Thursday open thread

This year, thread is the new black.
Gasoline for May delivery got above $2.00 per gallon on the NYMEX today.  The RBOB contract is trading at a substantial premium to that.  How concerned is everyone about gasoline supply this summer?  The recent drawdowns worry me.  And is there enough ethanol to replace MTBE?
There is a reasonable concern about localized shortages. If you are in an area that is phasing out MTBE for ethanol, you are at a higher risk of a shortage. Supply is one problem, but we are planning on importing ethanol from Brazil. But logistics is another. Ethanol has to be trucked or railed in and mixed at the terminal. MTBE can be mixed at the refinery and shipped in the pipeline.

These factors, combined with low sulfur gasoline coming online (which has reduced gasoline imports due to the inability of some suppliers to meet specs), as well as the transition to summer blends (less supply there as well) are a recipe for a very tight supply situation this summer. Gasoline inventories continue to be drawn down, and prices will have to rise until inventories stabilize.


Chicago sighting: In the city petrol/gasoline for the premium exceeded $3/gal. 20 cents behind is the regular lead-free petrol. I took onboard 6.3 gal this morning after 181.5 miles from the last load taken. 28.8mpg. Not bad, given how the last petrol onload was last week on a Thursday. (a week per fill-up)

When I take on gas, I always fill 'er up until the nozzle clicks off. Plus I usually use the exact same nozzle each week and reset the trip odometer just as I start the car to finish the mission to work. My Kia Rio has a 1500 cc engine able to make 95 horses, so it will not take off like the proverbial jet slingshotted off a carrier but the gas mileage sure makes up for it. I can get patient to accellerate up to desired speed. How does one put photos on this blogsite anyways? When I catch $3/gallon I want to put the picture up, just for fun.

I have a "car cam" onboard that is a semiauto cam on a homemade solenoid mount. That way, I can hit one button to charge the cap then hit the other to squeeze off the pic. I have a "spy car"! Someone saw that spy cam as I parked lately and was staring at my car like if I was landing a UFO instead of parking my Kia. :) I guess he noticed that car cam. Who needs a Ferrari to turn heads?

To post images, you have to host them at your own web space, and hotlink to them.  Your ISP probably gives you some personal web space.  Or you can use image hosting services like or

Go here for details how to post images.

Typhoon, we are heading into uncharted waters.  This society of ours...and I have to steal Matt Savinar's expression, WE ARE DRIVING OUR CARS FULL SPEED OFF THE BRIDGE.  Americans on the most part..have good hearts and intentions...but the brain stems have been dislodged some generations ago.  It is certainly something to worry about in the future.  The Hurricanes and their effects on the price of gas and the lines at the pump was a RED LIGHT to the American Public.  But, instead of this waking us up,  we went out and kept buying and filling up large SUV's.

The logistics of replacing MTBE with Ethanol is going to be a difficult one at best.  This will be apparent by price volatility on the open market.  One's biggest concern, should not be what will gas prices be this summer or next, but what will they be by 2009-2010.  Most people that I know plan on living more than a few years.  And, it is in the future where the real damage of energy shortages will be felt.

I don't believe people....even many bloggers on this website have a good grasp of just how difficult the future will be.  Now, to me, it will be a blessing.  People are working to hard and dieing too soon from disease from stress and junk food diets.  Going back to more of a simple life, might just be what the doctor ordered.  But of course, many people will fight tooth and nail to keep what they think is important...their Mc Mansions and Mc Suvs.  I believe the biggest area of opportunity in the future will be in recycling of large commercial buildings and infrastructure of our large cities into goods that can be used in a more sustainable lifestyle.

If one really thinks about it, all technology has done if you take it to its simplest denominator, is allowed us to use recources quicker and faster.  Walking is healthy.  All a car does, is speed up walking....get you there quicker and faster.  Not really better.  Cell phones, they just allow one to communicate over a long distance.  When people lived one needed cell phones..all you had to do was open you Cave Door and yell.  Jeeesh, that was better for won't get brain tumors from yelling.

Secondly, people tend to drive long distances to love ones and are strangers in their own neighborhoods.  If you think about it...that's quite silly.  I could go on and on, but in the end....we are going to have to live much more local.....just like Kunstler says.  So those whose brain stems are still have time to sell your house in the Burbs, move to the gold and silver and grow your own fruits and vegetables.  Then you won't have to worry about future can just watch them unfold on the evening news.

Actually, the changes have begun.  The fact that the government lets us feel a pinch as we go from MTBE to ethanol is probably part of it.  It's a wide program of E10 and biofuel, right?  And of course SUV sales are down, bigtime.  Hybrid sales are up.  I'm too lazy to make an exhaustive list, but this past winter was a big time for change.  There are certainly laggards, folks who buy SUVs in the spring of '06, and the laggard companies who try to sell them ... but that's going to happen in any population response.  Fortunately the laggards do not define the trend.

(Geez, the GM "yellow gascap" campaign is a sad, rearguard, action when you think about it.  The fact that they push a non-oil reason to buy SUVs means that the game has seriously changed.)

A Plan For Preserving Civilization

American Scientist reviews Lester Brown's Plan B 2.0:  

...Something must be done soon. "At issue," says Brown, "is whether national governments can stabilize population and restructure the economy before time runs out." But Plan B 2.0  is not a doomsday scenario; rather, the book is decidedly upbeat. Brown notes that destructive environmental trends that result from human activity can be dealt with using existing technologies, as some countries have already demonstrated. Denmark, for example, already uses wind power to produce 20 percent of its electricity.

Brown recognizes that the aims of reducing global poverty and of preserving and restoring the environment are inextricably linked. Estimates of expenditures necessary to address these interrelated goals constitute the heart of his Plan B. Brown estimates that achieving what he refers to as "basic social goals" (universal primary education, adult literacy, a school lunch program as well as assistance for preschool children and pregnant mothers in the world's 44 poorest countries, reproductive health and family planning, universal basic health care and improved availability of condoms) would cost, worldwide, about $68 billion per year. Reaching "Earth restoration goals" (reforestation, topsoil protection, water-table stabilization, restoration of rangelands and fisheries, and protection of biodiversity) would cost about $93 billion per year, he believes. But even the sum of these two figures ($161 billion) is only a fraction of the roughly $975 billion he says represents the world's total annual military expenditures. Reallocation of just one-sixth of that total--or, alternatively, reallocation of one-third of the $492 billion the United States spends--could therefore help ensure the survival of civilization. The U.S. military budget reduced by one-third would remain several times greater than that of any other country.

Hello Leanan,

Excellent OPEN thread start!  This article shows that if we can somehow rein in our military: we can have huge sums to start decreasing the ongoing national detritus-driven 'spiderweb' and start building in the NE & NW US the first dedicated biosolar 'spiderwebs'.  I think Jim Kunstler would be very pleased to see this get kickstarted.

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

If you haven't read the book yet, I recommend it.  The writing is intelligent, and it has an urgent, yet calm and composed tone.
My favorite Plan 2.B idea is to turn a few Ford and GM plants into windmill factories. The technology is very similiar.

Better yet combined windmill / hybrid packages.

Anyone know of any good websites with info on things like keeping a stash of food and other supplies in the wake of various urban disasters? I did some googling but I didn't come up with much that wasn't hysterical.

Yesterday I was reading a thread on this site while waiting for some code to compile, and the power went out. Heh.

During the hour long outage a few of my coworkers and I talked about the value of oil, efficient lightbulbs, natural gas shortages, and the like. Granted we're all electrical engineers, but really, we're regular people. Not everyone is clueless about these things.

Mormons are supposed to keep a year's supply of food for their families.  You might try Googling LDS sites.  They've got some good tips on building your stores on a budget.

And here's a government site:

It's on preparing for bird flu, but much of the information would be useful for other emergencies, too.

And Mormons are heavy into childbirth. I guess they don't care about their childrens' future. :( I put Mormons into the fundamentalistic catagory. Joseph Smith of the 1800s was a charlitan par excellance, and made himself a "church" to have himself multiple wives a la polygamy. Yecch. And of course, people fell for it and Utah is crawling with the descendants of the result. No good. And they oppose drinkable ethanol.

As if Peak Oil wan't a big enough challenge, the fact that most people go on Faith and trust in clerics (any religion will do) we are in for some nasty times ahead. The mormons are a perfect case, no more or less than the moslems. HELLO!!!

Oil is going to decline and no amount of praying is going to load gas into that car! Outside of the mormons, there is another problem with slowing population production. Some women think of having kids in a way like generating free-to-get but high-maintenance pets. You heard right. I was talking to a lady and after I said I was gladder and gladder every day I never had kids she described the joy of seeing kids who share her properties as in colour of eyes, shape of body, and so on. I walked away shaking my head, and that was after saying America is going to hell in a handbasket.

I would not pray for gas to be loaded in my car. I would pray for stamina and trust that I can get from point A to point B on my own two feet.  

I have always maintained that if asked, Jesus would still walk. Not drive anything we have today.

As to the Lady and here kids,  So there is another reason we have a messed up society and kids get to do anything they want to do.  

'I have always maintained that if asked, Jesus would still walk. Not drive anything we have today.'

That is actually an interesting thought. The idea of driving himself is one thing, but would he use something powered to spare his feet or go more quickly between two places?

I could certainly imagine Jesus doing that. I doubt he would refuse to use a bicycle, for example, or hopping a ride on the back of a farm tractor or something going between towns.  As for water vessels, obviously he would have no problem, so he would not need to use aircraft for any reason to travel. No idea if Jesus would or would not fly, or use rail though.

The idea of having one of humanity's more persuasive and respected moral teachers return to our current world and then thinking about it, though, would generally be idle distraction. But the question of how such a teacher would travel fits well into much of what is considered here.

What a measure of the difference between two epochs in human existence. And somehow, since peak oil is also essentially about changing epochs, worth a moment to reflect on in those terms alone.

Salt Lake City and Denver (also with high LDS population) are two of the three US cities most serious about transforming themselves away from the car. (Miami is the other).

In 2007, SLC is likely to have a vote to triple taxes in order to build their aggressive light rail & streetcar plans in less than 30 years.  Denver is well on the way to building a 117 mile Urban Rail system (a mix of commuter & light rail).

The LDS culture is much better prepared for Peak Oil (with community, mutual support, an emphasis on saving & preparing, etc.) than the rest of the US.

I am not Mormon, but I find your prejudice "distasteful", to be polite.

Mad Maxout -

I wish you would just lay off stereotyping. You could pick on Baptists just as easily about ethanol, or Scientologists about the real basis of their beliefs or Catholics for their abhorrence of birth control. I know lots of LDS folks, and for the most part, they are a lot like everybody else, with the same worries, fears and hopes. Point of fact, if you strip out the religious stuff, most of us are VERY MUCH alike. We all want to survive, enjoy life and let our kids carry our genes forward.

Throwing out the "religion card" is just about like throwing out the "race card" - all it does is alienate people who might, just possibly, save your life some never knows how the wheel turns!

MillMan, a good starting point is the Mormon website, they have food and necessities listed:,11677,1706-1,00.html


I read books and researched the Internet.  The best thing that I learned was:  Store what you eat, and eat what you store.

I finally ended up making my own spreadsheet.

We are attempting to stock 3 months of food, convering 50% of our protein, calories and fiber.  The food has to last 6 months, be routinely eaten during this time and be cooked on a propane camping stove (no oven).

Think of things like:  Oatmeal, soup mixes, rice mixes, canned beans (4 bean salad), Pork and Beans, spaghetti, pasta sauce, raisins, pancake mix, peanut butter, crackers, etc, etc.  Things that you like to eat...not somebody else.

Don't forget to store water.  We are collecting water in 2 liter pop bottles.

It really does not cost anything.  Just buy the stuff in quantity when it is on sale.  As long as you eat everything and rotate it, you are actually saving money.

Easy to do if you store what you are currently eating.


i am a fan of beans and some grains, and make my own power crunch granola.  A good way to increaset he protien is to get Whey Protien powders, In your favorite flavors.  They have the highest protein amount that the body can absorb, even more so than soy beans. After all they are a milk protein.  You can get them in organic or who knows what kind.  You can have several in the IsoPure line that are really great for gastric by-pass patients.  I know I have tried them while preparing them form the x-wife.

I would suggest the staples like sugar, dry milk powders and a small supply of spices that you normally use.  I have a traveling kitchen, and 24 of my closest friends from my spice cabinet.  Under proper conditions some spices can last a long time flavor wise.  Especially if you pack them in vinegars, oils, and sugar or hoeny.

After I move I won't be roughing it, but I will be living a lot more rough than I am now.  Though I wash my clothes in my bthroom sink in cold water and save the wash water and rinse waters for future use,  Cycling the wash water till its up to a certain amount of dirty, then i either drain it or feed it to othr plants

RickD -

If you live in a house, you might consider buying a large plastic cistern. If water goes, then toilets won't work and things get "campgroundish" pretty fast. Water is one of the things that really keeps things civilized.

