As the world celebrates the Olympics . . .

Perhaps it is a little harsh to note, as the world begins to celebrate the Olympics, that gas supplies from Russia, through Ukraine to the host country, Italy, remain reduced.

And with that dour note to start what will be, I hope a happy weekend for you all, the floor is yours  . . .

they have also been covering the snow up in the mountains with fabric to prevent them from melting. first time they have had to do this.
Well, at least the warmer weather means less heating will be required. Looks like Europe has begun to thaw out. Now the chill shifts over to North America. Anyone think that NatGas futures may have bottomed out this past week?
There are masses of snow in parts of Germany. Houses need to be evacuaed on account of roofs prone to crash under the snow's weight. But maybe on the other side of the Alpes it looks different. matthias, berlin (almost no snow here)
According to NOAA  (National Oceanic and Atmospheric Administration)  this January was the warmest on record for the US.  Their calculations are that residential energy demand would have been 20% less than normal.  I guess that has had a substantial effect on inventories.

Interesting link to NOAA... which explains record high US January temperatures happened because the jetstream was north of its usual location, trapping cold air in Canada and Alaska rather than in the Lower 48.

My question is, how much warmer was it in January, than the average temps when the  jetstream is in a similar position in January? And given that we have only 111 years of records, can such a sample exist? It would be nice to tease out the effects of the jetstream position from those of climate change.

Two links on this.  First, James E. Hansen, the NASA climate scientist who sparked an uproar last month by accusing the Bush administration of keeping scientific information from reaching the public, said Friday that officials at the National Oceanic and Atmospheric Administration are also muzzling researchers who study global warming: science

Second, a blast from the past regarding unusual hurricanes:

"Emanuel has another disagreement with government scientists. He thinks they've been too quick to dismiss the role of global warming in hurricanes.

NOAA puts all the blame on something called the multidecadal signal -- a historical pattern in which several decades of high hurricane activity are followed by several quiet decades."

Sad, isn't it?  I for one now question how political is this "jetstream" explanation for high temperatures?

All I can say is, I hope you are wrong. It is one thing to muzzle scientists, or to call for more global warming research as an excuse to preclude action most scientists believe to be necessary -- bad as these things are. But if the science agencies are now forced to lie about scientific data -- that would be a new low even for the Bush Administration and a sad day for the United States. If you are right, this would seem to be even more egregious in some ways than McKelvey's muzzling of Hubbert; after all, at the time, Hubbert was in the minority and most professional opinion was on McKelvey's side. He at least had respectable, professional company in being wrong.

If you are right the blogs dedicated to climate change will have to give the NOAA their own version of the McKelvey Award...

The position of the jetstream (a river of air in the upper atmosphere which guides low pressure systems and generally separates warm and cool air masses) makes an enormous difference to the temperature and weather where I live. It also makes a big difference if the flow is zonal (flat, latitudinally speaking), or highly distorted.

In the summer, the jetstream is usually to the north and we languish in a hot humid airmass with poor air quality. If the jetstream dips to the south during the summer, it carries low pressure systems over the great lakes and we get a cool, wet spell. During a typical winter, the jetstream is usually to the south and we sit in a cold, stable airmass with bright sunshine. If the jetstream moves north of its usual position (especially if it rises far north in the west, plunges in the centre and rises again in the east), then it typically brings Colorado lows charged with moisture from the GOM our way and we get an enormous dump of snow.

In recent years (with the notable exception of the winter of 2002/2003), the jetstream has been further north than usual for the time of year and the flow more zonal, which has meant more precipitation than usual for us (although more often as Alberta clippers than Colorado lows so the individual dumps of snow have been smaller), warmer temperatures and less sunshine (bad for my PV system). Those cloudy and wet conditions are more typical of spring and fall here when the jetsteam would normally be transitioning from its winter to summer position or the other way around.

The role of the jetstream in defining weather patterns is not in dispute, but the interesting thing to study would be the effect of global warming on the position and shape of the jetstream.

That all sounds completely reasonable.  To fine-tune my statement of discomfort, it is whether the global warming relationship in this warm-weather pattern would be "strangely missing" as it was in the discussion of the "multidecadal signal" and hurricanes.

I was actually watching TV and caught a NOAA chief's response to the global warming question, post-Katrina.  His flat surety that global warming was not involved was shocking.  He did not take the more nuanced position that global warming's contribution was unproven, and would likely be one factor among many.

Sad, isn't it?  I for one now question how political is this "jetstream" explanation for high temperatures?

This is what I like about TOD. The Peak Oil question quickly gets emmeshed in discussion of politics and human behavior.

We are not shy to cast doubt on the "Stay the Course" guidance given to us by our esteemed leaders (the figures of "authority" within our herd mentality masses).

I personally have no idea how the NOAA chief you watched rose to his position of royal "authority" and power. Maybe it was based on merit and scientific ability, and then again, maybe not.

I highly doubt that "merit" was the basis of his authority. Politics is the more likely answer. In our "competitive" societies, it is the most ruthless, the most political and the ones willing to step on the dead bodies of those who trusted them; who rise to power.

You may think it an oddity --but it is not-- that in the corporation you work for, the boss and his henchmen are the sleaziest of Enron style exectuives who constantly cook the books, and constantly "reorganize" the organization just to keep everyone off balance, this even as the corporate ship is sinking. In fact they are grabbing all they can and preparing to bail out with their golden parachutes before the plebes figure out what happened. How often is it that the crooks who sank the boat stay on board? If you work for a corporate entity where the leaders are honest, hard working types, count yourself in the lucky minority.

It is no accident that in our "competitive" societies that the most ruthless kind of people rise to the top. And by the way, who sold you on the idea that "competition" and "free markets" is the way to go? (Hint: they did.)

P.S. Aren't the jock-elite Olympics just grand?
I am so thrilled to celebrate the "thrill" of their victory and the agony of our defeat.

Enjoy the demand destruction of NG while you can. It seems passing the tipping point of no return re. climate change postulated by Lovelock, is being confirmed by other climate scientists. It's out of the closet guys. We better start facing it.
What little of the Olympic coverage I saw on US TeeVee was oddly propagandistic, in my view.

No mention was made of how preparations or planning were impacted by warm weather or energy issues.

The camera panned the crowd and settled on Laura Bush more than once (sitting with Tony Blair's wife?) as though they were Holy People.  When Iran's athletes came out, the comments were starkly political and alluded to awful comments made by Iranian leaders and such.  Great for priming the pump for war.

I was actually more focused on reading at the time, but found the coverage to be very warped to fit the "climate change is not real" and "we must occupy the oilfields by force" warmongering that is in vogue in Washington DC.

Corn acres expected to decline

High fertilizer prices are shaping up to be a significant factor for lower U.S. corn acreage this year, according to David Asbridge, Doane Ag Services, St. Louis, Mo. Asbridge spoke at the National Alliance of Agricultural Crop Consultants in Tucson, Ariz., in January.

High natural gas prices are part of the reason why fertility prices are skyrocketing, although not directly, according to Asbridge. Rather, high natural gas prices are forcing U.S. nitrogen manufacturers to cut back on production, leading to more imports, which is increasing global demand in a tight supply situation.

...The United States also currently has a shortage of production capacity for natural gas, according to Asbridge. "We are actually producing less natural gas in the United States than we were producing 20 years ago. This is a real problem that Congress, or our leadership, is going to have to address.

Guess this puts a crimp in GM's Go Yellow plan...

Speaking of corn acreage how will this effect corn and beef prices not to mention nitrogen fertilizer.

My suspicion is that many of the new ethanol plants in planning may never come on line due to cost and availability of Nit fertilizer. Without it corn production will plummet and gov. subsidies will never provide the economics to continue corn ethanol production, let alone the fuel to produce it.
Personally, I am delighted to see the price of fertility rising;-)
Along with the comment by Unplanner,
I have been trying to bring this to attention.

1-Leanan's article totally refutes the arguement that the
"Markets" will allocate and signal substitute

2- Farmers have been hit 3 ways by Katrina/Rita-diesel is a $ higher than last year.
Nitrates are being rationed.  Crop prices are the same.
The NO Port is still limited.
And Farmng is the only bizness where input is bought
retail and output is sold wholesale.

3-The US is in a knock down dragout fight with Europe to reduce farm subsidies.

4-Why plant?


I think all but the most rabid of Libertarians accepts that some kind of farm subsidies are necessary.  I've no doubt that if enough farmers quit farming, the price of food will rise.  But will the customers survive until next year so they can pay the higher prices?

Globalization is doing a lot of damage, I fear. For example, Mexico used to be self-sufficient in corn.  Then NAFTA flooded the market with cheap U.S. corn, driving the farmers to the city to find work.  Mexico now must import corn.  The typical reaction to this is, "Farming is a terrible life.  They're happier in the city."  Maybe so, but it leaves them rather vulnerable if we decide to put that corn in our gas tanks instead on the open market.

The subsidies should be for growing more local food, not grain for export to fish farms.

I know of at least 8 people that are drafting a reply to Science magazine blasting last months pro-ethanol research piece. We need to move beyond the idea that corn-ethanol can replace gasoline - some crops may play a role but this one won't/can't.

Even if we assume Farrel et als. calculations that ethanol is 1.2:1 EROI as correct (which I do not - they leave out many inputs, such as tractors), that would mean we would need to create 6 units of ethanol from 5 units of fossil fuel input just to net out 1 'new' unit of energy to society. Extrapolating that to US fossil fuel use of 21 mbpd, we'd need to create 120 mpbd of ethanol using 100 mbpd of oil to net out 20mbpd. Clearly we could do this on a small scale, locally, when co-products are needed by local farmers. But large scale no way. And cellulosic (presently) is even worse.

In my opinion, there is exactly one good reason (and it is a VERY good reason) for subsidies for farm products. Because of weather fluctuations there will be great harvests and sometimes hardly any harvest, due to drought or something else that cruel bitch, Mother Nature throws at the farmer. Thus if you leave it to the free market, sure you'll have equilibrium, but prices will fluctuate wildly, say between $1 and $15 for a bushel of wheat. The way subsidies are set, however, has almost nothing to do with economic logic and almost everything to do with political logic.

The way political logic works is that the fat-cat agribusinesses buy (excuse me, rent) Senators and Members of the House of Representatives. For example, Senator Bob Dole, long before he became famous as a spokesman for Viagra, was known as the senator from Archer-Daniels-Midland. The system as it works is totally corrupt.

However, having said that, reflect on this: Would you rather have surpluse in most years, at considerable cost to tax payers and all sorts of inefficiency costs? Or would you rather have a loaf of bread spike to $8 every time the wheat harvest was bad? Corruption, chronic surpluses, and ineffiecient allocations of resources are not part of utopia, but they sure beat food riots.

I think the least damaging of such systems is to have a government or other stockpile of food that is filled in years with abundant crops and continously emptied into ethanol and biogas production to rotate the stock. Then it do not disturb the food product market all of the time and there is massive ammounts of emergency food available.
I agree 100%, and when my daughter becomes first Empress of North America and I am her economic advisor, then your plan will be implenented.

But not before then.

Economic logic almost never rules.

Politics rules.

Not since the bygone days when FBI Director J. Edgar Hoover could deny the existence of the Mafia while at the same time vacationing annually at Southern California's Del Mar Race Track as the guest of Texas oil man Clint Murchison, whose part-owner in his oil company was New York Mob Boss Vito Genovese, has there been such a total disconnect between what passes for the news in America... and what really happens every day.

Aquifer under Desha County drying fast, study finds
Friday, Apr 9, 2004

The USGS study was done over several years at a cost of about $1 million. The study is different than previous ones because it developed numerous models of the entire region and determined different scenarios at various rates of water usage.

In December, the USGS released a study showing that sections of the aquifer under Arkansas, Lonoke and Prairie counties in the Grand Prairie region of East Arkansas could begin running dry in five years.
A third study, on the Sparta aquifer (the Sparta is in worse shape) which supplies water to South Arkansas, including Pine Bluff and El Dorado, is to be released in the next few weeks, said USGS spokesman Jim Peterson.

Eastern Arkansas is the #1 rice growing area in the US.
We're #4-5 in cotton and #8 in soybeans.

My point-These are GM-genetically modified crops, meaning they must have water, fertilizer, RoundUp(Monsanto), at just the right times in just the right amount.

You can spiral in any direction from Ag because Ag is the Foundation of Civilization.  The fact is that the Ag Wealth has been shifted to the cities.  

My point: Farmers are miners now. Ag is doing everything it can to keep Society going.  Asking it to
also provide Energy is going to break it.

If corn is too expensive to fertilize and cultivate and energy is expensive, the obvious move is to grow something that needs much less fertilizer and cultivation and produces energy.

Pity we don't have much of a market for solid biofuels (other than wood pellets) yet.

I've been reading a few stories about farmers making the switch to organic foods.  As they become more popular they become a way to both reduce some chemical costs and also sell at a price premium.
There is much wisdom in what you say. I agree.
Wheat is a small part of the price of bread by the time it reaches my shopping basket. Whether the government subsidizes bread or not is irrelevant, since I pay either way.
I support stockpiles because I know that there have been times when volcanos, asteroid impacts, or wars have wiped out harvests. I would feel better with a year's stockpile of food in America. At least in terms of calories and vitamins.
Having a Strategic Food Reserve for the US is like a Strategic Petroleum Reserve for Saudi Arabia.

We have a years worth or more of food in commercial storage already, (just look at a typical grain elevator along a rural road or in a port and consider how many people that would feed) if one excludes corn (maize to outside US).  If one is willing to eat corn as a staple, we have several years worth in storage.  And lean beef that has not been corn-feed could be slaughtered at a younger age.

ATM, yes, but the US is projected to cease being a net exporter of wheat by 2025 due to demographic changes, and that is without factoring in any potential drying out of the great plains.

Back in the mid 1970s, when the early mutterings of global warming were made, tentative predictions about its effects were that the US central plains would become drier and the Russian steppes warmer and wetter, suggesting that the wheat breadbasket of the world would switch from one to t'other. I'm not sure about the exact current state of such predictions but I'm pretty sure they still expect the US plains to become drier and less productive.

I would feel much better if this was true. Do you have a citation? Any site that measures food stores in the pipeline in the US? It would take a load off my mind. I thought that the storage of crops in the US peaked in October and went down till June.
I understand that if we went vegetarian we could easily get by on half as much crops by not feeding grain to pigs and chickens, and that cows and sheep live on grass that is mostly rainfed.
We also have a reasonably large standing crop of deer and other wild animals since hunting went out of style in the last thirty years. It's not as much as our cattle/sheep production, but it would help.
I am also aware that there is a lot of irrigated land that will keep producing crops even if the rain fails due to climate change, at least for one more crop, and sometimes for years where they are producing fossil water like the Oglalla aquifer.
While we do have an increased population of {deer] of around 30 million,  it is not for lack of [hunting] as one source says that we annually kill 7 million.

