

At lot of rebuilding is cash basis, so interest rates are not a concern for that fraction.

Best Hopes,


Is there money to finance the rebuilding? Insurance?
I wish I had the prices. A few blocks from me there was an absolute auction yesterday on 5 large townhouses, complete for a year and still unsold. On the same block, new construction underway..
This guy is a great read.   He has been spot on.

Housing Free Fall Turning into Meltdown...2007 Recession Ahead

And even at these low levels of permits and housing starts the housing sector is nowhere near its bottom. In previous housing recessions, housing start fells as much as 40% to 50% from their peak; so, with starts now being only 27% down, the housing bust has still a very long and ugly way downward to go. And lower permits today mean lower housing starts ahead, and lower starts mean lower construction and lower construction means much lower construction jobs; expect over 800K jobs to be lost in housing in the next year.

So, the housing recession is now becoming a construction recession; and the construction recession is now turning into a clear auto and manufacturing recession; and the manufacturing recession will soon turn into a retail recession as squeezed households - facing falling home prices and rising mortgage servicing costs - sharply contract their rate of consumption. As I have predicted since July a recession in 2007 (as early as Q1 or at the latest by Q2) is now highly likely to occur. Expect the Fed to slash the Fed Funds rate as early as January and expect this Fed easing to fail to prevent the 2007 recession as the glut homes, autos, consumer durables will make the demand for these totally insensitive to changes in interest rates. The Fed easing in 2001 failed to prevent the 2001 recession and the Fed easing in 2007 will also fail to prevent the 2007 recession.  Also expect this sucker rally in equity to continue for a while into the end of 2006 as expectations of a Fed easing will lead to the delusional hope that such easing will prevent the 2007 recession. But once the signals of a recession are clear to all by the beginning of 2007 expect, as in previous US recessions, for the stock market to experience a sharp contraction; as detailed in my research work, in the typical US recession the S&P500 has fallen by an average 28%.  


Yep, I enjoy his stuff too. IF he is right (and I think he almost certainly will be), then I reckon you will see oil fall sub $50 as demand takes a whack.

The way to look at it though is this would be the first of the multiple oil induced recessions. I have no doubt the Fed will respond by lowering rates (they should probably have moved already, but they are constrained by inflationary fears, and are too busy trying to convince punters that a problem doesnt exist) and this may lessen the impact towards the end of 2007 (there is though of course the possibility that the debt mountain in the US causes a BIG recession, not just a mild one). If the Feds medicine did work you might see economic recovery and oil demnd grow again in 2008 till once again the buffers are hit in terms of supply, and so on.........

I feel we really ought to be pushing the message that the incipient recession now is the first of the peak oil age...

Fed easing doesn't prevent recessions, but I am not sure that's the point.  I think a big part of it is to try to make the recessions less damaging.  I am not sure the next recession won't be bad, however, as we really have run up a lot of debt in the past few years.  
Re: carbon sequestration.

I have often thought about the idea of pumping the CO2 deep under the sea bed. AFAIK liquified CO2 is heavier than water so it should be staying there. The temperature is low and the pressure high so I suppose (and here I'm asking for an opinion) that the CO2 will be stranded there much in the way the gas hydrates are. Eventually with time CO2 will slowly dissolve in the water, slightly incresing its acidity, but probably this will take ages and the deep ocean is a magnitude larger in volume then surface waters.

All we are going to need is infrastructure of pipelines to transport the CO2 to the on shore pumping stations.

I believe that scientists are already warning that the ocean will become so acidic because of co2 that the shells for shellfish will start disintegrating. It seems like this ocean sequestration idea would just make things worse.  Whether it should be done, anyway, depends upon the impact on the entire food chain, including man, and what are the benefits and risks of the alternatives.

What can be done starting right now assuming that we place a moratorium on new coal plants that will not have sequestration?

It is more dense at ocean depths greater than 3000m. There is some recent published work on this:

Permanent carbon dioxide storage in deep-sea sediments
Kurt Zenz House, Daniel P. Schrag, Charles F. Harvey, and Klaus S. Lackner
Proceedings of the National Academy of Scientists
PNAS 2006;103;12291-12295

Stabilizing the concentration of atmospheric CO2 may require
storing enormous quantities of captured anthropogenic CO2 in
near-permanent geologic reservoirs. Because of the subsurface
temperature profile of terrestrial storage sites, CO2 stored in these
reservoirs is buoyant. As a result, a portion of the injected CO2 can
escape if the reservoir is not appropriately sealed. We show that
injecting CO2 into deep-sea sediments <3,000-m water depth and
a few hundred meters of sediment provides permanent geologic
storage even with large geomechanical perturbations. At the high
pressures and low temperatures common in deep-sea sediments,
CO2 resides in its liquid phase and can be denser than the overlying
pore fluid, causing the injected CO2 to be gravitationally stable.
Additionally, CO2 hydrate formation will impede the flow of CO2(l)
and serve as a second cap on the system. The evolution of the CO2
plume is described qualitatively from the injection to the formation
of CO2 hydrates and finally to the dilution of the CO2(aq) solution
by diffusion. If calcareous sediments are chosen, then the dissolution
of carbonate host rock by the CO2(aq) solution will slightly
increase porosity, which may cause large increases in permeability.
Karst formation, however, is unlikely because total dissolution is
limited to only a few percent of the rock volume. The total CO2
storage capacity within the 200-mile economic zone of the U.S.
coastline is enormous, capable of storing thousands of years of
current U.S. CO2 emissions.
It looks like the idea is even more feasible than the geological storage. I think it is worthed to go for a small scale experimental storage and see if it meets the expectation.
Every form of CO2 disposal that has been raised seems to be full of problems. That includes the deep oceans, forests newly planted, forests not cut down, flue gas algae, iron fertilised algae, charcoal added to soil, impermeable rocks and chemically bonded rocks. Maybe we should just cut back CO2 emissions to what the environment can absorb naturally.
Maybe we should just cut back CO2 emissions to what the environment can absorb naturally.

I don't see that possibly happening, absent a nuclear war. We must find another way within our current arrangement.