I bought two 650 gallon plastic water storage tanks for $450. They are green to keep light out and prevent algae from growing inside. I replaced my metal gutters (which are zinc coated and use lead screws) on two runs with plastic ones, and these drain into the cisterns. Each cistern is set 2 ft off the ground for water pressure, and I have nandinas planted around them to keep the water cool and hide the ugly. There is a coarse screen trapping crud in the gitters and a very fine everted cone screen at the opening draining into each tank.

Clorox or chlorine tablets for a swimming pool can purify the water, and you can buy water clarifiers to clear most of the solids out, or just run it through a filter system.

I did this because we have been hit by droughts in the past few years, and last summer the water got so bad from local wells that it ran brown for a time. Now I don't really have to worry too much about interruptions...

A cheaper way might be to recycle some chemical barrels, as long as they are for soap or other things that will not adversely affect water quality. But once your water goes, gallon containers disappear really fast - especially in summer!!

You can visit this website:

The food storage faq (in PDF format) is several pages long and is pretty comprehensive.

I also like Peggy Layton's Emergency Food Storage & Survival Handbook," as well as the "Crisis Preparedness Handbook" by Jack Spigarelli.

Hope you find these resources helpful.


Thanks for the link, that's pretty much what I was looking for.
Beware of people who want to sell you expensive stuff.
May I suggest the literature on cruising sailboats? The problem of provisioning a small boat for, say a round-the-world nonstop single-handed cruise are similar to that of provisioning a home for times when it might not be advisable to leave the house for a few weeks or months.

See, for example, the classic GYPSY MOTH CIRCLES THE WORLD by Sir Francis Chichester and the excellent THE CARE AND FEEDING OF SAILING CREW by Lin and Larry Pardey. If you will be cooking on a camp stove, (and it may come to this), I also recommend THE ONE-BURNER GOURMET by Harriett Baker which has a bunch of tasty and easy recipes.

Also, in storing food, I cannot overemphasize the importance of having stuff that people actually will eat, especially children. Thus staples such as graham crackers ($1 per box at Wal-Mart), peanut butter and honey are good.

Don't forget to have a few hundred gallons of potable water. These can be stored in inexpensive containers that most people throw away, such as empty rum bottles:-). Also, a variety of cooking fuels and stoves is good to have along with cheap charcoal grills, charcoal briquets and wood.

Right now I have a stash of food in a plastic storage bin under by bed, it would probably last me 2 weeks. The idea was to cover short term social hysteria that causes runs on grocery stores, for example. I'm thinking about expanding it out to three months, which for an individual probably isn't a huge amount of food. The problem, though, is that I live in an apartment, and while I do have space in the basement I don't want to lug a lot of food around when I move, which I tend to do every 12-18 months.

I will check out the one burner gourmet, I do a bit of camping so it's probably a good book to check out regardless. And I'll probably buy a stash of isobutane, too.

Isobutane is convenient but expensive. If budget is no constraint, just go to REI and spend about six grand.

However, consider alcohol as a fuel: Sailboats often use it, because it has the huge advantage that water will put out an alcohol fire--but not a gasoline one. Kerosene also has much to recommend it--especially cost, and the fact that its fumes seldom explode.

Consider various scenarios with care. For example, I have lots of friends and relatives who have informed me that when TSHTF, they are heading right for my place. Fortunately, these friends include various U.S. Marines, members of the Rangers 10th Mountain Division, retired Delta Force guys, etc., and althought they do eat a lot, they are most welcome. In addition to having a large house I also have two large cabin tents, because I believe in hospitality and sharing;-)

I didn't mean to imply that I'm going to buy 3 months worth of isobutane, again, a big consideration here is storage in a place I don't own. I have a few "military survivalist" friends out there too, but sadly they don't live anywhere near me. I suppose I could try fighting my way Mad Max style to their place on west coast when TSHTF.

Hmm, on second thought, it wouldn't be too tough to stash several gallon jugs of kerosene in the basement.

Don,  another great item would be a .22LR bolt action.  The rifle is cheap and so is the ammo. The round is quite and will not travel far. Most game in north america (except maybe boar and elk) can be felled with an accurate shot..

I'm sure you have a rifle already but this is a user freindly one for our non gun owning colleagues.

I am a big fan of single-shot weapons. One shot, one kill.

Also, they are cheap.

BB and pellet guns are good for training and some can be used effectively to hunt for little critters.

.22 long rife excellent, and ammo keeps for several decades if kept cool and dry--always have a few 500 round "bricks."

.410 is good for running rabbits etc., and with slug more effective on big game than .44 magnum in handgun. Can get combo guns, .22 long-rifle over .410, good value, very handy, easy for small women and young people to handle.

.223 good for longer ranges, little recoil

Do not waste ammo on elderly Republican lawyers;-) Meat is tough and stringy.

IMO handguns are relatively ineffective compared to long guns, and they require constant training to maintain proficiency--a waste of money.

What about close quarters urban combat when trying to defend my stash?
A community with a vested interest in your survival, just as you have in theirs, is the best security.  
For weapons that are good for Mad Max -ish cases, try a pistol-grip crossbow with a salvaged laser pointer hose-clamped to it. The advantage is that arrows will be easy to make and can kill - including shoot through bullet-resistant vests. Plus that red dot makes for getting a point across. The drawback is having to salvage the batteries for the laser pointer. 21st Century meets Midieval, a poetically perfect weapon. Second drawback is short range even with aligned laser pointer. (50 meters max range on a good day)
Wow, talk about doomerism!  I'm not planning on total societal collapse.  The money one spends on guns can be spent on other things much more likely to be needed.  I may buy some ammo for my grandfather's old deer rifle or the .22 I got as a kid (it's at my parents house still!), as it would not cost much, but that's it.  In the societal reaction I'm expecting, there will be plenty of weapons - in the hands of the authorities.
It's kinda sad when a "moderate" peak oil discussion slide off to survivalism.  And that's what it is, when you talk about large caches of food and guns ...

In "fooled by randomness" Taleb talks about an interesting effect.  Maybe it's a framing effect, I don't know.  When people are asked to rank the higher probability, a thousand deaths due to a disaster, or a thousand deaths due to an earthquake(*) ... many will choose "earthquake" despite the fact that it is of course a "disaster."

Taleb is kind of moving fast and recounting more serious studies, so he doesn't go into detail, but apparently the mental affect is that we get fascinated by outcomes that we can visualize.  We are attracted to those ideas that make a compelling internal mental movie.

Let's face it guys, "Mad Max" makes a better movie than "The Day Gas Sold For $3.25"

I think this is something I've felt myself, that I sort of play with the idea of a bad scenario and how I'd deal with it ... but I try to remind myself now that this might be a human mental effect (a bounded rationality) ... and that I should probably be thinking about the more likely, but less dramatic scenarios.

* - interestingly the same question with "violence" and "terrorism" give higher scores to terrorism, which might explain the American public fixation, and the political hay to be made off that fixation.

odograph, there are three things here: one, my investment in a small stash of food and a cheap .22 (the .22 may not happen anyway) is pretty minimal in terms of money and time, and two, part of this is just interest on my part into how other people think about extreme scenarios. The third item is the last paragraph below.

Even when my modern American life is good it is relatively mundane, so romanticizing Mad Max scenarios of fighting urban barbarians brings a bit of excitement. Of course, if that scenario really did come to pass, I would be praying to every diety known to give me my "mundane" life back. Also, it's easier mentally to be a fatalist than to work towards solutions. I do struggle with that sometimes.

At the same time, with my technical backround, I can increasingly see the intricate web of processes that have to flow smoothly every day to allow modern society to function, and as time moves on, we're using technological advances to build more risk into the system instead of less. The benefit is more profit and cushier lifestyles, the risk is that it takes less damage to any given process to cause cascade failures in other areas. So while I know statistically death by car accident is by far my greatest daily risk, I have to assuage the worry in my mind stemming from what I just talked about. Thus my little stash of food.

Nothing wrong with having reasonable emergency supplies, I was really speaking to the way the thread in general drifted to the more survivalist.

And we should probably be aware of how these scenarios shape our actions.  People buy SUVs for safety reasons, but suffer a higher incidence of death, owning an SUV.  Case in point.

BTW, why wouldn't you see the "intricate web" as "higher redundancy?"
AK-USA. Check out the viddy's in their "gallery."

This is from the Russian American Armory Company. Rednecks from Indiana putting their engineering skill into the 7.62 Round. Doesn't get any better than this.

My friends mostly carry caliber .45 automatic pistols, cocked, with cartridge in chamber and safety on.

Sailorman is more proficient with blades in close quarters than noisy and expensive firearms. Long ago, teenage homicidal psychopaths (aka sociopaths and anti-social personality disorder types) taught me that if you cut off a guy's trigger finger, you spoil his aim. Also, knife is faster than gun and easier to conceal. Cutlass (i.e. expensive machete with 3/16" thick fine Swedish steel blade sharpened well enough to shave with) is also very handy to have--for trimming tree branches, etc.

Again, big problem with handguns is constant practice needed for proficiency; it is a use-it-or-lose it skill. On the other hand, cowboy action shooting is fun, and there is nothing faster than an Old-West style gunfighter rig combined with, say a .44-40 Ruger Vaquero, to accompany your Winchester 1873 lever-action carbine (or clone of same).

i train with a 6 foot iron Gas pipe, that has end caps on the threads at both ends.  Using it like a staff weapon, anything not shooting me with a gun is mush in a radius of 5 feet all around me.    I train for stamina, I wanted to train like I was getting back into mountain climbing.  I use it 5 times a day and up to 30 to 40 minute sessions, when I have time.  I can slip the silver looking wally world special free weights over the ends and screw the cap back on and do the same mucsle toning and building exercises.   I am up to 4- 2,5 pound wieghts.  sliding them to either end of the pipe they make a great strength inhancing exercise,  I can control the pipe wen with this heavy weight on it.

I can also do many other mountain climbing exercises and i don't think I will be up on a mountain much again.

Sorry about all the typos, I was falling asleep while posting.  I had filled my vans back section which is roughly 4 feet by 3 feet by 4 feet and the sections above the other folded seats with green tree trimmings twice yesterday.  The last load so heavy that my shocks were low. Some of the pieces 2 strong men, Someone else and myself, could barely get in the van.  I was going to wait till today to off load it, but the bottoming out, worried me, so I took it by my friends house and off loaded it all by myself. Well in the last 2 weeks I have gotten her at least a cord of green wood for next season.  Ok its supposed to rain again today, no yard sale.
It's true that water will put out an ethanol fire. But it's nowhere near like a wood fire. Ordinary E40 booze will burn. Not so great, but drinkable E40 will burn. Push come to shove, drinkable E30 will burn too, like Jaegermeister. You need a bunch of water to dilute that booze fire to drop the concentration to where it won't burn. Ironically, BEER (dE03) foams up like airport firefighting foam and can be used for booze fires. An overpressurised beer keg could make for a great ethanol fire suppression system. Just pressurise with CO2 and let the dE03 foam up!

When I was in the US Navy, I noticed how beer foams up like airport fire fighting foam and dreamed up the idea of using a fire suppression system using ordinary beer. Easy to brew up, and easy to pressurise with its own CO2. Perfect low-tech Class B fire putter-outer. Fun note: "airport fire fighting foam" is my interpretation of what the Navy calls AFFF - Aqueous Film Forming Foam. AFFF in this case are a match.

I'm more concerned with earthquakes here in California than a fast oil crash, but I go with the "store what you eat" method.  White rice lasts a long time (and Trader Joe's has it packed in thick 3lb plastic bags).  I've got a backpacking stove and a gallon of coleman gas lasts a really long time.  I may get tired of black beans and rice ... but I'll be ok. ;-0
With respect to your power-outage, you guys might want to consider switching your desktops over to laptops.  If your central network infrastructure (servers, switches, hubs, etc.) are powered from a UPS, then you can 'weather' any blackouts that are under an hour.  They also use heaps less power (depending on whether you use a monitor or not).

Long-term you can also look at powering your essential server-room equipment off PV-solar powered batteries, with additional low-cost vertical wind turbines on the roof.

Most of us do have laptops, the problem is that they powered down the server room after 5 minutes, and I was working with files on the network at the time.
After Katrina, an excellent series on all aspects of disaster preparedness was posted on dailyKos by AlphaGeek.  This is the link to the conclusion, Part 5, which includes links to the earlier parts.  It doesn't include many specifics on food supplies but covers risk assessment and planning, communications, food storage, water purification, shelter, light and power, medical supplies, security, sanitation, etc. etc.  It includes recommendations on specific gear and links to additional resources. The comments to each article contain a lot of info as well.  I've been using this series as the basis for our family's planning.  
Good info, but pricey.

I'd emphasize water, and also a multi-purpose tool such as the Woodman's Pal (not cheap but of excellent quality, and time-tested for more than sixty years).

In regard to weapons for personal security, without extensive training they are worse than useless. My inclination is to rely mostly on highly trained friends and relatives, and also useful multipurpose tools such as an axe or a machete.

Shovels and entrenching tools are very good to have.