The average meat from a deer is about 65 lbs (source: my father) that equates to 435 million pounds of meat compared to over 27 billion from [beef].

Bottom line: venison is a silver BB.

Thee is very little farming subsidy in Canada and yet they seem to have stable production.  There is no farm program for beef cattle (unlike dairy*), and most fruits, nuts & vegetables.  Yet we seem to get enough of them, with demand shifting in response to price signals die to supply & demand.

The "$8 load of bread is a "straw man".  The cost of wheat is currently a few pennies/loaf.  If wheat became too expensive, potato bread, rye bread, etc, would gain in popularity.

* where we have had to pay too much for most of my life for the "privilege" of stable & high milk prices instead of prices that fluctuate between high & low, we just get "high")

We would be FAR better off just scrapping ALL farm subsidies (with the possible exception of the drought insurance program) and letting the market have it's way.

Bein' from New O'lins, y'all know about politics and corruption. Shucks, the great state of Louisiana is #1 in murder rate and #1 in corruption ever since the days of Huey Long--and I speak as one who lived under the criminally corrupt regime of Mayor Daley the First in Chicago during the mid nineteen fifties.

Take a good close look at the sugar industry in your state. Who is doing the work? Illegal Haitians with machetes--great workers, work harder than the plantation slaves ever did. Who is getting the money? You damn well know who. How does it work in Congress. You know that too.

My point is that economic logic has almost nothing to do with the way farm subsidies are set. And BTW, if the wheat crop is wiped out, say by drought, there is a good chance that corn and rye are not doing well either. Also, we grow hardly any rye in the U.S. And why? No subsidies for rye--plenty for corn, wheat, rice, cotton, sugar, soybeans, peanuts, etc. Farmers grow what is profitable to grow; they are not dumb. The best way to make money in farming is to suck at the government tit, and that is what the Fat Cats are doing.

If you want to fix the system, you will need a social movement comparable to the American Revolution, because the corruption is endemic and has been for a long time.

Well said.

This what I love about our "free" markets.
We all have "freedom", it just happens to be freer for some than for others.

(Did Orwell use that line in Animal Farm, or was it just about "equality" and it being more equal for some than for others?)

A couple more agriculture stories.  One from the U.S.:

Ag department warns farmers of likely drop in income

WASHINGTON (AP) - Farmers will see their incomes plunge in 2006 coming off two years of unusually high prices and record crops, the Department of Agriculture said yesterday.

Rising energy costs and interest rates are gobbling up the bottom line for farmers, analysts said.

One from the U.K.:

UK fruit and vegetable producers are counting the costs of higher energy bills

Rising energy costs are already a concern this year and with higher prices expected for the foreseeable future, many UK producers are preparing to square up to this challenge.

Insiders are reporting fuel hikes of anywhere between 60-80 per cent, with energy-intensive sectors such as protected tomatoes, cucumbers and peppers, (where energy use can amount to as much as 40 per cent of the costs of production) likely to be hardest hit.

Solution to peak oil found!

It took some work, but I am pleased to announce that I have found a solution to the coming world-wide oil shortage! It turns out the solution is not any of these:

  • Find massive new oil fields that were somehow previously overlooked.

  • Develop technological break-throughs in oil extraction methods.

  • Develop technological break-throughs in fuel-efficient vehicles.

  • Develop alternate sources: tar sands, biofuels, hemp, etc.

  • Violently seize resources of oil-rich nations.

Basically I followed the advice of Sherlock Holmes: "When you have eliminated the impossible, whatever remains, however improbable, must be the answer."

So I eliminated the above "solutions" and there was just one left, and once I got it all by itself it turned out to be pretty obvious (or maybe that was just hindsight):

  • Drive less.

At least in the U.S. and Canada, there are large numbers of people who have chosen to live far from where they work, and so commute an hour or more each way to work. The key observation is that this is a preference, not a necessity. People choose this lifestyle for economic reasons: they can get a bigger house, with a bigger yard, for less money. Good for them; but, when the economics change and it no longer pays to choose such a lifestyle, they can instead settle fewer square feet, a smaller or non-existent yard, higher mortgage, no long summer trips, and all kinds of bad stuff like that, which, bad as it may be, won't kill you.

What's really missing from this whole discussion of peak oil is a frank acknowledgment that we (the U.S. and Canada, at least) have chosen an extremely profligate (and totally optional) lifestyle that simply wastes a huge amount of oil. We may like it; but we sure don't need it. And when reality takes away the option, for all the complaining and teeth gnashing and wailing and  moaning that will be unleashed, it won't really matter. The complainers can complain to each other. No one else really needs to pay them any attention.

I remain cautiously optimistic about biofuels, especially if combined with plug-in hybrids. I've updated the ethanol:land calculator to include switchgrass, which, if the yield figure is to be believed, shows that 50% of US gasoline usage could be met using 6.5% of US agricultural land. This assumes a 1:1 mpg equivalence which Saab seem to have achieved; EPA figures seem to show more like 75%.

The biodiesel:land calculator shows rapeseed (canola?) as the best crop for Northern climes; yields for palm are about 9 times that of soy beans.

I find it interesting that the USA's two main biofuels crops have the lowest yields, ie soy beans and corn.

Simply because either the technology or the alternative crop is not yet available. I am not aware of any switch grass bio-diesel technology being commercial as of today. All bio liquid fuels are currently made from plant oils, starch, or sugar. Perhaps some one can show me my error.
Biodiesel no, but iogen ( claim that ethanol from cellulose is a commercial technology.
Russians have been getting commercial (large) quantities of ethanol from cellulose for more than thirty years. It works, isn't very complicated (or efficient, but that never bothered the Russians), and it is scalable. If Russia (or Canada, for that matter) decided to devote tree plantations to making ethanol, they could make huge, huge quantities on a sustainable basis. I suspect that iogen's (or somebody else's) biomass technology is bigger than a silver BB, maybe a silver .22 caliber pellet, possibly even bigger.
This from Iogens website:

What is the capacity of Iogen's demonstration plant?

At full capacity Iogen's demonstration plant is designed to process about 40 tonnes per day of feedstock, and to produce 3 to 4 million litres of ethanol per year. The plant uses wheat, oat, and barley straw as raw materials.

What is the scale of a commercial facility?

The size of a commercial facility is dependent on local conditions, but Iogen envisions plant will process approximately 1500 tonnes per day of feedstock and produce around 170 million litres of cellulose ethanol per year.

170 million litres per year equates to 3000 barrels per day - and thats the OUTPUT, doesnt include how much energy went into it!

Also, Their website claims that using cellulosic ethanol reduces greenhouse gas emissions by 99% compared to gasoline. Smoke and mirrors. How does the soil get re-nutriented? How do you process everything? Madison Avenue is trumping Cleveland and Hall (EROI).

For alternatives to work we need to qualify 4 criteria:
1)net EROI
3)Timing to implement vs decline in liquid fuels
4)Environmental impacts on soil, water, ecosystems and GHG

Iogen is looking at:
1) ROI

You're right. Soil preservation is one of those things that's been nagging at the back of my mind for a while when it thinks about biofuels, partuicularly cellulose because a lot of that goes back into the soil at the moment. If you take it away, you can say for sure that the impact on soil structure and fertility will be negative.

What we need IMHO is a "sustainability metric" that we can use to evaluate various alternative courses of action oe technologies.

Perhaps "years to collapse" under the proposed scenario? The difficulty being, it's very difficult to estimate.


Do you have any numbers on HEMP?

I've been searching but can't seem to find anything.

Hi Stryker, I can't find anything for hemp either (at least not in terms of gallons of ethanol per acre). If you or anyone can find a number (and it's source) then please post it on the next open thread and I'll update the calculator.
Read George Monbiot's article on what biodiesel will really be like. It won't be grown mainly in the US or Europe, It will be grown in third world countries and will cause devestation to the local food production and environment as third world shrimp farming for first world markets has
I wonder how much ethanol will be grown in the country that consumes it.
Nick, I agree; these are real concerns. On the other hand, wouldn't it be wonderful to reforest the drought-stricken parts of Africa (for example), if there was a way to do this equitably? And no, I don't (yet) work for D1 Oils :)
JN2 -those nifty biodiesel: and ethanol:land calculators totally ignore EROI (in this case, all the energy it takes to grow and refine the corn) so are essentially worthless.
Hmm; nifty but worthless - damned with faint praise :) I shall give more thought to EROEI (I am at least explicit that I ignore it!). For the time being, corn does seem to be the least likely candidate for an ethanol crop - it has the lowest yield per acre AND the lowest EROEI. I suspect corruption of the government/market by big agribusiness. Not least because the USA has an import tariff on Brazilian ethanol - where are the free marketeers when you need them?
EROEI calculations are going to depend strongly on the crop and on how you assume agriculture is done. There was an article on energybulletin a while ago comparing "standard practice" and organically grown corn in terms of yield, inputs and change in soil fertility:

The conclusion was that the yield wasn't greatly different but that organic farming reduced the input requirements (including energy, presumably) substantially. Labour requirement was higher.

On another matter, it might be interesting to consider bamboo as a sustainable source of cellulose for ethanol. Properly managed, bamboo agriculture is apparently highly sustainable.

There are three paths to using less oil for transportation (only 2/3 of US oil use BTW).

  1. Drive more fuel efficient vehicles
  2. Substitute non-oil fuels for gasoline & diesel
  3. Reduce the demand for transportation (your drive less)

I have posted the link here before (and would like to publish it on TOD), but I would like to push electrification of transportation using VERY well known, and widely used technology.

The two biggest pieces are to electrify US freight railroads (except, perhaps little used branch lines) and Urban Rail (trolley buses as well).  I think that all that is needed is an exemption from property taxes for any rail line that electrifies.  This reduced cost of capital (no property taxes) will tilt towards greater investment in rail infrastructure.  Energy and labor savings from a more capital intensive electrified rail industry will steal modal share from the 18 wheel trucking industry (uses over 2 million b/day in refined product.

Urban rail changes the development patterns of cities and reduces the demand for transportation.  This, over time, is often a larger effect than the substitution of small amounts of electricity for large amounts of oil.

Transportation need not be premised on the automobile or the semi-tractor trailer, thus one need not reduce transportation simply by driving less. I understand that our culture and transportation system assumes that personal automobile transportation is the only way to go, but there are other far more efficient ways of getting around without toting one's own two-ton personal energy plant and heat and CO2 pump.
Re:  Drive Less

I agree--thus my recommendation that we abolish the Payroll (Social Security + Medicare) Tax and replace it with a much higher liquid petroleum fuel  tax (several dollars per gallon).  This would unleash all the forces of free market capitalism against petroleum use.

This isn't a solution since its not possible to tax Chinese and India consumers with a US tax. If the US consumes less, countries like China and India would consume more and expand their oil dependency even faster. Its unlikely that higher energy prices would cause consumers to reduce consumption. What would likely happen is that the tax would result in inflation, which could over a period eliminate the drag on consumption. This is what happened in the 1970s when the cost of oil rose and the US experienced a severe case of inflation.

The best way to reduce consumption is to induce a global recession or depression. Demand for oil, natural gas and all energy resources is dependant on the global economy. The best way to trigger a economic decline is with higher interest rates, since it slows down economic investments and prevents inflation, although you will never see political support for this solution.

In the long term, conservation isn't going to matter. Perhaps, it could delay the problem by a decade, but in the end oil is a finite resource. The only long term solution is to find something else or adapt to back to a agraculture civiliation (altough this would require a huge reduction in the population, to about a billion people globally). I have yet to see any new technologies or collection of new technologies that can match the usability of fossil fuels.  I'll let you figure our what the likely outcome will be.

Your grasp of economics is decent. Oil - OK. But the final product is muddled. Since you only started posting today, I may be misinterpreting what you mean. Try again if only for my sake.
Tech guy,
When you say that it is unlikely that higher energy prices will reduce consumption of energy, you cause this old retired economics instructor to weep bitter tears of frustration.

Here is a Deep Universal Eternal Truth (another DUET):

If other things stay the same, then less will be purchased (demanded) at a higher price than at a lower price.

This is the Law Of Demand, and if you fight the Law, you lose. Your words imply that the demand curve for (say) gasoline is perfectly vertical, or in another way of saying the same thing, the demand for gasoline is perfectly price inelastic.

Now, what do we economists agree on with regard to the price elasticity of demand?

First price elasticity of demand is greater the longer the time period. It takes people time to adjust to price changes. Also it takes time to find reasonably good substitutes for a good such as gasoline.
Second, although portions of the demand curve may be vertical or nearly vertical, if you get the price high enough, you can get the quantity demanded (i.e. the amount purchased) down a lot.

O.K., fellow economists, guard my flanks here . . .

Tech Guy,
I'm neither an instructor nor an economist.
But let's try it from a micro-economics perspective:

Pretend that I bring home $500 a week (after taxes).
Pretend that half of it goes to rent (or mortgage).
That leaves me with $250 to spend on food & gasoline.

When a fill up of the tank was $20, that was just about 10% of my budget.

When the fill up went to $40 (which is what it is out West in BART country), now we're talking more like 20% of budget, not a marginal amount.

As energy prices keep going up, something has got to give, and guess what, it's not going to be my boss giving me a pay increase. His "costs"  have been going up and he can't afford it. His cutomers' costs have been going up and they can't afford higher prices. So everyone is caught in a squeeze. (If anything, my boss is going to be thinking of how he can reduce costs by liquidating human assets.)

One solution is to talk my boss in to letting me do 4 days of 10 hours apiece instead of 5 days of 8 hours apiece --that is if he lets me keep my job at all. In that case I will have cut my gasoline consumption by 20%. If I can find a co-worker who lives near by and we car pool, we can cut it even more. In either case, demand goes down as price goes up because the boss is "inelastic" about paying me more for higher energy costs.

"Demand" does not go down as price rises. "Quantity demanded" goes down as price rises; these words are another statement of the Law of Demand.

Those who have not taken Econ 101 or learned basic economics in some other way are doomed to go through life confused and misinformed. Sorry.

Now let us say that gasoline gets up to a reasonable price, say $8 or $10 per gallon. You could park your car near where you work and live in it; being homeless is one solution. You could give notice to your landlord and move closer to where you work--maybe on a bus line. That would probably be a better solution. And while you are at it, sell your car and buy a bicycle as a substitute. Or a good pair of walking shoes. Or a moped.