Just out of curiosity what was the problem with adding charcoal to soil?
No problem with tera preta but the scale is miniscule. I've been powdering charcoal and mixing it in watering cans. Something like that could be scaled up with second generation biofuels. The real problem is coal whereby carbon that was safely held underground is turned into atmospheric gas. Maybe there is no practical answer to that except cutting back.
Because the quote above suggests placing CO2 into ocean sediments, not the deep ocean itself, the suggestion quoted above is geological storage.

The idea of using deep ocean water to dispose of CO2 has been around for at least 15 years but nobody has got past the pilot project stage. The probable reasons can be found in this quote from Scott Doney, from Woods Hole Oceanographic Institution.

Direct injection of CO2 into the deep-ocean accelerates a natural process whereby much of the fossil fuel CO2 will eventually end up in the ocean on thousand year time-scales. There will be, undoubtedly, dramatic local impacts near an injection site; some studies on acute exposure to very high CO2 levels have been conducted, but not the longer effects of chronic exposure. A more difficult issue is that even with injection down several thousand meters into the ocean, some of that CO2 will leak back to the atmosphere on timescales relevant to policy makers (decades to a couple of hundred years). Because of that fact and some logistical issues most sequestration efforts are currently focused on geological sequestration (i.e., into used oil and gas fields).

Several accessible presentations on ocean acidification are linked here at the World Ocean Observatory site. A good primer can be found over at Real Climate.

Scientists want more ethanol research

DES MOINES, Iowa - To ensure there's enough corn to fuel humans as well as vehicles, scientists are urging more research into boosting corn yields and improving ethanol production.

Many key issues related to expanding the nation's ethanol industry aren't being studied under current government programs, said Kenneth G. Cassman, director of the Nebraska Center for Energy Sciences at the University of Nebraska-Lincoln.

"It's the core issue to ensuring that we don't come up short in food supply, and don't have high consumer prices, and can still maintain expansion of the ethanol industry," he said.

Should this be read as GMO corn? A Faustian bargain, no doubt.
I said it earlier and will repeat it here.

Unless there are plenty of petrochemicals available at a reasonable cost to produce fertilizers, pesticides, insecticides,mildecides and other sprays to protect against various virus borne diseases, such as Asian Soybean Rust,insects such as corn borer, corn ear worm,army worms,etc there will be almost NO crops to speak of in the domestic market view.

Its going to have to be organic all the way , like it or not in the future. Break out those hoes boys.

I think that there is enough oil and NG for production of critical petrochemical for a long time. Also you can use natural sources as feed stock. Methane and syn-gas are just fine as feed-stocks. Coal can work also.

We will go without plastic toys first.

Now I do think organic practices can be used to lessen the impact on the land. But I think we are stuck with monocroping for a long time and we can't afford to have the blights of the past so we will still use significant amounts of insecticides and fertilizers. But they may be a lot more expensive than they are today.

Organic farming today is very dependent on the fact that most of the insects and plant diseases are controlled in the surrounding area by using insecticides and sprays. I don't the todays organic farmers have faced the blights of the past and I'm pretty sure they don't have the right strains to do real organic farming.

Finally although mono-cropping gives the highest yields if we want to have true sustainable organic farming without massive losses to blights and insects we should focus on mixed crops.

If your interested you should read this.


It explains the difference between natural farming and so called organic farming.

The important concept is that post peak oil we need to take a quite different path from what we have taken today. One of the most important principals of what I call the centurion view point is identifying with certainty long term goals for society. For agriculture moving to natural farming makes sense so you identify the goal then work your way back to the solution. In my opinion jumping to organic farming makes no sense. You should first changed the farming methods then remove the prop of chemical support. Organic mono-cropping is a dead end.

Especially, since he knows that 97% of his state's corn crop is headed towards ethanol production (plants already built+under construction+have been given permits).  Implications are horrendous and this whole situation is headed for a big train wreck.  I hope no one here likes meat or dairy products, exporting grain, or having CRP land.  I could go on, but I'll leave it at that.
Just found this although it's 2 yrs old.  Pardon if you already had it but I found it detailed and interesting enough to take 10 mins to figure out how to read it.


For that chart and others, go here:

Especially note the optimistic future of the hydrogen vehicle energy economy of 2050. All is well.

That's a great site for big picture on energy flows. Unfortunately LLNL ceased their report after the 2002 data. Their data source was the Annual Energy Review available at http://www.eia.doe.gov/emeu/aer/ which has produced some flow charts of their own. However none of these are as useful and all encompassing as LLNL's. It would be interesting to get a thread going around the multitude of observations available from these flowcharts.
The head of the Federal Trade Commission predicted Thursday that Congress would pass a gasoline price-gouging law despite her warnings that the country doesn't need one and it might cause fuel shortages.

I think this is likely with the new political climate, but this is very short-sighted. What they don't seem to realize is that if prices are frozen during a Katrina-like crisis, then rationing is the only other option. I think most people would prefer to pay more for their gas (rationing by price) than for everyone to be told they are only getting 75% of the gas they would like.

In fact, the same story warns of this:

Testifying in May before the Senate Commerce Committee, Majoras said retailers might let the gas run out rather than raise prices and risk facing prosecution. She noted the price spikes after Hurricane Katrina last year resulted in more fuel getting to market.

Gouge away!!  Gouging is the environment's friend.
Depends what kind of crisis, though. If one looks to be prolonged, as in a major war, people will overwhelmingly prefer rationing.
I would prefer rationing.  Especially if I could sell my unused ration coupons.  :)
Yes, "cap and trade"!
Several years ago the Canadian province of Prince Edward Island implemented a similar scheme to set fixed gas prices for specific periods in an attempt to prevent price "gouging."

The outcome was as described in the RR blockquote. Gas prices did not rise; there was also no gas available anywhere on the island and no plans to import any.

The legislation was repealed.


And I'm sure that if constraints on gasoline price incresases should become law, Big Oil wouldn't mind seeing some serious shortages sort of 'just happen', so as to teach the consumer a good lesson: the lesson being that the Little People shouldn't interfere with Big Oil doing its thing.

In all fairness to Big Oil, though, the Democrats are obviously pandering to the high level of antipathy among the general public toward Big Oil and will milk this issue for all it's worth.  