Do not forget large quantities of toilet paper, especially if you have a lot of females in the family. High quality paper towels are also very good to have in quantity.

Don Sailorman;

You are the first other person I've seen who has brought up acquisitions
of the most valuble commodity.  Toilet paper is MONEY!  Any person truly serious about preparations has already stored mass quantities of TPBUs
(toilet paper barter units).  A single BU will one day purchase a meal or a gallon of gas.  Why?, you say.  Because toilet paper is the most addictive substance known to modern man.  And who, do you say, is so addicted that they will trade other very valuable commodities for a single, two-ply,
extra absorbent roll?  White women.  Toilet paper is more addicitve than tobacco, more addictive than air conditioning, more necessary than booze.
White women will eventually sell their bodies for rolls, because their senses
of propriety and vanity will overwhelm their need to eat.  I have stored over 1.5K BUTP.  Build yourself a nice metal shed and fill it up.  The stuff lasts forever, at least until its been used!

Also, shop the specials, can sometimes be purchased for half price.

My women friends mostly prefer Charmin Ultra, and whatever women want, that is Sailorman's policy, that they get it.

Men do not mind cheap toilet paper, but women's delicate bottoms must have the finest;-)

BTW, toilet paper is a good inflation hedge.

Squat toilets at 1 liter a flush and no toilet paper, just have to practice the Asian way. Hand washing is not optional!
I've read a bit on the "humanure" system and it sounds like a good one, you don't need to dig the stuff up and use it in your garden but if there's a way to turn shit into gold they've found it.

My own personal theory is that fungi in the wood are doing the real magic, it's all good.

Actually, AlphaGeek covers a range of solutions in each category, from the high-end down to the improvised.
How about leaving them in the supermarket?
You might look up Steven Harris and "Knowledge Publications"..
Pretty Basic-seeming guy in the midwest (Chicago area) who has a lot of Practical DIY notions about Civil Defense and Preparedness, Homemade Energy Solutions, Hydrogen, Solar, etc.

He hawks a few books and DVD's on the stuff, but also provides a free-stuff area, too.  Might strike you as a little goofy, but he tosses out a lot of interesting thoughts.  I have his 'Sunshine to Dollars' booklet, and he does pack a lot in there.  (Whole section on Solar water sterilization, and how critical that setup would be during a crisis.. ask our pals in the Miss.Delta)

I also looked up a bunch of Prep Lists from Red Cross and other sources, so it's def. out there.

After 9/11, when my wife watched that nightmare from 50 blocks to the north in her own officetower, 30fl. above Penn Station, I made her a "Hey! Bag", to be her best buddy in an office crisis.  Just a quick-grab with water, clifbar, flashlight, money, maybe a kerchief, knife etc, your last backup CD from the 'puter.. all the stuff you'd want to have assembled if you had to run (in the dark and smoke,) that MIGHT give you a chance, or at least get to keep the things that would be gone if there was no office (!!) to come back to.  Idea Works for home & car too.


Might strike you as a little goofy, but he tosses out a lot of interesting thoughts.  I have his 'Sunshine to Dollars' booklet, and he does pack a lot in there.  (Whole section on Solar water sterilization, and how critical that setup would be during a crisis.. ask our pals in the Miss.Delta)

Part of any survival is how to find, eat for, make , and store water in the outdoors whereever you are.  I have recently found Chia Seed to be a good source of thrist quenching additives to several bottles of water in my fridge.  Chia Seeds are used today in Mexico, and Have been used for thousands of years in the hot southern states as a food and thrist quenching drink.  It seems to work for about 2 times long than just water.

You have to sort the seeds for dirt and other plant items.  Then you soak 2 tsp per pint of water. The form a gelatious shell over each seed and drinking them is like drinking lumpy jello.  I keep a bottle in the fridge for heavy working on hot days.  Yesterday it hit 85 degrees here in Huntsville.

Here's a guy who thinks that oil prices are high because of covert manipulation, not geology:

He's pretty convinced.  I'm less so. I mean, OPEC's entire reason for existence is to manipulate oil prices.  That's not really news.

 I have not yet finished wading through Stuart and HO's excellent technical posts so the following may be incorrect.

I suspect we are seeing increased prices for Brent quality crude due to disruptions in Nigeria (some 500,000 bpd held off the market) while at the same time seeing growing inventories of heavier crude due to lack of refinery capacity. The lack of refinery capacity is due to under investment over the last ten years, due to seasonal shutdowns for plant maintenance, and due to unexpected problems with existing plants.

I wonder how Brown came up with those rather
silly figures.
'Brown estimates ..."basic social goals"
(universal primary education, adult literacy,
a school lunch program as well as assistance
for preschool children and pregnant mothers
in the world's 44 poorest countries,
reproductive health and family planning,
universal basic health care and improved
availability of condoms) would cost, worldwide,
about $68 billion per year. Reaching "Earth
restoration goals" (reforestation, topsoil
protection, water-table stabilization,
restoration of rangelands and fisheries, and
protection of biodiversity) would cost about
$93 billion per year, he believes.'

The current economic system requires that the
oceans be stripped until they cannot deliver
any more, that water tables are depleted faster
than they fill, that forests are destroyed to
make way for more people and more machines.
The cost of the objectives Brown talks about
is abandonmnet of the GDP-based economic
system. Well, it ain't going to happen.

Those phemomena will continue for as long as
the present economic system is allowed
to operate, or until it falls over as a
consequence of the destruction it has
caused. Once the economic system has shot
itself in the foot a sufficient number of
times to cripple itself, then things may change.

Oil at around $68 a barrel and apparently
trending upwards when there is not a hurricane
in sight suggests the end of the GDP-based
economic system could be on its way.

However, the US seems to have already decided
to opt for the military solution and appears
committed to seeing the military solution
through to its natural conclusion ......
much death and destruction, much grief,
followed by a humiliating defeat. Either that
or 'we've got more nuclear weapons than you
have and if we cannot have it our way, we'll
destroy the entire planet so nobody can have

The first step toward real solutions of
powerdown, small scale, local communities,
real democracy at the local level is not on
any government's radar because that involves
the ruling elite deflating their egos and
starting to act in the best interests of the

What is our nation?
My nation is the United States of America.

What is yours?

I like big boobs. Is that a nation?
We got some in the

(Couldn't resist. It's a two tier joke.)

And quite different from the ones inhabiting the whitehouse during the previous admin.
Hello TODers,

Kunstler has written about this before, so it is not an original thought on my part, but the Disneyland mentality and theme parks would be an excellent place to start a Powerdown movement.

Consider how much cheap detritus energy is used to run these parks, and the massive transport requirements to get the visitors on site.  I think the President should ask the people to study Peakoil websites and forums, then email their congressional reps on how quickly the Disney Corp. should be forced to power their entire operations by biosolar generation only [PV, wind, tidal, etc], or be shutdown entirely.  Make it a requirement that in five years, for example, the only way to visit these themeparks is by rail, no flights allowed.  This could jumpstart a huge national rail rebuilding program.

If the people thought saving themeparks was essential, a portion of the taxdollars could be diverted in a massive effort to make these parks quickly free of using detritus energy.  Visiting adults and their kids would then be awed and inspired by all the installed PV panels, windmills, and such in the nearby geographic area.  Comments?

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

I'd rather get rid of dry-cleaners.  At least amusement parks provide something people want.  Who actually likes dry-clean only clothing?  We wear it because we have to "dress for success" at work.  Wool suits, even in summer, and buildings air-conditioned so it's comfortable to dress that way.  Let people dress for the weather, and eliminate the dry-cleaners.  
Bob, I've thought about the idea of turning some large landscapes into "Lord of the Rings" living theme parks, with some areas as Shires, some regions as Rivendell, some areas even as Mordor.

The parks would be huge and mysterious, and very educational, especially with people living in the Shires and Forests and showing how to live off their bounty.

The Mordor section would show people what happens if you continue on the unsustainable path toward poisoned lands and imperial conquest.

Hello Don and other responders to my thread,

Great ideas all! Whatever it takes to start a massive Powerdown!

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

Ride the Hubbert-curve coaster!  Get a real "seat of the pants" understanding for how fast production can fall off!  Experience Die-Off Land and Agrarian Paradise!  Spend a day in the Post-Petroleum age.
Hello TODers,

I just sent a email to Disney through their Guest services website, hoping it gets passed up.  I spent about half an hour trying to google a direct email contact, but couldn't. Here is the text of the Message:

You certainly make it difficult to contact the board of directors of Disney Corp.  Please forward this letter up the chain of comand please.

Dear Board of Directors,

I am sure you are aware of Peakoil, if not, please see and for info.  The implications for your employees are enormous.  How quickly are you moving to totally powering your operations by a purely daily biosolar process of Photovoltaic panels and windmills, for example?  When your visitors cannot afford airflights, how quickly are you moving to a strictly rail transport system to bring your guests onsite?  I am interested in your response.  Thank you for any detailed reply.

Bob Shaw in Phx,AZ  Are Humans Smarter than Yeast?
As usual, I expect no response, or just an auto-reply form letter going blah,blah,blah....

Bob in AZ:
I'm not a 'let the market decide' kind of guy, but I'd think there are ways to work WITH the 'big shows' like DisneyWorld, aided by the progression of energy prices that are likely to support your plan to develop this kind of example.  I've been thinking about some wind-generators that play against the old 'Eyesore' complaint, making the visible ones (say, adjacent to a theme park) follow the designs of giant Dutch Windmills, Pinwheels, Spinning Kites, etc.  

Thing is, as much juice as they draw, there aren't all that many of them, so while they might 'set a good example' (or on the darker side be treated as scapegoats), the net energy savings might be marginal at best.  But if you're taking the PR attack, then it's something an industry that is heavily travel-dependent might find attractive for their attractions.  Ecotourism is becoming the name of the game (S. Africa, Costa Rica as good examples)..

For energy-hungry amusements, look at the electric bills for a Ski-resort.  Huge Pumps and Liftmotors..

Bob in Maine

I've just been reading an interview in the German magazine Der Spiegal with the economist and Nobel Luareate Joseph Stiglitz. He thinks the US and the rest of us are paying an enormously increased price for oil because of the Iraq war. According to Stiglitz oil would still be around twenty-five dollars a barrel, but for the war. The extra forty dollars the world is paying per barrel is a kind of 'tax' imposed on the world economy by the US. A 'tax' that benefits George Bush's Texan oil chums, the oil companies and the oil producers, but is potentially terrible burden for the rest of us. Stiglitz isn't a great fan of the president's policies. He also appears to believe that oil could jump to over a hundred dollars a barrel if action was taken by the US against Iran, let alone an invasion.

What also struck me about the interview was that oil insn't just paid for in dollars. Stiglitz thinks the war will cost way over a trillion dollars, even if it ends quickly. But it's not just costly in dollars, America is also paying a price in blood for this absurd and terrible adventure. It's a price not paid by Bush or Cheney or Rumsfeld or Rice, or their super-rich Texan oil chums, or by Congressmen or their famlies. They seem to have arranged to keep well out of harms way. No the price in blood is being paid for by ordinary American soldiers.

We've all heard that around 2,300 soldiers have been killed in Iraq, but what struck me was the number of wounded. Because of advances in body armour, first-aid and medical science one can now save the lives of soldiers who is previous wars would be dead. Literally thousands of lives have been saved, and that's a good thing. But it does have the effect of 'massaging' the casualty figures, so we're not really aware of just how bloody the war in Iraq really is. We can keep more wounded men alive, but what kind of lives are we going to give them? After Peak Oil, on the way down the slope, are we going to have the resources to look after them?

According to Stilitz there are more than 17,000 severely wounded American soldiers and 20% of them have serious brain and head injuries. The cost of caring for these men will be over 35 billion dollars over the course of their lives. It could be far higher, Stiglitz is being conservative in his calculations. Who knows how long the war will go on, who knows how many more thousands will be wounded, didn't somebody talk about a 'generational struggle for democracy?'

Stiglitz was also scathing about the army's attitude to the use of appropriate body armour, which is in relatively short supply. According to him, the army is trying to save money in the short term and leaving future generations to 'pick up the tab' for long term care of the wounded. Stiglitz regards this as being morally and fiscally irresponsible. One could call it deeply cynical as well. All this is part of a plan to deliberately downplay the true finacial costs of the war. It's like letting the deficit just grow and grow and grow.

The 'price' for a dead US soldier is around 500,000 dollars. It's not that generous is it? Stiglitz says the true 'economic' cost of the average dead American is calculted as loss to society of well over 6,000,000 dollars. So one dies for one's country as a 'hero' and one's family receives a mere fraction of the compensation one would get if one was killed in a car accident. 'Heroes' sure come cheap in the US army. Isn't so much of this 'patriotic' blather about 'heroes' just plain hypocracy on the part of the State?

It seems some people are 'paying' a tremendous price for the war in Iraq and being grossly short-changed at the same time. Not only have we 'hidden' the true cost of the war, we've also hidden the wounded. Out of sight, out of mind, seems to be the policy. How many pictures of the wounded does one see on the television in the US? They certainly hide the UK wounded away somewhere, one could almost get the impression there weren't any.