A hundred years ago it was typical for ordinary middle-class Americans to walk a dozen miles a day in some cities. As recently as the Great Depression, one man I knew would walk eight miles, twice a day to save ten cents in streetcar fare. Walking sixteen miles should only take you about five hours, and plenty of people spend that much time now in traffic each day with their insanely long commutes.

Hi Don,

 >other things stay the same, then less will be purchased (demanded) at a higher price than at a lower price.

I am well aware of the economics of supply and demand, but your arguement does not consider the effects of inflation.
Higher energy prices virtually always causes inflation. I suppose that a quick and dirty way is to suddenly jack up taxes so that demand distruction over powers inflation, but this would have serious ramifications for many people and businesses that need time to adapt. Usually most tax hikes are implemented slowly so businesses and people have time to adjust. During this transition the rate of inflation rises. Business anticipate higher energy costs and increase their prices to compensate. Later employees demand higher wages, which means businesses and consumers have more money to spend on energy resources and evenly begin to consume more energy. High inflation rates causes people to consume even more since its silly to save money. Why save when its going to be inflated away in a few years anyway?

People living on fixed income (retirees) suffer the worse since their buying power is reduced as the cost of everything rises. This of course creates a new set of problems that usually leads to even more inflation.

In addition, as I argued earlier, a US gas tax does not affect consumption for overseas nations. If we implement higher taxes here, developing countries will simply consume the oil that we stop consuming. Thinking globally, Higher US taxes would amplify the energy crisis as more of the global becomes addicted to oil.

IMHO, it is far better to simply increase the cost of borrowing money, since it has the opposite effect on inflation and protects the buying power of retirees who can't adapt to inflation. It also slows down overseas investment as overseas investors from providing a source of cheap money to China and India. Investors will also choose to invest in bonds that offer the highest interest rates. This would in turn cause all central banks to raise rates to match the US rates to prevent money following out of their borders.

Making the cost of money rises also forces business to come up with better business plans and stops the wasteful excesses of economic bubbles. Cheap money will always cause wasteful spending.

Money can be considered as energy reserves. Make it more expensive and everything else becomes more efficient. For instance, instead of being able to purchase McMansion's, people would purchase smaller homes and cars that are less energy wasteful. They would also have less money to spend on bigger cars, vacation trips, etc. If your goal is conservation higher interest rates would deliver the goods far better than any tax would.


I haven't heard you say this before. Somehow I missed it. I agree completely.
And thus it can be inferred that the global war on terrorism or GWOT is, in reality, the global war to
save suburbia or GWSS.

"Yeah, I like the way you say we think it's independence. Because we really have become slaves, we've become slaves to our own lives, we've become slaves to our automobiles, it's not going to be an easy process weaning ourselves off from that, it's going to be a very difficult, emotional experience."

The best line from Kunstler-"I wonder how many people
stuck in those traffic jams pee themselves.  You know
it happens."

Driving less and living locally (destination walking and biking) is what Jim Kunstler has been saying for a long while. "The Geography of Nowhere" is a biting critique of North American car dependency and suburban sprawl.

This business of developing alternative fuel for cars is engineering masturbation. Who can realistically imagine enough sawgrass to power Los Angeles or nothern New Jersey? Or Atlanta?

Mikey's comment last week: "you guys will really enjoy biking" hit the proverbial nail on the head.  

And believing that living locally or relying on bikes will solve the problems of Los Angeles, nothern NJ, or Atlanta is sufficiency masturbation.

We cannot rearrange our entire society to completely accomodate higher energy costs and radically reduced supplies.  Nor can we make a major dent by retrofitting public transit into existing areas.  The difficulty and costs (monetary and otherwise) would be off the scale.

We cannot replace all of our current gasoline consumption with biofuels.  Looking for one silver bullet replacement for oil is a fool's errand, and it's probably the most commonly seen error among the Apocalypticons.  (That isn't aimed at you, Will.)

But we can use a combination of solutions, the silver BB's I'm always harping about: Conservation and some urban reorganization and retrofitting, using pure electrics for smaller vehicles, and using biofuels as efficiently as possible (diesel/HCCI hybrids) for larger vehicles.  This is why I keep saying that for both environmental and longer-term energy supply reasons we need to push very hard to add wind power.  It lowers emissions now and it gives us more capacity to help power transportation in the near future.

> We cannot rearrange our entire society to completely accomodate higher energy costs and radically reduced supplies.  Nor can we make a major dent by retrofitting public transit into existing areas.  The difficulty and costs (monetary and otherwise) would be off the scale.

I quite disagree.  Give me the cost to date of the Iraq War, and a dozen or so years and I can "retrofit" well over half of the US urban areas with Urban Rail and trolley buses.  Quite frankly, I begin to run out of projects on the drawing boards/wish lists at about $250 billion, but if the money is there useful ways will be found to use it.

We CAN rearrange our society.  We did it after WW II (for the worse IMHO) and something similar to what I propose was done from late 1890s to WW I, so precedents exist.

Some low density areas may, by economics, not be served and may well result in boarded up buildings.  But the US did that to much of it's pre-WW II housing stock and we thrived despite the loss.

I do agree that extra "silver BB's" are worthwhile, but the "silver bullets" are electrified freight rail and electrified Urban rail supplemented by trolley buses.  The rearrangement of society around electrified rail "works".  It can be moderate density (I point to moderate density Long Island suburbs and the electric LIRR) or higher density (the wonderful Lower Garden District that I live in).  Build Urban Rail, wait twenty years and redevelopment around it is usually quite significant (and this is prePeak Oil, add $8/gallon gas and redevelopemnt will increase dramatically).

You appear to support current travel patterns and salvaging the suburbs etc.  I do not.

 <<We CAN rearrange our society.  We did it after WW II (for the worse IMHO) and something similar to what I propose was done from late 1890s to WW I, so precedents exist.>>

I agree 100%

Yeah, but then we had far fewer people and alot more resources to accomplish that. Plus with the lack of political will to accomplish that, it makes me skeptical that anything larger than local retrofitting will occur.
Exactly.  We will be facing Tainter's "declining marginal returns."  We have twice as many people.  We have a lot fewer resources.  (Note that most of our infrastructure was built before we hit the U.S. oil peak.)  And we have a lot more to rebuild.

USA Today had this article yesterday:

Has USA lost drive to rebuild after tragedies?

It's about why we are not as eager to rebuild after 9/11 and Katrina as we were after previous disasters (the Chicago fire, the San Francisco earthquake, the Galveston hurricane, etc.).

The reasons the article gives - cities that were on the rise, but are now on the decline, the fact that there's so much more to rebuild now - reminds me of Tainter's work. He argues that's never a natural disaster that's the root cause of a society's collapse. It may be the final straw, but it's declining marginal returns on complexity that's the root cause. That is, not enough energy to support the increasing complexity needed to keep the society going.

Or maybe it's just part of the post-WWII secular trend to abandon the cities in favor of the suburbs. Nobody talks about rebuilding Detroit.
No, I think it really has gotten harder to build (and rebuild).  Most of our infrastructure was built before we hit the U.S. peak, and I suspect it's not a coincidence.  

We built the Interstate system in the '50s and '60s, with a 30-40 year projected lifespan.  We just never imagined that when the time came to replace those bridges and highways, we wouldn't be able to afford it.

But we can't, partly because we don't have that kind of money anymore, partly because it's become much harder.

Now that the highways are built, we are dependent on them.  It's easy to build a highway through wilderness or farmland.  It's much harder to repair a highway that's already carrying heavy traffic.  Even with new highways, it's much harder now.  The country is more crowded, and there's less wilderness and farmland.  There are more environmental hoops to jump through, and NIMBYism to deal with (not least because we've seen all too clearly the problems "progress" can bring).

That, IMO, is classic declining marginal returns.    The solutions we have found have caused us even more problems, many of which we never foresaw when we first started down this path.

More than enough dollars are flowing in the US economy to rebuild infrastucture as well as upgrading housing and conversion to a renewable energy economy. What's lacking are enough politicians with the will to tax the people who have control of the money. We can't do what we did in the 50s and 60s because we no longer have the tax code of the 50s and 60s.
This doesn't make any sense to me. We produce more oil annually than China, and we have larger coal reserves, and a much smaller population. They are producing around 10 times as much cement as us and using it to put in place a complete new infrastructure. The difference between us and them is not geological constraints - it's culture/economics/politics and it's subject to change in the future.
My guess is that refactoring an existing infrastructure is much more expensive than building a new one from scratch :)

Chinese are building railroads and highways on undeveloped land; What we need to do is scrap Suburbia and build dense European-like cities... when I only think about the costs, I simply don't see that happening at all even in 50 years. But I don't mind being wrong about it...

We don't need to build high density cities, we need to build high density villages in the country away from the nuclear blast zones.
Perhaps such a scare for the thirld world war was one of the things encouraging spread out cities in USA?
Nah, not worthed the trouble. If it gets there nobody would survive the nuclear winter that follows.

If I am to choose dying from nuclear blast or from hunger, I think I'll pick up the blast.

Are they building railroads and highways? I think they're building factories.
>They are producing around 10 times as much cement as us and using it to put in place a complete new infrastructure

  1. Massive subsidiation for large projects and energy. Oil and Gas is subsidized.
  2. Little gov't debt. The US has a massive $8 Trillion debt
  3. Very cheap labor and few laws to regulate worker safety
  4. No legal system to prevent the gov't from taking over the land owned by private citizens
  5. No enviromental laws.

I am sure there are dozens more, but I think I made the point here.
#5 is a very powerful factor in slowing the rate of infrastructure additions and improvements. Even on a highway project that has no opponents and no significant natural or man-made resources that could be disrupted, the time and expense from complying with the variety of state and federal ordinances is significant. That hassle factor alone has the chance to make agencies and developers think again. On a contentious project, the legal opportunities afforded to opponents can kill a project or drag it out so long it no longer makes sense. Rebuilding destroyed construction is generally exempt from enviro review, but the problem with disaster recovery is that rebuilding exactly whatever destroyed makes no sense if there is a liklihood that the disaster could re-occur or the object destroyed itself was no longer viable. If a landslide took out a bridge that was 60 years old and carrying twice its rated capacity, it would make no sense to rebuild it as it was and skip the review. Yet rebuilding to address pre-existing problems (and there almost always are some) requires enviro review and with that debate. In the case of New Orleans or the WTC, there are competing ideas on how to restore what was destroyed. This disagreement will inevitable string out the process and with that prevent the market/private citizens from rebuilding by denying them financial, legal and insurance protection needed to rebuild. Heck in New Orleans, they cant even figure out what should be abandoned. In a legal functioning democracy, enviro laws, legal and financial requirements and competing political leadership deny reconstruction/renewal projects the ease of completion that an autocracy can get away with. Since we don't have that system is the next easist thing to do is to build new projects on virgin land.
a large part of our incremental advantage of oil and coal production is swallowed up by our much higher standard(cost) of living. In fact, I would argue that our consumption per capita of 'stuff' outweighs the amount of extra oil and coal we produce so there is less left over for infrastructure. I hope youre right that it will change- but its easier to go forwards than backwards (e.g. we are addicted to oil, the Chinese are still only addicted to cement)
Can you elaborate? I'm not really catching what doesn't make sense.

>Exactly.  We will be facing Tainter's "declining marginal returns."  We have twice as many people.  We have a lot fewer resources.  (Note that most of our infrastructure was built before we hit the U.S. oil peak.)  And we have a lot more to rebuild.

Excellent statement! This is why explonential growth curves always crash, whether its single cell organisms or human beings at the top of the food chain. As long as the growth is unchecked, it will eventually grow to an unstaintable level that the evironment can't support. In the past, the human population was regulated by disease, high numbers of birth deaths, limited food supplies, etc. But with our intelligence and tools we managed to virtually conquer these restrictions and have slowly painted ourselves into a corner from which we cannot escape.

Good place to bring in the population bomb part of the puzzle!

Somewhere else, another commenter was asking how the pieces of the puzzle fit together, as if Peak Oil can be separately analyzed from population growth and vise versa. But they are not separable pieces. You need to step back and view the whole puzzle. If our population was greatly reduced through bird flu for example, then Peak Oil will be a non-issue for a very long time to come.

Excellent Point.

You may disagree with me, which is fine, but I am an anti-Kunstlerian.

I understand Deffeyes and Simmons. I like numbers, facts, and truth on which to base my thoughts. Kunstler manufactures the distant future out of his own manufactured versions of the near futures. (I don't know why I'm going off on Kunstler now - it just looked like a good place). I've read 'The Long Emergency.' It is poor. I could make the case that it is exploitative. I get worried when Deffeyes and Simmons and any other energy-icons start to parlay they're positions by making all kinds of predictions.

If you doubt me - look at the absolute nonsense that has surfaced on this site regarding Natural Gas in December and Iran in the last month.

One cannot, in my estimation, base assumption on supposition on assumption - and then come up with a beautifully wrapped version of the future.

We do in fact need to step back and take things one step at a time.

The biggest obstacle facing the Peak-Oil community in its efforts to get its point across are its supposed adherents who have a perfect record of being wrong.

"Silver BB's."  Yup!  A plurality of efforts will be needed.  Some of these efforts will be contingent and transitional.

It is vital to keep this out in front in any discussion: we need lots of "silver BB's" and will not be deluded into thinking that any one strategy is a "Silver Bullet."

The other "silver bullet" we have is cars that store energy from the grid, rather than relying in fuel. This could be either plug-in hybrids with some kind of battery technology or a compressed-air vehicle. True we will never get close to the energy density and range we can get with hydrocarbons and cars will probably be fewer and more expensive but those are things we can live with.

This "bullet" offers the following benefits:

  • infrastructure is already there (roads, grid).
  • the "fuel" problem is decoupled from the "energy" problem so they can be solved independently.
  • it could fairly easily be used as a kind of intelligent distributed energy storage system, making load levelling and the use of intermittent renewable power sources less of an issue.
> Nor can we make a major dent by retrofitting public transit into existing areas.

Two contra examples.  Washington DC & the San Francisco Bay Area.  Both built mass transit SYSTEMS (not single lines) after 1970 and both have fundamentally changed the urban fabric since then,

In 1970, 4% of DC commuters took mass transit (the city bus) to work.  Today 40% do.  If there was a major oil supply interrruption, that figure would climb to well over half.  Build the Dulles & Purple Line extensions, another towards Baltimore and DC's planned streetcar system and one would likely get half without a crisis.

Direct substitution of electricity for gasoline is estimated to save a half billion gallons of gas/year.  Add changes in development patterns and one could argue double that #, or even more.

