DrumBeat: December 23, 2006

[Update by Leanan on 12/23/06 at 11:28 AM EDT]

Racism, recruitment and how the BNP believes it is just 'one crisis away from power'

Then I heard a recording of a speech Nick Griffin gave to a closed conference of white supremacists in New Orleans last year. In it he spelled out the party's strategy - and made clear that winning votes is not an end in itself.

After his almost-casual denigration of British Muslims - "the most appalling, insufferable people to have to live with" - Griffin revealed his belief that a period of prolonged recession was certain to engulf the developed world as a result of fuel shortages and global warming. This, he said, would happen soon but it would not be a disaster, rather "a once-in-200-years opportunity".

Climate change and Russian gas

But besides politics, a whole other problem could threaten Europe`s gas imports -- climate change. Russia`s gas fields lie below a several-hundred-feet deep layer of permanently frozen ground -- permafrost. In western Siberia, entire pipeline systems are relying on the solidity of the year-round ice.

Asia new crude oil output expected to slow down

SINGAPORE: Asia's oil industry will see only a handful of new fields pump their first crude next year as construction setbacks and rising costs delay major projects, interrupting this year's production revival.

The Great Game on a razor's edge

The accidental killing of Alexander Ivanov, a Kyrgyz fuel-truck driver, by Corporal Zachary Hatfield, a US serviceman, at the Manas Air Base on the outskirts of the Kyrgyz capital Bishkek in December is threatening to snowball into a first-rate crisis for the United States' regional policy in Central Asia.

A Down Market's Ripple Effect - If Oil Prices Fall, Will Interest in New Energy Sources Wane?

The Year Ahead in Energy

While 2006 has been a good year for many energy investors, it wasn't quite as strong as 2005. Moreover, there are growing concerns that oil and natural gas inventories are building and that an economic slowdown could curtail demand. Both could affect prices of commodities and energy stocks.

US Moves To Help Gulf Nations Protect Energy Sites

A quiet, U.S. government campaign to boost anti-terrorism measures at major Middle East oil installations may be running into resistance from some Persian Gulf governments, who have long sought to distance themselves publicly from any direct American involvement in regional oil issues.

Analysis: Is wind power for the birds?

Despite a recent endorsement from the National Audubon Society and improvements in bird-friendly technology, there is still some opposition to wind power.

China's need for crops may curb biofuel plans

Beijing - A shortage of farmland and a government priority to grow food crops for China, the most populous country, could hamper plans by the country's oil companies to produce biofuels on a large scale.

This Needs to Change

America is too reliant on fossil fuel and needs to find a new path, fast. Our security depends on it. Here are 10 ways to get there.

The New Coal Car

Powering cars with coal might seem like a recipe for ecological disaster. But if fuel experts are right, a liquefied form of the notoriously dirty mineral will be providing much of the world with its transport fuel within the next two decades.

Nevada On-Track to Quadruple Its Geothermal Power, Over 1000 MW to Be On-Line, New Report Concludes

A new report from the Geothermal Energy Association (GEA) concludes that Nevada is now on-track to be producing over 1000 MW of geothermal power -- quadrupling its current geothermal output -- over the next 3 to 5 years. This level of geothermal production would meet roughly 25% of the state's total power needs.

Resource warfare intensifies across "Grand Chessboard" and Horn of Africa

With the world now one full year off the Peak Oil and Gas cliff (according to work of geologists such as Kenneth Deffeyes), it is no surprise to see geostrategic tensions superheating quickly in several key oil and gas regions, as the world’s superpowers and multinational energy giants (supported by their nation’s militaries and intelligence agencies) intensify their combat over remaining energy supplies.

Pakistan: Reduction in petroleum prices may impact on credit rating'

LAHORE: Advisor to Prime Advisor on Finance, Dr. Salman Shah Friday said that there is deficit of Rs15 billion in oil imports; therefore, the prices of petroleum products cannot be lowered.

Canadian Energy Trusts Appeal Government Tax Decision

If an exemption isn't granted, energy trusts will be less likely to continue current rates of investment in developments such as enhanced oil recovery projects at marginal oil and gas fields, likely leading to lower Canadian production in the future, they said at a press conference held by the Coalition of Energy Trusts.

Statoil to Temporarily Decreases Production at Kvitebjorn

Statoil and the licensees in the Kvitebjorn field in the North Sea have decided to reduce gas and oil production temporarily to enable sound reservoir management and safe drilling operations for the wells remaining to be drilled.

"Happy Relocalisers", Doomers, Wheelwrights and the concept of Resilience

Mulling over Zachary Nowak’s recent piece, "Homeowner’s Insurance and Fire Extinguishers," it struck me that a key concept in the whole debate about whether one might prioritise individual survival over communal survival, or vice versa, may well be one found in the study of ecology, that of resilience. It is a concept I have been exploring a great deal over a lot over the last few weeks, and I have found it a useful way of looking at this whole question.

Outsize Profits, and Questions, in Effort to Cut Warming Gases

QUZHOU, China — Foreign businesses have embraced an obscure United Nations-backed program as a favored approach to limiting global warming. But the early efforts have revealed some hidden problems.

We Got Our Kicks in 2006: The top 10 green stories of the year

Salem couple are driven to make a change: Saving money inspires pair to replace engine with an electric motor

Going green: Earthaven provides a glimpse into an 'ecovillage'

When winter arrives, most Americans have the luxury of warmth of a central heating system. Not so for Earthaven resident Chris Farmer, for whom winter means fighting the brutal cold without electricity. He braces for the unforgiving wrath of Mother Nature by boiling water, sealing it in a Mason jar and holding it in his hands for warmth. Farmer often wakes up in the morning to find nothing but solid ice in his canteen.

Why do global warming and peak oil skeptics speak out against their own economic interests?

I don’t understand global warming and peak oil skeptics. What is their incentive to disprove global warming? Warming alarmists feel that they’re protecting the future of the planet—a pretty good incentive. But the skeptics don’t really get much payoff, unless they're energy majors, besides the opportunity to make fun of Al Gore. And yet people like Michael Crichton still get more press than Tyrell Owens on Monday Sportscenter.

The Kremlin's oil grab

Big oil has a long history of having assets appropriated by hostile governments. Yet no one has been quite prepared for the land grab by Gazprom of a 50% stake in the Sakhalin-2 project.

Schwarzenegger goes Green: California governor challenges GOP on global warming

...as governor of California, Schwarzenegger has engaged in a savvy makeover, befitting a Hollywood star. He retooled one of his four Hummers to run on alternative fuels and is quickly fashioning himself into one of the most aggressively pro-environment governors in a state known for leading the nation on that issue.

Nevada seeks to nix government nuclear waste storage plan

WASHINGTON - The state of Nevada on Friday asked the Nuclear Regulatory Commission to reject the U.S. government's plan to store thousands of tons of nuclear waste temporarily above ground at a mountain located about 90 miles from Las Vegas.

Peak Oil Passnotes: Peak Oil vs. Cera - The Fight Continues

Officials: Nigerian refinery bombed

PORT HARCOURT, Nigeria - An explosion rocked the outside of a government building in Nigeria's southern oil hub Saturday, soon after the military reported an overnight bombing of a water pipeline leading into a refinery.

The attacks came at the end of a week of violent strikes against petroleum companies in Africa's largest oil-producing nation. Militant groups say people in the oil region aren't benefiting enough from the wealth.

Georgia to pay more than double for gas

MOSCOW - Georgia will pay more than double what it pays now for Russian natural gas under an agreement signed Friday, a top executive with Russian gas giant OAO Gazprom said, in a deal that could potentially threaten its fragile economy.

US court cuts ExxonMobil damages for Valdez to $2.5 billion

SAN FRANCISCO - A US appeals court cut the punitive damages to be paid for the 1989 Exxon Valdez oil tanker disaster to 2.5 billion dollars, saying the amount is more in line with legal precedent.
I want to start a discussion on what possible responses there will be to the phase 1, right after the oil peak.

I think that things will change according to the nessecity.
We will drive as long as we can drive. There will be discussion about how to conserve, but I think conservation will just happen where it can be done and where it is needed. Just like what is now happening in the third world where country after country is shutting down.

I don't believe in a masterplan put in place by the government to make the transition happening. The forces needed are simply to big and to costly.

The only master plan is letting oil, gas and NG prices rise to the level that demand destrution balances suply and demand again.

The efforts to migitate future energy shocks are so huge and ask for so much sacrifices years before it is actually needed, that any politician who will ask this from the civilians will be put out of office right away.
So things will be done when the need is there, not any sooner.

What do you think?

Roger from The Netherlands.

Roger from the Netherlands, Unfortunately, you may be right. Politicians necessarily act on problems where ther is a ray of hope of a resolution before the next election, a rather unfortunate price we pay for living in republics. Only a lame duck or an out-of-power has been can address those issues,, and he (or she) will be ignored and marginalized. As examples, look at Al Gore on global warming or Jimmy Carter on world peace. They are emenently reasonable, even statesmen, but they are like contagious plague carriers to the national political parties of the United States.
  We have a country to huge that no one can expect to act much different and still be in the ploitical process. Maybe the size of the Netherlands makes statesman-like behaviour possible. The antceint Greeks thought democracy was impossible in any polis with more than about 5,000 citizens, and I'm not seeing much to change my opinion.  
However, leaders can appear to address extraordinary crises using extraordinary means.  Few would have predicted in the 1920s that the basically conservative US  would reformulate itself to address inequality by providing a social safety net and come to accept the role of government as a mediator between citizens and business interests.  Given the challenge of the Great Depression and a leader with the intellect and political skill to lead the nation through that challenge, the US transformed itself and successfully emerged from both the depression and the challenge of fascism.

If there is to be a government based response to Peak Oil, it will require an extraordinary leader like FDR to sell the ide to both the public and elites.

Yes I agree. In Phase II some redistribution of wealth has to be carried out. Otherwise large outbreaks of violant riots will occur.

But I think that this will only happen when we are a couple of years on the downslope. In the mean time it is wise to get out of debt, get your house and youself in goof shape and buy some gold (not a paper gold-option, but some real krugerrands)

I was speaking less to the redistribution of wealth than to the need for leadership.  To address a monumental problem such as peak oil someone needs to 1) recognize the problem and its potential impact; 2) communicate the problem to the populace in an effective way; 3)propose a viable solution (which at this point is not prevention but adaptation and mitigation); 4) mobilize the populace to achieve that solution; and 5) deal with the "Powers That Be" backlash of attempting to preserve the status quo by discrediting the articulation of the problem and proposed solution.  It is a tall order and I don't really see anyone on the horizon who could fill it.

Al Gore has recognized the problem (and most likely has the knowledge of the system to assist in implementation.)  However, he ,like all empiricists, believes that if he just lays out the evidence people will see what the problem is and what they need to do about it.  Unfortunately, as we have seen that is not necessarily the case (see Number 5 above)

We have a small response in the US, driven by our current "high" prices.  I know they are low in comparison to Europe, but they've moved a few people.

As I say, a small response:

According to Ford, the full-size SUV category shrunk to 800,000 units in 2005, from a 2003 high of more than 1,000,000. That's 20 percent less high-profit hardware hitting the highways in just 24 months, including the biggest-of-the-big Ford Excursion, which was pastured a year ago.


Pushed by the Toyota Yaris, Honda Fit and Nissan Versa -- small, front-wheel-drive, fuel-efficient subcompacts introduced this year -- the low-price end of the small-car market is up 42.2% through November, compared with a year ago, industry tracker Autodata says.


I can only think that such things will accelerate if and when "peak oil" becomes apparent to the average consumer.

... if you are an arch-cynic, that's the kind of thing you just didn't expect to happen ... yet.

Exactly, people will respons on the crisis by conserving;
-more efficient vehicals
-cutting car trips

Thing is, there will be a lot of losers in the proces.
Just like the African countries that power down first, it wiil also be the poor individuals in the US and Europe that will power down first.

There is going to be a tension between efficiency and conservation, certainly.  And even efficiency will benefit some (looks like the Japanese car makers) and hurt others (Detroit).