 There appears to be no sane middle ground: the Republicans are in bed with Big Oil; the Democrats want to paint Big Oil as the Prince of Darkness.

The question that remains to be answered is this: In the long run, will Big Oil be part of the solution or part of the problem? For me, the answer is by no means obvious.

 If Big oil continues to insist that we really don't have an imminent and serious supply problem and that global warming is just a lot of nonsense stirred up by a bunch of granola-crunching nervous-nellies, then they will be part of the problem. But if they start investing their enormous capital in alternative energy (excluding ethanol), then they could be part of the solution.  However, my gut feel tells me that pressure from Wall Street will force them to continue the status quo as long as they possibly can.

The only thing I can be certain of is that it is a very fluid situation.


Another use of Big Oil's enormous capital would be to return it to the shareholders in the form of dividends and share repurchases. This is in fact what ExxonMobil and perhaps others have been doing with part of their recent windfalls. It is not the worst thing to have happen (it's better than investing in corn ethanol, for example). The returned capital will be reinvested to its best use in the judgment of its owners, and some of it will presumably make its way to alternative energy firms. Nothing wrong with that.

ExxonMobil, by the way, has come in for a lot of criticism for doing this. If I recall correctly, they were admonished at their last congressional grilling to invest their windfall profits in new projects to help increase the fuel supply. Analysts and pundits are also noting that they are returning the money to shareholders because they can't find enough worthwhile projects to fund (e.g. High Profits, Sluggish Investments, by Floyd Norris, New York Times, Feb. 3, 2006).

I am hearing rumors that a Chicago Hedge Fund is tanking today.  Just thought you guys would want to be the first to know.
Any details at all? I am very interested.
Dollar falls after talk of hedge fund trouble

NEW YORK (MarketWatch) -- The dollar fell against the euro and yen in late morning trade Friday on market talk that a major hedge fund is in trouble.

"Rumors of a major U.S. hedge fund collapse appear to be behind the dollar's latest dip," said Brian Dolan, director of research at Forex.com, a division of Gain Capital.

Rumour on the street is Citadel, but nothing but rumour at the moment
When I see posts like this it makes me wonder if the house of cards has begun to fall. Didn't the Stock Collapse in the 20's take several months or years to play out?
New info says it's all hype but nothing is known at this point.  The info I have is that and a further unwinding of Amaranth related book holdings is responsible for most of the volatility in the commodities market.
Ya...anyone hedged on energy stocks is probably taking big punches these days.
I keep reading about Feb 07 as the month to watch for.  I have been in that mode for months now, so the Keynes saying about the market remainig irrational longer than you staying solvent, holds true.
Perhaps, but I'm burned out on predictions.  All I know is my company is cutting everything back big time in 2007.
re "Rate of Conversion" article: I found this most helpful in understanding in plain and simple terms why all the attention given to reserves is a red herring. Differentiating between stocks and flows is pretty basic but it is easy to get diverted.
Hello TODers,

I have posted before on how I believe 60-75% of the US pop. needs to move to relocalized permaculture.  The Heinberg topthread link by Leanan adds fuel to the fire, but 50 million farmers is just a early postPeak start, IMO.

I have also posted earlier how concerned I am with much of our vital, but basic products being manufactured in China, or someplace else, outside the US.  The invention of the precision ball-bearing race, spoked wheel, and inflatable tire is arguably the key invention of techno-man.  Useful and essential postPeak tools such as the bicycle, wheelbarrow, and small wagons will be highly dependent upon reliable supplies of these rolling devices.

I am all in favor of TODer AlanfromBigEasy's RRs+ mass-trans ideas, please don't misunderstand me.  The electrified steel wheel on steel rails should be deemed essential.  This infrastructure spiderweb should form the 'urban spine and cross-country limbs' of postPeak transport design, along with barge canals and shipping where geographically applicable.

But the 'heart & abdominal core' of the postPeak Age will be defined by how well we adapt our localized 'ribcage and capillary flow' infrastructure spiderweb; the short distance resource flow from permaculture areas back into the relocalized urban density.

Manual permaculture labor can be much less arduous if maximal efforts are made to reduce carrying items by hand or on our backs.  We have all seen photos of the poor African woman balancing a heavy load on her head, or the Chinese porter struggling under a long pole with suspended cargoes on each side.  This is a highly inefficient, early disabling, possibly a killing design that should be avoided at all costs!

The initial capillary crop harvesting into wheelbarrows, small wagons [possibly pulled by future batt-tractors], or into bicycle baskets should be the much preferred alternative, yet I fear existing stocks of these items are vastly insufficient if a sudden energy crunch occurs.

If we bomb Iran, for example, I could easily see China and others immediately stopping the export of ball-bearings, spoked wheels, and bicycle and wheelbarrow tires as a beginning strategic military goal.  The asymmetric tactic of shutting down our capillary logistics could prove fatal, if we are simultaneously reliant upon only our SPR, and we cannot ramp up national tooling in time.

Zimbabwe is a good example: bicycles, or more accurately, the lack of them, is one of the leading inflationary items.  I would imagine a good wheelbarrow, or a sturdy two-wheeled hand-truck is a highly prized Zimbabwean item, too.  

Remember, the German Weimar Republic story of where a wheelbarrow of nearly worthless money was dumped on the street, and the wheelbarrow was stolen instead?  100 lbs on your back, or the relative ease of pushing a wheelbarrow, hand-truck, or pedaling a basket-filled bicycle--you will quickly ante up, if you can afford it, or even find one for sale!

The efficiency and desireabilty to shift the loads from our arms and backs to wheeled-tools must not be overlooked at the capillary level of the fields and gardens where most of us will earn our future living.  Tremendous human and humane energy savings are possible by insuring sufficient human-powered wheeled devices are plentiful.  Now we shift to the ribs of postPeak design.

Review my earlier posting on light PHEVs and rail-bicycles: actually riding on the steel-pipelined infrastructure ribs back into the resource transfer point of Alan's RR + mass-trans spinal column that is key to the relocalized urban core.  Again, riding the web as soon as possible with steel wheels on steel rails achieves the maximum energy savings over land.