My statistics for the Bay Area are less complete, but no one would argue that MAJOR fuel savings did not result from "retrofitting" Urban Rail, and even more could be saved with larger investments.


Sorry to tell you that BART was a huge gigantic dreadful mistake. What it did was to accelerate and aggravate sprawl, and it also worsened--by plenty--traffic congestion. In the bad old days, preBart, people might commute to San Francisco from Orinda, in Contra Costa county, and I know a lot of people who did that (because I lived in Orinda, just over the hills to the east of Berkey). You could drive from Orinda to downtown San Franciso during rush hour maybe in an hour, back in the 1950s and 1960s, and we bitched about the terrible traffic.

Now let as look at the total disaster area that we now have. People are living in Livermore, for heaven's sake, driving to the nearest BART station, and commuting to San Francisco. What has happened is that BART greatly aggravated the flight of the wealthy to ex-urban areas. In other words, it caused a major transfer of income from less wealthy people to more wealthy people, the one's who are now commuting from as far out as Tracy, and in some cases from farther.

Oh, and how long does it take to drive from Orinda to San Francisco during rush hour now? Hard to say, because the congestion is so bad that the time is variable. Two hours? On a bad day, much more. On a good day somewhat less. There are fewer and fewer good days.

Now why didn't the planners figure this out before they created the disaster that BART has become? Who says they didn't figure it out? It has certainly benefited the wealthy people who live in million and five-million dollar houses within a few miles of the BART rails.

I am less qualified to speak on Bay Area urban development patterns that I am on the DC area.

However, if "the wealthy" drive a few uncongested miles to a BART station and then take high efficiency electric rail to work, this replicates the Long Island-NYC example that I gave.

Enhancing social equity was not the goal (leave that to tax policy et al), but reducing the use of oil is.

Absent BART the response would have been more freeways from Orinda (which has a BART station for others on the list) and more bridges to service the auto commuters. More gasoline consumed, more investments of "limited future utility".  And the auto alternative would have cost FAR more.

Quite frankly, one should not be driving to SF from Orinda, but taking BART instead.

Without BART feeding the CBD of San Francisco, those high paying jobs would have left for far more sprawling cities.

Without BART much of the population growth in the Bay Area for the last couple of decades would have gone elsewhere, creating more sprawl elsewhere.

Without BART, the working class in Oakland would not have easy access to good paying jobs in San Francisco.

Whatever the limitations of BART, the best solution lies in building more.

> What has happened is that BART greatly aggravated the flight of the wealthy to ex-urban areas.

Odd, since real estate prices in San Francisco have chased out the working class and most of the middle class.  Without BART siphoning out the wealthy, who would be left ?

BART has done nothing to help the poor urban blacks of Oakland and may have worsened their condition by making San Francisco ever more a city of astronomical rents, very high paying jobs for very highly educated people (Almost all white or Asian, by the way). Lanes HAVE been added to the freeway since BART. You just don't "get it." BART has made everyone worse off--except for the wealthy, who are better off.

In the absence of BART there is no way the sprawl could have gone so far. Back in the pre-BART days I learned to fly and always used Livermore as the area to fly over when doing low-altitude maneuvers, because it was almost all fields, and had the engine failed I could have put my plane down with little hazard. Now I would have to fly another thirty miles to the east to find a place where the ticky tacky little boxes (now going for $500,000 to $1,000,000) have not covered the fields.

What BART has done to the SF penninsula and to other areas it reaches is just as bad. BART is an experiment that failed.

I also don't get it.

> In the absence of BART there is no way the sprawl could have gone so far

And where all these people that moved to suburbs would have otherwise lived? Yeah. Right. Downtown SF. I guess your argument is that BART has made SF more attractive city to work and live in and as a result the high price of living. Well that thing is called capitalism, and unfortunately it has always been not quite fair towards poor people.

BART worsened sprawl in the greater San Francisco Bay area by accelerating population growth there--growth based on the feasibility of building hundreds of housands of suburban homes seventy-five miles or more from downtown San Francisco. God did not decree that northern California had to follow the disgusting pattern of growth in southern California and spread ever farther in every direction except west.

Without BART, commuters would have had no feasible way to go seventy-five miles in heavy traffic; it would have taken them perhaps four hours each way to drive.

Surprise, surprise, it is possible to build buildings taller. Also, it is possible to have houses with smaller yards or no yards or (Gasp!) go to high-density row houses such as are widely found in London. Lots of outcomes are possible, but if you set up incentives for more sprawl, then you will get more sprawl. And that is exactly what happened with BART.

> BART worsened sprawl in the greater San Francisco Bay area by accelerating population growth there-

So, without BART, serving as the "transportation artery" rather than the all too familar interstate highway, either:

1) MANY more freeways would have been built (look south to LA for the contra example)


2) The population growth would have gone elsewhere, with even higher levels of sprawl in most cases.  Phoenix and Las vegas come to mind.

Sorry if BART failed to properly redistribute income, but that is rarely a goal of mass transit (see tax system).

The electrified Long Island Railroad allowed NYC suburban sprawl to consume Long Island.  However, the oil use per capita (the topic of this board BTW) there is relatively low AFAIK. FAR from the worst of possible worlds, even if NOT the best.  BART is also a success in that mode, a "B".

BTW, if you want an ideal example of livable, walkable, human scale urban development, come to my neighborhood in the Lower Garden District of New Orleans.  An ideal balance !

IMO you swap the cause and effect here. The cause is not BART, but the choice of people to live in suburbs, and BART is the effect. My guess is that people that use the railway system now, would have commuted otherwise despite the traffic. Maybe the development pattern would have been denser but it would still be a typical suburban type, I can bet.

In the land of cheap energy and expensive real estate that's the usual choice people make.

>I quite disagree.  Give me the cost to date of the Iraq War, and a dozen or so years and I can "retrofit" well over half of the US urban areas with Urban Rail and trolley buses.  Quite frankly, I begin to run out of projects on the drawing boards/wish lists at about $250 billion, but if the money is there useful ways will be found to use it.

Unlikely. To upgrade urban transportation systems large amounts of urban land would need to be taken over for constructing the transportation system. Large groups of people would use the legal system to stop their homes, business, and favorite latte shop from being replaced by a new rail system.

In addition transportation is only a part of the problem in urban areas, since home and businesses will still need large amounts of fossil fuels for  heating and cooling. Ever stay in a high rise with no heat in the winter or no AC in the summer. Not very pleasant!

When an energy crisis begans, urban areas are usually hit the hardest. Its starts when revenues fall because businesses go out of business and unemployment rises. Cities stop cut back on gov't services because they have less money to spend. Rising unemployment leads to higher crime, drug abuse, and the number of homeless force to live on the streets. The worse place to remain in the future once the energy crisis becomes severe will be the big cities. Higher crime rates, higher drug use, higer taxes, higher heating costs, no land to set up a family garden. Nothing but trouble!

I don't think the car's demise will be an apocalyptic moment for our society. But I do see it as inevitable. When a tank of gasoline goes to $100, I think people will begin to hate their cars. Beyond that important shift in consumer psychology, cars will also be much more expensive. Lower sales volume and higher material expenses costs work against us.

Perhaps we will have a short era of electric cars... but ultimately it simply makes more economic sense to live where you work and shop. People will do that.  

If I were to confess an apocalyptic sentiment it would concern  North American natural gas. I see a huge, ugly, problem looming there.  

Filled my car today - £75, thats approx $130.  World didn't end, I just used the plastic and didn't think much about it.  I am no millionaire, or any kind of petrolhead.
The price required to reduce consumption may be higher than you think.  
And you live in a developed country with much higher standart of living. In countries like Bulgaria for example you fill an average tank for 40 euro ($48). But relative to average income it is the equivalent of $300-400. And people still love their cars and drive and drive...

I'm almost sure that absent shortages, people in USA will drive close to what they used to even with $10/gallon. At 10$ you can drive a 30MPG car for the average of 1000 miles per month, and the cost of fuel will still be lower than your car payment plus the insurance. Some low-hanging fruit of conservation + efficiency will indeed cut demand (maybe by 15-20%), but to further reduce consumption a lot of sweat in rebuilding the current way of life and/or much higher prices and pain would have to kick in.

I had the privilege of driving Jim Kunstler around the Dallas area last fall.  I was taking him and a reporter around town giving them a tour of the little islands of New Urbanism is a sea of suburbia in this area.   You haven't lived until you have personally experienced a stream of consciousness running commentary on suburbia by JK.  
I can imagine it: "Dood, this so punishing".



What makes you think that violently seizing oil rich nation states is NOT plan A on the Rummy/Cheney list of things to do?

That may well be their plan A, but I doubt it will be effective. Sure hasn't been so far.

The other problem with the violent approach: it really disturbs me that my government has been killing all those civilians. I recently came to realize that with my laptop and plug-in speakers I can listen to various radio shows while doing dishes and stuff. But it's better than radio because you listen to what you want, when you want, and can pause or rewind etc. I really like the show "This American Life," and I've been listening to various episodes lately. They had one recently about the civilian casualty count in Iraq that I recommend:

What's In a Number?
Episode 300

About a year ago, a study estimated the number of Iraqi casualties since the war began. It came up with a number - 100,000 dead - that was higher than any other estimate, and was mostly ignored. This week, Alex Blumberg revisits that study to look at the reality behind it. In Act One he reports that not only is the study probably accurate, but it says that most of the deaths were caused by Coalition forces (despite concerted efforts to avoid civilian casualties). In Act Two, we hear U.S. forces trying to cope in the aftermath of some of those deaths...

No, no! The government just has to PRINT MORE OIL!!
Uh-oh, that could get kinda messy when helicopter commander Ben starts dropping it from the sky.
"Drive less."

This is one of the most effective "Silver BB's" in our little packet of Peak Oil responses.

This is also the "silver BB" that we will resist to the last gasp, IMHO.

I ride pedicabs and cargo trikes for my work vehicles as well as for nearly all my personal and family errands.

My wife drives a hybrid Civic and logs as few miles as possible. We'd prefer not to use a car at all, but we manage to keep our car driving minimal.  Even so, if we as people committed to eco-justice have trouble going car-free, then those who give it little or no thought are going to have a tough time.

And then there are those with the attitude of "You can have my Chevy Suburban when you pry it from my cold, dead hands."

Many people are waiting for a miracle technology to be available "off-the-shelf" to solve the problem.  A poor strategy.  If the techno-magic happens (which I doubt) a "peak oil aware" lifestyle will not have hurt anyone along the way, while the autocentric lifestyle will demand war all along the way.  If the techno-magic does not happen, the "peak oil aware" lifestyle will prepare us for the future while the autocentric lifestyle will not.

If we all cut our driving to (for example) half of the current average, we would do more to solve resource depletion and global warming problems than any other single transportation-related step.  We would need to eveolve a variety of changes in our community and lifestyle patterns to support such a change, but it seems quite doable for those of us in urban and suburban places.

Once again, I agree that "drive less" is the most effective single step we can take at this time.

I believe this should be updated to "You can have my Chevy Suburban when you pry it from my warm rotting flesh."
  The very important point has been made in PO discussions that peak oil is not an energy crisis, it is a transportation fuel crisis. At first, you might say this smacks of the cornucopian view of Huber and Mills in their new book "The Bottomless Well", where they say all the energy we'll ever need is all around us. We are not using up energy for transportation or anything else, it is merely changing form - from matter to heat to vapor back to matter and on and on. And according to the first law of thermodynamics, energy is conserved - no energy crisis. We just need to be tech-clever enough to catch energy transformation in ways that are useful to us. But my response to that "solution" is that tech innovation tends to come along in quantum leaps in the grand scheme of things. And while 5 or 10 years is but a blink of an eye in that scheme, it is a very long and dangerous time atop Hubbert's peak. And the second law of thermodynamics places severe limits on how we can just reach out to all that "energy" and grab some for our use.
  But in a more practical way, there is, in fact, no energy crisis other than transportation. That may sound strange to the doomers who are moving to the hills and reverting to an 1890s life. But we get our electricity from our own plentiful coal (50%) and our own nuclear plants (20%) and our own dams and some natural gas (which will be replaced by coal). About 70% of our oil use is transportation fuel. So the foreign oil ATM could cut us off totally next week, and we would still have all the good life that electricity gives us. We just couldn't go anywhere in our piston pushers. That's the way it happened in the '73 oil embargo. We had plenty of light to wait in gas lines by.
  The crisis we are entering is indeed a liquid fuel technology crisis. If we had developed gasoline-from-coal the way Presidents Ford and Carter started to do in response to the Arabs picking a fight with the oil sword back in the 70s, we would now be using only a fraction of the oil we're now using. And the global oil peak would be delayed for many years while we developed alternatives for the non-transportation oil use. But no - we had to vote down the intitial bill in Congress to build 20 coal conversion plants 30 years ago. We had to protect the natural habitat of the yellow speckled owl and this and that. Now 30 years later, with oil and terrorism taking up the same geography, we are starting into what may be an endless, complicated series of combat adventures harming our enlisted kids. But the yellow speckled owl is OK.
   Now there has to be a panic rush into coal conversion and other liquid fuel technology, electric, and non-conventional oil that is going to be dicey for many years. This is not impossible. Hitler did it when the Allies deprived him of oil imports. About half the motor fuels used by Germany's immense war machine was made from domestic coal! And this hastily built synfuel infrastructure was constantly being bombed by the Allies. Something tells me we could probably do something at least as effective in 2006 America with 65 years of improved technology and no bombing. But it faces a great wall of stupidity and complacency in our governing bodies. Maybe the free market forces will prevail. I've read where coal derived gasoline is cheaper to make than oil refined gasoline over $40/bbl. But this is one instance where government mandate should have trumped free market activity. Ford and Carter had us rolling in a foreign oil free path. Then Reagan tore Carter's solar panels off the White House and let his normally good faith in free market economics tell him to trash coal conversion in his sweeping reforms to get government off our backs. He felt the markets would fix any real problem we had with energy. The embargos stopped, oil got cheap, and we sleepwalked into the crisis we now face unprepared.  
Except right now, before the infrastructure for CTL is even created, we already have a coal deliverability problem...
But in a more practical way, there is, in fact, no energy crisis other than transportation.

Thank God transportation is such a minor issue. For a minute there you had me worried.

It is simply wrong to say that we have only a liquid fuel supply crisis.

First: Peak oil is about that and about other things made from petroleum as well.

Second:  we face a crisis with NG as well.  Not an immediate, impending peak, but a real problem with supply.  If we become too dependent upon a global NG distribution sustem, we will be looking at peak NG at just about the time we've invested huge amounts of resources in global NG distribution.