Ah well, I'm out for the weekend.   Merry Christmas to all ...

In the Netherlands (one of the richest countries of the world), last year there was a sharp increase of households who got cut off from nat. gas, electricity and even water.

The main reason for this is the energy price increase (up 80% since 2000) people cannot afford to pay anymore.

Powering down in the mists of plenty!

Is this happening in the US also?

Roger from the Netherlands


I am in Canada and was unaware of the degree of current impact of recent price changes in your country. I know of nothing similar here.

With regards your comments on GHG and AGW I believe you are being much too complacent. There is growing evidence that the environment may be more sensitive to forcing then was first believed. GHG continue to increase at a rate greater then that encountered in any prior historical natural record; the potential for positive feedbacks resulting in a further acceleration of AGW is high.

The IPCC is due to issue an updated report early in the coming year. I would strongly urge reading the text of the IPCC report. The press does a very poor job of communicating the issues.

I would also observe that statements along the lines of "we cannot afford the required response to mitigate AGW as this would devastate the [local, national, global] economy" simply underscore the degree to which our current economic system is unsustainable. To put it bluntly, we cannot afford our current western lifestyle. Both PO and AGW are in the process of teaching us the truth of that fact.

Cheers! And best wishes of the season.

Wow. I'm surprised. They allow people to be cut off?

I don't think I've ever heard of anyone being cut off from water in the U.S.  I don't know what happens if you don't pay your bill, but I imagine it would be considered a health issue to not have water.

Power and natural gas can be cut off, but generally not in winter.  What happens is people who can't pay rack up huge bills in the winter - so big they can't pay them in summer.  So they get cut off in the summer, and the next winter they struggle to heat their homes.

It's apparently pretty common for people to try to heat their homes by turning on the oven and leaving the door open.  (Which is not safe.)  Also to run the shower with all hot water (since often, hot water is included in the rent, while electricity isn't).

We have programs to help the poor with winter heating costs, but there's not enough funding for them.  Hence states' eager acceptance of Chavez's cheap oil charity, even when they hate his politics.

Oh yes, they do allow that. This year over 20.000 households where cut off. On a population of 16 milion and say an average household of 3 people that's about 0.4% of all households. That is not a lot, but it is rising fast.

My wive is a social worker and the stories she sees unfolding in the poor families are heartbreaking...  children starting to smell because there is no running water to wash with... people who burned their house down because they tried to stay warm with a wood fire inside...

This is just the beginning!

I'm really astounded.  I guess the rumors of Europe being a giant, cradle-to-grave welfare state are greatly exaggerated.
The welfare state in Europe is something that is disappearing quite fast. There are a multiple of reasons for this (in random order):

-Depletion of oil and N.gas fields in Europe
-Increasing imports of energy from outside Europe
-Large amounts of immigrants from the former Russian states and Africa
-The aging of the total polulation
-The introducton of the Euro

Remember the large riots in France this year?

And let's not forget another biggie - that overweening sense of entitlement that is sometimes falsely regarded as quintessentially and uniquely American. For example, plenty of Europeans want les trente-cinq (the 35 hours) for themselves. On the other hand, most also demand the limitless "right" to the fruits of somebody else's  soixante-cinq (65 hours) in order to provide themselves with many, many things. Such as ultra-super-deluxe luxury medical care and marvelous but fantastically expensive TGV networks.

This sort of thing is unsustainable regardless of the size of the energy supply or of the economy itself, so in accordance with Stein's law, and consistent with the post, it isn't being sustained. So I have to guess that in the end, and putting it crudely, if people demand trainloads of this, plenty of that, and boatloads of the other thing, then there's little choice but to also demand that they turn off the TV, drag their bottoms out of the couch, and work for it.

marvelous but fantastically expensive TGV networks.

Unlike that marvelous and fantastically cheap highway network in the U.S., which has paid for itself and is generating a profit to this day?

Sorry for the sarcasm.  My point is that the TGV network may be expensive to build, but as far as I can tell it makes a profit, so that's hardly an argument against it!


It is interesting to note that the TGV became one of the few SNCF services to operate at a profit, paying for the construction costs in just ten years.


The three TGV lines now in operation--TGV-Sud-Est, TGV-Atlantique, and TGV-Nord--are moving millions of people between France's major population centers with speed, comfort, and convenience--and they're doing it at a profit. The 11-year-old Paris-Lyon TGV-Sud-Est is earning 15% on investment--an ROI that rises to 30%, claims SNCF (French National Railways), when you factor in fuel savings and highway and airway maintenance savings--the French even enter sharply reduced highway fatalities into the equation. Air traffic has all but vanished between France's two largest industrial centers, where center-city-to-center-city travel time is now three hours by plane and two hours by train.


Emmerich told IRJ in Paris: "Unlike the commuter rail services, grandes lignes is not subsidised.
It depends on the country. In Belgium people are entitled to minimum services of electricity (barely enough ampère to run a washing machine, but still).
Squatters have the right to have a connection to the grid etc. - they still have to pay, of course.
Could it be that utilities in Europe are socialized and government owned and thus able to be nastier to poor people than the privately owned but highly regulated U.S. utility companies? Just a guess.
  Water utilties are mostly public in Texas, although in the last 30 or 40 years they are mostly built be  Municipal Utility Districts rather than directly by a municipality. The MUDs issue bonds and collect taxes as well as fees, but are incorporated separatly from counties or cities. This rather Byzantine arangement allows for maximum feeding at the public trough.
I'm surprised too but only a little. It causes me to recall that some of our politicians in the USA paint life in Europe as some sort of free ride, at least when they're advocating their pet programs, i.e. advocating more control by themselves over other people. But nothing could be further from the truth - it's not a free ride, just a different ride.
Oops meant this to go under Leanan's comment.
After thinking about this for a few years, I come back to the same conclusion.

I do believe the problems are going to really ripple through the financial sector. Seeing the amazing statistics regarding  consumer negative savings rates and debt levels, it would appear that a significant portion of the populus is poorly prepared for rapidly increasing energy costs.

So, once the peak oil is out of the bag, I imagine that many will start to drastically cut back on discetionary items that fuel the economy, and keep people employed.

Look at the auto industry. Ford and GM cannot survive without the sales of SUV's and trucks. Their business model is dependant on those high margin vehicles, for now. From what I remember, about 1 in 5 domestic jobs are tied to auto industry. From manufacturing, subcontractors (Johnson Controls, Dana, etc) all the way to the person selling you the vehicle. Oh, and don't forget the refiners that make gasoline. So about 20 percent employment!

The average person owing 20k on an SUV will have a hard time unloading a highly undesireable vehicle to go buy a hybrid, or Corolla. Will they be able to continue to fill up the SUV? Ford or GM will have to look alot different when the peak oil news breaks, or one of them is going to fail quickly. (Rather than the slow death they are now experiencing)

How about the Marine industry? I would expect that would suffer a huge contraction. This will be one of the first industries to take a big hit.

RV Industry: Ditto the Marine Industry.

Dining out. Mid tier and up will start to suffer. (Chili's, TGI Fridays, etc) This is about the first to go when consumers are pinched. (in this case, rising energy costs)

Housing. The exurbs will be a undesireable place. I see a shift toward consolidation around employment centers. What happens to those institutions holding paper that financed this housing?

IMHO, these are the things that I would expect to suffer in "Phase I". By no means a comprehensive list.

When the consumer starts cutting back, or eliminating the need for the aforementioned items, I would expect unemployment to skyrocket. An unemployed individual does not  pay his bills, let alone buy much other than basic necessities.

Conclusion: A viscous circle of layoffs, foreclosures, failing industries (reliant an discrentionary income), higher taxes, inflation, declining wealth from a depressed stock market and finally bank failures.

Capitalism cannot work without growth. Nothing has been proven yet to provide the energy density and transportability of oil (save nuclear), and that oil has fueled alot of growth.

It's the fraudulent monetary system that is dependent on growth. An economic system based on free markets would not need central banks to control interest rates.
An open letter that has been prepared by Chris Skrebowski, Editor Petroleum Review, Energy Institute, written in response to the recent CERA report entitled:

"Why the Peak Oil Theory Falls Down: Myths, Legends, and the Future of Oil Resources"


Dear Mr Jackson,

I was surprised and somewhat saddened to read CERA's curious attack on the concept of Peak Oil and the implicit attack on the Peak Oil community in your recent press release and report `Why the "Peak Oil" Theory Falls Down - Myths, Legends, and the Future of Oil Resources'.

Surprised because it appeared more or less at the same time as the IEA's latest World Market report (WEO 2006) was announcing the IEA's view that non-Opec oil production will peak by the middle of the next decade. Saddened because I had thought we were getting away from the sort of intemperate dismissals that have in the past been feature of the debate about Peak Oil.

In the fourth paragraph of your report you note:-

`This is a very important debate, and as such it deserves a rational and measured discourse. We respect the urgency and seriousness with which some with whom we disagree put their case. Sometimes, however, the debate gets quite polemical. We wish that this debate could be approached in a more rational and thoughtful manner, buttressed by the recognition that this is (a) subject in which knowledge continues to evolve. A debate based on evidence and dialogue would be more constructive and would certainly better serve the importance of the discussion.'

Quite. So why issue a press release that was a polemic? Why confuse stocks and flows as though the two were interchangeable? Why list resources that are far from commercialisation as though they could be turned on in the morning? In short by not offering any indication of how quickly resources can be commercialised your report does little more than say there's lots of resource so we must be all right. Would that life was so easy.

Now I have no way of knowing what pressures CERA is under nor do I know if this was a CERA initiative, instigated and funded by CERA, or a commissioned report. I know oil analysts, like supermodels, don't leave their beds for less than extravagant piles of dollars. So who paid for this report is important if we are to take it as any more than special pleading.

Because CERA has chosen to use its resources and contacts to achieve maximum anti Peak Oil impact I have no embarrassment in seeking the widest possible circulation for this open letter.

In the report and press release you suggest that the Peak Oil community is somehow irresponsible in drawing attention to the challenge Peak oil could present. Now a `Be happy, don't worry' approach may be applicable in many areas of life. However, I find it hard to believe that the future of global oil and energy supplies is one of them. The maxim `Hope for the best, but prepare for the worst' encapsulates what most people would call a responsible approach.

It is not even clear if CERA believes it own report as I am intrigued to see that CERA is now promoting a new multi-client survey `Dawn of a New Age' Global Energy Scenarios for Strategic Decision Making--The Energy Future to 2030. In the promotional blurb we learn in the first paragraph that it is a multi-client study and such gems as `.......reflecting the heightened anxiety about the future of energy. The concern is not just over oil, but every aspect of the energy value chain; and the stakes are high for all participants in the global economy - but especially for senior executives and policy makers.'

Let me see if I've got this correct. For a public attack on Peak Oil activists' concerns you claim there's not an oil supply problem and we're all irresponsible alarmists. But for senior executives and policy makers you have `undertaken the most comprehensive research project in our history'. Seems hard to believe the report's conclusion is that there's not a care in the world. Could it be that the real objection to the increasing publicity given to Peak Oil is that the senior executives and policy makers are losing control of the secret?

Global Resources, Conventional and Unconventional, CERA Projection

The heart of your contention that the Peak oil community is being alarmist is based around your table (above), which shows a potential resource of 4,821 Gb. I am afraid the table can only be described as a motley collection of the known, the unknown, the possible and the plain unlikely. More prosaically it appears to be a collection of apples and pears along with a couple of lemons. The left half of the table appears largely uncontroversial (for a more detailed critique and some questions see Appendix 1) while the right half, although technically possibly, is only of interest if it can be discovered, mobilised and marketed within a reasonable time period.

This in essence is the entire debate - can all the unfound and unproven resources be exploited quickly enough to more than offset the peaking and decline of the known and proven reserves? If not they simply guarantee that some sort of oil industry will be around for a long time but one that will be unable to meet the requirements currently placed on it. Now I am not sure that in your attack on Hubbert's relevance and your determination to show how large oil resources could be that you realised that you appear to be repeating history. Let me explain. Unfortunately in that excellent history `The Prize' written by your boss there is no mention or reference to Marion King Hubbert, Vincent McElvey or Mr Zapp, which is possibly why not enough people know the following story.