I hope this brief essay paints a clearer picture of what I am imagining.  Rubber tires for dirt or mud capillary level, then transfered to the above-ground steel-wheel on pipelined ribs every 1/8th of a mile or so, then, if required, ultimate transfer to the RR + mass-trans spine or canal systems.

Some have dismissed my idea as impractical because of the required enhanced steel supports to hold the ribs above ground securely.  I counter by saying these extra supports could also be the base for holding millions of solar panels above the ribs to generate electricity & help shield web-riders from inclement weather.

Finally, an empty bicycle or wheelbarrow is light and small enough so that one or two people can easily lift it over the ribs, yet still go under the solar panels to quickly traverse to the gardens and farms on the other side of the tracks.

Hopefully this brief essay paints a clearer picture in everybody's mind.  A bunch of posted Cad/Cam photos would really help, but sadly, I am not a computer guru.  But I hope this synthesis of AlanfromBigEasy's ideas, and those TODers advocating PHEVS and bicycles can see the vast energy savings of uniform streamlining of our spiderweb infrastructure and relocalized permaculture.  Thx you for any pro & con elaboration on the topic of Can Humans Be Smarter than Spiders?.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

I hope many of you read this recent article...

Fifty Million Farmers
by Richard Heinberg


Farmer jmy in Ca

Hello Jmygann,

Yes, I did read it avidly.  No dispute on my part that relocalized permaculture is the postPeak way to go as Kunstler, Heinberg, and countless others have long advocated.

My post [just above yours] is an idealized application of how to smoothly, easily, and with minimal energetic effort, in all forms, to systematically address the primary resource flow from garden to consumer.  What I am trying to do is combine the best ideas of TODer AlanfromBigEasy's RRs + Mass-Trans spinal column into a paradigm shifting synthesis-form suitable for the low density farm & permaculture capillaries.

Obviously, we will have much less detritus energy in the future, and any biosolar powerup attained will be electrically-optimized for higher civilizational tasks such as hospital and school illumination, the making of critical tools and electric motors, etc.  The incredible postPeak value of conserving water and enriching topsoil will be the primary drivers of my surmised 60-75% permaculture labor.

But I fear this needed change will not happen in time, but I sure hope I am wrong.  For example: does America have 50-100 million wheelbarrows ready to go before we go postPeak vs starving to death?  Do we have the resources in place to make bicycles, ball-bearings, and tires to sustain us for the next two hundred years?

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Is there a sustainable Model in the USA ?

Anything close ??

What is the FFA ?

Hello Jmygann,

Thxs for responding.  FFA?--Future Farmers of America?--Hope this link helps.

I believe some permaculture orgs claim true 'circle of life' sustainability--check out the references in Heinberg's article.  I wish I could post more links, but recall that I am a marooned city-soul in an Asphalt Wonderland--I am amazed I haven't killed my single pink grapefruit tree yet, LOL!

I will leave it to the experts to advise you as to the best non-detritus permaculture techniques.  I am trying to focus my study on the most efficient way to move the harvested goods inward, the re-supplying the essential recycled nutrients outward from the city-heart to the outlying capillaries.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

  I've always done a little vegetable gardening, and you would be astounded at how much food a person can produce with a little lot and a bunch of labor. Some stuff-like home grown tomatoes and yellow squash- tastes better than anything a person can buy in a grocery  and store. I live in Galveston,Texas, and we can raise citrus, papaya, avocados and mangos, but its not cold enough for most vareties of apples. Lots of pecans, though.
   I'm thinking that when peak oil cuts way down on vehicular traffic we can easily convert half of the streets and the driveways to food production by building raised beds and planter boxes. Roofs canbe covered in planter boxes, although check the weight support.  a plastic garbage can under the gutter downspout is a cheap, effective cistern.
Chain link fences are good trellises for tomatos and climbing spinach.
   I've got a friend in Houston-the folk artist known as the Flower Man-who raises sweet potatos in his flower beds, also peanuts and his trees are an orange (valencia),a tangerine, several banana trees, and 4 papayas . My next door neighbor has two 30 ft advocados and big fig tree. Our civic club also has a community garden with large raised beds available for members that are so inclined. Places like that are good areas to get a little gardening experience.  
  There's a kind of sacred, spiritual experience about raising your own food, catching your fish and killing and preparing game. We've gotten so far away from this that many people have no idea where to start. This spring plant an edible tree in your yard and raise some tomatos in a flower pot. Check it out!
Hello Oilmanbob,

Thxs for responding. Good for you and your community!  I sent a bunch of emails to my city council trying to prevent the last plot of open land in my community from being converted to a pointless gathering place for seniors [not senior housing].  To no avail, of course.  I was hoping the city would believe my request to use the land for a community garden--no such luck!  The Asphalt Wonderland is mostly very small lots, not much room for gardening for most.  Our best postPeak chance is to convince the city that our golf courses need to be the future gardens, but I doubt if the rich duffers will go for that.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

I hope you'll all allow an interesting historical digression here. Wheelbarrows, which enormously increase an individual worker's productivity, were invented in China early on, but didn't make it to Europe until the Middle Ages.

That is, the Ancient Greeks and Romans never used wheelbarrows. The Romans in particular were great engineers, but never seem to have hit upon this very simple idea.

The answer proposed by some historians (e.g. De St Croix) is that a slave-based system didn't encourage this kind of innovation - So the slave wears himself out and dies, big whoop... Where's that Thracian gone?

Moral: When the US really collapses, no one's going to need wheelbarrows anymore...

Take this for what it worth but it is an Israeli military site

For starts, there are two carrier groups, the Marine carriers have some fighters and helicopters but are not full air groups:

US-Led Military Thrust Focuses Heavily on Broad Naval Deployment

October 30, 2006, 11:53 AM (GMT+02:00)

Hundreds of US and allied war ships foregathered in the strategic seas of the Middle East and India in the last days of October 2006 for two primary missions: To prepare for a US-led military strike against Iran which has stepped up its uranium enrichment program with a second centrifuge project - undeterred by the prospect of UN sanctions; and measures to fend off palpable al Qaeda threats to oil targets.
DEBKAfile's military sources provide details of the massive deployments:
1. A large-scale US-Indian sea exercise called Malabar 06 is in progress off the Indian coast of Goa, ending Nov. 5. The American vessels taking part are the USS Boxer carrier, the USS Bunker Hill guided missile battle cruiser, the guided missile destroyer USS Howard and the USS Benfold , as well as the Los Angeles-class nuclear attack submarine Providence and the Canadian guided missile frigate HMCS Ottawa .