If we look at energy demand and supply as a whole, and then look at the complex environmental implications of various options, we see a very complex and challenging enrgy crunch ahead.

And Germany could not produce enough fuel to keep it's war machines running, amoung other problems.  

We are facing more than a transportaion fuel crisis.  While I agree that there is a tremendous amount of oil left, and that we could make it last so much longer if we did not use so much of it commuting to work one at a time in Suburbans, you have way over-simplified the problem.  Replaceing oil with coal will be disasterous for our environment in and of itself, regardless of what you think of spotted owls.  And coal is finite too, and will deplete faster the more we shift to it.  Further, modern agriculture consumes enormous quantites of oil.  And the world is not static - the rest of the world is using increasing amounts of oil constantly, so our share must decrease faster than other's.

So sure, "just drive less" will be part of the solution whether we want to or not.  Hopefully it will not be accompanied by "just earn less", "just eat less", and "just kill more".  Simple, really - what's all the fuss?

My wife stayed up way late watching the first day . . . Not like her to stay up past 10:00 pst

So it appears oil will drop to maybe $55 a barrel the next few days of next week. I will be curious to see if it sits there or goes back up to the low $60s, say $61-62. It broke through the $62 mark on its downward slide this week.

With no fear of successful contradiction I hereby make the following fearless forecast: The price of oil will fluctuate.

What do these short term fluctuations (week, month, sometimes a couple of years) mean? Mostly what is happening is that speculators are changing expectations.

The way this works was most clearly explained by John Maynard Keynes, a highly successful speculator, this way. Sometimes the market is driven by real forces of supply and demand. More often it is driven by what others think that others are thinking. And beyond that, it is driven by what speculatiors think that others are thinking about what others are thinking. And so on. Semihumorously, Keynes said this process sometimes went on to  . . . I forget the exact number of levels, but maybe it was seven.

Thus, Keynes never bothered much with fundamenatls, he just tried to play the game smarter than the others, and he usually won. A famous case of this was during World War I, when Keynes was working for the British treasurey. I think this incident happened in 1917, but I could be off by a year. Anyway, Britain was desperate for food, the U-boats had been sinking ships left and right, and the UK was down to about a six week supply of things to eat in Nov. 1917. One major supplier of meat was Spain (and also of wool, for uniforms), and England desperately needed Spanish pesetas. Unfortunately, they had little Spanish currency, and with the outcome of the war in doubt nobody was going to give them credit. So the Big Cheese at the British Treasury told Keynes to buy pesetas.

That afternoon, Big Cheese comes to Keynes's desk and asks how many pesetas JMK has been able to buy. To which he replied:

"Oh, I sold all our pesetas this morning. I broke the market."

What Keynes had done by dumping pesetas was to convince other speculators that the peseta was going south in a hurry, and so everybody was in a panic to get out of pesetas. Then Keynes bought up tons of the Spanish currency (cheaply) with doubtful paper pounds, which suddenly looked solid compared to the pathetic pesata. This story is almost too good to be true--but it is true and is easy to check out.

Moral: Unless you are as smart as JMK (i.e. about one in a hundred million), speculation is a fool's game.

Don Sailorman,

Your first sentence had me laughing for about 2 minutes. I am still chuckling.

I totally agree about speculating. And it is a fun game. So far I am doing O.K. but I just watch energy, all forms of it, carefully.

I believe it was 1917 for JMK, that was the worse year for the war at sea for U-Boat sinkings. All because the Brits did not want to go to convoys though they had worked great in the American Revolution, Seven Years War, Napoleonic Wars, . . ., look up energy, and it has some great speculating charts for oil. New to me, maybe not to you.

Your point about speculation disconnecting prices from the fundamentals is very important Don. The successful traders are not the ones who bet on the consensus (ie with the herd) - they are the ones who initiate the process which eventually leads to consensus, and then make their money by doing the opposite of what the new believers in that consensus are doing. By the time a notion has taken root to the point where it could be called a consensus, it's usually time to get off the bandwagon not on it. A consensus which persists for an unusually long time (for instance, buy and hold stocks because markets always go up over the long-term) only serves to suck in (and eventually fleece) even more people. This is the dynamic of a Ponzi scheme.

I would rate the ability to understand human psychology (and the ability to resist becoming emotionallly caught up in where the herd is going) as more important than even an understanding the fundamentals when it comes to trading. Most trading reflects a herding impulse IMO, but the people making the most money are the contrarians. In my view, the fact that one could consistently exploit human nature in this manner invalidates the efficient market hypothesis. If anyone would like to watch someone actually doing this (quantitatively - that's the controversial part), check out They're having a free week (ends Wednesday) on intraday market analysis.  

Here is a funny story to illustrate your point. In 1962 I inherited a few thousand dollars and had no clue as to how to invest it. But I was a top student of social psychology and had studied under the reigning masters, Herbert Blumer and his disciple, Tamotsu Shibutani. So, says I to myself, now is the time to see if I've learned anything worthwhile. If I want to buy an undervalued stock, then I've got to do something different from the herd. So . . . I go to my local stock broker and start going through the looseleaf Standard and Poors sheets on stocks listed on the NYSE and AMEX. If the broker had even heard of the stock, then I would not consider it. Finally, I found one that he had never heard of, one that when I mentioned it to him . . . . well obviously it was beneath contempt. Remember this was 1962, when the market took a huge hit, and stocks such as IBM went down about 50%. Well, anyway, the stock was Pato Consolodated Gold Dredging, at about $2.30 a share. So I bought all I could (gradually, so as not to drive up the price. You can follow my trades, e.g. in "Barron's." So I held the stock for a while (It went up 29% in 1962.) and sold it gradually between $10 and $12, after having received dividends of more than $3.00 per share over a couple of years or so.

Then, in my folly I went back to school and got an MBA in finance and a couple hundred or so post-MBA credits in econ and business administration and math and stuff. Have I ever come close to my performance with Pato Consolidated Gold Dredging, Ltd.? Of course not. My mind is polluted by all the irrelevant things I learned about economics and finance and business, supply and demand, etc.

So if you want to go back to school to learn to be a speculator (not a good idea at this point, I think), my advice is to study symbolic-interactionist social psychology.  

Here's another example of the herd mentality being exploited:

"In the early 19th century Nathan Rothschild set up a Europe-wide network of messengers and carrier pigeon stations, gathering information that could affect his investments. He soon garnered a reputation for being first with the news.

In June 1815, when the Battle of Waterloo was being fought, other speculators watched Rothschild's stocks in an attempt to guess who would win. Shortly after the battle ended, and long before anyone else knew who was the victor, he began selling stocks. Everyone assumed this meant Napoleon had won and Europe was lost. Panic selling ensued. When prices crashed, Rothschild bought everything in sight and made a packet."

Don - Ive read your posts before and they are insighful and cogent - you seem to understand our biological undperpinnings well - how do you mesh evolutionary psychology/biological psychology with symbolic interaction/social psychology?  I have come to believe that social psychology is just a bunch of academic aristocrats spouting theories that could be easier explained by evolutionary mechanisms (e.g small group dynamics or rhetorical thinking (relative fitness...)

I guess Im asking how you reconcile SocPsych and Ev Psych, if at all?

Social psychology is an emergent property at the population level of biological/evolutionary psychology. It's a fascinating field. Your own work on human discount rates, extrapolated to the population level, would fit right in. (That happens to be something I'm particularly interested in at the moment.)

You might enjoy Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay (1841).

There is social psychology taught in psychology departments, and it is, IMHO worse than useless. To understand why, we would have to use path dependance analysis, and it gets way too complicated because you have to look at the peculiarities of the individuals who developed the field.

The roots of symbolic-interactionist social psychology go back to a brilliant guy named Charles Horton Cooley, who published some VGS (Very Good Stuff) around 1900. Then around the 1930s there was a philosopher named George Herbert Mead who essentially created symbolic-interactionist social psychology, but who was very hard to understand and who published little in his lifetime. But he had a remarkable student named Herbert Blumer, who is, I believe, the only man ever elected to Phi Beta Kappa and All American footbal champ in the same year. Blumer played some pro football for a few years, which I think was essential preparation to developing his powerful and clear theories. His student, Tamotsu Shibutani, was the best teacher I ever had. At the end of the last class of the season for introductory social psychology, we 450 or so students got to our feet and gave him a nine-minute standing ovation. (Most teachers got maybe ten or fifteen seconds of polite applause. Some got none.) Of course, due to the viciousness of academic politics, Shibutani was not given tenure at Berkeley (which pissed me off so much I quit the department and swore eternal vengeance against the guy who had engineered a stab-in-the-back while Blumer was away in Brazil doing research)--but I digress.

Anyway, a good place to begin is HANDBOOK OF SOCIOLOGY with Blumer's entry on collective behavior. There are offshoots of symbolic interactionism, including Garfinkel's ethnomethodology and Erving Goffman's social-psychology of the self. Goffman was one of the most remarkable men I have ever met, as were the other two; read all his books. Very readable.

Now, how does all this mesh with evolutionary biology? Well, what are the problems in evolution? To survive and to have offspring that survive reproduce, right? O.K., now how do we do that? We think, we develop a self-conception which consists of identity and self-esteem, we have self-images that change with how we think others see us, and so on. Symbolic interactionism is 180 degrees opposed to behaviorism.

Also, I shall never forget Blumer, who never used notes, blowing his big nose at the lectern and launching into one of his veiled attacks on the discipline of psychology, as he said, "I have studied over 3,000 articles on attitudes and found that the concept of "attitudes" has contributed . . . nothing . . . to the understanding of human behavior." Then he paused and grinned and went on. Incredible teacher; I took all his classes, was amazingly lucky to have him and Shibutani as teachers.

Were I to go back to school now that I'm retired, I would work on explicitly linking evolutionary psychology to symbolic-interactionist social psychology, because (to the best of my knowledge) nobody has yet done this.

One final quote from my 1956 Introduction to Sociology class with Blumer:
"I believe that we face two great problems--war and organization. And of the two, I think organization is the greater problem."

And now, I ask you, how do we organize to deal with the implications of Peak Oil?

Thank both of you for your suggestions - Ive read Goffman but not the others - couldnt stop arguing with my Social Psych professor about how silly and unprovable most of the theories are so he charged me with exactly what you proposed! A draft paper on integrating symbolic interactionism and evolutionary psych.

Living with animals and having been on hundreds of dates (w women) in past few years, my life observations fall in the ev psych camp (as you might guess from my posts). Thanks for the ideas- to me the mold is set on the 'supply side' of Peak oil -we have a certain amount of oil and all the engineers in the world will eventually figure out the best way to replace it, though it will be a losing game - On the demand side - to mesh our behaviours with an EP framework, find ways to lower our discount rates and then market a lifestyle that people are happier with less: THAT is a goal worth some work and sacrifice.

Jack Greene - I am confused - oil is at $62 now - why do you wonder if it will get 'back' to $61-$62 ? What makes you think it goes down $7 more dollars in the next few days? Hasnt done that (2 week slide of $14) in 25 years.

My belief is that it will go through the $60 and maybe touch $55 before going back and stabilizing at around $61-62. The biggest wildcard is armed conflict, especially with Iran and anyone.

Heck, if I was right more and wrong less I'd sure be driving a newer car!

Technicals. Basically how the price has behaved in the recent-ish past (several months) and mathematical ratios based on previous peaks and troughs in the price; round numbers tend to come into it a bit, too.

These get distilled into 'support' and 'resistance' levels (of price) which may have real meaning or just become self fulfilling prophesies since market traders pay attention to them. When a price falls through a support level that then becomes a resistance level and vice versa. The price is likely to have a tendancy to 'stick' around these levels or bounce off them and move relatively quickly in between them.

Currently the levels seem to be around these prices: $66, $62, $60, $58, $56.50.

I'd guess the price oil could drop a little further in the very short term (though it may bounce up from $62 without falling further), would be surprised if it went much ($0.50)below $60, quite surprised if it dropped through $58, very surprised if it crossed $56.50. Once it has 'bottomed' there is likely to be a bounce back to current levels ($62) and probably to $66 by late February / early March. There's cold weather planned for quite a bit of the US in the next 2 or 3 weeks ;)

War drums continue to beat.  Iran's prime minister tells a cheering crowd in Tehran that Iran may revise its participation in the (nuclear weapons) Non-Proliferation Treaty, if the West continues to deny Iran nuclear energy.  Evidence of his mystical disconnect with reality:
"Allah is our master. He helps us and he's not going to help you."

And here: Ahmadinejad: Israel 'will be removed'

Iran's prime minister:

"Allah is our master.  He helps us and he's not going to help you."

American General (name?):

My God is bigger than your God."

Me:  Oh, boy, here we go.  WIJWYNH?  (Where Is Jesus When You Need Him?) ....or similiar questions about Mohamed, Ghandi, MLK, Reason, Human Compassion, Cooperation, Intelligent Design, Evolution.....

We will get nowhere with leaders on both sides who make a final appeal to War Gods in order to whip up the frenzy of fear and rage designed to herd people into war.  The end of the road for such Resource War is apocalypse.  Nobody wins.

Apocalypse, hm, . . . where have I heard that before. Oh, now I remember, the Revelation according to St. John. Well, IMHO John had been eating rye bread loaded with ergot (same chemical as LSD, or pretty close) and he was totally out of his gourd. Now here comes the problem: A number of otherwise intelligent people I know spend a lot of energy and time trying to get prophecies out of these these ravings, and although I can explain until I'm blue in the face and debunk all this nonsense with rigorous logic and solid references, they just smile serenely and say that I don't get it.

So, what is the problem? Well, a heckuva lot of people are predicting TEOTWAWKI for the same few years roughly a decade hence that a lot of the more pessemistic pundits we read about on this site say will be the time when the big permanent blackouts begin. I think this is coincidence, because lots of Christians have been predicting the imminent Apocalypse regularly since about about 28 a.c.e. (Note that Jesus was born around 4 b.c.e. Very confusing) If it is not coincidence, then it is Jungian synchronicity, but I find that hard to swallow. Never in my whole life did I think I would be agreeing with fanatical fundamentalists as to what is going to happen.

Has anybody else noted this strange coincidence? Or does nobody else have fundamentalist Christian friends?

Well, Don

I was born into an "American Christian" fundagelical preacher's family.  I was raised on "Left Behind" theology and the doctrine of "pre-millenial,imminent return of Christ" and the doctrine of the "Rapture of the Saints."

I do think that some kind of Jungian archetype surfaces in the fundamentalist religious doctrines of apocalypse.

The "End Times" are always with us somewhere in some way.  It is always stormy somewhere.  But the End Times are very real for those who are going through them.