Last, but definitely not least, not anywhere near least, is the 'cost' to Iraq of it's dead and wounded, which Stiglitz doesn't go into in detail. I don't even want to get into the 'cost' of over a 100,000 dead Iraqi men, women and children, not to mention the plight of the tens of thousands of invisible wounded, in country which has seen it's health system destroyed.

So all in all, it seems like an awful lot of people are really paying a high 'price' for our oil. I think we should think about all that blood next time we fill our cars at the gas station. Just imagine, for a minute, that one is filling one's car with blood, instead of gas.

Just imagine, for a minute, that one is filling one's car with blood, instead of gas.

Questions. Do I get to choose who's blood it is? Can it be your blood, or does it just have to be generic blood? Is this going to screw up my engine?

At around 2 kilofatalities I made a t-shirt about Iraq. It showed an oil drum spilled over with the red river's worth and the drum had on it "42 gallons US Crude Blood". And the caption was like "Are 48 barrels of blood worth it?" A nice reference to oil for sure. By now it's got to be 60 barrels of blood minimum. Probably 70 bbl blood. And that's for the Americans. Try about 750 bbl blood for indiginous peoples.
Well, oil CEOs get a lot more to say about that question than most, right? Just guessing, but generic blood is fine. Since odds are the blood will mainly come from people without a certain touch of sulfur, it should be fine for anyone's motor.

As we all knew long before peak oil, blood is fungible.  

According to Stiglitz oil would still be around twenty-five dollars a barrel, but for the war.

I have read Joseph Stiglitz and respect him as a highly intelligent economist. He is incorrect on this point.

The extra forty dollars the world is paying per barrel is a kind of 'tax' imposed on the world economy

I don't know who said this, he or you. But I know why you bring it up here, because it is easy ammunition for your argument. Fact and analysis means nothing here to you. The higher the figure, the better.

America is also paying a price in blood for this absurd and terrible adventure.

This is pretty much all you write about. We get it. You don't like Bush. Iraq is how you express this.

A 'tax' that benefits George Bush's Texan oil chums, the oil companies and the oil producers, but is potentially terrible burden for the rest of us.

Note the carefully inserted word "potentially." You suffer no burden whatsoever. You could care less what the price of gasoline is or how much blood is shed.

As George Orwell noted,"war hysteria increases in intensity as one rises in the social scale."

We get it. You don't like Bush. Iraq is how you express this.

At the risk of feeding the trolls, can you imagine any other reason why anyone might be unhappy about the war in Iraq?
Imagine? I could give you seventeen other reasons. What is your point? This site is about oil.
As is this war.
But it is not. To prove so would be as hard as finding WMD in Tikrit. Simply talk.
In "American Theocracy" Philips notes there is a long history of American and British politicians making oil-based strategies, and then going out in public and saying "this has nothing to do with oil."  This goes back a hundred years.  I wonder if it amused Pres. Bush to follow a pattern laid down by Lord Curzon?
So let's be clear about what you mean. Are you saying that American involvement in Iraq is purely about the 115 Billion barrels of oil underneath it, and nothing else?
Thank you for your strawman, may I have another?
Have you ever entertained the idea that the conflict in Iraq might, just might, be slightly more complicated than the notion of oil? Or is that possiblity completely out of the question?
I hope you aren't suggesting that an "oil war" must be 100% oil driven, to be in fact an "oil war?"

Go ahead and name major non-oil drivers (that aren't proven by recent news to be misrepresentations to the American people).

This is silly. You know very well what they are. But you obviously don't believe any of them to be valid. You will simply claim that they are "proven by recent news to be misrepresentations to the American people."

Removal of Saddam Hussein. But then you just counter that this was to gain control of his oil. This is a pointless exercise. We obviously disagree on this point.

I would suggest that an "oil war" should probably have a component that is oil-driven of something more than 20%, if something like that can possibly be measured.

You have to admit that oil figures pretty prominently in that region of the world and figures quite heavily in any analysis of world events since the turn of the century, so to suggest that there is some kind of conspiracy being waged by British and American governments because alot of their actions seem to revolve around oil doesn't really seem to significant.

Look at the first Gulf War. Was that about oil? Or was it about saving Kuwait? Or was it about both?

No, I honestly don't know what they are.

Removal of Saddam Hussein is only important in terms of oil.  Similar thugs are a dime a dozen around the world.  And indeed it is true that we didn't mind him when we thought his thuggery was in our interest.

I couldn't disagree with you more. Similar thugs? He was a murderous dictator who launched two major invasions of his neighbors. The first one lasted the better part of a decade and claimed as many as 2 million lives. The only similar thugs that come to mind are those in the former Yugoslavia who met with a similar US-sponsored fate and didn't have any oil.
So why didn't we start at the top of this list?

(Countries Ranked - Death rate (deaths/1,000 population))

Look, I've never said that oil doesn't play a part in any calculations regarding Saddam and Iraq, only that I find the argument that it is the reason we went to war problematic.

American policy regarding its energy interests in the Mideast has been an open book since at least Jimmy Carter.

The argument that we should be intervening elsewhere such as in the list of countries you provided or even doing something at home always comes up, no matter what the case.

Remember the cries as soon as the clouds had lifted in New Orleans that all those National Guard members should be home instead of in Iraq?

Need I remind you of Haiti, Somalia, Bosnia, Kosovo and Haiti again? Where's the oil there?

If Kuwait's largest export has been pistachios & mohair, there would have been no Gulf War I. Just sanctions, UN resolutions, etc.

And if Saddam controled a decent percentage of the world's dates, he would still be in power.

I strongly believe both statements to be true.

You don't like Bush. Iraq is how you express this.

Name a polition worth liking based on their actions.

History is filled with countries that bankrupted themselfs fighting wars of aggression.   History doesn't really care WHO does the war of aggression, history almost always bankrupts the aggressor.   Why is this time going to be different?

But what does a CEO give a danm?   They'll just keep upping their own compensation package "because they are worth it".

For those interested in further info on military disabled/injured...

...the Disabled American Veterans ( ) has a fairly informative site. (Full disclosure: I am a member.) In particular, the magazines (.pdf versions are downloadable) and the legislative section can be eye-opening.


Thank you for the link. It's an interesting site. I've got a couple of American friends who visit regularly with wounded veterans. I don't have anything against individual soldiers, but I'm not that sure about armies. I wish we didn't need/have them. However, I do loathe war, all the killing and destruction, isn't for me. Though I've written some war stories. In may stuff the 'real enemy' is War, not soldiers. Funny, as so many members of my family, for about the last two centuries, have been in the military and on lot of differnet sides! This is probably why I'm not much of a patriot.

My grandfather loved war as boy. All he wanted to be was a soldier for the Queen. He loved it so much he joined up early. He lied about his age and they were desparate for men, or in his case, boys. I think he was fifteen or sixteen at the time, anyway he was very young.

In 1916 he was involved in a gas attack, that destroyed a portion of his lungs. He spent the next sixty odd years out of breath. It's puzzling that he managed to join the army again at a later date and went off to India.

He remained pretty angry most of his life. He thought the French were cowards and weak. He posiviely hated the Germans and Japanese. He would have wipped them all out once and for all. 'The Germans and Japs are just waiting to have another crack at us!' I remember hearing him say 'That the only good German was a dead one!' This made me feel rather uncomfortable. His hatred of Germans was unfortunate. It lead to a lot of unpleasantness and friction in the family.

It all erupted when his sister-in-law actually married a tall, handsome, German aviator. She did this as soon as soon as WW2 ended! My grandfather did not go to the wedding. Then his favorite daughter married another foreign soldier, one who looked German, sounded German and had a German surname. On top of it all, this guy actually admired Germany, especially the fighting abilities of the Germans he'd fought against in Italy. Fate really seemed to have conspired against the old man.

God, bless America.

2300 Americans and 100,000 Iraqis are not so high price for 1) plenty of cheap liquidity for the world economy, 2) fortune for the citizens of oil producing contries, 3) lucre for the arms dealers, 4) pot luck for the America's competitors.

As for Stiglitz, maybe there are fools among Nobel Laureates too.

Russ I agree. Actually, the deaths of a lot of underclass Americans are a net gain, one less welfare check - I actually lived a while in a place in the US that's like this, all white by the way. There was little actual law enforcement and if one "hillbilly" killed off another, no big loss. Live in a nice, middle-class part of the US and life is treated as precious, but it's not very precious down at the base of the social pyramid.

The rise in oil prices is due to decreasing supply and more humans like Chinese and Indians have learned to drink oil. Simple as that.

Sounds like this Steiglitz is trying to blame those damned Amis for the oil prices just like our red-state types like to blame the ay-rabs and bankers etc. Fools all.

Your post yesterday is sickening.
Bizarre.  I've generally gotten something from Stiglitz's perspective in the past, but I don't see how anyone informed could think what you describe him thinking.  The loss of Iraqi oil is, while not trivial, certainly not that big a deal to explain the entire price rise.  And the profile of the loss doesn't match the price rise well at all:


Almost every day I think about what's happening in Iraq and its relationship to the whole question of oil. I find it difficult to disentangle the two things. I feel like the least I can do, when so many are suffering, is to  remember, and not forget.

I also wondered about the emphasis Stiglitz puts on the loss of oil procuction/exports from Iraq. After all Iraq wasn't exporting that much more oil before the invasion was it? He did contend however that oil prices would be lower, but for the war. He mentioned a figure of around twenty-five dollars a barrel. I decided I'd just go with his figures/thoughts, as he's a Nobel Laureate in economics after all! Given the tightness in the world market for oil I suppose one could get into some rather complicated theorizing about the causes of the current price level. I wasn't really concerned in getting into or criticising Joseph Stiglitz's calculations. I just started to think about the wounded soldiers and what it must feel like to be one of them. I also think about the Iraqi dead and wounded a lot too. I have to admit, it does make me feel rather angry.

What really interested me, was his reference to the high longterm costs of paying for the wounded. I don't know how accurate his numbers really are. I'm not sure I think it's that important. What's a few billion dollars on way or another? He has said before that he's conciously been 'conservative' in his calculations.

Personally, I was not primarily interested in the dollar cost of American lives/wounded. What interested me was the actually number and nature of the wounded and the 'price' they've 'paid' during the invasion and occupation. I do think this is a 'hidden cost' we shouldn't forget. In ethical and moral terms, the cost to society is probably far higer, than in purely economic terms.

I was reading Stiglitz in German, so I may have missed or messed up a couple of details. I don't believe I misrepresented him in any important way. I was mostly interested in the main thrust of the interview, that the war is incredibly expensive and the true costs are being hidden and it's future generations who will have to pay for it.

I am also angry and frustrated that it's so difficult to hold our elected political representatives accountable for their actions; even when their actions are arguably criminal, bordering on war crimes. I like to give them a taste of their own medicine before they went on trial. If I had the power and my way, I think I'd like to kidnap them out of their comfortable beds, hood and handcuff them, put them on a plane, fly them around the world a couple of times; and then land, at dead of night, in some isolated desert location. Probably somewhere in Arizona. Then I'd leave them there for few hours to stew and have a good, long, think.

What's wrong with looking at it the simple way, the way prices responded to the invasion?  This may not be the best graph, but it shows a pretty good "take off" after military action commenced in Iraq on March 19, 2003 (point "66"):

I guess my gut would say Asian growth was a bigger factor, but that's been going on for longer right?  Or was it so closely timed ...

There is pdf available on his homepage.  
The Economist did an article comparing Stiglitz projections with two other projections.

Btw, the article shows a very disturbing picture taken in Bagdad.

The Detroit Free Press breaks the story ...

"I don't think this is a supply and demand issue at all," said Rink. "There is plenty of oil out there. I think the biggest thing going on is there is massive speculation on the markets where hedge funds and other groups are buying oil futures ahead of the traditional run-up in prices to guarantee a return on their investment."

more here

Speculators have generally had a net short position on crude oil.  To suggest that gasoline prices are high due to a speculative bubble in oil is ridiculous.
I agree. But there is a fear premium in the market right now. As high as crude inventories are, a sane market would have pushed oil prices back down a bit. Inventories can't keep growing week after week without eventually pushing the price down.


I am looking for critiques/comments on my essay that explains why I am not a doomer:

The executive summary is that I don't believe the peak is on top of us right now, but I believe we will see a sustained period of high prices due to a supply/demand imbalance. I believe higher prices will stem demand and give us more time to act, but higher prices also come with the potential for social unrest and economic upheaval.


A fairly balanced essay, IMO. It is good to see a second one for today after this one:

I also believe that "all-things-being-equal", we can certainly muddle through (more or less painfully). My worry is that those "all things" are never equal, and there are risks which there is no possible way we can envision now.

Thanks for that link. I agree with a lot of what he had to say.