Indian maritime might is displayed with its warships like INS Beas , INS Mysore , INS Shakti , INS Ganga , tanking ship INS Gharial , submarine INS Shankush and Coast Guard ship CGS Samar
Malabar also involves the landing of large number of soldiers ashore, ahead of the Indian acquisition of the massive amphibious USS Trenton transport dock which can carry six helicopters and about a 1000 soldiers.
Our Tehran sources report that last Thursday, Oct. 26, Iranian officials were seriously rattled by a rumor that an Iranian spy plane had located the USS Boxer heading for the Persian Gulf. It prompted fears of an imminent American military assault to lift Republican prospects in the coming US midterm elections of Nov. 7. In any case, the Iranians suspect that at the end of the joint US-Indian exercise in the Arabian Sea, Boxer will veer west and head into the Persian Gulf. There would then be four US air carriers with task forces parked opposite Iranian shores, including the USS Enterprise Strike Group, the USS Iwo Jima Expeditionary Strike Group and the USS Eisenhower Carrier Strike Group, which are already in place.
According to the intelligence reaching Iran, the Boxer and its escorts carry 850 Marines who have just spent months in special training for operations on offshore oil rigs and platforms.
2. American, Italy, France, Britain, Australia, Bahrain, Qatar, the United Arab Emirates and Kuwait are taking part in an exercise practicing the interception of ships carrying nuclear materials or components for use in advanced weapons. The exercise opposite Bahrain is the first to be held in the Persian Gulf under the three-year old proliferation security initiative. It applications could be translated equally into the enforcement of sanctions against North Korea, which conducted its first nuclear test on Oct. 9, or Iran.
On Oct. 27, Robert Joseph, the US undersecretary of state for arms control remarked: "From Iranian news reports we know the exercise got the attention of Iran." But rather than climbing down, Tehran referred two days later to the war games as "adventurous" and placed its armed forces on a high alert which encompassed the joint naval units of the military and Revolutionary Guards in the Persian Gulf, while the Revolutionary Guards, the Iranian army, navy and air force were placed on "yellow" alert, one level short of full war.
Also Oct. 29, , supreme ruler Ayatollah Ali Khamenei replaced Iran's air force chief, Karim Qavami with Brig Gen Capt Ahmad Miqani, on the recommendation of the Revolutionary Guards commander.
DEBKAfile's Iran sources report that Khamenei did not approve of Qavami's admiration for America's military capabilities - especially the US air force's advanced aircraft and equipment. Qavami was wont to speak out at general staff meetings in favor of procuring a new air fleet the better to stand up to a possible US attack. His successor follows the supreme ruler unquestioningly and has complete faith in the ability
3. Saudi Arabia did not join the multinational Bahrain exercise, but instead mustered its entire navy and all its special forces for deployment in dense defensive array around the biggest oil terminal in the world, at Ras Tanura. Riyadh acted in response to tangible intelligence that al Qaeda is preparing to attack its oil installations.
Warnings have intensified in recent days of impending al Qaeda attacks on the oil fields, oil ports, oil tankers and oil fields of Saudi Arabia and the Arabian oil emirates. One threat specifically targets the Bahraini offices and staff of the Benin Republic's Societe Togolaise de Gaz and Societe Bengaz S.A.
It is not clear exactly why al Qaeda is targeting this African-owned oil company in particular. In addition, the US embassy in Riyadh has warned Americans operating in the Gulf region to stay clear of all oil installations, especially in Saudi Arabia. Another pointed alert covers Western residential compounds in Saudi Arabia and other Gulf countries, specifying American expatriates as al Qaeda targets. Saudi security forces are standing guard at these compounds which were fatally attacked in November exactly three years ago.
4. The fourth major naval concentration is deployed in the Red Sea along Saudi Arabia's west coast. The oil kingdom has placed its military and fleet at their highest level of preparedness for Al Qaeda-instigated terrorist attacks along this coast, particularly at the ports of Jeddah and Yanbu.
DEBKAfile's counter-terror sources report: That the Saudis have by and large switched their defenses against al Qaeda to coastal targets indicates the receipt of intelligence input of a new local sea base established by al Qaeda, which enables the jihadist group to stretch its capabilities for assaulting oil and Western shore targets from the sea. This base might be located on the shore of a Gulf nation, somewhere in the Arabian Sea or in the Horn of Africa.

Al Gore is depressing.  He embodies everything I find disagreable about wealthy country BANANA environmentalists.  Full of objections with no solutions except suggesting conservation measures and public awareness campaigns of negligible value.
Well. It is always a joy to see one of our long-time contributors chiming in. Mr. Lindsay, If I may?

What exactly is agreeable to you? Thank God you are here. We've been looking for a solution.

I'll second that ....

I'll take Al Gore and Jimmy Carter for US Citizens

maybe the Dali Lama or Bono ????

I am the Dali Lama. And Bono can't sing. At least not anymore. US fucking citizens! Hah! You don't even need to be a US citizen to be a citizen. Saddam Hussein has more rights then you or me. Orwell just turned over in his grave and pissed himself. Laughing. Did we break 52 today? Where the Christ is SAT! Finally got a girlfriend, I see.
  I was a Gore delegate to the state democratic convention in 1992, and voted for him several times in 2000 (just kidding you Republicrat and Demican fat cats) but I'm not going to support him in 2008. He couldn't carry his home state of Tennesee, and if he'd carried Tennesee he wouldn't have needed Florida to win. Then,he caved on a recount. I'm still mad and disgusted.
  I don't know who to support or what to do. Maybe I'll just pray that Osama drops a very dirty nuclear weapon on Washington while King George II is making the State of The Union speech and takes out our entire government.Lets try a revolution -it might be a liberating experience!
I don't know who to support or what to do.