In his famous lecture in 1956 Hubbert with the aid of nothing more than his intellect, a pencil and some graph paper demonstrated that the prevailing cornucopian view of US oil supply was plain wrong and that a peak would occur around 1970. Instead of his views being received as a useful analysis he found himself being harassed and vilified. [Several in the contemporary Peak Oil community would probably observe that their own treatment has been little different].

Vincent McElvey was head of the USGS at this date and appears to have taken a very political view of his role and the necessity for the US to have large oil reserves to support a rosy output outlook (Does that sound familiar?). As a result he pressured the hapless Mr Zapp, who actually issued the USGS reserve estimates, to produce ever higher US reserve numbers. This process ended in near farce with a final US reserves estimate of 590 Gb (rather more than the entire Middle East) shortly before US production peaked and started its inexorable decline.

McElvey's fate was to be sacked and discredited. The USGS then moved away from single figure assessments to the current system of probability based reserve/resource assessments.

It is worth noting that this has not fully solved the problem of politically driven reserve assessments. The USGS currently produces P95, P50 and P5 reserve numbers. More prosaically I refer to these as `what they know more or less for certain', their `best guess' and `the number for the politicians'. The Caspian provides a vivid example of the risk in providing a political number. At their last major study the USGS rated the Caspian reserves as 20Gb (P95), 60Gb (P50) but a staggering 200Gb (P5). Now the widely held contemporary view is that the Caspian is an exploration bust. In fact all the indications are that the USGS' best guess (P50) was spot on. Their problem was all the publicity given to the political number (P5). It seems fair to conclude that low probability reserve numbers are just that -- improbable.

It would seem that the rest of your table consists of reserves that are probably there but which can only be turned into production flows rather slowly.

Your figure of 118 Gb for Arctic reserves seems highly questionable. Apart from the known reserves in Alaska and northern Siberia, say 20-30 Gb, the remainder appears speculative. The USGS has their estimate of 47 Gb for Eastern Greenland. But, Eastern Greenland is `iceberg alley' the source of the iceberg that sank the Titanic. Climate change is accelerating the rate of iceberg calving. There is no licensing, so far, and the offshore eastern Canada experience, where icebergs are much rarer, suggests that the cost of exploiting any Eastern Greenland resource would be prohibitive. The only exploration interest in Greenland, in Western Greenland has yet to make a commercial or even sub-commercial discovery.

The USGS' record to date in terms of predicted discovery versus actual discovery is so far pretty poor. IHS Energy (your parent company) in their presentations has a slide which shows that only 17.5% of the anticipated discovery to 2025 has occurred in the 10 years to 2005. Now 17.5% discovered in 33% of the time is effectively just under half what the USGS were predicting. As if this wasn't discouraging enough a new report from Wood Mackenzie and Fugro Robertson suggests that the Arctic is a gas province with at least 80% of the potential resource likely to be gas. As discovery in the entire Arctic over the last decade has been very low, can the Arctic regions add more than minimal liquids flows for the foreseeable future?

Enhanced oil recovery is a real phenomenon. The problem is the rate at which it occurs. Using average oilfield recovery rates in IHS presentations we can see that recovery increases by around 0.5%/year. Other estimates are lower. Using the IHS Energy figure of 0.5%/year would give an annual increment of 6.26 Gb/year (0.5% of 1,251 Gb). At that rate the 592 Gb you foresee would take 94.6 years to materialise.

Your heavy oil resource of 444 Gb seems large but not unreasonable. The challenge once again is to mobilise the resource at a useful rate. It has taken until now to get Canadian tar sand production to just over 1million b/d and until now to get Orinoco heavy oil production to 600,000 b/d. Of course these volumes can be multiplied many times over but how quickly? Cost inflation in the Canadian tar sands is already spiralling. There are major challenges in terms of gas supply, water availability, environmental pollution and CO2 emissions. On current plans oil sands production could increase by 2-2.5 million b/d by 2015 or a rate of 200,000-250,000 b/d per year. Yet by 2015 all the richest sands will be in production and operators will be looking to develop leaner ones. As far as I am aware, despite numerous hopes and plans, President Chavez has yet to sanction an incremental Orinoco project (although Lukoil has just started drilling on the Junin-3 block). Venezuelan production by 2015 is unlikely to even reach 1.5bn barrels/year. If production rates from Canada and Venezuela could be sustained at the 2015 projected levels then the 444 Gb would last for nearly 300 years but the flow would amount to only 5% of this year's oil production.

Your shale oil resource numbers are undoubtedly perfectly accurate but do they represent anything more than hope? At the moment there is no economically viable method for extracting shale oil. Hundreds of millions of dollars were expended in the 1970s trying to crack what I call the shale oil paradox - to turn the immature kerogen in shale into usable oil the shale must be heated. If shale is heated it swells. When shale swells it becomes a good thermal insulator so the heat doesn't get very far.

In the 1970s it was effectively proved that all the mine, grind and extract solutions either failed or produced little or no net energy gain. Shell now has an in-situ process that, they claim, has been proved in the lab and is now moving towards a pilot plant trial. It seems to me premature in the extreme to regard shale oil as anything other than a geological curiosity until robust economic viability has been established.

You define an exploration potential of 758 Gb. It is a large number. According to IHS Energy for the last ten years new field discovery has averaged a little over 11 Gb/year. At that rate your exploration potential will take over 66 years to materialise.

Now although you regard the Peak Oil community as far too pessimistic I ask you to consider the following. If we take the simplest and most straightforward reserves based approach and use the best figures for proven and probable (2P) reserves from IHS Energy, these show that by end 2005 some 1,077 Gb had been produced and 1,251 Gb remained, giving total discovered reserves of 2,328 Gb. Now if Peak Oil occurs when 50% of the reserves have been depleted - how long will it be until 1,164 Gb have been produced? Again using IHS Energy figures we are finding a little over 11 Gb/year and consumed 29 Gb in 2005 so our collective net consumption of reserves is 18 Gb/year. On that basis we peak in slightly under 5 years or in 2012 (1164-1077 divided by 18). Rising demand will foreshorten the time to Peak. If you believe we can delay Peak till 55% of know reserves are consumed then we peak in 2018. If you believe, as many do, that Middle East reserves have been overstated, the so-called `paper barrels', then you need to bring the peak forward by around 5 years for every 100Gb of exaggeration (100 divided by 18).

However, there is an even more straightforward analysis, again making use of IHS Energy data. A slide shown in recent presentations indicates that 20% of global reserves had been consumed by 1985, 30% by 1995 but that by 2005 the number had risen to 46.3% (1,077 divided by 2,328). Extrapolating that forward to 50% gives a Peak Oil date of around 2010 while 55% depletion of known reserves would be around 2014.

As you know my personal belief is that an analysis based on new production flows is more accurate. Using all the latest data in my megaprojects (actually all yielding peaks of over 40,000 b/d) I find that Peak Oil occurs in 2011 plus or minus one year. However, whichever approach is used if the Peak occurs at any of the above dates it is very hard to see how any or all the additional resources you (CERA) identify on the right hand side of your table can, even potentially, be mobilised in time to move Peak Oil by more than a year or two.

I therefore conclude that far from dispelling concerns about Peak Oil you have effectively confirmed that they are real and imminent. I do hope that you and CERA find it possible to come and debate all these points with the Peak Oil community.

I look forward to your comments.

Seasons Greetings and best regards

Chris Skrebowski

Appendix 1

Let us consider your table (see above). The first column - cumulative production amounts to 1,078 Gb. As your owners IHS Energy make presentations in which they use 1,077 Gb there is clearly nothing to dispute or debate. IHS Energy uses the figure of 1,251 Gb as remaining 2P reserves at end 2005. If we add up your Opec Middle East, Other conventional and Deepwater we get only 1,127 Gb but as this does not include the proven arctic and heavy oil reserves do we assume that you use the 1,251 Gb for remaining 2P reserves?

In last year's World Energy Outlook 2005 the IEA examined the Middle East and North African countries and provided reserve estimates attributed to IHS Energy among others. These estimates are significantly lower than the official reserve estimates (as used by Oil & Gas Journal, World Oil and the BP Statistical Review). Your (CERA) figure for Opec Middle East is 662 Gb, BP's is 742.8 Gb, The IEA's proven reserves (p141) is 540 Gb. The IEA's prints 2P reserves estimates for most Middle East countries but the listing is not complete. It would appear to total to around 600-630 Gb. Perhaps you could clarify CERA's position? Do you use the 2P reserves of 54.9 Gb for Kuwait and the 55.1 Gb for the UAE? Do you include the 25.7 Gb of Qatari NGLs/condensates? Do you include the 26.3 Gb of `proven undeveloped' in Iraq? [All numbers taken from the IEA 2005 Middle East and North Africa report]

A full debate on Middle East reserves is clearly difficult but precisely because it is a key component in determining the risks to future supply it is a debate worth having.


Ya...saw that a few days ago...it's an awesome response from Chris and turns the whole report on its "spinning" head.  I really do think Yergin & Gang are closet "doomers", but they are embedding their "fears" in euphemistic terms.
Here's some commentary on this:

Peak Oil Passnotes: Peak Oil vs. Cera - The Fight Continues
Chris Skrebowski from the Energy Institute in London has written an open letter to CERA wondering about many of the same questions. Skrebowski is in fact a regular `peak oil' chap. He is not given to wild pronouncements and is currently editor of the industry magazine Petroleum Review. This makes what he has to say a lot more interesting.
Although it's great that Skrebowski added additional information and questions about the report in the public domain, I think we all recognize that CERA will ignore it and any other attacks that are published.

There is simply no rationale for them to get into a spitting match. Afterall, they still have their clients and until clients start jumping ship, CERA isn't going to respond in any way.

Todd - in case you missed it I had some good dialogue with Peter Jackson on UK reserves:


and I don't think that he, CERA or IHS will ignore everything written on these pages or by Chris Skrebowski - that is not to say that we should expect an immediate response.

The feeling I got in email correspondence with Jackson is that he believes in what he is doing and is as concerned about his / CERA's credibility as contributors at TOD are concerned about their credibility.

Thanks.  I had read it but had forgotten about your contact with Jackson for some reason. I still don't believe that CERA is going to defend their report for a number of reasons:  First, it is bad public PR.  Second, I believe they would ultimately have to disclose their data.  I don't evision them doing that.  Third, my gut feeling is that they fronted the report for someone else.  I know this was discussed so I won't get into it again.
Re: some good dialogue with Peter Jackson on UK reserves ... that is not to say that we should expect an immediate response

Having been privy to that dialogue, I am wondering what "good" means in this context.

CERA is quite profitable. I'm so glad he "cares about" his credibility as much as we do, so much, in fact, that he is laughing all the way to the bank.

An immediate response?

We get a response from CERA,
but it is too late

I am wondering what "good" means in this context

In view of the fact I was writing an article that was pretty critical of his / CERA's approach, I felt it was pretty helpful that he went to the bother to try and explain what they were doing - even though we didn't reach agreement on the approach - at least it let me produce an article that I believe to be accurate.

CERA is quite profitable. I'm so glad he "cares about" his credibility as much as we do, so much, in fact, that he is laughing all the way to the bank.

No doubt The Oil Drum gave CERA a lot of publicity and they will have sold reports on the back of that - ironic isn't it that CERA probably made several grand out of TOD - and you may also recall that some of us felt this report was best ignored.  Conversely, visits to The Oil Drum were up on the back of the CERA report - that is supposed to be our reward

CERA are harbingers of good news, and it seems there are a lot of folks out there prepared to pay for good news - regardless of whether it is accurate or not. Much more difficult to sell bad news - though having said that, our newspapers in the UK tend to be full of bad news.  Perhaps people will buy bad news when they are reading about the misfortune of others, but are not so keen to pay for bad news that may affect them.