The part I disagree with is that the current plateau is just a function of the various short term problems, although I understand why it's a tempting hypothesis.  I did an analysis a couple of months back where I identified all the short term losses, added them back in as though they hadn't happened, and still found the curve had much the same shape (just a little higher):

Average monthly oil production from EIA, and as corrected for geopolitical and hurricane losses.  Click to enlarge.  Believed to be all liquids.  Graph is not zero-scaled.  Source: EIA

Hi Stuart,

I had seen your analysis. I will make a few comments. First, I think if you add the trend line back in and compare the curves with and without the shut-in production, you are going to see less flattening of the line. In the case where you do not include the shut-in production, the end of 2005 is sharply down, which will flatten your trend line. Including the shut-in production shows an upward trend at the end of 2005.

Second, shut-in production is only part of the story. Producers try to bring supply on to meet demand. They plan these projects years in advance. They do their economic justifications based on the forecast price of oil. In 2003, most external forecasts projected oil at (believe it or not) about $25/bbl through 2010. If I am a supplier in 2003, the last thing I want to do is bring too much production online in 2006 at a price of $25/bbl. However, they anticipated incorrectly. A lot of supply was shut-in for various reasons, and the price was much higher than the forecasts had predicted. So, the extra production will not be coming online when it is needed, but will be coming online as quickly as they can get the projects done.

Third, and probably my biggest criticism, is the very narrow time frame you are examining with your graphs. If you extend it to 10 years, you will see perhaps 3 plateaus in production, including at least 1 period in which production declined from 1 year to the next. The fact that there is a plateau does not necessarily represent depletion, but often it represents an incorrect anticipation of when supply would be needed.

I think what you are doing is a good exercise, and I think it is important to communicate Peak Oil to the public. But you are putting your credibility on the line here, and I don't think you are considering all the factors involved, nor the fact that plateaus have historically occurred. I think your predictions are a bit early. My fear is that when production does turn upward, as I am almost certain that it will, a lot of people will discount these predictions in the future, even though sooner or later one of them will be correct.

Finally, note that I am not projecting the peak 20 years from now. I believe it will happen sooner. But I don't believe it will happen before 2010 (which is still very soon).


You echo one side of my internal argument.  (I am a Bumpy Plateau guy).  The side points to depletion of Cantarell (Pemex has 5 scenarios, from bad to OMG terrible 44% annual declines), Ghawar should be showing it's age about now. Burgun is going down but PROBABLY slowly.  Russia is talking (offically) about their peak in 2010 or even 2008. Add known declines elsewhere, and nothing the international oil companies can do can offset this. Too small players.

Tar sands are going to be delayed by resource limitations, coal to liquids take time to develop, as does NG to liquids.

I doubt that robust economic growth will go with declining oil production, so oil prices could drop as production declines and unemployment skyrockets.

I'll do a little more on it in a few days when we get the next data point from the IEA.  I'm pretty sure the trendline is going to be just as flat from eyeballing it (but will check).  It will be interesting to see how the last few months look  But I would point out to you now that the extra production you are looking for in coming years is only a little higher than the 2005 number according to Chris Srebowski's analysis.  There is no tidal wave of relief on the way.  I can't rule out a small increase in 2006/2007, but it would only take one percentage point increase in the decline rate (or geopolitical/storm/general chaos rate) to wipe it out, and the effective decline rate increased much more than that from 2004 to 2005.

As to past plateaus in the last 10 years I am well aware of them but they have obvious demand side explanations (the Asian currency crisis, and then the tech crash).  What's interesting to me about the recent supply plateau is that it has no obvious demand side explanation.  GDP growth was good until the fourth quarter of 2005, so oil supply issues clearly led.

What's interesting to me about the recent supply plateau is that it has no obvious demand side explanation.

I think what you are seeing here, in addition to supply being knocked offline, is that the economic projections for investing in new projects as recently as 3 years ago were completely wrong. So, there was delayed investment. Whether or not to invest in a project to drill is greatly affected by whether the price of oil is $25 (the previous projection) or $70. But it takes some time to get those projects done.


> Soem time to get projects done.

My understanding is ten years for a major "green field" project from financial decision to production.  Peak production some years after that.

In field drilling, terteriary (sp ?) recovery, etc. take less, but usually more than 3 years.

Ten years from now, no greenfield project (even in Saudi) will offset declines in Ghawar, Cantarell, Burgun, etc. So they are "off the table" when it comes to determining Peak.  Minimize the downslope (VERY good), but after Peak.

ANWAR is in that green field group.

Getting more out of existing fields (CO2 covered here recently) is just too little to offset the major fields declining.

What I see that can be done in 2 to 5 years (financial decision made last year) is unlikely to offset probable declines.  Ghawar is, of course, the BIG Black Oily Box.

"Producers try to bring supply on to meet demand. They plan these projects years in advance. They do their economic justifications based on the forecast price of oil. In 2003, most external forecasts projected oil at (believe it or not) about $25/bbl through 2010."

Yes and no. "Producers" generically do not want to flood the market and thereby depress prices. However, the typical producer is not in a position to control what the other producers are doing. Acordingly they do not want to forego their own potential revenuce streams.

What you are describing might be the m.o. of a swing producer or a cartel that acting as a unified whole constitutes a single swing producer.

OPEC does not have its excrement aggregated to the extent that it can act in this fashion [scratch the cartel acting as one theory?] That leaves Saudi Arabia the acknowledged swing producer. They might have missed their demand projections ... or it might indeed be "Twilight in the Desert."

Price and cost projections are the basis for go or no go decisions in terms of either whether to drill a prospect after geophysical work has been performed or in determining whether the a prospect that has been drilled to depth is commerical or should be abandoned [mostly applicable to offshore or remote locations -- most development or readily accessible wildcats will be cased and an attempt at production made unless it is clear they are not commercial.] If you are aware of any projects that were abandoned based on 25 dollar oil that are deemed to be viable at current projected prices please let me know [I am not engaging in flame war -- this is an honest question.]

"Producers" generically do not want to flood the market and thereby depress prices. However, the typical producer is not in a position to control what the other producers are doing.

But they do pay attention to announced projects by competitors. I know this for a fact. If all of your competitors announced an expansion before you did, and oil is expected to be $25/bbl, then you are going to be very conservative about bringing projects on line, especially if the already announced projects will meet the forecast demand.


Once again, kinda / sorta. Do the majors ignore production forecasts? You're right the answer is "no."

However, they have traditionally relied on the fact that oil prices have been managed. Have been for a very long time. Since the State of Texas started managing production in the early part of the 20th Century there has always been a swing producer. The decision making shifted from the Texas Railroad Commission to the Government of Saudi Arabia but the function remained in place.

Accordingly, the operative assumption of all other producers based on experience should have been that the market would absorb their production and prices would be stabilized to a large extent by the swing producer. It didn't always work this way in practice as the oil bust of the late nineties demonstrated. However, even that was not a failure of the swing producer's power to manage prices -- it was IMO largely an attempt by the Saudis to instill discipline within OPEC.

Which brings me back to my belief that the current price is either Saudi Arabia badly missing the demand forecast or Twight in the Desert.

Robert Rapier -

I just read your essay and thought it was very well-written and a  good representation of the moderate, not-too-pessimistic/not-to-optimistic point of view.

I fully agree that many people fail to make sufficient distinction between geology, economics, and just plain 'ol trouble when analyzing if and why production from certain sources is going up, down, or nowhere.

I personally think that global average production will muddle along for a while longer and that the decline won't be as steep as some think. I'm no expert; just a hunch.

However, what I am not so sanguine about is whether we are going to start preparing for the post-peak world in time for when it comes. Even if we have say 10 years till that happens, I think the 'postponed term paper syndrome' will govern, and people will put off daunting and unpleasant tasks till the last possible minute regardless of how much time they actually have.

Then we have the problem of how much investment is actually going to be made in the US as long as it is pissing away well over $100 billion per year on Iraq, and God knows how much more if the Bush regime should decide to also 'do' Iran.  I consider myself a moderate with slight leanings more toward the pessimistic camp.

I would like to think your "muddle along" hunch is correct but three things give concern:

  1. The rapid decay rate in the North Sea which benchmarks     modern production methods.

  2. The rapid industrialization of China and India.

  3. the "war" on terror.
I don't think it matter whether the obstacles are above the ground or below the ground.  As someone else here said recently, the oil industry has always had "above the ground" problems.  Bad weather, war, labor unrest, etc.  Why should those not count now?  Does anyone think they are really going to get better as the energy crunch worsens?  

I think they are more likely to get worse than better.  The poverty and corruption in Africa is a big reason for the problems Shell is having in Nigeria, and it seems unlikely to improved by peak oil.  Ditto the labor unrest in France, the chaos in Iraq, the saber-rattling in Iran.  Then there's the hurricanes.  I suppose the oil industry could start building Category 5-proof platforms....but that will probably slow production before it increases it.  

Very well-stated! Murphy's Law is a DUET (Deep Universal Eternal Truth).
Hello Leanan,

Cat5-proof platforms.  Not an engineer, but this seems almost impossible unless the platform could temporarily submerge underneath the ocean to escape the monster waves and winds on top.  Mountainous moving waves of water pack enormous amounts of energy.  My two cents.

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

The North Sea oil rigd are at least Cat 3 or 4 proof.  They cost a lot more to build and have other limitations.

 On the Grand Banks it is not uncommon to encounter a 70 foot sea. Semis can handle that. There will be damage to minor portions of the structure (walkways, railings etc) but the structure is engineered for this.


It was mentioned earlier in this thread that Saudi Arabia alone is in decline of 600,000 to 800,00 barrels per day per year. Many other major producers appear to be in or entering steep decline.

Your citations of 300,000 barrels per day "shut-in" in the GoM and 500,000 barrels per day being held by patriots in Nigeria are of a pretty humorous drop-in-bucket scale compared to the big picture.

I think there are physical laws that will dictate that the decline will be approximately as steep as the prior rate of increases, and it would be absurd to think we can ride a plateau or more increases for more than a very short time period.

Stewart S. and others make a clear and strong case on the peak-about-now hypothesis. But yeah, there are many biased "studies" to be cited where the money is interested in a different conclusion.

Thanks for the link, well written, better to think wrong than not at all, but this does appear to be mostly fantasy.

It was mentioned earlier in this thread that Saudi Arabia alone is in decline of 600,000 to 800,00 barrels per day per year.

Saudi Arabia has increased production year after year. I think this interpretation is a mistake in comparing a period of high demand (summer) versus the winter season which is of lower demand. I will make a bet that when this year is compared to last year in Saudi, production will not have dropped by 600,000 or more barrels. The key is to compare apples to apples - either a full year comparison, or at least a comparison over the same driving seasons.

Your citations of 300,000 barrels per day "shut-in" in the GoM and 500,000 barrels per day being held by patriots in Nigeria are of a pretty humorous drop-in-bucket scale compared to the big picture.

The illustration of the shut-in production is merely to explain why production was so flat over the past year. If you add that production back to the graph, then there is a production increase.

I think there are physical laws that will dictate that the decline will be approximately as steep as the prior rate of increases....

You presume that higher prices will not slow demand. They will. We saw that right after the hurricane. When prices rise and people start to conserve, production will have to slow down as inventories fill up. The only way the decline would be as steep as the rise is if prices remained low.


Sorry to bring up the old bete noir of terminology, but I think you are confusing "quantity demanded" with "demand," which refers to the whole demand curve.

Other things remaining the same, higher prices will bring about a decrease in quantity demanded.

But of course, other things do NOT remain the same: Incomes increase, population increases, the number of cars in China and India increases, etc. Thus DEMAND, i.e. the whole demand curve, continues to increase (The curve shifts Northeast, upward and to the right.) even while price increases.

Thus, despite major price increases, we can expect the amount people buy (consumption, quantity demanded) to increase, because the effect of shifting demand curve tends to swamp and overwhelm the effects of increasing price.

Hence, there is no reason to expect falling demand to qualify or diminish the effects predicted by Hubbert lienearlization.

Thus, despite major price increases, we can expect the amount people buy (consumption, quantity demanded) to increase, because the effect of shifting demand curve tends to swamp and overwhelm the effects of increasing price.

Hence, there is no reason to expect falling demand to qualify or diminish the effects predicted by Hubbert lienearlization.

Well, there are really only a couple of options. When demand exceeds supply, either the price is increased until the 2 are in balance, or some portion of the population simply runs out of product. After Katrina, supply rapidly started to decrease, but price hikes brought supply and demand back into balance.

My argument is not that we won't peak and eventually suffer perhaps devastating effects. But we are opening up a supply/demand imbalance that is causing prices to rapidly escalate, and this will force people to learn to conserve, better preparing us for when the peak happens. Higher prices will also hopefully spur a serious effort into developing a combination of alternatives that make sense.


I agree that Very Much Higher Prices (VMHP) are a good thing. The big problem I see is that the whole demand curve is shifting so fast to the right and up that even $150 per barrel for oil may not restrain consumption on a global basis.

What I think is quite likely is a rapid increase in the supply of dollars that will drive the price level in general and the price of gasoline (etc.) up greatly--but will not do much to reduce the quantity of oil products purchased.