The day one writes that line is a better day then the one when you admitted it to yourself. I don't know. I've never done either. But I know the pain. It's the same with girls as it is with candidates. It hurts like hell, it keeps getting worse, and it never goes away. You just learn to handle it as best you can. Then you die. All attempts at mitigation are just that. You will never find a greater love. She was the best. She's gone. You can only warp the paradigm after that. Hmmm. [what did you just say? Did you mean that?] I don't know. The pain was gone. That's the only reason I said it.

Somebody help OC refill.. He's missing the glass.
[chuckle...I heard that...I'm going got bed..(at least trying to)]
You say you want a revolution, well, ya know...we all want to change the world!
Not me.  I came of age in the '80s, when it was Everybody Wants to Rule the World. ;-)

All for freedom and for pleasure
Nothing ever lasts forever
Everybody wants to rule the world
Imagine if you had actually heard some good music when that was happening. Tears for Fears.

For the record, apart from Metallica, the 80's were about the worst time in modern music history. Worse than the 50's. Cobain only started to produce at the end. Then he peaked and died.

99 Red Balloons.

Me as well...I have older brothers that forced me to listen to the old stuff.

My world was Alan Parsons, Yes, Talking Heads, Elvis Costello, REM, Jethro Tull, The Who and The Cars.

I'm happy to be depressing too, then.

We have to find ways to use less power.  When I say 'Have to', that can be earlier by choice, and some will continue to straggle into that camp and learn new habits, devise new systems, and the rest will 'have to' do it because the energy just isn't there to be had as it was before.

Of course educating each other about it is useless.. if we continue to fail to do it.  Some have tried, but we'll just keep trying, no matter how depressing it is for people to hear it, delivered as it is alonside the endless dieting advice, and the 'Kill your TV' advice, and the 'learn more about your not-too-stellar candidates' advice, etc.  Yeah, it's a dreary and unsexy set of possible solutions, next to watching more 'Desperate Housewives', but too bad.  You can leave it to the UberNerds like Gore to try to get it out there.  Have some cocoa, get a warm bath.

As my brother said.. "You never told me you can't communicate.."

Or from Chad's failed 'Realistic Self-help system'
"Forget the power of positive thinking.  It doesn't work, and it never will."

Hello TODers,

I just did a quick check of MSNBC and CNN news.  They are not headlining this, but are instead focused on OJ's book and the TomKat wedding, but the Foreign Press is reporting this news widely [I am so discouraged by our MSM]:
Islamic militancy could yield World War III-US general
18 Nov 2006 01:21:37 GMT
Source: Reuters

CAMBRIDGE, Mass., Nov 17 (Reuters) - The top U.S. general in the Middle East said on Friday that if the world does not find a way to stem the rise of Islamic militancy, it will face a third world war.

Army Gen. John Abizaid compared the rise of militant ideologies, such as the force driving al Qaeda, to the rise of fascism in Europe in the 1920s and 1930s that set the stage for World War Two.

"If we don't have guts enough to confront this ideology today, we'll go through World War Three tomorrow," Abizaid said in a speech titled "The Long War," at Harvard University's Kennedy School of Government in Cambridge, outside Boston.

If not stopped, Abizaid said extremists would be allowed to "gain an advantage, to gain a safe haven, to develop weapons of mass destruction, to develop a national place from which to operate. And I think that the dangers associated with that are just too great to comprehend."

Abizaid said the world faces three major hurdles in stabilizing the Middle East region: Easing Arab-Israeli tensions, stemming the spread of militant extremism, and dealing with Iran, which Washington has accused of seeking to develop nuclear bombs.

"Where these three problems come together happens to come in a place known as Iraq," said Abizaid, who earlier in the week warned Congress against seeking a timeline for withdrawing U.S. troops from the country that is wracked by insurgent and sectarian violence.

"The sacrifice that is necessary to stabilize Iraq, in my view, must be sustained in order for the region itself to become more resilient," Abizaid said.
Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Operation CYA..

  Let's make darned sure we don't end up just 'handing them practically two entire undergoverned nations' that are in enough turmoil that these extremists can safely implant and regrow their operations.

  And above all, we have to do everything possible not to give the broader Muslim world any reason to sympathise with these 'underdogs'..

Ummm... if you want to stem 'Islamic militancy', then it's very simple. Cut Israel loose. In fact, back the Palestinians instead of the Israelis. The Israelis can't fight anyway (see recent invasion of Lebanon), and even if they could there isn't any point. They don't provide you with any strategic advantages: they're a massive handicap to US national interests. The sooner your 'representatives' wake up to this, the better... although seeing as they all wet themselves over AIPAC, it's not going to happen.

'Islamic militancy' is a bullshit construct anyway. In fact, the US actually invented it, through support of the madrassas in its effort to create lunatics who would go fight the Russians in Afghanistan.

Finally, these 'Islamic militants' are in the long and painful process of defeating the US in Iraq and Afghanistan as we speak. You're already 'confronting' them, and it ain't working. Give up and go home. You'll do it one way or another. Do it now. Save treasure, save blood. You'll need both.

(Don't take my word for it. See William Lind.)

It's late in the day to post this but I will anyway.  Jim Puplava's current Captiain's Log has several things of interest including the fact that he bought a copy of the CERA report and has some comments on it.



Thanks for mentioning this, but Puplava, who I greatly respect, basically wasted $1,000.

He could have learned more just reading TOD.

Hello TODers,

This is a very interesting webpage for the pictures and graphs of SuperNafta.  I recommend you just scroll through it first with Peakoil on your mind --I seem to think that instead of globalization marching ever onward-- it is becoming more likely that the shrinking of shared carrying capacity is more likely.

It is obviously that great editing and bibliographic care went into this webpage--must have hours, or days of work.  I won't comment on the overall political message--to each his own.  Here is the link.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Mexican news reported this week, that oil exports from Mexico to the US could end in as little as three years.  Meanwhile if the developing housing collapse turns into a full scale bust, many Mexican workers will find that their jobs in the US have also vaporized like the oil export market.

Those behind NAFTA may suddenly want to exclude Mexico from NAFTA - but seek a closer relationship to Canada as its oil 'sands' and other energy sources become more valuable.  

Hello Charles Mackay,

Thxs for responding.  Do you have a websource for this, or is it something you heard on Mex TV?  I would like to know more on the exports to the US being curtailed in 3 yrs.