What I find most odd is that so much of the American fundagelical theology encourages rampant consumerism, fatalism with regard to the future, and a dual sense of entitlement and victimization amoung people who are "blessed" with more material ease than a great majority of humans have ever exprienced.

This egocentrism has perpetuated an idealised lifestyle that intentionally destroys the environment and that demands war.

The self-fulfilling prophecy of American Christian fundagelicals is met by the strangely similiar fundamentalist Muslim and fundamentalist Jewish folks and is made all the more intense by the fact that the conflict centers over the "Lake of Fire" that is petroleum and NG in the Middle East.

Nothing like a confluence of powerful motivations to make life interesting, eh?

Me, I just pedal my tricycle and try to stay out of the way.

Good points, but one small quibble. Herewith a classic joke that goes better in Yiddish, but anyway in every little Polish-Jewish village of the nineteenth century there were one or two village idiots. What to do with the idiots? Well, they were appointed Messiah watchers at the outskirts of town, and as each visitor approached the watcher was supposed to ask the person if he (or maybe she) was the Messiah? Thus the villagers would be sure not to miss the Messiah and would also be able to greet him appropriatley with some nice chicken soup with matzo balls.

And so one of the visitors comes into town, says to the watcher, no, he is not the Messiah. But how do you like your job?

"My job," says the idiot. "The wages are not good. But the work--ah, the work is very steady."

Don. S.  Was it not Keynes who noted that a good fraction of "jobs" in the general society were just about as productive as messiah watching?  And was it a Stanford economist who noted that people could be divided into 4 groups- The Thieves, whose actions helped only themselves; the Saints, whose actions helped only others;  the Fools, whose actions helped no one; and the Wise Ones, whose actions helped everyone?  And, that no matter how you grouped people- short, left handed, Nobel winners, etc, etc.  always about 20% were Fools?

If true, big opportunity to save energy in there somewhere.

Keynes was brilliant. Every few years I go back and reread Keynes (all of his writings, not just the famous ones) and every time I learn more. Holy smokes, just take a look at his "Treatise on Money," (which almost nobody reads nowadays), full of good and entertaining and even exiting stuff, I mean, exciting if you get thrills from tracking the fluctuations of the rupee early in the twentieth century. (BTW, much can be learned from a study of India, and I am serious here.)

Anyway, Keynes pointed out what historians have known for a long time: The Egyptian pyramids were a public works program to deal with unemployment. Contrary to popular belief, slave labor was a minor component in building those incredible monuments. And pyramid building was the IDEAL public works project, because you could always build more and bigger pyramids. I mean, do you think those ancient Pharaohs were nuts, to think that these big tombs would ensure luxury in the hereafter? I seriously doubt that most of them believed that: What they did know from ther Council of Economic Advisors (i.e., the priesthood that monopolized a knowledge of writing and that kept track of everything--Nile floodings, irrigation rights, taxes, amount of grain in the stockpiles, etc.) was that peasants needed to be fed and that skilled craftsmen and the small middle class needed work and wanted prosperity.

Sure, you can stimulate your economy by having the Second World War, but how much more brilliant (and less destructive) it is to build pyramids. Oh, and it is nice to glorify your reputation and solidify your prestige to be building a bigger pyramid than any built before, so you can accommodate a growing economic surplus and keep getting the bread and radishes and olive oil to the people you want to keep happy with the regime. Pyramid buidling was far, far more intelligent than anything the New Deal ever came up with.

I cannot overstate the brilliance of John Maynard Keynes. He learned economics from about the age of four, from his father, John Neville Keynes (himself a noted and now neglected economist). JMK would sometimes hide under the table when he was a little kid and listen to his dad and guys like Alfred Marshall have discussions; in other words he learned economics the old-fashioned way, as an apprentice.

Keynes had a gut instinct for what was important. Read his "Economic Consequences of the Peace" published in 1919 in which he savages Woodrow Wilson and other victors at the Peace of Verseilles, because JMK clearly sees that this almost Carthaginian "peace" is sowing dragon's teeth, and that instead of being "The War to End War" as H.G. Wells so tragically mischaracterized World War One, the economic consequences would create much worse things to come. And of course he was right: the destruction of the German middle class by the inflation of 1923 (which was caused primarily by attempts to enforce the terms of the Peace of Verseilles) paved the road for the success of Hitler.

Better yet, read and ponder "Economic Possibilities for our Grandchildren," published in 1930, possibly the most optimistic piece of writing ever published by an economist--and yet with warnings built in.

Personal footnote. When I took the highest level macro theory class at Berkeley, all of us were assigned to read all of Keynes's 1936 book in which he examines the Great Depression and invents macroeconomics as a way to get out of it. To the best of my knowledge, out of about fifty students, I was the only one to read the whole book. Every- body else read Dudley Dillard's "Guide to Keynes." Why? Because all the other students believed they could maximize their grade by reading the simple-minded dumbed-down version rather than the real thing. I never looked at Dillard (clearly, a second-rate mind) and instead read Keynes and forgave him for his sometimes sloppy prose. Parts of the book are clearly first-draft, hastily written in the heat of passion, but if you can read, you can understand Keynes.

Oh, that was another objection to Keynes. "He writes in prose? Where are the equations?" Also there is a silly mistake in one of the two graphs in the whole book (a confusion of "capital" with "investment," just a labelling error, really). So everybody thought I was totally weird to be actually reading the book and struggling to understand it.

Keynes had the humilty of great geniuses. He never thought his ideas could cure the great depression, only that they could get unemployment down by perhaps half or a little better than that. Also, he clearly stated that his ideas applied to the particular conditions of the 1930s and that new economics would have to be developed to deal with new problems of later decades.

Keynes smoked, enjoyed rich food, didn't exercise much and had a severe heart attack at an early age. During the Second World War he quite literally worked himself to death trying to deal with the financial problems Britain faced. After the end of the war, he devised the Bretton-Woods agreement, which was the foundation for more than twenty years of Post-War prosperity and growth in trade. Then he died.

IMO, Keynes, who did more than any other person to save capitalism and democracy from totalitarianisms such as Naziism or Soviet style communism, was one of the three great thinkers who shaped the twentieth century. The other two? Freud and Einstein.

Charles Darwin complained that geologists do not read one another's books. I have news. Economists do not read one another's books either--and the discipline suffers.

Wow!   I shall be more careful next time.  (Note- don't mention K----- around this guy.)

But truely, I too admire (unnamed person of great genius).

Well. . . there is June 6, 2006 to consider, i.e.,  6/6/6.
Re:  Update on Quantitative Assessment of the Accuracy of Hubbert Linearization (HL)

Khebab has taken the Lower 48 production data and using only the 1971 and earlier data generated a predicted production profile for post-1971 Lower 48 production.  The results. . .

Actual post-1971 Lower 48 US cumulative produciton was 97% of predicted, with said prediciton based only on 1971 and earlier data.

The same exercise for Russia found that post-1984 cumulative production was 96% of predicted, with said prediction based only on 1984 and earlier data.

In regard to the Alaska/Lower 48 debate, IMO it depends on what you are trying to do.  If you want a total reserve assessment, I think that you should go with total US.  If you want a model for the world, I think that you should go with Lower 48.  

Khebab has done 99% of the work so far.  I've got to add the written component.  

I do have a question.  These two regions account for close to one-third of all oil that has been produced worldwide, and the HL method is showing basically an identical predicted accuracy for production post-peak (97% and 96%).  Excluding any new discoveries in Russia, why is the HL estimate of remaining recoverable reserves of 18 Gb or so in Russia (from existing fields) so unrealistic?  Just look at some of the internal data leaking out concerning other exporters like Kuwait and Mexico.  

> The same exercise for Russia found that post-1984 cumulative production was 96% of predicted, with said prediction based only on 1984 and earlier data.

This 96% figure is an artifact on the point in time chosen.

The two slopes (HL predicted cumulative production @ 1985 from memory) and actual cumulative production are near crossing but the slopes of y-o-y production (1985 HL prediction for 2004 to 2005 production change (falling quickly) and actual 2004 to 2005 production change (rising slowly)) are quite different.

If one had made your statement in, say, 1996 in would not have been even close to true (96% match) and thus the same error may appear in 2016 forecasts  as well.  

You just picked a good year to compare the two cumulative numbers, but the error in growth rates in HL predictions throws the entire analysis into serious doubt.  It is anything but "proven" at this point in time.

BTW, there are a number of underlying assumptions in HL that appear to have been violated in the Soviet Union/Russia.  Will these violations of underlying assumptions invalidate HL in the short & medium term ?  Only time will tell.

I need to get busy and post the full report.  But for both the US and Russia, we (my idea--Khebab did the math) took the entire data sets to find the year that corresponded to 50% of Qt.   We took the data from that year and earlier (1971 for the Lower 48 and 1984 for Russia) to generate predicted production profiles for 1972-2004 and 1985 to 2005 respectively.  There was nothing convenient at all about the dates.  We applied precisely the same methodology to both areas.

The world is at 50% of Qt.

The question I was trying to answer is how accurate the HL method has been for large discrete areas in the past.   The answer is that actual post 1972 cumulative production in the Lower 48 was 97% of predicted, and actual post-1984 cumulative Russian production was 96% of predicted.  Granted, the US production profile was far smoother than Russia.  

In any case, these are not opinions regarding reserve estimates, they are facts.   Look at what's happening around the world, e.g. leaked internal reports from Kuwait and Mexico.  The most pessimistic, i.e., the most realistic, internal estimate at Pemex predicts that Cantarell--the second most prolific oil field in the world--is about to start showing a 44% per year decline rate.  

I have a quote from Ayn Rand (from "Atlas Shrugged"), "By the essence and nature of existence, contradictions cannot exist. . . if you have evidence of a contradiction, then you should check your premises, because you will find that one of them is wrong."

As Sailorman would point out, Rand was just paraphrasing Aristotle.
Bolivia edges close to energy takeover:

New leader may nationalize gas reserves, revive state-owned oil company

Bolivian President Evo Morales is moving his country closer to nationalizing South America's second-largest natural gas reserves and reviving a state-owned petroleum company that now amounts to little more than a collection of bureaucrats and decrepit gas stations.

The latest rhetoric from Bolivia's new leadership seems ominous for foreign energy companies faced with the prospect of renegotiating their contracts to extract and export Bolivia's gas.

"Some multinationals already have conspiracies," Morales said Monday in one of his harshest speeches since taking office two weeks ago. He said Bolivia's military leaders are preparing a response, and he pledged to bring government control over all levels of oil and gas exploitation.

It's all Hugo Chavez's fault...

It's about time the west actually started paying for its oil and gas imports.  So far the money has circulated straight back into western banks and businesses via repatriation of profits by the multinationals.  From the GDP perspective this effectively cuts the price for the imported energy.  In the case of Saudi Arabia even the absence of foreign ownership of its oil and gas doesn't matter since it invests most of its oil revenues in western countries.

The oil "addiction" is due to the unreasonably low real price.

I do find it fascinating that South America is swinging way left, while North America went way right.  Perhaps it's the difference between the haves (or people who think they could be haves, one day) and have-nots (people who realize they're being taken advantage of, and that it's unlikely they will ever rise up far enough to be the takers rather than the takees?
It makes me glad I live in Asia where the "have nots" realized they could be "haves" too. There may be a romantic glee to be derived from watching Latin America swing left, but it fades fast when you see the damage they are inflicting on themselves.

China is saying "f*** you" to the US much more effectively than Bolivia.

IIRC, the major market for Bolivian gas is... Brazil.

Kind of puts the "US is behind everything" lie to rest.

Bolivia doesn't see much of Brazil's money.  Bolivia's gas is exploited by British Gas, BP, Exxon Mobil, Repsol and Total which are clearly western corporations.  Petroleo Brasileiro does most of the shipping to Brazil.
Quick anecdote for the readership.

I am an American citizen living in Brazil.  Yesterday I needed to take a taxi, and called my wife´s driver Louise.  

After a few minutes of chit chat, I asked Louise whether he fills up his tank using Alcohol, Nat. Gas, or Methane.  He never heard of Methane.

(aside, when I learned to drive a stick shift down here, my teacher filled up his tank with what I think was Methane. I remember that he inserted a tube directly into the engine and there were dire warnings that this is highly combustible, and the gas was very cheap)

He told me his engine ran on a mixture of Alcohol and Gas.  That Gas was much cheaper despite being 50% more expensive.  

Price: In Local Currency...
Alcohol 1.7 Reals per liter
Gas    2.5 Reals per liter

His engine is a 1 Cylinder.
With a full tank of Gas he is able to drive 200 Kilometers
With a full tank of Alcohol he is able to drive 50 Kilometers

Maybe the fleet of taxis in Brazil needs to be upgraded or perhaps his numbers are way off?

other ethanol drawbacks:

One of the main contaminants in fuel is water. Alcohol mixes easily with water. Exposing it to air allows alcohol to absorb water from the air. After you add alcohol, you will ALWAYS find water contamination in your tank.

any alcohol in your gasoline will increase blowby past the rings. It will encourage fuel to enter your crankcase.

The ideal mixture ratio with gasohol  drops when more alcohol is added. Suddenly your fuel needs a 13 or 14 to one ratio to be chemically correct. BUT the engine's default ratio remains fixed at 15 and therefore runs lean in the presence of alcohol. In other words, the engine finds itself with too much air and not enough fuel so efficiency and mileage take a dive. Ethyl alcohol and methyl alcohol both lead to these problems: corrosion, pre-ignition, poor mixture control and misfiring.

You've never studied closed-loop mixture control, have you?
No, I haven't.  And it sounds complex.  I'd love to hear it.

Adding more complexity to an engine would by necessity raise the time needed to get into
production plus raise the cost.

Thus, I was discussing with the Brazilian/American the problems
that just adding alcohol to a regular engine (which is
always the default when discussing a biomass savior/not retrofitting)
or storage would present.


You haven't been able to buy a car without it since the 1980's.  Ever see the "OXS" light on your dash?  That's for "oxygen sensor", which is part of the closed-loop mixture control system.  It operates whenever the oxygen sensor is hot enough to function.

Basically, in a car with a 3-way catalyst the computer looks for oxygen in the exhaust.  If found, the engine is running lean, and it starts adding more fuel.  If oxygen is essentially absent, the engine is running rich and the computer starts backing off fuel delivery.  The mixture see-saws back and forth around stoichiometric, loading the catalyst with oxygen from NOx and then burning it off with a little excess fuel.  This is how it gets so clean.

The process does not work if the mixture is way out of whack, and the car will not meet emissions.  Fuel that won't let cars meet emissions could not be sold in the USA.