Thus, we can have the worst of all worlds:

  1. rapidly increasing inflation,
  2. economic downturn with increasing unemployment and enormously escalating and accelerating budget deficits,
  3. no decrease in the amount of oil purchased per year so long as the "bumpy plateau" continues.
Some of you may have already read the article about the world's largest megatropolis - Chonquing in China a week or 2 ago in The Guardian. Now there's a little video of the same article

That is what every city aspires to be. Growth for growth's sake.

Well, I think we're both mostly crytal balling here based on what we hope to see.
But staring at the graphs, numbers, and my senses of physics and mathematics, I do believe this debate will be clearly resolved in the next few months as production starts trending downward and prices rise and rise.
I do believe this debate will be clearly resolved in the next few months as production starts trending downward and prices rise and rise.


Prediction - you won't be here in a "few months" to analyze these statements. At least not under your current pen name.

Production may trend downward in 2006, but it will be because higher prices have stemmed demand, not because production can no longer be increased.


Granted. My comment was aimed more at the comment that this debate would be clearly resolved by (when? July?).

This relates to the whole JD/Westexas/Deffeyes thing.

I suppose I should be happy that the writer acknowledged that there is actually a debate.

Also, I'm really disappointed jack doesn't post here anymore. I don't know if you are on vacation or what. Can't speak for everybody, but at least one person misses you.

I think production may end up lower in 2006, but it won't prove anything.  Even non-peak oilers think 2006 could be bad, but they are expecting 2007 to be better, since a lot of new production is supposed to come on line then.  

It may be that 2005 was the peak, but we won't know for sure until years afterward.  That seems to be the usual pattern.  The drop in production is assumed to be "temporary" - due to technical difficulties, bad weather, a strike, political problems, lack of investment, etc.  It's only when they look back over several years of declines that they realize that was the peak.  Heck, some in the British government are still hoping production can be raised in the North Sea.

"We" may indeed be able to weather the storm, so to speak, if by that you mean the affluent, wired professionnals in the Industrialized World. That doesn't mean our world won't become a decidedly uglier place in the meantime. When I read in this thread of "demand reduction," what I see coming is really demand destruction, meaning shaving off the bottommost segments of society. African nations will go first, of course; Zambia's already on its way back to a pre-industrial model. How long can even a stalwart like Kenya last when fuels for transportation and cooking consume all the discretionary income of her people? But it won't stop there - The real point to the peak IMO is the beginning of the decline of civilization. The rich in their redoubts can hold out for generations, perhaps, but our world will be irrevocably changed. Think of the cops in Gretna turning back the Katrina refugees, times ten thousand. Think of Okies fleeing the Dustbowl, but this time there's no safe direction to go, and every town is defending its own water supply and vegeteble patch. No, I don't know when it'll come to your town or mine, but we'll see it on video long before we experience it personally.

I don't know the way out - I appreciate all the erudite observations and good advice posted here, but "term-paper" procrastination is the way of the world.

Africa's plight will affect us as well.  They may decide to keep a greater share of their oil for themselves.  They know what's coming:

"The era of cheap oil is over," he said. "What then becomes of our ambitions and our dreams to see Africa take the path of harmonious development?",,2-11-1447_1909645,00.html

Prices have been rising for years, up 300% since 1999, yet annual worldwide demand over those same 7 years showed no decline.  There is no evidence to support the claim that higher prices translates into a marked decline in demand with regard to petroleum.
Why would you assume RR won't stick around or will change his handle?  

I don't know him, having just learned of him and his own blog through this site, but he seems to be a very reasonable, open-minded person.

Is it my imagination, or is the general level of friction on this site growing, particularly (but not exclusively) between people on different parts of the optimism/pessimism scale?  It feels more polarized to me of late, which I find bothersome.  For me, one of the draws of TOD is the polite, helpful atmosphere, so I'm hoping this is just a phase that we'll all get past quickly.

It is not your imagination.  
I second that. Unfortunate trend IMO.
My comment pertained to ryvr, not RR.

ryvr has alot of good stuff to say, my comment only applied to the one statement, and I still stick by it.

RR is probably the best new addition we've had on this site in the last month.

RR is probably the best new addition we've had on this site in the last month.

Aw, you are making me blush. But thanks!

Believe me, I do have an open mind about this. I have a lot of inside information on the oil industry, so I have to be careful sometimes about what I say. But the information I do have says that the current plateau is not "the peak". I also know that based on previous "false peaks", we will only see the peak in the rear view mirror.


I think it would be ethical for you to share anything that's not specific to your company or some individual identifiable competitor.
Which is exactly the line I am trying to delicately walk.


It's not your imagination.  There has been a regrettable lack of civility of late.  I'm not sure why.  Perhaps we've simply grown too large?  Or maybe a few rude jerks are bringing down the level of discourse for everyone.  Or could just be spring fever.  Seems like later winter/early spring is a bad time for flamewars on the net in general.
I agree.  I don't come here to read rude talk and flame wars...I can go to for that.  Let's clean it up, guys.
I like your essay overall, especially the tone.
Where I question your conclusions is not whether a lot more oil is left to develop, but whether that will be overtaken by decline rates from existing fields. I don't think we have the answer, but that part of the equation is chronically neglected, partly because we don't understand it well enough. As Hirsch's work shows, in every case where peaking has occurred it surprised us and confounded the experts, and they don't seem to be learning from those mistakes. They not only overestimate time till peaking, but rates of decline after peak occurs. This is still a yearly surprise in the North Sea, for example.
Peaking will be driven not by lack of new production, but by acceleration of depletion/decline of old production.
Great comment.  I remember Hirsch every time I read this type of article.  The peak is sudden and sharp, and you never see it coming.  

And it is especially distressing that the mainstream experts don't seem to be learning from their mistakes.  I suppose business types are naturally optimistic, but still.  

And it is especially distressing that the mainstream experts don't seem to be learning from their mistakes.  I suppose business types are naturally optimistic, but still.

Not sure if that was directed at me, but I am not a "business type". My undergrad degrees are in chemistry and math, and my master's is in chemical engineering. I am a chemical engineer in the oil industry, but my job also entails some planning and economics functions. People who know me would call me a hardcore skeptic (about everything) with an open mind.

Note that I have read the Hirsch report, and I think it was on the money. I just don't think 2005 or 2006 represents the peak.


No, it was not directed at you.  I was referring to the oil industry experts who were surprised by the sudden and "unexpected" declines of Prudhoe, the North Sea, Cantarell, Burgan, etc.  And I can't help but wonder if they will be equally surprised when Ghawar hits the wall.
Robert, I too liked your essay, but I would also like to second peakearl's comment about depletion.  One big area of disagreement between pessimists and optimists seems to be in the assumed rate of decline of existing fields in production.  Is this just a highly uncertain thing?  It seems like this could end up being the controlling factor in the date of the peak, with the effect of new production primarily to prop up the tail.
I don't work on the drilling side, so I really don't know what the average depletion rate is. But I agree that if we deplete very quickly, it will be disastrous. I still think price will stem demand. It has to. The only other option is to completely run out of product, and producers won't allow that to happen. But then I am not sure the government will allow us to raise gasoline prices to $10/gallon if that's what's required to stem demand. Government intervention is one area of great uncertainty that I have about how it will all play out.


Greetings TODers-

I did some preliminary research into solar power for my huge (3500ft^2), old (1860s), currently inefficient (i can stick a finger through the gaps in some window panes) home, and after being somewhat floored by the estimated cost, the real problem seemed to be batteries and battery life and maintenance.  Then I began looking at the Prius, a fairly costly economy car, btw, and it struck me: what is the relationship between the amount of electricity needed to power a car like that on battery only compared with powering a home, a normal size home with the holes plugged?  IOW, if you plugged your house into a Prius, how long could you run the 'fridge?  And if Priuses' batteries last for a looooong time without much maintenance -at least that's what the totally unbiased salesman said- why can't analogous batteries for home use do the same.  I was also impressed that the Prius battery was so small -seemed smaller than a gas car's battery, so a bank of them in a home would not take up too much space, though space is not my concern at this time....

Thoughts from people who know about these things (other than "do the research you lazy sob")?

If you're really thinking about powering your home with solar, you should really do it in this order (ie this will give you the most bang for your buck).

1)Lower your total energy use. Insulation/weatherstripping, CF bulbs, sometimes even appliances have really short payback times compared with solar electrical.

2)Solar THERMAL for hot water.

3)Then think about solar electrical, but by that time, the sticker shock won't be as bad.

PS Are you sure you were looking at the battery for the engine (not the one that starts the car)?  It's behind the back seat.!%20005.jpg

As an old house owner as well, I've looked at various schemes as well.  I'd say your comments are spot on.  The most effective thing to do is look at insulation and sealing.  The windows and doors are the things to address first - after that it depends on the construction (frame, stone, brick, etc.).  Stone does not really need to be insulated.  

It's often difficult because things are not standard sizes (and often not even square!).  I'm going to have to fabricate my own storm windows - I hope to do it this summer.  You can still buy bronze spring stip at Home Depot, it works quite well for sealing old doors.

Twilight -

" Stone does not really need to be insulated."

I don't think you are correct on this one. Most stone that you are likely to find in home construction in the US is actually a very poor insulator and conducts heat rather well (which is why stone will feel much colder to the touch than wood of the same temperature).

I forget the exact numbers, but I recall being quite surprised to learn that a 1-inch thick layer of typical fiber glass insulation is rougly equivalent to over a 12-inch thick layer of stone. Of course, stone has a great deal of 'thermal mass', and thus a thick stone wall can help even out diurnal temperature fluctuations, which is why there are so many homes with thick stone walls in the Middle East. But that has nothing to do with insulating properties.

20" to 24" thick adobe walls have much to recommend them in Calif. and much of Mexico and similar places. You can make the brick yourself or (if you can afford it) import some skilled Mexicans to do the job in a few days with the benefit of strong sun. Kept dry, adobe lasts for centuries and has the added benefit of offering considerable protection from bullets;-)

High ceilings are nice, too, when it comes to hot days.

Yes, the R value of stone is not so great, but the thermal mass is a big help.  Many old stone houses were built with southern exposure and absorb a fair amount of heat from the sun.  

I've lived in old stone farmhouses since I was a kid - I've heard the R value comparison before, but my experience is that it's not an accurate assessment.  I suspect that it's because the walls are not one solid piece of stone all the way through.  The stones are separate, with mortar (lime and sand, and a fair amount of air) packed between, and a layer of plaster on the inside.  You'd have to measure the effective R value of the total assembly.  

R value per inch:

0.04 Granite
0.07 Heavy Concrete
0.11 Limestone
0.11 Face Brick
0.15 Concrete Block
0.20 Mortar
0.52 Lightweight Concrete
0.67 Plaster
0.90 Gypsum Board
0.90 Redwood
1.25 Plywood
1.30 Softwood
2.20 Blown Cellulose
3.14 Batt insulation
7.20 Polyisocyanurate

If masonry walls are built tight, with continuous air cavities between the wythes, the R and U values of the assembly improve quite a bit.  But you're far better off putting some insulation in the cavity, or on the inside face.

My original point was to focus on sealing the air leaks (and I sould have mentioned the ceiling) before focusing on anything else, and that stone construction did not need to be further insulated.  I'll stick to that.  I have not argued that the R value could not be improved - one can improve the R value of anything by adding more insulation.
For a low-mass exterior wall, the 2003 International Energy Code recommends R-11, even with less than 8% window area and 0 degree days of heating (IOW, a really temperate climate).  A high-mass wall, in the same climate, would be required to be at least R-6, with integral insulation, or R-10, with inside face insulation.

A 42" thick limestone wall, with air films and a cavity, might make R-6.  Granite would have to be 5 or 6 feet thick.

Back in the 60s, ads for loose perlite insulation showed masonry voids filled with peanut butter, with captions that read, "Fill them with something!"  Unless you're building a thick stone trombe wall behind glass, I'd insulate the cavity or the inside face.

I live in a stone house with 15" thick walls, so I have some experience with this.  I don't see great energy savings in the winter, but summer is great.  My house, when no AC is running, is about 20 degrees cooler than an equivalently sized brick house.  I can cool my house with 1 window AC on the second floor.
The "my house runs on a Prius" idea is not too far from Richard Smalley's idea of a home electrical storage appliance that could be used to temper the diurnal production of large scale solar-based power plants. I'd hate to see someone forced to drive to recharge their car to keep the pizza frozen!

"Smalley also predicts a rise in the use of distributed energy generation and storage--an interconnected network of homes, businesses, and even cars generating energy in situ as it is needed and selling surplus energy back to the grid or storing it for later use. Many small energy storage sites could even out peaks and troughs in energy demand and confine shortages or power failures to a limited area. In addition, better storage would allow more reliance on intermittent energy sources such as solar or wind power."

I have read that nickel-iron batteries have the longest life times, usually for several decades (some as long as 50 years).

Otherwise not very competitive.

Partly as a response to this journal, I have looked online for NiFe batteries. I've actually had the pipe dream of an energy independent home for a couple decades now, but haven't acted on it yet.

