Wednesday Open Thread

Wow, there's an awful lot out there today. There's a linkfest under the fold if you need something to get you going, beginning with this one from Leanan (also more of Leanan's under the fold as well):

It's the hot season in south more ways than one. Temperatures as high as 48C (118F) have been recorded in India: Sweltering heat across northern plains of India, combined with power cuts that shut off water pumps and fans causes 28 deaths.

"The US's Political Nightmare"

Excerpt: In the space of 12 months, Russia and China have managed to move the pieces on the geopolitical chess board of Eurasia away from what had been an overwhelming US strategic advantage, to the opposite, where the US is increasingly isolated. It's potentially the greatest strategic defeat for the US power projection of the post-World War II period. This is also the strategic background to the re-emergence of the so-called realist faction in US policy.

Friedman on the Post-Post Cold War:

Bad news for economists:

Abstract: In this paper we use results from the Hotelling model of non-renewable resources to examine the hypothesis that technology may increase petroleum reserves. We present empirical evidence from two well-documented mega-oilfields: the Forties in the North Sea and the Yates in West Texas. Patterns of depletion in these two fields suggest that when a resource is finite, technological improvements do increase supply temporarily. But in these two fields, the effect of new technology was to increase the rate of depletion without altering the fields' ultimate recovery - in line with Hotelling's predictions. Our results imply that temporary low prices may be misleading indicators of future resource scarcity and call into question the future ability of current mega-oilfields to meet a sharp increase in oil demand.

The Popular Mechanics Poster on Alternative Fuels (really good):

In Pakistan, power outages are lasting 22 hours a day in some areas:

Load shedding hurting economy, National Assembly opposition walks out twice

But the crisis seems worst in Bangladesh. There were protests by farmers over fuel and fertilizer shortages earlier in the year, and now the unrest has spread to the cities:

Power hungry people lay siege to REB office in Khulna

Violent protest rally over power outage in city: 100 hurt, 100 vehicles damaged

People marched on a power plant in Dhaka, demanding an end to power outages:

But when the police tried to intercept the protesters, some turned violent, setting fires and destroying vehicles.

(Photos by AP)

These countries generate most of their electricity via natural gas (except India, which is increasingly dependent on coal). The tighter natural gas market means power generation cannot keep up with growth.

There is more interesting bits.

In Russian State of the Nation address this morning Putin proposed to create oil and gas exchange in Russia denominated in russian currency, also issued a veiled but clear response to Vice President Dick Cheney's accusations that Moscow is rolling back on democracy and strong-arming its ex-Soviet neighbors.

``Where is all this pathos about protecting human rights and democracy when it comes to the need to pursue their own interests?'' said Putin, who also used a fairy-tale reference to criticize the aggressive U.S. course in global affairs.

``We are aware what is going on in the world,'' he said. ``Comrade wolf knows whom to eat, it eats without listening and it's clearly not going to listen to anyone.''

Putin proposes creation of ruble-denominated oil, gas exchange

MOSCOW, May 10 (RIA Novosti) - President Vladimir Putin said Wednesday that a ruble-denominated oil and natural gas stock exchange should be set up in Russia.

Speaking before both chambers of parliament, cabinet members, and reporters, Putin said: "The ruble must become a more widespread means of international transactions. To this end, we need to open a stock exchange in Russia to trade in oil, gas, and other goods to be paid for with rubles."

"Our goods are traded on global markets. Why are not they traded in Russia?" Putin said.

Hoo, boy.  You think Dick Cheney ticked him off?
Yes, and look what the Chinese are doing:

Looks like they should have gone for a State Dinner after all...


They're wanting to buy the equivelant of 9 months of worldwide production, I assume with dollars.  Gold is getting ready to skyrocket, and the dollar is going to plummet.  I think this consitutes the first battle of the new economic cold war.  

Anyone know how a young person with absolutely no assets and no savings could perhaps borrow around $100,000? =D I don't think I've ever seen such a good investment.  Appreciating gold versus depreciating dollar.  

Fun times.

it's already over $700 a ounce. thats what they said on npr on my ride home from work tonight.
I suspect that the US will increasingly have to exchange  dollars for something else in order to buy imported oil--unless the US seizes control of the Middle Eastern oil fields.