Personally I wouldn't over play the role of CERA here - they are one of a number of comentators who are entitled to their view.  The notion that they, IHS, Freddy, Lynch et al are going to role over now and admit they are wrong is fantasy.  We, along with many others just need to keep evaluating and reporting the data in an objective and professional way - and focus on swaying opinions that count which IMO are politicians, civil servants and financiers.

No doubt The Oil Drum gave CERA a lot of publicity and they will have sold reports on the back of that - ironic isn't it that CERA probably made several grand out of TOD...

Nonsense! Any publicity that CERA got from The Oil Drum was definitely negative publicity and is likely to cost them several grand rather than profit them. Negative publicity is something that marketers dread. A bad reputation can be the road to ruin.

Ron Patterson

One thing I notice in Chris Skrebowski's April '06 Megaprojects analysis is that of the 2.14 mb/d net new capacity he sees in 2007, 0.8 mb/d is from the Saudi Arabia Abu Hadriyah/Fadhili/Khursaniyah development (0.5 oil + 0.3 NGL). However my understanding is that this project is not expected to come on stream until December 2007 at the earliest.

That certainly leaves capacity looking tight next year if demand increases as forecast, despite some major non-Opec projects coming online.

It is interesting to note that as time passes, the expectations for Saudi Arabia's new projects keep growing. For instance when the Khurais project was first announced, it was to produce 800,000 barrels per day. Now that expectation has jumped to 1,200,000 bp/d. The Abu Hydriya, Fadhili, Khursaniya project was originally supposed to produce 500,000 barrels per day. Now we find that it will produce 800,000 bp/d.  Incidentally, Khurais peaked in 1981 at 144,000 bp/d then began to drop dramatically. A massive gas injection program was initiated in 1983 to try to stem the decline. It failed.

And it must be noted that all of Saudi Arabia's so called new projects are not new at all, but they are all an attempt to squeeze more oil out of very old, very tired fields.
Matt Simmons comments on Abu Hydriya, Fadhili and Khursaniya project. Twilight in the Desert, pages 221-222:

Update on Abu Hydriya and Fadhili. The technical papers written about Khursaniya describe an older oilfield that seemed poised to fade quietly into oblivion. It was surprising then, to say the least, to read in October 2004 that Saudi Aramco's next big development project to bring on yet another 500,000 barrels per day of oil production capacity would focus on Khursaniya and the nearby Abu Hydriya and Fadhili fields. When this new project is completed in 2007, the Saudi Petroleum Ministry has been widely quoted as saying, "these three fields will steadily produce 500,000 barrels per day for decades." It seems quite amazing that each of these projects to rehabilitate old, underperforming oilfields targets a projection level of 500,000 barrels a day for a very long period of time. It is even more surprising that so many oil experts then simply accept these aggressive predictions without question or comment, as if predicting high production were tantamount to achieving it.

As noted, Khursaniyah did achieve a peak oil output of over 200,000 barrels per day 25 years ago, and while Abu Hydriya and Fadhili peaked in 1977 at 130,000 and 59,000 barrels per day, respectively. These three old, small fields could suddenly anchor the growth of Saudi Arabia's oil supply presses optimism right to the edge of fantasy and invites a reality check.

Numerous other oil and gas fields are listed as discoveries in Saudi Arabia's published data. None of these obscure, yet-to-be-developed fields is the subject of a technical paper in the SPE library. If any of these inventoried but utterly fallow fields offer promise for the future, it is difficult to imagine why Aramco, at some point over the last 20 years, would not have begun to develop that potential, if only to take some of the strenuous burden from Ghawar, Abqaiq, Berri, Safaniya, Zuluf, and Jarjan in the interest of extending their productive lives and ultimately recovering more of the oil-in-place.

Ron Patterson

Thanks - interesting. The next couple of years are going to be...educational.
As performance goes south, promises go north.
Thanks for posting this, Khebab.

Skrebowski does an admirable job of covering the peak oil ground. I recommend that all people reading this website read what he wrote in addition to the TOD response. Lately, I've been feeling burnt out and I've been pretty argumentative as a result. I'm sorry for it, but it is understandable.

Re: Why confuse stocks and flows as though the two were interchangeable? Why list resources that are far from commercialisation as though they could be turned on in the morning? In short by not offering any indication of how quickly resources can be commercialised your report does little more than say there's lots of resource so we must be all right. Would that life was so easy.

Here, Skrebowski gets to the heart of the matter. "Stocks" are reserves. Confusing the two is rampant among people criticising peak oil. Since CERA must know better, I have concluded they have a political axe to gring. We at TOD and others like Skrebowski, ASPO-USA, have been subjected to constant attacks in the media since the oil price started falling in August. But, they are not so much "attacks" as they are hit & run "ambushes" in which a press release is issued, a rash of stories appear in the MSM, everyone is re-assured that the future is limitless -- and then, by the time we or Skrebowskit or anyone else is able to respond, the moment has passed. It's like shadow boxing. It has worn me out.

Re: I look forward to your comments

That's the problem, Chris -- there won't be any comments.

Re: I know oil analysts, like supermodels, don't leave their beds for less than extravagant piles of dollars. So who paid for this report is important if we are to take it as any more than special pleading

Unfortunately, I leave my bed for almost nothing at all. This makes it all the more frustrating to be ambushed and not have the capability of mounting a media blitz of our own. This is what we need in the peak oil community, a well-organized way to disseminate information, both pro-actively (like CERA) and re-actively. Sadly, we lack that capability, being a loosely organized group of activists scattered all over the world. There is no structured organization with a budget to support this.

While it is true that these efforts would not directed at us unless we were perceived as a threat to the myth of eternal Progress & Prosperity, it is my view that we have just got our ass kicked in 2006 -- not because we are wrong, but because those with the means to get their propaganda before the public have convincingly demonstrated their ability to do just that. When I got into this, I was a bit naive about the rough treatment we would receive, I think. Not anymore.

As far as The Oil Drum goes, the flurry of "trolls" that we have gotten as the year went on has made me angry, but I now see it as part of the general attacks the peak oil community has undergone. When I say "trolls", I mean people who don't have reasoned arguments about the issues -- their sole purpose is to disrupt the discussion by spreading confusion, an attempt to obscure the signal with noise. Thus, our life is reduced to Shakespeare's tragedy Macbeth, which says ---

Life's but a walking shadow, a poor player
That struts and frets his hour upon the stage
And then is heard no more. It is a tale
Told by an idiot, full of sound and fury
Signifying nothing.
Although I welcome Skrebowski's excellent remarks, they come too late. No one but the converted will read them. After the CERA response we issued, Kurt Cobb asked "does The Oil Drum threaten CERA's market share?" I think the answer is clear, we do not. When I wrote that response, here's what Step Back wisely said:
Now that you've finished (a masterpiece) ... it's time to "step back" and ask yourself: "Why did I do this?" or more to the point, for "whom" did I do this?

If your answer is simply to impress the regular readers at TOD, then you have done a good job. But then again you are the prima baritone in our choir and of course we will always applaud each of your in-church performances to us, the choir.

On the other hand, if you think that CERA presents itself as being in "a debate" with us and as willing to do a point, counterpoint with us regarding the merits of Hubbert Linearization, you are sadly mistaken.

CERA doesn't care what TOD regulars think. They are talking past us as if we were ghosts in the room. They are talking eye to eye with the MSM journalists. They are hoping that the journalists will parrot their words to the unsophisticated public. And if that happens (as it has), then they have pleased their masters. That is really all CERA cares about.

Now if your true intent is to get MSM attention, then you need to speak eye to eye with them, not with fellow TOD posters.

I did not ignore this remark, which I agreed with, at the time when Step Back made it. I now fully understand the import of what he said.

Cheer up: I've figured out how to get the Peak Oil message out by writing some best-selling humorous books. Herewith are some of the first titles:

The Peak-Oil Way to Fitness and Permanent Weight Loss

COOKING AFTER THE CRASH: How to improve your nutrition and save money

ECONOMIZE, LOCALIZE, AND PRODUCE: How to thrive during the coming hard times

How Global Warming Can Improve Your Sex Life

Of course, I'll lift all the material from TOD and add a bit of my own Sailorman's salacious humor. Then come the film versions, with me as a character actor in a supporting role.

The Peak Oil Diet

Guaranteed weight-loss program! You'll lose 25 pounds or your money back! 1

1. Prices subject to change. Not available in all states. Subject to Federal Regulation #25/J85ft7092/77--TFR. Money returned if you are not satisfied is not inflation-adjusted.

During Cuba's adjustment period to having their oil cut off, I believe the average weight loss was 20 pounds.  But their overall health actually improved, not surprisingly.  So much of America's fatness is due to easy living engendered by abundant supplies of oil.  I wonder how well America will adjust when we get into serious oil decline. My guess is that we won't fair as well as the Cubans, who started at a lower level in the first place, embraced organic farming, embraced mass transit everywhere, have never had a a significant number of cars and are still driving American cars from the 50s, have the best health care system in all of Latin America, are extremely well educated, and live in a more top down centralized political structure which has demonstrated the ability to quickly adjust to what would normally be described as a total disaster.

Can our democratic, so called "free" economy and political system adjust to signicant shortages without chaos and mass murder. I have my doubts.  

Maybe you'll make more from a fictional work, Don.

The Lord Of The Rigs by J. R. R. Ewing.

"An epic tale of the battle between Good and Evil for control of the ancient land of Middle East"

You could sell the film rights to CERA. I'm sure Peter Jackson would be interested in directing it.

Unfortunately, many thrillers with variations on this theme are already on the market--some going all the way back to the 1970s.

Nonfiction is where the money is, e.g.

How to Be A Warlord: Profiting from Peak Oil

Be a Winner During the Coming Collapse of the Dollar: How to make money during deflations and inflations

Financial Independence Through Saving and Hoarding

You see, I'm not going to run out of themes and variations. I could use an illustrator or cartoonist as a collaborator.

Hi Dave,
I have been right where you are many times before.  Seeing mass delusion and feeling powerless to alter it really sucks.

Take some rest.  Drink some beer.  Rant to friends.  

What we are trying to accomplish may be impossible. But if there is a slim chance we are going to make a difference then I feel it is worthwhile.  

We despise falsehoods.  We have little choice but to speak out against them.  It is just who we are.

Perhaps in the New Year TOD can strategize about how to use the MSM.

It's such human nature to see people running around trying to alert the masses that this disaster is coming.  It's like we're the gazelles that jump up and down trying to alert the rest of the herd that a hungry lion is approaching.  My advice is don't wear yourself out.  You are fighting millions of years of evolution that brought us to this point.  Everyone around you is trying to increase their inclusive fitness and pass on their genes to the next generation.  Knowledge of peak oil accomplishes neither of these goals - so it will be ignored or ridiculed.  Gotta learn to live with those selfish genes.

Prepare yourselves and your families for the inevitable collapse and dieoff.  It's all you can really do.

While I don't think we have influenced the BIG media outlets, I believe I have seen quite a bit of TOD influence among the smaller media venues and alternative news sites.  That is a start.  The "thinking" journalists that are free to write their opinions and own analyses are digesting the information and assimilating it into their own style.

I think we could all identify articles and writers that have obviously read here at TOD without necessarily citing us as a resource (shame).

Khebab - thanks for posting this - I'd thought about inviting this as a guest post over on TOD E - and way well still do so.

Chris Skrebowski - an excellent rebutal.

The EOR number of 592 billion is IMO pure fantasy.  We need to remember that a significant portion of the 1078 is achieved through EOR and EOR will be required to get the 1066 (OPEC + other) out. And so including a further 592 billion for EOR smacks of double accounting.

The 758 billion for exploration potential seems wildly optimistic - as I understand it, we are finding oil at 11 Gb per annum - and this rate is decreasing all the time - but even using 11 Gb - it will take 69 years to find all this oil! And surely the exploration potential lies in the Arctic and the Deep water - double accounting again!!

The Extra Heavy and Oil shale will never be produced at anything like the rate of light sweet gushing out of the ground - it seems scaling up from current levels of tar production is an enormous challenge.

These numbers make grim reading.  I don't believe the 662Gb number for ME OPEC, but also believe that peak will occur beyond 50% of URR / Qt.