This place was linked from the wikipedia article:
and I found the Chinese company's web page here:
, but haven't contacted either of them yet. It's hard to find NiFe batteries on the web...

The advantages of NiFe batteries are:

  • Long life -- according to all the litereature, they can go decades without maintenance
  • They can be repeatedly, deeply discharged and overcharged without impairing capacity or life
  • Environmentally friendly elements -- nickel and iron and potassium are some of the commonest elements in the earth's crust
  • They don't spew a sulfuric acid mist as they charge like lead-acid batteries do
The disadvantages are:
  • Lower voltage / cell, and lower energy density overall -- you'll need a (maybe 50%) bigger battery farm than with other technologies
  • There is no simple way to gauge the amount of charge left in a NiFe battery -- when it runs out of charge, the voltage drops off abruptly.
If you ever find a source for NiFe batteries, please post 'em.

(as for the 'charge' you bank is holding....just look at the watts in VS the watts out.)

The 'beutilityfree' website claims to be a source for them, but I can't vouch for them. Their web page is pretty underwhelming, though.

And for the watthours-in, watthours-out metric, you need an accurate current sensor. I suppose most modern battery management electronics can do that, though. :)

you need an accurate current sensor

400 Amp shunts on ebay are $5.

Atlantic insurance to cancel policies

About 140,000 Florida homeowners will lose their insurance policies after a large provider said it will begin canceling them just over a month into this year's hurricane season.

Atlantic Preferred Insurance Co., a subsidiary of Tampa-based Poe Financial Group, will begin dropping its policies July 13 as they come up for renewal.

The move comes just weeks after Poe announced that another subsidiary would stop policy renewals. The company said it needed to lure investors to help cover a $2 billion hit from claims in the 2004 and 2005 hurricane seasons.

"With the ongoing loss activity and the uncertainty of future losses, this is action that we have to take," Senior Vice President David Gough said Wednesday. "At this point, we don't have a solution."

I found this article most interesting.

Besides telling us that OPEC production is down in March, it says that Haradh, Saudi Arabia's newest field, is pumping full flow and producing 300,000 barrels per day. Haradh came on line just this year. It states that Saudi is now producing 9,450,000 barrels per day, up 50,000 barrels from February.

However the devil is in the details. from April through September, according to the EIA, Saudi Arabia was producing at 9,600,000 barrels per day. Then for October, November and December Saudi Dropped to 9,500,000 barrels per day and was down another 100,000 barrels in January, and apparently February as well, fell to 9,400,000. But now they are up to 9,450,000 as Hardah comes on full flow at 300,000 barrels per day.

So what does this all mean. It means that even with a new field of 300,000 barrels per day Saudi Arabia is still in decline. The EIA estimated earlier that Saudi Arabia's existing fields are declining at six to eight hundred thousand barrels per day per year. This means that Saudi will need a new Haradh ever five months just to stay even.
But they have no such new projects in the pipeline for several years yet, if then, if ever again.

Ron Patterson
Pensacola, Fl

When I cited your figure of Saudi Arabia declining 600,000 to 800,000 barrels per day per year downthread, Robert R. said:

I think this interpretation is a mistake in comparing a period of high demand (summer) versus the winter season which is of lower demand.

Do we have any more info on what time period or information EIA based the estimate? Links/reference?

I have the link:

You will notice that it is not unusual for production to drop in the winter and then come back up during the summer driving season. In fact, there was even an annual production decline from 2001-2002, but production was increased in 2003-2005. You can see from this that trying to predict a decline by extrapolating just a few months would have failed in the past. You really need more data before you can say "Saudi is in decline".


Well no Robert, that was not the link at all. Again, the link is:

And a very good Energy Bulletin article on the subject:

Actually we do have enough data to say that Saudi Arabia is in decline. Have you read Matt Simmons' "Twilight in the Desert"? He supplies a mountain of data. Saudi Arabia produced an average of 9,900,000 barrels per day in 1980. Then they declined, mostly due to self imposed cutbacks, then began producing flat out again in 1991. They managed to produce an average of 9,550,000 barrels per day in 2005 but will not reach that level this year.

Saudi Arabia is definitely in decline.

Ron Patterson

I have read Twilight in the Desert, and his argument is not that they are in decline, but that they soon will be. I don't have a problem with that argument. But you are taking data and extrapolating it to suggest they are in decline now, when the production numbers show otherwise.

Again, here is the link showing their actual production month by month:

You can't conclude from that information that they are already in decline.


ryvr, "per day per year" means they drop that much daily production each year. There are no seasons involved because "per year" includes all four seasons. But here is the EIA link and in it they give their source. Actually they say 500,000 to 1 million barrels per day. I just remembered incorrectly.

"One challenge for the Saudis in achieving this objective is that their existing fields sustain 5 percent-12 percent annual "decline rates," (according to Aramco Senior Vice President Abdullah Saif, as reported in Petroleum Intelligence Weekly and the International Oil Daily) meaning that the country needs around 500,000-1 million bbl/d in new capacity each year just to compensate."

And notice that is from Aramco, that is straight from the horses mouth.

Ron Patterson

Well, that is quite different than saying that they are in decline, given that they have had the fields to produce that "500,000-1 million bbl/d in new capacity". In reality, as my link shows, Saudi has increased production year after year, except for a decline from 2001-2002, they have increased production every year. This, despite the fact that some of their fields are in decline.


Saudi Arabia has increased porduction, but nit clearly production capacity at all. They were generally assumed to have a several mbpd supply cushion, which is now largely gone. As far as I can tell, virtually all of the increased production has come from utilizing the previously existing supply cushion. It is even possible that their capacity has been declining even as production increased, although I don't claim this.
T. Boone Pickens stated unequivically a few days ago we will max out at 85mbd. I understand he has a fair record.
Yeah, unless you actually look at his record. Check out - there is excellent archiving here of people's "records."
"NEW YORK (Reuters) - Boone Pickens' bet on crude oil last year helped the Texas investor take home an estimated $1.5 billion."

That's good enough for me!

I'm assuming you got part of that $1.5 billion.
That would be an incorrect assumption.
Thanks very much for the article.
Who knows what is really happening at Haradh or on any other Saudi project? The important thing is that once again, Aramco has promised an increase in capacity and according to their own figures, there is no reason to believe they have delivered. And as Heading Out indicated, they have tacitly admitted that their previous statements about already existing unused capacity of theirs were -
terminological inexactitudes.
Pardon me if this information is readily available elsewhere or has been provided already in a previous thread...

...but I would like to ask: are you aware of Web sites focused on Peak Oil that are not in English? I know that a Spanish-language site (crisisenergetica? if I recall correctly) has been mentioned here in the past, as have a few others. If any readers could respond here with their favorite non-English site on Peak Oil, I (and hopefully others) would appreciate it.


P.S. For bonus points, list a Peak Oil site in Lithuanian or Russian -- my kids will be wondering why Daddy has suddenly been struck speechless.

There is a French one:

Using IEA revised world oil production figures, I compiled a rolling 12-month mean average of world oil output. The data I use starts from March '03 though Feb. '06 (Feb.'s number not yet revised). From this, I took the difference (rate-of-change) between each successive 12-month average. These numbers being a little "noisy," I took a rolling 6 consecutive mean average of the (12 month) differences, producing a less noisy pattern (averaged month-period difference in mbpd):


These figures would show an average "delay" of 3 months, putting world peak oil production around December 2005.

Our crystal-balling will be history soon, as production decreases will become quite obvious in the next few months. I can't wait to hear the "excuses."

The First Derivative is Dead, Long Live the Negative First Derivative!

I am rethinking my statement of peak-at-December 2005. Since this is based on rolling 12 month averages that would regress it another approximately 6 months ... June 05 ... In which case, I'm a bit surprised they've avoided glaring production decreases this long ... but obviously they have a lot of incentive to squeeze reeeeeeealy hard. But the manifestation of the down-slope must be eminently imminent, and will be steeper due to this hard squeezing to have maintained the plateau.
Another interesting trend that I noticed is that except for September and October, right after the hurricane, every month in 2005 had a higher oil production than the corresponding month in 2004. That trend continued in January 2006 with an increase over January 2005.


This is true, but appears to be "noise" or forced overproduction past June 2005 when the averages are taken into account.

At , Stuart has a nice moving average graph showing much the same thing.

We know there is a current plateau. We seek to find averages and elimate the noise to determine where the idealized curve would put the peak. We belive based on oil extracted and oil reserves and high oil prices that this is the world Hubbert Peak plateau.

If revised Feb., Mar., and Apr. production numbers are higher than their corresponding 2005 months, I promise I will recite 50 times, "Robert Rapier might be right."

Here are the annual average worldwide production numbers from 1997-2002 in million barrels per day. Time travel back to early 2003 and give me your conclusion from looking at the numbers:

74.19 1997
75.69 1998
74.87 1999
77.77 2000
77.73 2001
76.93 2002



I understand the point that you are making, but the context of my analysis includes the total extracted oil vs. remaining reserves that applies to now, not 2003, and a number of other considerations like the high oil price which would put strong force on production increase were it possible.

We know there is a plateau now. There have also been several in the past. The plateaus of the past were not due to a world Hubbert Peak. I stand in concensus with a community looking at the full picture and seeing this as very likely THE Hubbert Peak plateau.

I understand the possibility that this is not the case, and if so, there will be a large group of us who are surprised and humbled.

But if all of this production didn't get knocked offline unexpectedly in late 2005-2006, we wouldn't be looking at a plateau. New projects are scheduled to come online and boost production, just as they have in the past. They come online to meet expected demand. Several years ago when they started planning these projects, it wasn't known that we would have 2 million bpd knocked offline for various factors, or they might have sped the projects up. You don't want to bring a bunch of projects online too far ahead of demand, or the price will crater. They just miscalculated.

I am not arguing that the peak is not coming, and maybe soon. When I first started really digging into this, I thought it was on top of us as well. But I would take bets that if oil production flattens this year, it will be because high prices have stemmed demand, and not because producers can't pump any more. I see a 75% probability of a peak within 10 years, but very little chance of a peak in the next 3 years.


Not much evidence that prices are stemming demand yet, or at least I'm not convinced (see HO's post).  It may be true that people aren't buying as many SUVs, but that does  not equate to less driving or fuel consumption.  What will it take?
I might buy your argument if prices drop significantly along with flat demand. As long as prices remain this high or higher, I will believe there are supply issues, not demand issues. As long as prices are high, by definition there are buyers competing for the oil.
There IS a supply issue at this point in time. That doesn't mean that production can't be increased. But I am of the belief that supply and demand will probably remain pretty tight until we do peak.

A few years ago, during the early planning stages of the expansions that will be coming online in the next few years, the economic assumptions were quite different than what the reality turned out to be. Oil prices are much higher than were forecast, providing incentive today to bring production online that wasn't there 3 years ago. Producers try to bring supply online to match demand. They miscalculated available supply (hurricanes, Iraq, Nigeria), hence we have a supply/demand imbalance that many mistake for peak oil.


My point is that if production flattens, you can't say it's due to reduced demand unless prices also fall. In the same way, if production increases to exceed demand, prices will fall.
To my eyes, the production "unexpectedly" lost has revealed the fact that we no longer have swing producers with the ability to take up the slack.

There also may be meaningful subtleties to this area of debate that we have been ignoring. We may be more past peak on light sweet, while still having possibility of noticeable increases from heavy, sour, or oil sands, but these would involve much more expense than previous extraction and refinement, and would still result in supply and price pain.

I also think it is clear that global warming is having currently noticeable and increasingly disruptive effects and that most of the causes of recent supply disruption are likely to continue or get worse. Therefore, to try to think about how the world would be without "unexpected" disruption seems like living in a fantasy world to me. I expect these disruptions.

Therefore, to try to think about how the world would be without "unexpected" disruption seems like living in a fantasy world to me. I expect these disruptions.

The whole point about the disruptions was to demonstrate that they caused the plateau, and not a peak in production. Disruptions will cause a supply/demand imbalance which should not be confused with peak production.


We're three months into the year already. Do you see any evidence of high prices cramping demand?
Prices aren't high yet. Let them get to European levels, and believe me demand will drop. It is off slightly, but people have largely gotten used to the price.


Crude would have to cost well over $100/barrel for US gasoline prices to match the current European average at present tax rates. Do you see that sort of price coming this year?
I don't see $100 oil this year unless something really unusual happens (terrorist attack on an oil installation, another hurricane wiping out a lot of oil production). I could see gasoline climbing higher and higher without the cost of oil driving the price. Right now, crude inventories are rising, but inventories of gasoline are falling. The only way to rectify that is for gasoline prices to rise, as they have been doing. I am a bit baffled as to why crude prices keep going up in light of the inventory data that says we are at the highest crude inventory level in 7 years. At some point, refiners have to say "enough", which should put some downward short-term pressure on oil prices.


See the Schlumberger article I quote in the above post, which says that Jan. '06 US gasoline consumption was 0.6% lower than in Jan. '05.