BTW, I postulated a theory regarding BCR (Bush/Cheney/Rumsfeld) some time ago, to-wit:  they knew about Peak Oil from day one; they knew the federal debt would never be repaid; therefore, why not run the debt up and in effect borrow the money to deploy a permanent military force to the Middle East, with the aim of securing the oil fields in Iraq, Iran and Saudi Arabia, the most valuable real estate in the world in a post-Peak Oil age?  In addition, I theorized that BCR would in effect renege on the debt, either explicitly, or through inflation and/or by crashing the dollar.

Events in the first few months of this year don't seem to offer much contradiction to the theory. What concerns me is that BCR may--and probably do--believe that that have no choice but to proceed with he plan.  If they don't seize control of the oil fields, they will have bankrupted the country and turned the whole world against us, without having control of the oil fields.  An interesting question is whether Bush is part of the plan or if he has been duped by Cheney and Rumsfeld (I keep thinking of Bush as playing the part of the governor in "Blazing Saddles").  Bush apparently believes that he is on a mission from God to bring democracy to the Middle East.  Therefore, to oppose Bush is to oppose God.  

In any case, the above article on the US's geopolitical nightmare is very good.

Well, yeah I guess so.

Great strategic thinking; just "thousands of little tactical errors" as somebody said.

I've been mulling over a little epiphany I had the other day (now that I'm re-interpreting modern history in light of the oil peak).

I was struck by the odd symmetry between the USA and Russia :

  • USA : oil men take over the government, by fair means or foul
  • Russia : government takes over the oil men, by fair means or foul

Khodorovsky is rotting in jail, and what was his crime? Standing against Putin? No, trying to internationalize Russia's oil industry (in particular, with US partners).

Putin has been strikingly more successful than Bush in his oil strategy : he's created a powerful geopolitical tool, which a "free market" would have taken out of his hands.

Putin has been more "successful" because his goals are obviously different. He is attempting to increase the economic and geopolitical strength of Russia. BCR are like CEOs with lots of stock options-if what they do results in long-term strength for the company it is a side effect not the main intention. BCR have been extremely successful at making money for themselves and their friends. Isn't this what American success is all about?  
Good logical explanation of reasons behind Putin actions:
I don't actually think oil men have taken over the US government. We might all be at least somewhat better off if they had.
Oil is merely one of several businesses Bush junior dabbled in, with conspicuous lack of success.
Cheney has no deep roots in oil.
No-one says pharmaceutical executives have taken over, though that was Rumsfeld's job.
Amen to that.
If the Pres was T B Pickens & vice was Simmons - we would be well on the way to trying to fix this mess.
Interesting times, indeed.....

Westexas, I have to congratulate you, as I have slowly but surely come around to your theory, as outlined above (and previously). Still hope you are wrong, but no longer think so.

Westexas is interesting but still wrong. Or at least I still hold that he is wrong.
I appreciate westexas' theory on BCR.  I have had a had time putting the pieces together.  His theory helps in that egad.  I just read the Asia Times article about the failing BCR agenda.  I was a bit shocked at the orchestrated insult to Hu during his White House visit.  As a funny aside, I had dinner with an old buddy of mine during Hu's DC visit.  He was back in town interviewing for a Dept. of Homeland Security job.  He is a good friend but totally unqualified for the job, but when did competence come into play for BCR gov't jobs. Anyway, we wrapped up our dinner and were heading back to his room at the Washington Hilton along Conn. ave just as Bush's motorcade came down the street, returning from a reception at the Chinese embassy.  He waved happily and I flipped Bush off, happily, at the same time standing side by side.  I just hope Bush saw it but I doubt it.  lo, I digress.

The insult to Hu I suspect was to harden Chinese resistance to sanctions against Iran.  The BCR clan can then claim diplomacy has failed and we have no choice but to move unilaterally against Iran.  Cheney's insult to Putin the other day was another calculated attempt to piss off Russia so they too will block any sanction vote in he UN against Iran.

Perhaps the bigger picture is coming into focus.  Any thoughts on my theory?

"BTW, I postulated a theory regarding BCR (Bush/Cheney/Rumsfeld) some time ago, to-wit:  they knew about Peak Oil from day one; they knew the federal debt would never be repaid; therefore, why not run the debt up and in effect borrow the money to deploy a permanent military force to the Middle East, with the aim of securing the oil fields in Iraq, Iran and Saudi Arabia, the most valuable real estate in the world in a post-Peak Oil age?  In addition, I theorized that BCR would in effect renege on the debt, either explicitly, or through inflation and/or by crashing the dollar."