Flex-fuel cars have a problem:  their fuel composition can vary enormously from shutdown to restart due to filling the tank.  This causes problems with starting, because the amount of fuel delivery that worked properly at the last shutdown might be too rich or lean to even ignite with the new fuel composition.  This is why such cars have a "flex-fuel sensor" which allows the composition of the fuel to be estimated independently of the exhaust gas oxygen level.  The computer uses this to get the mixture roughly into whack until the O2 sensor is hot enough to do its job.

The car won't operate with the mixture too far off.  If something failed and it couldn't deliver the right amount of fuel, your "CHECK ENGINE" light would be glowing if the engine would run at all.

And that's why the paper you cited is full of hooey.

Well said E-P. In fact if you stand in front of a running 1983-85 SAAB 900 (8 valve) you can hear a faint rising-falling buzzing sound from the engine compartment. That is the continuous fuel injection system fuel mix valve regulating the mix, just as you explained. I often told owners of SAAB they were in need of a tune up when the buzzing sound did not cycle (see-sawing).
Thank you very much EP.

I am in constant need of enlightenment.

1-Since we're in Car Talk now,  I have never seen
the "OXS" light on my '96 Toyota RAV.

And I have marveled aloud that even today, 8 degrees F,
I can go out, turn the ignition, and it starts, without
touching the accelerator.  

AAMOF, if I do press the accelerator, it is less likely to
immediately start.

2-what about the lubricant stripping aspects of alcohol?

Always willing to learn,

I went to the car salesman who had been at the same desk for 23 years selling Fords at the second biggest Ford dealership and said I was interested in buying a Ford Taurus station wagon and running it on E-85. I asked him what had been the feedback from his loyal customers of many years on this fuel. Well, he said they were quite happy. But because of the way prices were set, you did not save any money on fuel. O.K., I ask, how about engine wear. Well, says he, that is an interesting question. Why? Well, the engines on E-85 where the owners use synthetic oil seem to be averaging more than 600,000 miles before any major service is needed, and one of the mechanics had almost 1,000,000 miles on his E-85 fueled Taurus station wagon, without much engine wear.

How about same engine running on gasoline and synthetic oil from day one? Oh, pretty good, 250,000 miles or so.

Now I grant you that this is a small sample, but it really does pay to go out into the world and talk to people who actually know things, mechanics and (the small percentage of) honest car salesmen.

There is so much B.S. on the Internet . . . .

But I am reading this on the internet!
1% information
99% noise

Or thereabouts.

Danes have no sense of humor.
Thank Allah Syrians do.
Hi Oil,

I'm brazilian and, trust me, his numbers are way off. As a rule o thumb, ethanol cars have at least 70% of the mileage of similar gasoline cars. OTOH, perhaps he meant 150km out of a tank?

On another topic, you should have asked for natural gas instead of methane (I wouldn't expect a cab driver to know what's in natural gas...)

Oh, I forgot, his is most likely a 4 cilynder, 1 liter, "popular" car. Over half of the cars sold in Brazil fit the description above.
This is a rather long post, where I try to obtain insight on one of the consequences of peak oil at the economic level.

In a previous post, I argued that we will probably not see any rise in unemployment derived from monetary policies, i.e. that the Fed will follow a path that will ensure that existing debts will be gradually melted away by inflation, so as not to add insult to injury to the majority of the American population who is in debt and will already be feeling the painful effects of the decline in oil and gas production.

I want to focus now on the issue that the decline in oil and gas production will tend to produce a class of long-lasting, "structural", potentially high unemployment independently of any monetary policy, an issue that - in order to be addressed in a way compatible with the good of those unemployed and of the whole of society - will require many people to get rid of strong paradigms.

In the very long run the problem will not exist since, as J. H. Kunstler has repeatedly pointed out, in the post-oil future farming will employ a lot more people than today.  I agree with his view, being almost certain that in the XXII century farming will be done pretty much the way it was in the XIX century, with oxen and all.

That said, the problem lies in the transition to that final steady state, the key point being that - in my view - the processes involved in the production of basic items will be the last processes to move out of fossil fuels, because the essential nature of those items will grant their producers enough pricing power to pass through the rising cost of fossil fuels (as energy sources and feedstock) to their products.  

As an example, it is likely that a rising price of plastic will make the toy industry fade away while food will keep being packaged in plastic.  The point is: what will happen to the toy makers, since they will not be needed in labour-intensive farming until decades away in the future?

Since I am convinced that simplified models greatly help to obtain insight on phenomena, I have devised one for this case.  Interestingly, it applies not only to the present world, but also to a real-life model that history has already provided: the case of Easter Island (EI).

Before delving into it, I want to make clear a couple of points.  First, I like to call things by their names.  If a possible path implies the death by starvation of a portion of the population I will say so and not "life for them will get difficult".  Secondly, but more important, my plain showing that such will be the logical outcome of that path is not out of being inhumane, but on the contrary to support the argument that such a path must not be followed.  I am fully aware of Mt 25:31-46, and want to be on the right side.

Let be a self-contained society where the population is divided between producers of:

BI: Basic Items (EI: fishing mainly), and
DI: Discretionary Items (EI: statue carving, transporting and setting up).

Production of both types of items is based on the consumption of:

dNR: depletable Natural Resources

For the present world, we will focus on fossil fuels, which are absolutely depletable.  For EI, we will focus on trees, which are a potentially depletable resource if cut down in excess of the reforestation rate (which was the actual case in EI).

Let be:

PB(0) = Price of Basic item at t=0
PD(0) = Price of Discretionary item at t=0

DB(0) = Demography of producers of Basic items
DD(0) = Demography of producers of Discretionary items

(I use "Demography" instead of "Population" not to be fancy, but because "P" is already used by "Price".)

For simplicity, let's assume that:

each person needs to consume one Basic item per unit of time to sustain life
the production of one item - Basic or Discretionary - consumes one dNR.

And let's assume that the dynamics are such that up to and including t=0 the society was at an initial "temporary steady state" (which sounds like an oxymoron, but there are "even odds" it conveys the idea of a long-lasting equilibrium that cannot be indefinitely sustained) in which 200 dNR were consumed per unit of time to produce 100 BI and 100 DI, so that

OB(0) = 100 BI = Output of Basic items
OD(0) = 100 DI = Output of Discretionary items

Per the first assumption above, the total population always equals the production of BI per unit of time, so:

DB(0) + DD(0) = OB(0) = 100 people         (eq. 0.1 - life constraint)

Let's assume that at that initial state everyone also was consuming one DI.  So, we are starting with an egalitarian society.

Now, producers of BI trade their production to producers of DI and viceversa, and to have reciprocity:

value of DD(0) BI flowing from DB to DD = value of DB(0) DI flowing from DD to DB
DD(0) PB(0) = DB(0) PD(0)             (eq. 0.2 - reciprocity)

Note that this analysis is completely independent of monetary issues: the society could perfectly be using barter.  We will deal only with the ratio of prices.

Let's assume that the society, by wisdom or necessity, makes a transition to a second "temporary steady state" in which 100 dNR were consumed per unit of time.  

In the case of EI, the Council (?) could have realized in time the deforestation problem, foreseen its devastating potential consequences, and decreed an immediate end to all statue-related activities, so that the new rate of consumption of trees - now restricted to life-sustaining activities (canoe building, etc.) - was equal to the reforestation rate and the society was saved from collapse.  Thus, theoretically they had the opportunity to arrive at a permanent instead of temporary second steady state.

In the case of the present world, it is theoretically conceivable an universally agreed-on immediate end to all non-essential uses of oil (such as car racing) so as to stabilize the production at say 50 MBpD for several decades.  Thus, for us the (extremely unlikely in practice) second steady state would be intrinsically temporary.

In that second steady state we have:

OB(1) + OD(1) = 100 items          (eq 1.1 - nature constraint)

DB(1) + DD(1) = OB(1) <= 100 people         (eq. 1.2 - life constraint)

where the equality holds if all 100 dNR are used to produce 100 BI.  This ideal path (let's call it path A) which does not involve a population reduction implies the end of reciprocity between DB and DD.  I.e., DB (producers of Basic items) provide BI to DD (former producers of Discretionary items) for free, out of charity.  And in doing that they are happy to completely forego their own consumption of DI.

In the case of EI, this path could be followed without necessarily creating a class of permanently idle population, by having DB(0) share the life-sustaining activities with those previously dealing with statuary, i.e. DD(0).  Thus, if e.g. initially
DB(0) = DD(0) = 50 people, with DB(0) fishing 6 days a week,
in the second steady state former DB(0) would fish 3 days a week, former DD(0) would fish 3 days a week, and everybody would have 3 additional free days per week to search for the truth, sing in chorus, body build, or otherwise relax and enjoy the beatiful beaches of the island!  (Let's call this path A.1.)

For the present world, such a spreading of workload is extremely difficult in practice, though some timid attempts have been made in recent years e.g. in France with the reduction in weekly work hours.  So, the creation of a permanent class of unemployed seems more likely.  Though this situation might at first sight look similar to that of the US in the Great Depression, there is an essential difference between them:

In 1933 depletable natural resources in the US were most plentiful, the constraint on economic output arising from lack of aggregate demand (i.e. consumption and investment spending) due to monetary reasons. Therefore the cure was to stimulate aggregate demand through monetary and fiscal policy.

In contrast, after PO the "limits to growth" (actually the "enforcement of negative growth rates") in economic output will not arise out of insufficient demand but of a relentless physical constraint from Nature, namely the decline in the production rate of fossil fuels.  Stimulating aggregate demand with monetary policy will not be able to increase output at all, (as no monetary stimulus can reverse the decline of an oil field, and no monetary stimulus will be necessary to increase exploration efforts since the price of fossil fuels will be high enough to do the job by itself,)  the all-important exception being investments related to renewable energy sources, for whose financing the Fed should lend to the banks at preferential low interest rates.  

So, here are two paradigms that are being challenged:

Holding that former producers of Discretionary items - DD(0) - should not get "a free lunch" or "something for nothing" amounts to "let them die", as we will quantitatively show later.

And holding that they should be put to work to "keep their dignity" amounts to placing the whole of society in a fast path to collapse (unless you find a job for them that does not consume depletable natural resources).

To see why, assume that in EI having everybody fish 3 days a week (path A.1) was not an option.  So, you had the following paths:

A.2: feed the former DD(0) while they relax on the beach,
B: let them die,
C: have them keep on setting up monuments (i.e. let the whole society collapse soon).

Remember, FDR chose path C because scarcity of depletable natural resorces was not the issue then.

Follows the math to quantify the population reduction implied in path B for the second steady state, so you can jump to the final results at the end.

Let's start by making the following assumptions:

trade reciprocity is maintained
the whole OD(1) is now consumed exclusively by the producers of BI
DB(1) = DB(0)

From the above assumptions we have

value of DD(1) BI flowing from DB to DD = value of OD(1) DI flowing from DD to DB
DD(1) PB(1) = OD(1) PD(1)             (eq. 1.3 - reciprocity)

From eq. 1.2 (life constraint at t=1))

DD(1) = OB(1) - DB(0)

replacing DB(0) above from eq. 0.1 (life constraint at t=0)

DB(0) = 100 - DD(0)

we have

DD(1) = OB(1) - 100 + DD(0)

replacing OB(1) above from eq 1.1 (nature constraint at t=1)

OB(1) = 100 - OD(1)

we have

DD(1) = 100 - OD(1) - 100 + DD(0)

DD(1) = DD(0) - OD(1)      (eq 1.4)

which shows why the producers of DI now produce only for the producers of BI: the more DI they produce, the fewer producers can survive.

From eq 1.4

OD(1) = DD(0) - DD(1)

Replacing OD(1) above from eq. 1.3

DD(1) PB(1) / PD(1) = OD(1)

we have

DD(1) PB(1) / PD(1) = DD(0) - DD(1)

DD(1) (1 + PB(1) / PD(1)) = DD(0)

DD(1) = DD(0) / (1 + PB(1) / PD(1))    (eq 1.5)

This last equation includes path A: if PB(1) = 0 (producers of BI give them to former producers of DI for free) then DD(1) = DD(0)

From eq. 0.2 (reciprocity at t=0)

PB(0) / PD(0) = DB(0) / DD(0)

Replacing DB(0) above from eq. 0.1 (life constraint at t=0)

DB(0) = 100 - DD(0)

we have PB(0) / PD(0) = (100 - DD(0)) / DD(0) = 100 / DD(0) - 1

1 + PB(0) / PD(0) = 100 / DD(0)

( DD(0) / 100 ) (1 + PB(0) / PD(0)) = 1  

Multiplying the second member of eq. 1.5 times 1 from above

DD(1) = (DD(0)EXP(2) / 100)  [(1 + PB(0) / PD(0))  / (1 + PB(1) / PD(1))]

(DD(1) / 100) = (DD(0) / 100)EXP(2) [(1 + PB(0) / PD(0))  / (1 + PB(1) / PD(1))]  (eq. 1.6)

EXP(2) means to the potency of 2.

So, if there is no price gauging from producers of BI, we have

(DD(1) / 100) = (DD(0) / 100)EXP(2)

so if  DD(0) =50, DD(1) = 25

If I learned anything from the above post (I didnt get thru it), its that modern society has worn in our neural grooves and our attention span for ideas/solutions/info is very tiny. Another example of Tainters complexity theory.

 If you want someone to really understand what you wrote -paraphrase it in one paragraph with links to supporting docs.

Interesting mental exercise. You realize, of course, that what you have taken as parameters are, in the real world, variables.
now if only this could be shown through an inter-active animation, that would really turn on the light bulb, so to speak.
Interesting. I read it twice and believe I understood everything. Simplistic, but in being so forces one to focus on the most significant areas which may deserve complication.

I've checked through your algebra in detail and think it correct. I initially thought this wrong but spotted my error / your trick, lol:
1 + PB(0) / PD(0) = 100 / DD(0)
=>    ( DD(0) / 100 ) (1 + PB(0) / PD(0)) = 1  

A more easily applied version of your final equation might be:
DD(1) = DD(0) * (  DD(0) /100 )

The first thing I seriously baulked at was: "trade reciprocity is maintained
the whole OD(1) is now consumed exclusively by the producers of BI
DB(1) = DB(0)"

It would not be maintained IMO. Some means of adjusting this needs to be introduced, the rest of your calculation is dependent on that equalilty. The most likely mechanism in practice would be a blurring of B and D roles (basics and discretionaries producers) IMO. So, most Ds would be forced (by necessity) to produce some B and some B would choose to produce some D. This was the normal state of affairs until the recent past, even up to perhaps 60 years ago.