I will stick with my 2012±3 years - based on Khebabs loglets and your own megaprojects.

Personally I find my current world and circumsatnces to be rather sureal.  Christmas shopping etc in full swing, no shoratges of anything, life going on as normal.

Is it not time to panic?

Time to go buy some tuna and lots of wine.

Merry Christmas TODERs

Does anyone knows how it is possible that Mr. Skrebowski foresees a peak in 2011, +/-1 year, while it seems that the actual peak date is 12/2005?  

Is it that he's refeering to CO + NGL, while the december 2005 peak is only CO?

Skrebowski is a "bottom up" guy.  He is counting the future production scheduled to come online, and figuring peak that way.

IMO, he is way too optimistic.  His decline rates are too low.  And assuming that future production will go live on schedule and produce as much as planned is simply not realistic.  Exhibit A: Thunder Horse.  

A commentary by the chief economist for VectraBank demonstrating that a growth euphoria demands that mainstream economists ignore the finite nature of fossil fuels and embrace technology as a cure all:

"A shortage of oil is not an issue. Recent estimates have sharply boosted proven and projected reserves of oil. Advancements in technology will allow a greater percentage of oil to be extracted from existing wells. Advancements in technology will enhance the means of reaching oil in formerly impossible locations. Advancements in technology will boost the energy efficiency of new automobiles, new homes and new buildings constructed across the nation."

As energy related issues begin to take the main stage in the MSM, we can only hope that grassroots efforts shift the debates towards an understanding of ERoEI, relocalization, and long-term sustainability.

Southpaw, thanks for posting this. This is the kind of thing we will be seeing more and more of. Even as oil imports begin to decline and prices start to creep up, there will still be plenty of people saying; "Don't worry, be happy."

Only the data, the data of falling oil production will eventually convince people that peak is past, and only the events, that are the consequences of falling liquid petroleum, will convince the majority of people that we have a problem.

But I hold out one hope. People are not absolute anything. That is they are not completely cornucopians or doomers, pessimists or optimists but most people fit on a sliding scale somewhere in between. More and more people become aware of the problem every day. But as more and more people become aware, the greater and more shrill the cry that comes up from the media.

We will soon be seeing a lot more articles like this from The Rocky Mountain News. But likewise we will also be seeing more articles telling us that the situation is very dire. And the debate will not be settled until the consequences and events drive the cornucopians into submission. They will not be convinced by argument.

Ron Patterson

IMO the situation will be perceived as dire when and only when prices go up greatly and abruptly. For example, if gasoline goes from $2.30 per gallon in the U.S. quickly up to $5.00+ then I think many Americans will think that the sky has fallen, and hence demand price controls (which of course means rationing, too) and re-examine their basic premises.

I don't think a gradual runup to $5 per gallon in the U.S. would do the trick, but if it happens over the space of a few months then I think the shock would be enormous. Politicians will blame the greedy oil companies and probably impose a windfall profits tax--in adition to ever popular (and counterproductive) price ceilings.

I actually think people will really take it seriously only when gasoline can be hard to get, like the shortages we had in the 70s. That really got peoples attention (for a little while).
Which leads to the interesting notion that the shortages may have been engineered (by the documented government mis-allocations) to get the public to do what it should have been doing anyway.

Unfortunately, the belief that we had to get away from oil was either (a) not shared, or (b) was cynically denied by pols in order to gain political power.  Regardless of the motivation, "Morning in America" did the trick for 3 elections running.  It also gave people the impression that the boy was crying wolf.

And now that the wolf's here...

I agree partly with Ron - only falling production curves will bring a general acceptance of peak oil.

People don't relate local availability and price of gas, NG, or heating fuel to geology, but to various other temporary causes - price gouging, distribution difficulties, and so on.  They see local snarls in an overall system that keeps chugging along, and believe corrective action (often by the Gvmt.) can solve the problems.  People are also unused to thinking of the long-term future as throughout the ages the environmental difficulties and obstacles man has faced have been immediate or short term - for climate and crop growth, typically a season; or they have been `inevitable', sudden, and have had to run their course before a return to `normality' or the previous `stable' state returns or can be re-created (eg. plague, volcano).  And, as most  disagreeable and nefarious events over time have been created by man himself (sabotage, war), attribution of blame is neatly handed to oil companies, mean minded Arabs, inefficient Gvmt. etc. - all of which are amenable to manipulation and change.

Global warming is easier to grasp because it can be unambiguously and simply charted with temperature, and because `climate' or `weather' can be seen (indeed was always seen, religious practices set apart) as a complex system independent of human action.  What exactly causes global warming can be considered separately from the phenomenon itself.  

>But likewise we will also be seeing more articles telling us that the situation is very dire. And the debate will not be settled until the consequences and events drive the cornucopians into submission

I belive thats quite a while away. The Media like always will start pointing fingers. Since Media is filled with Liberal arts graduates with only a basic understanding of sciences and engineering, they will push for loads of useless altertive energy projects that will only exerbate the crisis. When these alternative energy solutions fail, then they start blaming engineers and scientists.

It going to be a long wild ride. Better buckle up!

I thought I'd link this real-life story to add some quaintness to your holiday season.  Envision this remote Christmas service celebration.  Happy holidays everyone!
Is this kind of a precursor to John Michael Greer's view of what's to come in his interviews with folks in the future?

Latest installment:

Nawida 2150: Q&A


Still propping up the science fiction to make your point?
What do you have against SF, Hoth?
It has no place in a rational scientific debate or community.  If people can bring up works of fiction to make their point, why can't others start using Star Trek as part of their arguments?

Both are equally silly.

Oh, Hoth.  For Xmas, I'd like to give you the gifts of "imagination" and "humility".  

Science would be nowhere without these two characteristics.  Sometimes, you need to go out on a limb and make mistakes.  Sometimes, the "wild" outlier in analyses are worth pursuing. Sometimes, you may fall on your ass for taking these risks.  You can either be afraid to take those risks and live in narrow definitions of life or you can suck down your pride and take a chance.

Good Science Fiction shows us future possibilities, hopes, and fears.  I think it is an integral part of showing current day science where it can take us.

Merry Xmas, young Hoth!!

Good Science Fiction shows us future possibilities, hopes, and fears. I think it is an integral part of showing current day science where it can take us.

Ah, so basically fiction you agree with like Greer's is Good Science Fiction, but SF that you don't agree with like Star Trek is Bad Science Fiction.

Fiction, whether good or bad, doesn't prove anything. You are just using it to project your own prejudice.

Like this SF?

Calculators are solar powered. We won't be needing slide rules again in our lifetime.(Thank God!)

So much for my attempt of a Christmas story for TODers. I don't think my link is working.  Sorry.  Leanan, how do you manage this every day???
I use Firefox and the BBCodeXtra extension, which makes adding links, images, etc., in HTML easy.

Also, as news editor, I can edit my links when I screw up.  :)

This is an excerpt from a much larger article (that you have to pay for), but the piece that's visible is worth a look:

Last of the Amazon

Brazil's dilemma: Allow widespread -- and profitable -- destruction of the rain forest to continue, or intensify conservation efforts.
Peak what?

As much as half of Russia's natural gas reserves are in danger because of climate change

Russia, the world's largest natural gas exporter with some 30 percent of proven global reserves, handles the majority of imports to Europe; in Germany, more than 30 percent of all gas used stems from fields in Siberia.

In 2006, Russia's record as a reliable supplier was questioned after a price row with Ukraine. The row, during which Russia temporarily shut off Ukrainian supplies, has worried politicians in Western Europe about the future of Europe's supplies.

But besides politics, a whole other problem could threaten Europe's gas imports -- cimate change. Russia's gas fields lie below a several-hundred-feet deep layer of permanently frozen ground -- permafrost. In western Siberia, entire pipeline systems are relying on the solidity of the year-round ice.

Over the past 30 years, however, the mean temperature in western Siberia rose by 5.4 degrees, resulting in gradual melting of the ground. As that process is releasing large amounts of greenhouse gases (such as methane), the melting even speeds up climate change.

Russian and British scientists have monitored temperatures and have warned officials that already tapped-in gas field infrastructure in western Siberia and the exploitation of future fields on the Yamal peninsula and eastern Siberia are threatened. The existing pipeline infrastructure would sink in the marsh, and even worse could happen: "The high-pressure oil and gas pipelines can explode," Roland Goetz, energy expert at the German Institute for International and Security Affairs, told United Press International. "Roughly half of all Russian fields are affected,"

The melting of the permafrost then would likely lead to a soaring of energy prices. All the existing infrastructure -- such as production facilities, pipelines, tanks, work housing and roads -- would have to be adapted to accommodate the softer ground, and such comprehensive construction work is very costly. In parts of Siberia, where production is planned to start in the course of the coming years, initial production costs would significantly rise. "Building and producing on the much softer ground is more expensive," Goetz said, costs that are naturally handed over to the consumer.

The Russian environment monitoring agency, Roshydromet, earlier this year published a report called "Strategic prediction for the period of up to 2010-2015 of climate change expected in Russia and its impact on sectors of the Russian national economy," in which the agency warns of the dangers of permafrost melting to the Russian energy sector, which makes up a major part of the country's economy and in recent years has transformed the country into an energy superpower.

In Moscow, however, officials have not showed any signs of concern yet.

NB: Canada and Alaska pooh-pooh the issue even more than Russia

On BBC news 24, they are showing the UN sanctions vote at the moment. Russia is to vote yes for sanctions on Iran. There are a lot of speeches going on at the moment, but it looks like the UN will vote for sanctions on Iran.
Seems like the Security Council has passed sanctions against Iran unanimously. No use of force, but what other conditions there are, I am not sure. I guess Iran can treat this as a slap on the wrist, but how will Iran respond?
found this over at the guardian, i have pasted in the last few paragraphs under the link, its the most appalling piece of face saving spin i've seen in a long time. i think there will be some celebrations in tehran tonight


Iran insists it is pursuing the peaceful production of nuclear energy and has said it will not give up the program.

The resolution orders all countries to ban the supply of specified materials and technology that could contribute to Iran's nuclear and missile programs.

It orders Iran to suspend uranium enrichment, an important part of the process of building nuclear weapons, and cooperate with the International Atomic Energy Agency. The agency's head will report to the Security Council by Feb. 21 on whether that happened.

A positive report would suspend the punishment and allow negotiations to resume. The United States and its European allies have proposed offering Iran economic concessions in exchange for halting uranium enrichment.

The timing of all this is really odd.  Why would Bush push for all this right at Xmas time unless he knew people wouldn't be paying attention?  So much crap is happening "under the radar" right now.  I've wondered about the last week of December being a bit of a window for Bush to act on Iran because it would be too late to affect the Xmas shopping season and it would be before the Democrats take Congress and Senate.
DEBKAfile made a valid point. The UN Security Council changes its composition in the New Year (remember Venezuela and Guatemala fighting for a SC seat?), i.e. in 8 days time.

Apparently, the negotiations would have to start again from scratch. So Bush either got a SC sanctions ruling now, or wait 6 months or so to get the same sanctions or better. The Russians and Chinese knew this and bargained hard to reduce its effectiveness. Bush decided for any sort of sanctions now, rather than for "effective" sanctions much later on in 2007.

I did not know all this and it makes sense.  The sanctions that passed seemed pretty weak at best.
And it's unanimous.  Sanctions are a go.
Remind me again when Iran announced a move away from the dollar for reserves and oil trading?

That was Monday, wasn't it?

The sanctions are only on "in sensitive nuclear materials and technology", which seems fairly minimal to me. Guess they'll just buy on the black market - like they were doing anyway.

Iran can just ignore it, but may chose to make an issue of it.

Right...so far it's all pretty superficial.  Just rhetoric heating up.
How (why?) to sponsor a billionaire: Comrade Khosla does NY State

New York state has given US$15 million in hopes of helping to build the country's first ethanol plant that makes fuel from wood chips, switch grass, and waste from the paper industry.