While you can argue that that's essentially flat, GDP and population rose, and gasoline consumption didn't.  That looks like a classic sign of higher fuel efficiency to me caused by people fleeing from SUV's and trucks because of increased fule prices (ask the Big Three car companies how bad that exodus has been for the last year).  I don't know what the VMT (vehicle miles traveled) were for those months, so I can't rule out that we suddenly drove fewer miles per vehicle with more vehicles to come out essentially even on gasoline consumption.  

Unfortunately -0.6% is a DISMAL short term price elasticity of demand,  Even if one says demand would have been up 1.6% with stable prcies, a delta of -2.2% is just terrible for the price  icnreases we have seen recently.

I can only hope (and a slender one at that) that price elasticity of demand will increase dramatically in the next FEW years :-(

IMHO, the alternative is a decline in economic activity (see depression) severe enough to significantly reduce demand.

Hmmm.  I thought we discussed this?  There's no real sign of a trend in fuel economy at this point:

You can't make an argument from one monthly data point!

Lou, while consumption was down 0.6% in January, it was apparently up 2.6% in February.  This was in a Resource Investor story I referenced in Stuart's Plateau Update thread:

I am assuming (but did not confirm) that Resource Investor got its number from EIA, and it may not be the revised, final number.  But I would suggest that it's a tad premature to draw conclusions about U.S. gasoline consumption in response to current prices.  I'm not arguing that high prices won't eventually suppress demand, just that the data doesn't yet appear to be definitive in this regard.

Why all this obsession with the "absolute peak".Personally I think 2005 was the peak, but who cares? The world economy has consumed from 75-85 mbpd for quite a while now and no one believes the total will ever exceed maybe 90 at the most. There is no "peak". This is a long plateau.  
Why all this obsession with the "absolute peak".[?]

Not long after oil production peak, there will be a trend of continuing production decrease. I believe that in very short order after that, capitalism will show itself as a completely failed experiment because it was predicated on growth that will never again be forthcoming the same way. Some suggest a series of recessions, but I cannot imagine why there would be any recoveries if investors make use of a brain cell or two and see that it will be a different system that generates a prosperous society, not market capitalism.

please Please PLEASE let's not let this site become a morass of 9-11 conspiracy theories, discussions of colloidal silver, recipes for muskrat, political platforms, and so on like That Other Site.
Peak oil connects to many, many things. And those many, many things are discussed here on TOD. 9-11 also connects to Peak Oil, so much so that Colin Campbell saw fit to include a chapter on it in his book OIL CRISIS.

I posted a link to a video. Did you read Campbell? Will you skip that chapter?

davebygolly -

For many people, to question the government's version of what really happened on 9-11 makes one, a priori, a conspiracy nut. Yet, as I'm sure you know, a rapidly growing number of highly respectable, technically competent people are doing just that. And there is indeed much to question, regardless of the various MSM hit pieces.  

I myself am quite skeptical of many things related to 9-11, but I try to refrain from dicsussing the subject in any great detail at TOD, as I don't want to abuse our host's hospitality by straying too far from the core subject: peak oil.

Having said that, I DO think there is a not insignificant connection between the subject of 9-11 and the subject of peak oil. My argument goes something like this: Whether or not the Bush regime, Israel, or whomever had direct or indirect involvement in 9-11, it is quite clear that the Bush regime has used that event as a pretense for invading Iraq. If the real purpose of invading Iraq was to militarily gain further control over Middle Eastern oil, then that reveals what the Bush regimes' energy policy really is.

 And if the US has no real energy policy other than to control oil through military domination, then that raises serious concerns over whether we as a people are going to constructively work together to get ourselves out of this energy mess or continue to march down the road to certain folly.

Thus,  I believe that  the subject of 9-11 is relevant, but that detailed discussion about the particulars should perhaps best be aired somewhere other than TOD.

In further discussion of the megafields article and consideration of declines, and particularly to get a little more specific about the decline of giant oil fields, lets talk about some of  the worlds most productive fields. These include:

Ghawar around 5 mbpd (decline rate - national secret)
Cantarell 2.2 mbpd (decline of ?% - depends what you read, perhaps 10% or more annually)
Burgan   1.7 mbpd (decline rate to be seen)
Daqing   (China's largest) 1.0 mbpd  (decline of 7% annually)

Together they produced about 10 mbpd in 2004, or almost 12% of the total world production by themselves. In general, decline rates of 7 - 10% would not be out of the ordinary.

What do they have in common? They all peaked around 2005. The only questionable one is Ghawar, since it has not been made official.  All the others have been announced by their governments. However, if you have been following not only Simmons' but other's work, I think the evidence is unmistakable. Most persuasive to me is that despite its dominant role in Saudi Arabian production and the billions Saudi Arabia continues to put into developing it, they never announce any expectation of increasing its net output and keep silent about its production and prospects..

One interesting source is the following PDF from 2005:

20 years ago, 15 fields had the capacity to produce more than 1,000,000 b/d. Today only four field can produce that much:

*Ghawar (Saudi Arabia), 1948
*Kirkuk(Iraq), 1938
*Burgan Greater (Kuwait), 1927
*Cantarell(Mexico), 1976

We know Iraq is in trouble - who knows what will become of Kirkuk in the near future. All the rest are declining from depletion.

Another discussion of the decline of the great fields:

The arrival at peak of such a significant group of fields all around the same time (plus or minus 1 year from 2005) is a new phenomenon. For this reason, projections from the past into the next few years should hit a discontinuity now. Having over 10% of our production base suddenly drop into a decline from growth or plateau has the potential for a major impact, to say the least.

I'm not as eloquent as others on this board, but I think this is really the core of the issue.

The WSJ had a story on Cantarell a few weeks ago that discussed an internal Pemex report that had five scenarios.  The most pessimistic--and the most realistic in my opinion, given the rapidly thinning oil column--was for an annual decline rate in excess of 40% per year.

Following is an excerpt from a column by Tom Whipple, in which he discussed the WSJ article:


An energy consultant in Mexico City published parts of the study and later the Wall Street Journal got to examine the document. It seems there is only 825 feet between the gas cap over the oil and the water that is pushing into Cantarell from the bottom. This distance is closing at between 250 and 360 feet per year.

The more pessimistic of the study's scenarios have Cantarell's production dropping from 2 million b/d to 875 thousand barrels a day by the end of next year and 520 thousand barrels a day by the end of 2008.

I'm quite sure more people read this

I think it offers valuable insights. Just can't seem to crack the numbers and doubt his standpoints. For example he relates demand to price a lot. To my knowledge demand had only grown since 1999, though prices increased five-fold.

Any comments from industry insiders and other professionals?

I found this from another site and thought it of interest. Points out that Exxon is fat, dumb and maybe not so happy:

From Octopus To Octopussy
Martin T. Sosnoff 04.07.06,  6:00 AM ET

Long-term underperformance of megacap stocks may not end so fast even though they now carry price earnings ratios lower then before. I'm talking about Exxon Mobil, General Electric, Microsoft, Procter & Gamble, Wal-Mart, et al, with Exxon standing as the top dog in the S&P 500--a prime beneficiary of rising oil quotes.

The market isn't taken in by these faceless giants. They do not execute flawlessly or show any signs of earnings reacceleration. All the motions of raising dividends and buying back stock while retaining pristine balance sheets fall flat. The best you can say about them is they're reasonably priced.

Exxon Mobil is a perfect case study of management complacency, if not inertia. Fireworks popped all over the energy sector. Refineries such as Valero  (nyse: VLO -  news  -  people  ) made timely acquisitions. Oil service operators like Halliburton  (nyse:  HAL -  news  -  people  ) and Schlumberger  (nyse:  SLB -  news  - people  ) scaled up their capital spending and raised prices methodically.

Rig operators like Transocean  (nyse:  RIG -  news  -  people  ) and GlobalSantaFe (nyse:  GSF -  news  -  people  ) rocketed to the moon as day rates soared around the world. Drilling and exploration budgets, particularly independent operators, spiked when oil crossed $50 per barrel. Yet Exxon Mobil is stuck near the $60 price of a year ago. At year-end, quarterly earnings bulged to $10 billion. Nobody makes this kind of money, but nobody cared.

Exxon Mobil underperformed the market by 500 basis points the past 12 months. The OSX energy index gained 40%, Exxon Mobile just 3.7%. There should be some gnashing of teeth in their boardroom.

It's annual report time, and Exxon Mobil is ready and forthcoming. Their 91-page operating and financial review is as comprehensive as it gets. But when you dig into it, you begin to understand their unsolvable predicament. Simply, the cost of drilling and exploration escalates inexorably. Some of the cost inflation is cyclical, but much of it is secular, like labor and well maintenance.

The rising number of wells needed to produce comparable amounts of oil and gas is a given so the depreciation and depletion account expands, too. It's easy to see costs rising annually between 10% and 15%. When oil quotes ease, costs still rise. Earnings are leveraged to the downside. Not good.

My sense is that Exxon Mobil management misjudged the sustainability of rising oil prices. Based in Irving, Tex., management sat unruffled, waiting for oil to revert to its finding cost, maybe $35 per barrel. So far, they're dead wrong, but nobody in the history of the world has accurately projected the price of a barrel of oil for more than a year or so. Amerada Hess  (nyse:  AHC -  news  -  people  ) sold most of its 2005 production into the futures market too early. They've just started to recover from that faux pas. Cowboy arithmetic catches up with you!

The stock market isn't stupid when it comes to valuing integrated oil properties. Exxon Mobil's earnings in a normalized scenario could decline to $4 per share, but not its present earnings power of between $6 and $7 with oil over $60.

First, the good stuff. They earned $36 billion last year, almost $11 billion more than in '04. Cash flow is gargantuan at $54 billion, and they brought in $18.2 billion in stock on a $375 billion market capitalization. However, net of share issuance, the buyback approximated 3%. Since 2001, management bought back 9% of shares outstanding, not exactly an earth-shaking initiative.

There are few more pluses. Debt is minimal with fixed charges coverage of 50 times. The return on average capital was a snappy 31.3%. Their message is insistent. We are a pristine property with position on the board. Our reserves are well-balanced in every hemisphere. Alas, nobody cares.

Nobody cares because Exxon Mobil disbelieved in the sustainability of world oil prices. Its capital and exploration budget stagnated over five years, declining in 2004 despite a 40% rise in earnings. Last year's expenditures rose by $3 billion, but that was the inflationary costs beginning to bite. The same goes for 2006 and '07.

If Exxon Mobil had believed in oil prices of even $50 per barrel, they could have locked up drill rigs on long-term leases for a song early in '04, even '05, but it didn't happen. They could have bought foreign refineries, but they sat on their hands.

Incidentally, Warren Buffett in his annual report essay points out that share buybacks favor management by increasing the prospective value of their options. Meanwhile, dividends hardly budged at Exxon Mobil over the past five years. The payout ratio stands at 20%. Warren likes a third of earnings paid out. Why not?

The deep basic is Exxon Mobil got swept along by escalating oil prices. Period. It misjudged its market and remained too conservative for too long. The most crucial aspect of an integrated oil property is renewing reserves, adding to reserves and increasing production. Exxon Mobil's production flattened over the past five years.

In the old days we called Exxon or Standard Oil of New Jersey a widows and orphans stock. Today, widows know more than I about the daily changes in the Treasury bond yield curve. Stocks such as Exxon Mobil don't interest them because the dividend yield is too skimpy. I put my mother-in-law, who's pushing 90, into REITs and Master Limited Partnerships with good results. Look at AllianceBernstein.

So much for the top dog in the S&P 500. It's more pussycat than tiger.

Martin T. Sosnoff is chairman and founder of Atalanta/Sosnoff Capital, a private investment management company with approximately $4 billion in assets under management. Sosnoff has published two books about his experiences on Wall Street, Humble on Wall Street and Silent Investor, Silent Loser . He had been a columnist for many years at Forbes magazine and for three years at the New York Post . He owns personally and Atalanta Sosnoff Capital owns for clients the following stocks cited in this commentary: General Electric, Microsoft, Procter & Gamble, Wal-Mart, Valero, Halliburton, Schlumberger, Transocean, GlobalSantaFe and AllianceBernstein.

My sense is that Exxon Mobil management misjudged the sustainability of rising oil prices. Based in Irving, Tex., management sat unruffled, waiting for oil to revert to its finding cost, maybe $35 per barrel.

It wasn't just ExxonMobil. I have seen projections made in 2003, and the consensus was that oil would be trading in a range from $25-$30 through 2010. A lot of companies based projects (or lack of projects) on these numbers.

One thing I can't figure out about XOM is why they would take out a statement denying Peak Oil. It would seem to me that fear of PO is in their best interest, and will make them more profitable. They can't be afraid of competition from alternatives, because they have the resources to get into that game at any time. I have had this conversation with my boss, and I said as far as profitability of oil companies goes, fear of peak oil will keep prices high.


Probably they think new regulation is less likely, the less worried voters are about oil in general. Especially since some politicians have blamed specifically the Exxon/Mobil merger for expensive gasoline.