The conclusion seems perverse to me, though. The more DD(0) the less DD reduction in both proportionate and absolute terms:
DD(0) = 90   =>   DD(1) = 81
DD(0) = 60   =>   DD(1) = 36
DD(0) = 30   =>   DD(1) = 9

I'd guess that at most 5% of US population are involved in agricultural production, perhaps 10% in that plus basic food processing (like milling, basic dairy processing).

One probably needs to define what B (basic items) and D (discretionary items) are, and perhaps some ability to switch D to B production on both macro and individual scales. Ultimately basic food, water and usable energy production are the key pre-requisites for survival, perhaps then basic housing and clothing, all else is discretionary.

A good theoretical starting point, what would you suggest next?

And where would you put capital investments ?  Long lead time, long life assets that help produce essentials.

In ancient times, these were irrigation ditches/canals & paddies.  Perhaps again.

A modern example would be a small hydroelectric plant, biomethane production infrastructure (varies with source), more efficient community bakery, planting & caring for forests, and so forth.

How to make gasoline from electricity.
First step is extracting CO2 from the air using a sodium oxide cycle. Pump air into a tank filled with sodium oxide and water. The sodium oxide absorbs the CO2 to form sodium bicarbonate. Distill the water out of the mixture then heat the sodium bicarbonate to release concentrated CO2. Mix the CO2 with H2O and electrolyze the carbonated water to form a carbon monoxide and hydrogen mixture. Bottle and sell the surplus oxygen. Run the CO and H2 through the an iron catalyst at the appropriate pressure and temperature to form gasoline (F-T process). The amount of electrical energy will of course be several times that in the final product but when have Americans cared about efficiency.
Re:  gasoline from electricity

As Jay Hanson pointed out, if you have energy, you can do almost anything you want to. If you don't have energy, you can do very little.  

Our total worldwide energy consumption from nonrenewable sources--natural gas; oil; coal and nuclear (leaving aside how to classify breeder reactors)--is the equivalent of one Gb of oil every five days.  Every two months, we consume the energy equivalent of Prudhoe Bay.

Neat chemistry ;-), but if things got that extreme I wonder how much feedstock we could find for thermal depolymerization?
(There is room for a Soylent Green style horror/dystopia movie here)
Well, fifty years of plastic in the landfills, to start.
I prefer extracting a mix of CO & CO2 from either geothermal or steel processing, combining with hydrogen extracted from H2S (at high temperatures) and making methanol is a better start.

MUCH lower energy requirements.

Here's an easier (and probably more efficient) way:

  • grow trees
  • pyrolise harvested wood to get CO / H2 mixture
  • F-T process
  • plant more trees
Isn't it amazing that our machines can't do what algae has been doing at low temps and pressures for billions of years.
Latest NYTimes Tierney op-ed drivel entitled "God's Thermostat"

Didn't even have to read it.  Says it all.  $14.95 a year for this?  I don't think so.

I propose a boycott at TOD of anything Tierney writes in the future based on the reasoning that some people's material shouldn't be dignified by a response.

Tierney's material is provactive and fun to poke at it.

What did Julian Simon's disciple say this time?

Couldn't get out in time to get a copy.
Is it posted for free somewhere? (Stupidity wants to be free, you know.)

I wonder if Tierney ever gets together with Brooks over coffee to discuss the 12th Law of Thermodynamics?

(... you know,
the one that is the same as the 1st through 11th laws:
the markets will provide.)

The IEA was reported on Bloomberg's yesterday as saying that 2.2 million b/d of capacity was being added by producers as a result of high oil prices. The IEA also stated that demand would be up 1.78 million b/d this year. Does anybody have any underlying facts that support their conclusions or comments on their analysis?
I sometimes wonder if some of the economic and social predicitons of peak oil could happen when oil production is still increasing - if demand starts growing faster than supply is increasing, we could be years away from liquid peak but still have big price increases and dislocations - though demand destruction would probably really 'work' in the neo-classical sense

I can say that IEA price forecasts for next years oil have been wrong (and very wrong) for 5 years in a row - they are more backward looking. This is not just symbolic-many corporations use IEA price forecasts for their investment and mileage algorithms etc.

Good question! I've said it before and will probably say it again in various ways: perceptions and expectations trump reality.

Expectations can turn on a dime--and frequently do so.

My understanding of the problem we face is exactly that - not the point of maximum production (PeakOil), but the point at which supply cannot match demand at any reasonable price.  IMHO, by that definition, the price trend over the last year and its volatility, would indicate that we are rapidly approaching that place.  Whether production is actually increasing, flat or declining will affect greatly the size of the shortfall, also the general public's understanding of the problem.  It is far easier to see that we must reduce demand when production is falling than when it is continuing to increase.
Important point, TLS. There are three distinctly different points that tend to be rolled up into 'peak oil':
  • 1. the real peak oil: when we produce the most
  • 2. the 50% used up
  • 3. the 'big rollover': when demand exceeds supply

The first trumps all and is what we should most focus on, it is the geological turning point beyond which we can only adjust by substitution, mitigation and... adjustment, LOL. The second is not immediately important, though will tend to be close to 1 given past data.

I guess you are talking about 3, it would be best if this preceeded 1 and most unfortunate if it happened a while after 1 (think of the slopes). If 3 preceeded 1 then supply would meet needs given a bit of economic adjustment. The price would increase, some demand would reduce, the rhetoric would become more inventive - the 'economic model' would still be operational. Once 1 happens the economic model is only useful in determining effects since geological reality will have taken over and, on this, geology trumps all.

I would refer you to something I said here before:

With a bang or with a whimper?

The bang will be obvious and is most likely to occur in Iran, Saudi, Venezuela or Nigeria. The whimper will be harder to spot so I'll give you some clues...

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

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

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

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

Stage 1 sounds kinda familiar, don't it? Expect 2 to become apparent in 2006, and 3 to follow in 2007 or 2008.

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

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

The scenario that worries me most is: a global recession happens lasting a year or so, meanwhile real peak oil has happened, unnoticed due to reduced demand, and meets demand just as it starts to turn up. A world already weakened by recession runs into the peak oil brick wall. That, almost certainly, would be 'run for the hills' time. Let's hope things conspire otherwise.

Pollute the environment, then drink bottled water, waste energy, pollute some more

(Urban Survival had a post this morning wondering if the recent 5.2 earthquake in the GOM might be related to the New Madrid Fault System.  Enclosed is an excerpt of an article I found).

The Great New Madrid Earthquakes

Then, the big one hit. At nearly 3:30 a.m., February 7, 1812, the most violent earthquake in recorded U.S. history hit the eastern half of the continent. It probably measured over 8.8 on the Richter Scale, or the equivalent of an underground nuclear blast. It's center is believed to have been under what is today an innocent looking rest area along Interstate Highway 55 between the towns of Marston and New Madrid, Missouri. For several hours, the earth shook so violently that the Mississippi River actually ran backward and waterfalls formed and lasted for weeks as the ground heaved in anger. Towering waves were cast over the banks and shattered trees along several thousand acres of shoreline. Riverboats were launched out of the river and onto dry land with an unknown death toll. In the predawn light, one boat was transported upstream, then floated down again, surviving one set of falls and then managed to steer ashore to the cheer of the townsfolk. No one else was so fortunate as 30 other boats that had been moored to the docks were smashed by the waves with total loss of life.The terrified residents of New Madrid who watched the spectacle said the earth literally swallowed the river in huge chasms which then slammed shut, the water shooting hundreds of feet into the air like fountains.

News traveled fast. Later that morning as the earthquake rippled across the continent, the South Carolina legislature near the Atlantic Ocean prepared for another day in the state capitol when they convened in panic as the building shook. President Madison was jolted out of his bed in Washington, D.C. as the White House trembled. Church bells rang in Boston, Massachusetts nearly 1000 miles from the epicenter and as the weeks passed, reports came from as far away as Cuba and Canada confirming the power of the earthquake.

There is of course, much speculation by scientists as to whether or not the central region of the United States is in for a repeat of events as the 1811-12 quakes. Colleges and government at all levels in the region have taken a particular interest in the fault zone that seems to be some sort of stretch mark in the center of the continent -- a hole in the North American tectonic plate system. Unlike the more famous San Andreas Fault zone in far away California, the New Madrid fault has no real beginning or end, no defined region and the rock strata is such that quakes are amplified, explaining the Feb. 7, 1812 quake. There are hundreds, perhaps thousands of tiny fault areas, all spreading in different directions, though researchers have recently linked the fault area to the magnetic differences of the igneous rock strata on either side of what is being recognized as a very complex rift that extends as far south as perhaps the Gulf of Mexico, defining the course of the Mississippi River.

Some geologists think the entire eastern half of the U.S. could be in trouble if there's a big New Madrid quake.  There aren't a lot of earthquakes in the east (unlike, say, California), but when there is one, it propagates a lot more, because the bedrock is more solid.  The New Madrid quakes of 1811 and 1812 knocked down buildings as far away as Boston.  If there's another one like that, old cities like New York could be in trouble. Those old brownstones were not built to withstand earthquakes.
Economic collapse, environmental disaster, political conflicts, and energy depletion - sorry, no room for earthquakes!  Didn't you get the memo?  
Wow, what a series of statements of misinformation, one stacked upon another.

The future is indeed rosy if one leaves our crucial information and exaggerates the significance of a few gee-whiz technologies.

I suppose it is inevitable that we will have to work through the stages of denial over and over again.

The guy who wrote that article (Donald Luskin) is wrong. He claims that 80% of our oil comes from US, Mexico and Canada -in truth it is 53% link. He also claims that less than 15% comes from Middle East-its over 20% as of 2004.
This person seems to agree with Luskin. Any comment?

Almost everything factual in the Luskin article is inaccurate except his quoted commodity prices. Unfortunately it probably sounds believable to most uninformed readers so he can get away with it... for now. (Has he been watching the price of uranium?)

The Aljazeera article is more accurate, they have slightly bent some numbers by rounding but it's otherwise accurate in its facts as I know them. It's surmise may not be far out, either:

People need to differentiate between the fact that the U.S. seeks to lay hands on the Arab oil and the fact that currently oil coming from the Arab world and the Middle East represents a small percentage of the U.S. oil imports.

I know, we know, they know we know, we know they know we know...

Careful with that axe, Eugene

Tons of drivetrain indeed!  Does this poor cretin think an electric motor on each wheel will be lighter than existing drivetrains?  Does he think the drivetrain contributes "tons" of weight to a car that weighs less than two tons?

How about lightening up the car by simply not having unneeded four wheel drive?

And here's a great line:

Even if it did mean sheer conservation -- rather than swapping one form of energy for another -- that doesn't have to be as bad as you think. Little by little, without our quite realizing it, oil is becoming easier and easier to do without every day.

Where do they get these Tierney clones?

i was listening to talk radio today in Houston, (as i often do) and i had just tuned in. So i don't know the question, but it was about natural gas prices. the caller mentioned than fertilizer is being made overseas, since it's cheaper to make and transport back to the states. and how domestic fertilizer companies have had shut their doors due to the price of natural gas. the comment that made me perk my ears up, was about LNG (liquified natural gas), and his comment was to the effect, all they gotta do is transport the LNG to the USA, and his logic was that if they can import fertilizer to the states, then why not LNG? All you need is a ship.
And i quickly realized that he doesn't seem to comprehend the logistics and costs associated with LNG. I know there are more people out there that probably have the same opinion. the sad truth is: bad information spreads more rapidly than good information.
Now if only this guy knew of The Oil Drum, he'd have a more clear understanding of LNG, hell i am not in the oil and gas industry, but i learned alot from the rest of you who are.
just thought i'd pass this on.
Thank all of you for sharing your knowledge with the rest of us.
You are so right that bad information spreads faster than good infomation--and the noise tends to drown out the information at some point. There are interesting reasons for this fact, but it is past my bedtime, and anyway it would take about 750 words to explain them.

There is good solid information on the Net, but most of it is BJ (whatever that may be) or BS or possibly camel feces in parts of the Middle East and North Africa.

My sense of humor has sometimes been described as macabre, but I prefer the adjective "mordant." As in wit. Anyway, here is my final funny observation for today. I do a lot of Googling for researching science fiction and mystery novels that I write, and one of my characters is a terrorist trying to learn to make a bomb from sources on the Internet. Guess what, much of the stuff posted will blow you to kingdom come before you even come near to making a completed bomb.

To separate the wheat from the chaf it helps to have a solid education in informal logic (same thing as critical thinking). Very few of us are lucky enough to have had such educations.

Since there are a lot of engineers on this site, and it supports a comment I made the other day about the exproting of engineering jobs, here is an "interesting" article:

Nuking the Economy

I have become more convinced than ever that the only way I will continue to work as an engineer designing products is if I start out on my own.  However, I do not find that prospect very comforting at this moment, given all the uncertainties we face.  But I suppose it's as secure as anything else.  And perhaps once we have destroyed our ability to manufacture things, and are no longer able to afford things made elsewhere, there may be a place again for people who know how to design and manufacture products.  

It continually amazes me how radical Paul Craig Roberts has become. He is definitely a sane voice crying in the wilderness. But, given his impeccable credentials,  one cannot easily dismiss him as some sort of whacko. He was deeply imbedded in The Establishment, and now he's on the outside pissing in. Well, good for him!

As far as engineering jobs go in this day and age: I'm inclined to say, "Fuhgetaboutit!" That is, unless you live in India or China. Tis so sad when I think back that when I was a senior in engineering school circa 1967, the seniors had an average of 4.2 job offers each. There was absolutely no question of whether you were going to get a job, but rather which of the many job offers you'd choose to accept.  There was only one really weirdo guy in our senior class who didn't have a job offer, so the president of the school called  in some favors and got him a  job so as not to spoil the school's  100% job-offer record.

I'm beginning to think that living in 1967 was like living on another planet, and maybe it was!

Peak oil in China's People's Daily.
Now that puts things into relative perspective.

A repressive dictatorship like China admits to Peak Oil,

but a "freedom on the march" Democracy like America does not?

Something does not square here.

There is a diffrence between the "Hubbert's Peak" Theory and Peak-Oil, whatever that is.

There is a growing consensus that we are going to reach some type of a crisis or break-point in the US, however nobody seems to agree what Peak-Oil means exactly. I'll bet you couldn't even get an agreed definition of what peak-oil is in this very forum. Try. Is it Reserves? Is it production? Is it both? Is it LSC? Do tar sands count? Are you including price in your analysis?

As far a admitting to a problem, no less than the President himself has done so. I'm not saying I'm pleased with the extent of his response, but it's better than Yergin's.

Agreed here also.
Even the new Chairman of the Fed Reserve (Ben Bernanke) stated today that we are close to the "margins" with regard to supply meeting demand.