The demonstration plant is planned to be built in Rochester by privately held Mascoma Corp at a total cost of US$20 million. It would produce about 500,000 gallons per year (1.9 million liters) of cellulosic ethanol, a minuscule amount of fuel compared to the nearly 10 million barrel-per-day US gasoline market.

But it could be a big step in the production of cellulosic ethanol -- a new generation of fuel that environmentalists, politicians and business leaders alike say pollutes less than gasoline and traditional US ethanol made mostly from corn.

[blah blah blah]

Mascoma, formed in 2005, has a backing of US$39 million from a syndicate of venture capitalist firms led by founding investor Khosla Ventures, a company led by investor Vinod Khosla. Samir Kaul, a partner at Khosla Ventures, said in a phone interview that by 2009 commercial cellulosic plants in the United States could each make more than 25 million gallons per year of the fuel.

A holiday treat for those who believe in bottom up analysis, or are waiting on that coming flood of new oil -

'Less than 100,000 barrels per day (bpd) of fresh oil - barely half a per cent of the region's demand and a third less than had anticipated at the start of the year - is seen coming onstream, according to data compiled by Reuters.

Net new output, taking account of fields in decline, looks even more meagre. Upstream consultancy IHS Inc estimates Far East oil and natural gas liquids (NGLs) production will rise by about 30,000 bpd in 2007 because of a shortage of human resources, goods and services, and surging costs.

"The Far East faces the unpleasant dilemma of dealing with rising oil demand and largely mature and declining oil fields," says Pete Stark, vice-president of Industry Relations for IHS.

For much anticipated major developments like Malaysia's first deepwater field Kikeh, and India's Mangala, its biggest discovery since 1985, dealers will have to wait until 2008 at least.'

Oh yes, there is a huge amount of oil just waiting its chance to appear - now, it seems like 2008 will be the big year, after the no longer big year of 2007, which won't be it seems, at least in Asia. Or the big year of 2006, which wasn't.

I still think it is time to bring that unlisted 60 GB Soviet field on-line - at least my fantasy could be real, the Soviets being noted for paranoid secrecy, as compared to all those projections based on increasing production.

Growth seems to nod off more and more these days, being so mature, but depletion never sleeps. Especially when you note this - 'Some 170,000 bpd of new Asia crude came onstream this year, according to Reuters estimates, high by Asian standards but short of initial expectations for 250,000 bpd, expected to have been the biggest boost of new output in a decade.' Well, keep waiting - 2008 is just around the corner, after all. And making up that missing third shouldn't be any problem at all - click your shoes together twice, and squint at CERA's harder than hard facts, and just keep driving into the sunset.

Re:  "Growth seems to nod off more and more these days, being so mature, but depletion never sleeps"

A copy of my post over on the Reserve Growth Thread:

Two OUTSTANDING Examples of Reservoir Management

The Lower 48 and the North Sea are examples of where the oil and gas industry has done its very best to maximize production from existing fields and to find new reserves.  

Based on the HL method, the Lower 48 hit the 50% of Qt mark in 1970 and started declining in 1971.  So far, the the oil and gas industry has been able to keep the net decline rate down to about 2% per year.

The North Sea hit the 50% of Qt mark in 1999, and started declining in 2000.  So far, the oil and gas industry has been able to keep the net decline rate down to about 6% per year (assuming 4 mbpd average production for 2006, crude + condensate).  

Just imagine what the decline rates would be if the fields in these two regions had not been managed by private companies doing their absolute best, with the best technology available, to maximize production.  

We should all keep these two examples in mind when we hear bold, confident predictions of rising conventional production from regions that have crossed the 50% of Qt mark.  

I for one am impressed at the oil and gas industry's ability to limit the North Sea decline rate to only three times higher than the Lower 48 decline rate, and I confidently predict that the oil and gas industry will be able work similar wonders with world production, now that it has crossed the 50% of Qt mark (crude + condensate).

WT, I read your comment on Rembrandt's thread but didn't comment as my view seemed a little to general for a specific discussion of reserve growth. This is from a landman's perspective, and not scientific but rather more a psychological/political observation.
  You noted that the decline rate in the US is only 2%, but expected to be 4-6% for the rest of the world. The main difference that I see is the private ownership pf minerals and oil resources in the United States. In the rest of the world the oil and gas is owned by the national governments, or the technical term is the sovereignty. Because of this private ownership, individuals like Edwin Drake or Anthony Lucas were able to make private deals with peoplethat allowed them to experiment with a new idea, production of oil and gas.
And this continuing private ownership allowed companies to experiment with new techniques and technologies that havethat have increased the recovery factor in oil fields and have made it profitable for individuals to develop small oil fields.
  It sounds like I'm a fan of private ownership of public resources, which I am only to a limited extent. But large National oil companies are like huge integrated oil companies in that their huge overhead requires them to find and develop only large resources, leaving small prospects to languish. Where you or I would be delighted with a discovery or redevelopment that yielded a couple of hundred thousand barrels over 10 years, Exxon-Mobil would go broke.
  An excellent middle ground which some small countries could adopt is the Texas Relinquisment Act lands. Details can be found on the Texas General Land Office website.
The gist is that around 1900 the State stopped giving landowners the minerals, which were retained by the Permanent School Fund, on lands that were granted to individuals and companies. But they made the landowners the agent for the state, and allowed them to keep 1/2 of the lease bonus and royalties for acting as agents for the State, and that right went with the surface and lasted as long as the production . The result was taht individuals and small companies could make their own deals on prospects too small to interest a major, and the State received the benefit and also the individuals. Plus, the local county and schools could tax them, adding to their tax base.
If a country such as Peru or Ecuador would adopt a policy like this they would bring huge prosperity to their landowners, plus encourage independent oil exploratiojn, and the world would benefit by having the production plateau extended, a win by everyone
  So anyrate, its off-the-wall, but thats how I'd do it if I were Emperor of the world!
Surely the quicker decline of the North Sea is because secondary extraction techniques, like water injection, were used straight off?  
The North Sea is exclusively offshore, in a pretty hostile weather environment.  

Because of the high costs, operators have a huge incentive to get the oil out as soon as possible, and there are some obvious limitations regarding the economics of smaller fields, all of which makes it interesting that the Lower 48 and the North Sea both peaked at 50% of Qt (crude + condensate).

In any case, it's interesting that "vastly improved technology" has resulted in post-peak decline rate in the North Sea that is three times that of the Lower 48.

I expect that the world decline will be similar to the Lower 48--in the 2% range--with Saudi Arabia in the 4% range.

What a load of retarded drivel in the "This is Money" article. How can that clown claim that Gazprom's partial buyout does not compensate Shell?  Shell retains a stake in the project and will recoup the money it invested from Gazprom's cash and future sales.  The only way that Shell would lose money if the future sales allocated to it were less than four billion pounds (based on the parts that Gazprom bought out).  There are 1.1 billion barrels of oil in Sakhalin 2, which translates into 27.5 billion dollars at $50 per barrel (cost adjusted) for a 50% extraction (in reality it will be higher since the price WILL go up).  Shell has rights to 7.6 billion dollars from this amount.  But then there is the 500 billion cubic meters of natural gas at over $200 per thousand cubic meters, i.e. 100 billion dollars.  So Shell gets another 27.5 billion dollars.

The absence of any serious numbers in Alex Brummer's opinion piece shows it for the trash that it is.  What an atrocity that Gazprom has Centrica in its sights!

We have that saying in Bulgaria: "The dogs may be barking, but the caravan is going on".

UK is my personal nominee for suffering the biggest blow of the clash with the peak oil reality. Its growing detachment with reality can be easily be tracked in its journalism, which is more than average full of self-delusions on such issues as the potential and limitations of renewables or achieving a balanced and realistical approach to relations with Russia. Russia wants, has the right and will achieve control on the exploitation of its own natural resources. They will not allow to be plundered in the way you wasted your North Sea, Texas or Alaska. This is the reality guys - try to deal with it.

As an extra, as the most prominent US personal dog, UK will be the first to be sacrificed and left on the field in the coming dog-fight for securing energy supplies. Abandoning and/or changing allies is a tactic which US is notorious for.

It's sad, but I have to agree. The UK's (and the West's as a whole) mass media are just a giant brain-washing machine now. Here in Russia the Washington Post is usually called Washingtonskaya Pravda because of utter disconnection with reality.
It appears to me that the Washington Post and indeed all major Mainstream Media in the United States is controlled. They print/broadcast and slant what they are ordered to do. Russia until recently was in financial trouble and was therfore not able to develop influence. Therefore when they want to create a villian it is Russia (news, Hollywood movies, fiction, analysis!). Not personal, just business :-).

It seems to me that Mr. Putin and the Russian establishment now knows who is pulling the strings and what the game is. They will do what they see as the interests of Russia independent of the barking of the Washington Post et al.

"They print/broadcast and slant what they are ordered to do."  

No orders required.  All volunteer action.  That't the beauty of the process.

If true that is amazing. Even those who do not agree know what is expected of them in order to keep jobs and advance careers?
I'm amazed that you are amazed. Have you never heard of the "yes man"? It is pretty common knowledge, and also obvious to those in the job, that you get career success by agreeing with the status quo, and not rocking the boat. People who don't agree with the status quo have a hard time. Normally these people quit, if they ever applied in the first place. Smart people realise the MSM sells entertainment and write puff pieces to sell advertising, people who object to that are hardly likely to seek a career in the MSM.

It is well known that organisations attract like minded individuals. There is nothing sinister about it.

In terms of the UK economy and peak oil, it seems to be like the the proverbial drunken man riding a bicycle - he has to keep going at full speed to avoid toppling over.  Housing prices keep rising, people keep borrowing money, manufacturing keeps declining, we keep importing more and more goods from China, we keep gutting town centres with out-of-town developments, while we transition from oil exporter to importer having basically wasted the North Sea bonanza.  All the trends are in the exact opposite direction to those (economise, localise, produce) that Westexas advises and there is no sign of change.

Having observed the usual Christmas buying frenzy, one could say that most of this discretionary spending could be cut out of people's lives without pain.  However, a big cut in such spending would hit retailing, increase unemployment.  With rising energy prices that would soon collapse the housing market and the economy as a whole.  I don't think Britain will be a great place to be 5 years post-peak.

Right, and this is the main reason "whistle-blowers" are very uncommon amongst the upper levels of management.  They are already filled with Yes men and women.
Seems that your calculations lack an understanding that Sakhalin-2 is a product-sharing agreement. Sakhalin Energy (of which Gazprom became a shareholder) is entitled to around 30% of total production. 70% will go to the state. The exact percentage depends on the profitability of the venture (i.e. on the future price of oil and gas). So, now Shell is entitled to around 30% x 27.5% = 8.25% of the total production. Though not so little, it's not so much.
This sounded like quite unfair agreement and I decided to dig out the exact terms of the product sharing agreement.

The Sakhalin production-sharing agreements stipulate that Russia must delegate the right to develop the offshore resources to the investors that will undertake both the financial and technical implementation of the projects. Profits will be used first to recover the cost of the investment and royalty payments (6-8 percent of the cost of the product), and only after that initial stage will a "profit sharing" mechanism kick in.

    Under the agreement on Sakhalin-1, the Russian side will receive 15 percent of the profits if the internal rate of return is lower than 16.5 percent, but if it is higher the Russian share will increase to 54 percent, with the remaining 46 percent going to the investors. If this is the case, the total share of the Russian side in profits can be as high as 72 percent, including the share of the two Russian companies participating in the consortium. In the production sharing agreement for Sakhalin-2, the Russian share will be 70 percent if the internal rate of return is higher than 24 percent. If it is within the 17.5-24.0 percent range, the profits will be split evenly, but with a level of return lower than 17.5 percent, the share of the foreign investors in the profits will be 90 percent.

So in Sakhalin-2 the Russian side has the right of 70% of the profits (not of the production, these are the after tax profits) only after the initial investment has been payed for and if thereafter the internal rate of return is higher than 24%. Obviously this agreement pushes up the producers to overestimate both the initial investment and the operating costs and IMO it was major mistake to sign it this way. But still it guarantees producers a decent ROI and provides Shell and Japanese customers with a secure source of supply.