From this Bloomberg article it seems Calderon is steaming full speed ahead to open Pemex to foreign investment:
Mexico Needs Foreign Money to Raise Oil Output, Gil Diaz Says

By Jeb Blount and Oriel Morrison

Nov. 17 (Bloomberg) -- Mexico must undo restrictions on foreign investment if it wants to increase oil output, the source of about one-third of government revenue, said Francisco Gil Diaz, Mexico's finance minister.

The foreign investment, along with technology, is most urgently needed to help the country and Petroleos Mexicanos, the state oil monopoly, develop deep-water offshore fields as its largest and most easily tapped wells start running dry, Gil Diaz, 63, said in an interview at a meeting of the world's 20- largest economies in Melbourne.

Mexican president-elect Felipe Calderon, who takes office Dec. 1, wants to ease a ban on foreign investment in the country's oil industry. Opponents in Congress have vowed to stop him. Output is expected to fall even with $16 billion in planned 2007 investment.

``Mexico shares with North Korea the strictest rules against foreign oil investment,'' said Gil Diaz, who plans to leave public service to take up a teaching position at the University of Southern California in Los Angeles in December. ``We need the foreign investment and technology; even Cuba allows foreign companies to take on risk in exploration.''

The country's crude output fell 3.3 percent in September to 3.26 million barrels a day from 3.37 million barrels a year- earlier. Production from Pemex's largest field, Cantarell, the source of 60 percent of Mexico's oil, began to fall this year.
Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Hey Bob,

As far as I know, it's from an opinion piece that has been circulating in the Mexican press. Dante's Peak of peakoil.com translated(?) the article.

Here is the link to Dante's translation:


"This opinion piece states that Mexico might not be exporting oil in as little as three years"

11/13/06 Universal (Mexico)
NoticiasFinancieras November 13, 2006

As it is well-known, the importance of Mexico in world-wide the oil market is been from single a great mantle, known like Cantarell, that has maintained to us by already practically 30 years. One is last megamanto discovered in the world, and about the second in importance, only behind Gahwar, the treasure of Saudi Arabia. It was by Cantarell that Lopez Opening alerted on "administering the abundance to us", and is by that mantle that, now, we will have to administer the mediocrity. Cantarell has undergone several stages in its operation, from "a natural" beginning to the most recent stage, of nitrogen injection. The maximum point of production of this mantle happened in December of 2003, when it produced 2,14 million barrels to the day (mbd). In fact, mbd produced more than 2 from March of that year to June of the last year, 2005: the Maxima plateau, to say it somehow. The later year to the plateau (July of 2005 to June of this year) was more under awaited, since Cantarell divided equally 1,87 mbd, 10% less than the plateau, one fell greater to the one than PEMEX waited for, since it had announced that the contraction would not surpass 8%. But the few later months to that year follow bad: now the contraction is of 9%, but added to the previous one. In the last quarterly reported, to September of this year, Cantarell not even mbd reached 1,7. The fall against the plateau, of less ago than 18 months, is considerable. For better illustration, during this Cantarell year it has produced every month less petroleum. Mbd initiated with an average of 1,92, in January, and closed September with 1,686 mbd. A loss of production, continuous, that already reaches 234 thousand barrels to the day. What produces a mantle of the best ones than it has in the American part of the gulf. To the price that is the crude one, thing of 12 million daily dollars. The exhaustion of Cantarell is not surprise for anybody, but the rate can be more near the pessimistic side. In agreement with PEMEX, this mantle mbd in 2008 would reduce its production of gradual way to reach 1,4. Nevertheless, the speed at which falls the production seems to be more near the estimations of a filtered memorandum some time ago it aimed at that in 2008 Cantarell as soon as would reach mbd. The difference is not smaller thing, 400 thousand barrels to the day represent 7 billion dollars in a year, with the present price. The impact of the smaller production of Cantarell has not been greater because there are small increases in other zones of operation. Thus, when the plateau of production of the 2 million barrels, the total produced in the country reached 3,38 mbd. The fall in the following year (July of 2005 to June of 2006), did not repel completely in the total, that was only reduced to 3,32 mbd. Last the three months, the total is 3,25 mbd. That is to say, which the fall of production of Cantarell of 234 thousand daily barrels during 2006 is reflected in the total in only half, 114 thousand barrels to the day. Other half of the contraction has been compensated with the greater production of other zones. Nevertheless, the production of Cantarell cannot be replaced in the short term. It is possible that other mantles exist, minors, in deep waters of the gulf. There is evidence of which thus it is. But to put them to work requires much money and long time, in addition to technology that we do not have and that nobody sells. Those that they know to remove petroleum from depths greater to thousand meters of sea do not receive to do it, they are associated. And that cannot be made so easy in Mexico, because our law is not clear on the matter. In any case, still beginning to work in that zone, the production we will not see it in five years. And in that time, to as the things go, Cantarell will have let produce. As the things are seen, the production of this mantle will be reduced in 300 thousand daily barrels every year. It is to say that in 2007 mbd will contribute only 1,5, and for 2008 mbd will suffer to arrive at 1,2. The total produced by the country will make the rounds, the next year, the 3 million barrels to the day, and following the 2,85 mbd. Since the internal consumption grows, although it is little, excessive the exportable one of crude, that has been of 1,8 mbd in the last four years, will be of 1,5 mbd in 2007 and 1,2 in 2008. In three years, the export of crude will be, in the best one of the cases, half of which today we sell. In the worse one, no longer it will exist.

Source: Mexico City El Universal in Spanish -- Major centrist daily. http://www.el-universal.com.mx/

Hello Gr1nn3r,

Big Thxs for the link.

You might be interested in this too:

Ramirez Corzo said Pemex's main challenge is financing the investment requirements without having to contract big debts Mexico City (17 November 2006)

Mexico City (17 November 2006) -- In less than six years, the risk of collapse will again threaten Pemex [Mexican Petroleum] in face of the need to invest $18 billion annually in projects that offset the decline of Cantarell , warned its director, Luis Ramirez Corzo.

"The collapse scenario has (only) been able to be postponed. The big challenge is (financing the projects) from now on, and the most important factor (of risk) is the decline of Cantarell," he emphasized in an interview with Reforma.

He said that the drop of Cantarell, which contributes 60% of the total production of petroleum, has put Pemex again in the necessity of having major resources to offset it, but at higher costs.

Ramirez Corzo warned that currently the financial structure of the semi-state-owned company does not allow taking on greater debt.

"The main challenge is financing Pemex's investment requirements, which are going from $10 to $18 billion a year, when the financial structure of the company does not allow taking on greater debt, and when we are restricted through budget," he stressed.

The official emphasized that at the beginning of this administration they were investing barely 2.8 billion pesos in the company, and they succeeded in raising that figure to 10 billion.

He explained that with this they only stopped the fall in production that would have led Pemex to produce 1.6 million barrels of crude daily and 1.6 billion cubic feet of gas per day.

Currently, 3.3 million barrels daily of oil and 5.6 billion cubic feet of natural gas per day are produced.

He said that one of the very short-term solutions he proposed to President-elect Felipe Calderon's transition team is making an urgent new adjustment in the fiscal system of the semi-state company to make projects deductible that are presently not so, and to increase production.

This year, a new fiscal system approved by Congress went into effect, by which a tax of 79% is imposed on the revenues from sales of crude and gas, while the rest of the activities will pay the ISR [Income Tax].

Another proposal is to speed up changes in regard to autonomy of management, which include independent advisers and that the criteria for state companies defined by the OECD be [verb missing in vernacular].

The Multiple Services Contracts (CSM) promoted by Pemex in this administration were the step prior to establishing strategic alliances with big companies, but it was a plan that was not allowed to go forward.

"It was a plan that did not give the results that it should have given, because we cut its feet off too early," said Luis Ramirez Corzo, responsible for launching the scheme in 2001.

The now director of Pemex said that at that time they opted for this scheme, because it was the most suitable for developing projects with proven, low-risk reserves.

He lamented that the issue had been polemicized to the point that the companies withdrew, because they were sued by several legislators.

"The companies were attacked. They were sued. They said, look, when you are ready call me. They are in Africa, Cuba, in China, all over the world," he ended.

One of the most urgent issues that Congress will have to solve consists of legislating with the United States for the joint operation of cross-border fields, since oil companies have already begun the initial work on the US side, assured the director of Mexican Petroleum, Luis Ramirez Corzo.

"It is urgent to legislate based in the international treaty that exists with the United States to have access to those deposits or to the economic value of the resource that is in them with the corresponding agreements, through new legislation, because otherwise we are not even going to see them," he warned.

In an interview, Ramirez Corzo emphasized that the big oil companies are starting to develop projects in the US portion, and it is time for Mexico to decide on the share it wants in these resources.

He explained that at the technical level it is more efficient to exploit an entire structure than only one part of it, because the petroleum migrates efficiently from one point to another, and it is possible to recover a greater quantity of hydrocarbons contained in the deposit.

Nevertheless, he explained that the exploitation would have to be done with strategic alliances, and he suggested the need for designing a legal scheme like the one that the eight countries with reserves in the North Sea have, where in some cases, like that of Denmark, it does not have investments, but it has an economic share of what is obtained.

"There is very efficient legislation at the international level for succeeding in capturing the economic value of the resource in these deposits which are in the Mexican portion, without even having to participate, either physically or with capital, in the exploitation that is made of these deposits. But all this is what has to be put in a new law," he said.

He said that the least that would have to be obtained in this case is that the economic value of the resources it shares with the United States be recognized to Mexico, although the ideal scheme is to associate oneself with those who are exploiting it.

He explained that although in principle Pemex would not have to invest in the project, it would be useful to the company to participate, because this would represent a process of enormous value for the company's technical people.

"No one is thinking that Pemex alone can exploit this part; we have neither the capital nor the technology to do it efficiently. We could be there for years, like in Chicontepec," the executive said.

He mentioned that Pemex's proposal for legislation on the subject is to use the international treaty that already exists with the United States for the Western Polygon, known as the Doughnut Holes, and make a modification in which the subject of cross-border deposits is dealt with.

in Spanish -- http://www.reforma.com/

Does anyone understand what the last sentence means????
(or was something lost in transaltion)

Hello Charles Mackay,

Thxs for the update.  Yeah, that last paragraph is confusing.  I am not an oilman, so this is probably wrong, but maybe he is saying the Doughnut Holes oilfield straddles both Mex & US property, and existing agreements already partially compensate Mex. for drilling by the US, who exploited their half of the field first [with horizontal drilling?] for whole reservoir oil migration to the US wellheads.

Then a legal modification to the contract might allow the IOCs to fully exploit both countries' sides of the Doughnut Holes, but kick more cash Mexico's way.  This way the best expertise & tech is brought to bear quickly on E & P, and Mexico gets more cash sooner and in an overall greater amount than if PEMEX fumbled around for years trying to develop their half of the oilfield by themselves.

Overall, Mexico's Pemex is caught between 'a rock and a hard place' moving forward: Potentially no exports to US and/or going broke in 6 years---Yikes!!!  Either way it greatly increases the chances of the Mexican economy imploding, with BIG ramifications for us Gringos.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Hi Charles:

It is referring to a Maritime Boundary Treaty ratified by Mexico in 1979 and the US in 1997.

"The bilateral Treaty of 1978 had the effect of formalizing the provisional maritime boundaries between the two nations. The agreement draws a line through much of the western and central Gulf of Mexico where claims of the two countries might have otherwise overlapped. However, this treaty left out the Western Polygon of the Gulf of Mexico, in which lie at least one of the so called, oil rich, Doughnut Holes.

The so called Doughnut Holes in the Gulf of Mexico are oil rich submarine areas. One is located in front of the Mexican coastline of Tamaulipas and the United States coast of Texas. This area is known as the Western Polygon, while the other one, the Eastern Polyugon is in front of the Mexican coast of Yucatan, the coast of New Orleans and the coast of Cuba"


Thanks much, totoneila and marcus.

I was aware there was a bilateral treaty between the US and Mexico concerning GOM oil, but I was not sure how they split areas close to both the US and Mexico.  

I also had not previously considered the interconnectiveness of oil fields that may run beneath both countries.  Independent US oil firms would most probably have lower extraction costs than the bureaucratic PEMEX.