I've used the estimations from the analytical notes for a government session. If exactly, they give an estimate of Shell's share in the whole life of the project in the range of 8%-15% depending on the future price of oil and gas and taking into account that the entire infrastructure will become the government's property in the future. Also, they assume that the percentage of extraction will be from 60 to 65, not 50 to 55 as initially estimated.
I assume this is after Gazprom's byuout?

If I synthesize the two pieces of information, the only possible explanation is that these 8-15% are after Shell has recovered its investment and operating costs (which makes sense). Using dissident's numbers 10% of the product is worth $13 bln. Not bad at all IMO - even accepting their numbers, Shell had invested 50%x22bln.= 11bln., and after receiving 50%x7.45bln. = $3.73 bln.in cash is still entitled for $13bln. of guaranteed profit while the agreement lasts. Or to to sum it up: you invest (11-3.73)= 7.27bln. and after you recover these 7.27 bln. you still have $13bln. de facto guaranteed money to cash. If Shell wants to protest it would be that it is allowed to receive excellent profits as opposed to obscene profits.

Of course in the end the majority of the money will end up in government's coffins (and now in Gazprom's too), but one should not forget that this is Russian's oil&gas after all. What concerns me more from Russia's point of view is:

  1. the minor share of the money which goes to the local govt.  This is quite typical Russian practice and reminds me also how things like that are settled in my country.
  2. who is going to pay for the environment externalities, which it looks like are quite a valid issue after all.
A brief reference to Peak Oil in Eric Janszen's latest piece at http://www.iTulip.com (December 22):

Successful capitalism is about cultivating the innate capacity of humans to produce incremental value for themselves and each other. Incremental as in not re-inventing the wheel but inventing something new on top of what has been invented before. The marvel of humans is that we can take all that has ever existed in history and continuously make it better. In your own experience, think of cars. Compare the car you own today to the one you owned 20 years ago. Didn't start in the winter. Left you on the side of the road at least once a year. And how did you call anyone for help? Pay phone. Quaint, isn't it? But it gets better. The improvements that will come out of developments in new technologies like biotech will rock your world. I am equally optimistic that technologies that allow us to conserve energy will push Peak Oil out on a long, declining curve versus falling off a cliff as many Peak Oilers predict.

The bulk of the commentary concerns hedge funds, check it out if that's your thing.

I apologize if this reference was already posted elsewhere in the thread or in yesterday's DrumBeat.

In the late 70s, Dutch traffic planner Hans Monderman experienced the kind of insight that gets people sent to an asylum. "Let's eliminate all traffic signals and signs and remove the divisions between the road and sidewalk where cars and people interact. There will be fewer accidents and traffic flow will improve." Monderman's approach seemed completely radical: roads that seem dangerous are safer than roads that seem safe. The concept was a smack in the face of convention.


Monderman's ideas were met with near biblical outrage. The Dutchman persisted, until the Netherlands gave him permission to test his theories. In several Dutch towns, engineers ripped out signs and signals, flattened sidewalks and created radical new road-flow patterns. The result: a statistically verified reduction in accidents and fatalities. Monderman's success with "human contact flow" has lead to changes in roadways throughout the European Union and the U.S.


Monderman's flow generation and Kulash' traffic calming principles could trigger a shift in automotive tastes. Transportation analysts estimate that the average U.S. vehicle travels roughly 30 miles a day. Encouraged by the "New Urbanism" planning scene, drivers may finally abandon the idea that their cars must be capable of transcontinental transportation, and shift to lower speed plug-in hybrids and electric vehicles. Rising gas prices and increasing environmental/political consciousness will only accelerate the transition.


Transportation analysts may be like petroleum analysts in their tendency to yield to confirmation bias. If things get truly expensive, many families will have to cut back to one car, since eliminating a car is far and away the most effective way to reduce expense. That one car will have to do everything, even if it does nothing optimally. There is no useful alternative, since, as we can see with the chaos in Denver, shared transportation (rental cars, jets, trains) becomes the most ineffective/unavailable at those times when people most want to use it, and the authorities who typically provide shared transportation care not one whit about quality-of-service.

So I suspect the slow, short-range car may work much better in The Netherlands, which is so tiny as to be almost a city-state, than it will in the USA or Canada, where lots of people routinely travel hundreds of miles in one shot despite the low "average" daily rate. I just don't think most Americans and most Europeans even begin to "get" this difference.

And the unmarked obstacle courses may work in the USA until, inevitably, somebody plows through a crowd of pedestrians in a fit of rage. The billion dollars in punitive lawsuits against the responsible authority should then put an end to the experiment.

Anyone that follows the news knows that drivers plow through pedestrians already. Some woman in Baltimore recently ran over a grandmother and toddler and carried the stroller in her undercarriage all the way back to her apartment. But:

The most serious charge filed against Arellano de Hogue - failing to stop her vehicle at the scene of a fatal accident - carries a maximum penalty of five years in prison and a $5,000 fine, county prosecutor Allan J. Webster said.


If you're going to kill someone, use a car. The penalties are comparatively low.

Back in the 80s, I remember a snow plow driver in the DC area crushing a few cars, killing one woman. When he was pulled out he was yelling about how he hated his job.

But we do need an attitude adjustment. In just the three weeks I've been in Baltimore, I've seen plenty of driving like idiots, cycling like idiots and even walking like idiots. Some people think talking on the cell phone allows them to walk right through other pedestrians.

  Here in Texas we had a dentist, a Columbian woman by birth, drive over her husband as he was leaving a hotel in Clear Lake. She then proceeded to drive around the hotels's round about three more times, leaving the car parked on the poor husband.He was also a dentist.
  There was a great trial-lots of testimony about how her husband had been telling her how various parts of her anatomy were no match for that of the mistress-but the jury found her guilty of murder, 20 years with no possibility of parole for 18 years. The verdict amoung my coffee drinking buddies was if she had only hit him once, she would have been found innocent or only received probation.
  The moral? Be careful about really angering Latinas from South America.
 " She said "Honey you can have all the clothes off my back,
   You can have everything you want in my shack,
   But if you ever try to leave they'll take you out in a sack,
   Cause me and my razor will see to that
   And thats the way the girls are from Texas..."
   Ry Cooder and Flaco Jimenez
 great song, Conjuto music style, from the album Chicken Skin Music
"English juries won't stand for mutilating the body"
2006 was indeed a depressing year for Peaksters.  CERA's infamous press release was merely the headstone placement on the grave.  It underscored what the Peakster camp at tod already knew:  The Peak was not in 2005.  It won't be here 'til 2010 at the earliest.  30,000 posts at TOD declaring the Peak has passed were in fact wasted and premature.  Just as were the premature declarations in 2005, 2004, 2003, 2002, 2001, Y2K, 1999, 1998, 1997, 1996, 1995, 1994, 1993, 1992 & 1991.

2006 commenced with ASPO announcing in January that it's estimate of Peak Rate was being upwardly revised by 5-mbd.  This was followed by similar upward revisions to Peak Rate and URR in April, July, August & September.  ASPO ends the Year having raised its Peak Rate for Regular Oil to 66-mbd and its All Liquids Peak Rate from 81-mbd to 90-mbd.  Regular Oil URR was raised 50-Gb.  All Liquids URR was raised 100-Gb.

In June, BP raised URR by 66-Gb.

In July, Jean Laherrere raised his Peak Rate from 88-mbd to 93-mbd and extended the date from 2014 to 2018.

In July, IEA announced its Medium Term Outlook forecasting a 12-mbd increase in global refining capacity by 2011.

In August, CERA announced a Medium Term Outlook forecasting global refining capacity of 101-mbd by 2010 ... up 12-mbd.

In October, the ASPO Netherlands newsletter inferred that its next Koppelaar/PONL Outlook would be upward revising its Peak Rate and extending the Peak Date.

And we end the Year with last week's announcement from the Skrebowski Megaproject that its Peak Rate has been increased from 91-bd in 2010 to 95-mbd in 2011.

TrendLines has graphed the progressive bad news: http://trendlines.ca/ScenariosGraphArchive.htm

2006 ends with the most optimistic year for Peak being 2010.

2006 ends with the most conservative Peak Rate being 90-mbd.

2006.  RIP, eh...

But let's start the holidays with a smile,

the Christmas Tree Angel Tradition...

When four of Santa's elves got sick, and the trainee elves
did not produce the toys as fast as the regular ones, Santa
was beginning to feel the pressure of being behind schedule.

Then Mrs. Claus told Santa that her Mom was coming to visit.
This stressed Santa even more.

When he went to harness the reindeer, he found that three
of them were about to give birth and two had jumped the
fence and were out, heaven knows where. More stress.

Then when he began to load the sleigh one of the boards
cracked, and the toy bag fell to the ground and scattered
the toys.

So, frustrated, Santa went into the house for a cup of
apple cider and a shot of rum. When he went to the cupboard,
he discovered that the elves had hidden the liquor, and
there was nothing to drink. In his frustration, he
accidentally dropped the cider pot, and it broke into
hundreds of little pieces all over the kitchen floor.

He went to get the broom and found that mice had eaten the
straw end of the broom.

Just then the doorbell rang, and irritable Santa trudged to
the door. He opened the door, and there was a little angel
with a great big Christmas tree. The angel said, very
cheerfully, "Merry Christmas, Santa. Isn't it a lovely day?
I have a beautiful tree for you. Where would you like me to
stick it?"

And so began the tradition of the little angel on top of
the Christmas tree.


The Peak was not in 2005.  It won't be here 'til 2010 at the earliest.

What is this? Freddy Hutter declaring that peak oil may come as early as 2010! Will wonders never cease?

When even the wild eyed cornucopians admit that the peak may be as early as 2010 the world is indeed in deep doo-doo.

My prediction. We are currently at the peak with the peak month, C+C, very likely to be December 2005. The peak calandar year will most likely be 2005. This peak-plateau that we are currently on, and have been on for just under two full years, will last another year, no more.

Ron Patterson

When even the wild eyed cornucopians admit that the peak may be as early as 2010 the world is indeed in deep doo-doo.

Robert is not a cornucopian, but he has downwardly revised his earliest estimate for the peak to 2009, to which I replied that I thought that it was pointless to dedicate a couple of threads to a debate as to whether the peak was in 2005/2006 or whether it will be in the  2009/2010 time frame (and Robert agreed).

Having said that, I agree with Ron and Deffeyes about the 2005 peak.

And the recurring problem I have with the rosy projections for higher production is the near certain decline/crash of the four current super giants--with the one new super giant not expected to reach peak production until 2020, at the earliest.

WT, I know Robert is no cornucopian. I thought I was quoting Freddy Hutter. Perhaps I was wrong and was only quoting Freddy quoting Robert.

My error, sorry.

Ron Patterson


I was just pointing out that Robert is now putting the earliest peak in the same time frame as Freddy, but I wanted to differentiate Freddy from Robert.

Note that while you and I have not changed our positions, the "later peakers" have been moving closer to us.

Which new super-giant are you referring to?  (I must have missed this, as I have been checking in only sporadically.)
From TOD.


(4) Kashagan

The biggest oil field to be discovered in the world in the past 30 years, it is in the North of the Caspian Sea, in the Kazakh sector (as shown on the map above), and it is being developped by a consortium including all the big majors - ExxonMobil, Shell, Total, ConocoPhillips, ENI and Inpex, with ENI, the Italian group, as the operator (Exxon did not want Shell, Shell did not want Exxon, and ENI was smarter than Total to be voted in...)). BP and BG were initially in but sold their shares in recent years. With 9-15 billion barrels of reserves (exploration is not totally complete), it is yet another ANWR fully in control of BigOil, but it is very, VERY, challenging technically (very high pressures, located in an areas which is at times seawater, ice, mud or any combination in between, and far away from any infrastructure of any kind in an area with a very tough climate) and it will need to find export routes for its production (a combination of CPC and BTC is likely to start with)

Peak oil is not a game to get bragging rights freddy.  Even if PO is at 2012 our civilization is going to be challenged to its utmost.  Is your smug attitude that we have to continue on our present trajectory and all will be well?  Yes, then you are a fool.
I couldn't agree more. I've an incredible 7 yr old boy. If the cornucopians are correct and the peak is 30 years out my boy is screwed. Basically making me a failure as a father. that said, I do like freddy pointing out the obvious. It helps me focus on the long term systemic problems we face. Not the "world is going to end tomorrow" mind set that plagues so many here and around the world

by the way, looking for a good way to time peak oil? do what I do, split the difference. As a builder, I come across problems daily that must be rectified quickly and in a reasonably sound manner. This technique wouldn't work for real science but it hasn't failed me in everyday life, as you know you can revisit the equation any time it is not working in real time.

here goes.
Deyfess 05 + doe 2030+-=4035/2=2017.5+-

You are not a failure as a father by having a child.

People have had children facing a far worse situation.

We can not know what will happen in the future. There is no point in worrying exactly when the peak will be - we will never know even in hind site.

Just help you son grow up with an intelligent and open mind, one prepared for any eventuality.  

If PO is in 2012 we might be in luck:  we could have a large fraction of all new vehicles kitted out as either PHEV's or convertible HEV's, and the SOFC's from Delphi and GE and Siemens will be on the market.  They'll give us the flexibility to ride the curve down, both switching energy supplies and using the remaining fuel much more efficiently.
I treated myself to a Xmas present - Cradle to Cradle by William McDonough & Michael Braungart. McDonough is legendary in my profession, so this is long overdue. This paragraph concludes the preface:

Consider this: All the ants on the planet, taken together, have a biomass greater than that of humans. Ants have been incredibly industrious for millions of years. Yet their productiveness nourishes plants, animals and soil. Human industry has been in full swing for little over a century, yet it has brought about a decline in almost every ecosystem on the planet. Nature doesn't have a design problem. People do.
Well, my birthday was yesterday so I treated myself to books that aren't too appropriate for Christmas such as ,Special Forces Handbook, Sniper Training and Employment and Guerrilla Warfare and Special Forces Operations.  Plus, a few I think are really too inappropriate to even mention on TOD.  My Christmas book is Patriots, Surviving the Coming Collapse by Jim Rawles.
When TSHTF, can I hide behind you???  ;-)
follow me I'm righy behind you ; )
Hide behind Donal,
Nobody will be shooting at him,
Todd will be a battle-magnet, by the sound of it.
I also like his line,

"..  It'll take all of us, and it'll take forever, but isn't that the point?"

  He makes some great observations that really forced me to check my assumptions.. challenging the green mantra of LESS, LESS LESS.., working in ways that promotes and cooperates with 'business', too often the whipping-boy of the environmentalists.     very useful book!

Hello TODers,

Leanan's toplink on Nevada Geothermal induced a trip down memory lane for me.  Over four decades ago, I lived in Beowawe, Nevada where there is now a 17MW geothermal plant.  Our family use to relax in some area hotsprings, and my brother and I, along with a few friends, used to build riverrafts to float down the Humboldt River.  The town is now mostly ghost town, but my family used to live in the two-story house [now long gone] that was between the saloon and general store/gas station.  I attended the little schoolhouse, where my mom was one of two teachers, and picked up the mail at the little postoffice.  It was a great place for an 8-10 year old boy-- adventures like Mark Twain's "Huckleberry Finn", but my mom was thrilled when we finally moved to Phx in the early sixties.

Couple of links:
Beowawe wiki

Beowawe Photos

Caithness geothermal

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

Bob, I don't know if you read the posts on the Yahoo Energy Resources group, but this one's for you:



Hello Todd,

Yep, my sentiments entirely.  I have sent dozens of emails to local and state officials warning about Overshoot & Dieoff, PO + GW, water shortages, acquifer depletion,... on and on....I never even get a reply.  As I have mentioned in earlier posts: when the fifty million Southwesterners start heading for Cascadia, the Cascadians, if they are planning ahead, better have their Earthmarines ready.  

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

I was just reading one of the last chapters of Diamond's "collapse" while at work, and came upon this paragraph, which is extremely fitting to both peak oil and global warming:

"Perhaps the commonest circumstance under which societies fail to perceive a problem is when it takes the form of a slow trend concealed by wide up-and-down fluctuations. The prime example in modern times is global warming. We now realize that temperatures around the world have been slowly rising in recent decades, due in large part to atmospheric changes caused by humans. However, it is not the case that the climate each year has been exactly .01 degrees warmer than in the previous year. Instead, as we all know, climate fluctuates up and down erratically from year to year: three degrees warmer in one summer than in the previous one, then two degrees warmer the next summer, down four degrees the following summer, down another degree the next, then up five. With such large and unpredictable fluctuations, it has  taken a long time to discern the average upward trend of .01 degree per year within the noisy signal. That's why it was only a few years ago that most professional climatologists previously skeptical of the reality of global warming became convinced. As of the time that I write these lines, President Bush of the U.S. is still not convinced of its reality, and he thinks that we need more research. The medieval Greenlanders had similar difficulties in recognizing that their climate was gradually becoming colder, and the Maya and Anasazi had trouble discerning that theirs was becoming drier."

I know its been said before, but its worth saying again. Humans do not recognize a problem unless it is an immediate emergency. I just don't see us as a race doing anything about our energy needs until it is too late for most of us.

We're already doing something.  Wind power is advancing at a pretty good clip.  Solar has several different varieties of PV as well as thermal engines, and new announcements come every month.  The only reason prices don't go down is because demand is so high, which will drive more and more investment and more production.

Once built, a wind turbine is good for around 20 years if not more.  PV is warranted for 20-25 and will produce for much longer.  These investments may not be enough - yet - but they're all in the right direction.

We have other technologies coming along rapidly.  Molten-carbonate fuel cell generators are commercial items in the 250 kW range, and solid-oxide fuel cells have fallen well under the $300/kW level in ~5 kW units.  Efficiency of both of these is either above 50% or will beat it soon.

The small SOFC modules are intended for vehicular APU's, but they would easily function as domestic cogenerators.  Annual production could be in the millions.  Scaling up to put one in every household would be no big stretch.  These could allow doubling of the efficiency of household natural gas use, to name just one advance.

It doesn't matter if we don't recognize the problem so long as we have the toolkit to address it.  That toolkit looks like it's either coming fast or already here.  What we need to do is get it pressed into use ASAP.

Another problem is that people see `oil' as having a few limited uses, mainly driving a car or bus.  In a city with `condo' or `communal' type arrangements in apartements, most people (Geneva, Switz, highly educated populace), I found out to my surprise, aren't even really aware of the heating oil that keeps them warm.  They don't think of it as `oil' (1) and `know' the price is fixed (in fact, it is smoothed, to be very brief) by the Gvmt, which somehow makes everything OK.

They don't know where it comes from, who sells it to them, and how much it costs. (A few had noticed price may have risen recently, as their utility bills went up.) I asked 50+ people, all adult aptmt. dwellers with `college' educations, and not one knew.  I also asked them how they would heat their own home if they ever came to possess one -this is a far-out dream around here- and about half mentioned Minergie, the Swiss build-sheet for energy efficient homes, and geo-thermal pumps. I read that 50% of 2005-built individual family homes have been equipped with these, newspapers have gone on about this. (I could not confirm that % with a lightning google.)

10 said they would use wood  - CH has plenty of wood.   Again, because they read news articles.  Eg. the village down the road from me - 700? souls - is building a wood-burning plant to heat water which will be piped to every home that wants it.  

I concluded that in a way the Gvmt. is doing its job with studies, guidelines, propaganda and direct action (laws, building codes, subsidies, tax breaks, etc.) in the building arena.  In fact I was surprised at the awareness of my respondents on this point. However, very few of them seemed aware of peak oil -only of rising prices-, they related the building measures to cost, efficiency (that is, to fashion, or a sort of greeny attitUude) and to getting `away from' nuclear power (!), a long standing tradition around here.

(To be fair, there were some exceptions, a few people who did grasp what is coming down..)  

Anyway, the point is that understanding of peak oil can, in a way, be by-passed. Not that I approve of or am lauding the CH Government..    

1) They seem to consider `mazout' - heating oil - to be inferior stuff of inexhaustible supply, nothing like the gas that goes in cars.  

With the TransAlp pand related programs to severely reduce the use of heavy trucks in Switzerland (CH to readers unfamilar) and move freight on (hydro) electric rail, half of new homes getting geothermal heatpumps and expanding use of wood (limited in CH), and conservation propaganda, Switzerland is far from perfect.

They may be doing half or 2/3rds of what will be needed post-Peak Oil.

But this FAR better than the US, which is doing 0% (perhaps 1%) of what is needed to prepare.

If a nation is already doing 1/2 or 2/3rds of what is needed when TSHTF, it is relatively "easy" to speed up and expand that to 100% (or 125%) of what is needed.  It will still be a struggle, but it will be doable.

To go from 1% to 100% in the space of a few years ?  Only WW II is a comparable that I cna think of for the US.

Best Hopes,


Re Freon freebies

This is a serious flaw with carbon offsets which hopefully won't be mirrored in the California emissions trading scheme. Under the 'clean development mechanism' the World Bank pays Chinese factories to incinerate or substitute refrigerant gases with high GW potential. Why not just make them illegal or prohibited imports? If A is assumed to be entitled to emit then B has to pay A not to emit? This is blackmail. Like farting in an elevator it shouldn't happen in the first place.

Hello TODers,

Will the KBR 'workcamps' be for Cubans?
US prepares for tide of refugees from Cuba

Emergency planners in the United States have been rehearsing for a range of "nightmare scenarios" that they fear could unfold on their doorstep after the death of Fidel Castro.

If Raul lets people go and there's not a naval blockade to stop them, we estimate as many as 500,000 people will leave in the first year," said Andy Gomez, a senior fellow at the University of Miami's Institute for Cuban and Cuban-American Studies, which has been involved in the planning. He added: "The pressure on the social infrastructure here will be unbearable."

They included the Cuban military fighting bloody running battles with pro-democracy protesters in Havana, and a mass migration north across the 90-mile wide Florida Straits that would bring chaos, drownings, and force the Sunshine State to declare a civil emergency.

Other concerns centre on pledges by some Cuban exiles in the US that they will head south in boats to pluck stricken refugees to safety, or even to lead an uprising.

The drill resulted in the fine-tuning of contingency plans for thwarting outbound exiles. Measures would include shutting down marinas in Florida, stopping road vehicles seen towing boats, and even restricting fuel sales. Meanwhile hurricane shelters and detention centres would be used as temporary accommodation.

Authorities emphasise that the plans being drawn up relate to a "worst case scenario".
Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

I predict Castro's death will not bring about any sudden changes. Perhaps Cuba should prepare for an influx of Americans. If I had a choice of Castro or Bush/Cheney as my dictator I might just move to Cuba.
The BNP (British National Party) have taken an interest in peak oil for some time, often sending representatives to peak oil conferences to take notes.  Their leader, Nick Griffin is no fool and clearly sees a possible episode of economic and social chaos resulting from peak oil (and in UK context possibvle gas shortages too) as an ideal opportunity to say "I told you so".   He would then step into the policy vacuum left by the major parties, in much the style the National Socialists did in Germany in the 1930's.  People in countries outside UK should be aware, as Griffin mentions in a speech in the Guardian article, that similar parties exist in many other countries and are presumably waiting for a similar opportunity.

What his policy to deal with a crisis would be, is not clear - maybe he has none or is keeping his cards close to his chest to prevent the ideas being stolen or rubbished.  In any event, this shows that preparing for and surviving a peak oil crisis is not something that can be done individually by slunking away into the hills with a ton of dried food, but only by organisation at a community or higher level.  

Which is one reason why the community initiatives in places like Kinsale, Totnes and many locations in other countries are so important.  Also why efforts on this forum to explore the peak oil issue and alert governments are so vital in spite of the off-site antics of CERA and on-site spoilers.

Happy Christmas to (nearly) all TODers.

Come on. It's Christmas.
Extend the branch of good cheer to your favorite troll:

Even silly cousin CERAh can join in the merryment.

Happy Christmas to (nearly) all TODers.