Jeffrey, I don't doubt that you could have come to this conclusion on your own.  But for the record, this is what Mike Ruppert has been telling his subscribers for the last 5 years.  While Ruppert is not infallible, I have made a windfall 400% profit investing on the insights gained from his "map" of what is going on in the world.  Of note, the subtitle of Ruppert's book, "Crossing the Rubicon" is "The Decline of the American Empire at the End of the Age of Oil".  Of course the rest of the story is about the means utilized to mobilize Americans in favour of an invasion of OPEC.

I check out Ruppert's summaries every once in a while, but I'm not a subscriber.    I'm sure a lot of people have come to very similar conclusions.  As Ayn Rand (and I think Aristotle) said, if you have evidence of a contradiction, you should check your premises, because you will find that one of them is wrong.

What has puzzled so many people is Bush's out of control spending.  But if BCR know that the federal debt will never be repaid, post-Peak Oil, it makes a lot more sense.   Why not borrow the money from foreign creditors to finance the takeover of the Middle East?  BCR would have control of the true capital, energy, while creditors of the US were left with piles of rapidly depreciating paper.  Debts are always paid--if not by the debtor, then by the creditor.

Thanks for your post. I have pondered whether some subset of Greenspan / Busher II / Cheney / Rummy / & a bunch of "leading" Democrates were following the John Galt model by actively bringing forward the day when the status quo ceases to work by deliberately destructive behavior.

Are the contradictions that are visible everywhere indicators of a grand conspiracy of merely overwhelming evidence of a culture of gross stupidity?

Who really knows [but my guess is a vote for "gross stupidity" in the general case --- but in regard specifically to peak oil, more likely almost the entire political class knows at a minimum that something is wrong but don't want to be the ones that break the news to the masses]?

In addition to Ruppert, this theory also sounds what the author of this article is theorizing:

Here is an excerpt:

But what if there really were no tomorrow, financially speaking? In that case, the reckless economic policies of today would not only be irrelevant, but might actually be shrewd. I mean, if one knows that he is not going to have to pay back his debts tomorrow, then why not borrow money like crazy today? In fact, if civilization is coming to an end, then why not use all that borrowed money to stock up on guns and vital resources, such as oil?
Ruppert's site is all pay, all the time now.  Because of this, he has been deleted from my favorite bookmarks.  His news was usually about 1 week later than here anyhoot.
What exactly do you get when you pay? And how much is it? Is there a menu? This is the funniest thing I've heard all day.
Same here, Dragonfly. American Samizdat is also a pretty sharp source for the political news.
All of the focus of oil in other regions, I came across this article that says we have 2 Trillion barrels of oil in Colorado... albeit shale oil, but still Shell Oil Company has a method of heating the shale releasing the oil... we could be seeing this go main stream by 2010...

Why is this not in the news, as we all panic over the Middle East oil?

It was in the news.  

But I think most people have an intuitive understanding that heating up the ground in order to extract the oil is not going to provide cheap oil.

You're right. It won't be cheap - even if you get really creative. I have thought of a way to get that oil, but it's not cheap. What you do is build powerplants that burn the shale crushed up like they do in Estonia. Powerplants make waste heat with coolant and its "car exhaust". While coolant temp is too low, the car exhaust temp can heat up shale to make oil as you make electricity. It's cogeneration though imperfect. The coolant temp can distill ethanol using waste heat.

Not perfect, but more efficient than otherwise - but way not cheap. Note I'm using the word "car exhaust" generically for the gaseous waste of fossil fuel burning devices due to chemical similarity.

I've always thought RF was black magic.....just not with shale.

Nuke Oil From Shale

Sounds like a microwave for oil shale but I'm sure the details will be long and involved.

If Shell is actually going to do this as a venture with a positive EROI, they're going to have to power those heaters with something like massive wind farms in Wyoming or Kansas.  I don't see this happening.
Maybe they'll do it for a negative EROEI - just to prove that it can be done.
if all else fails, they can just let it lay in the sun here in eastern kansas on a typical summer day and it will melt on it's own. :P
Yeah, I remember driving through Kansas as a teenager once and I just about had a meltdown myself.
Shell actually owns a 50 MW windfarm in Wyoming. It's at Arlington in Carbon County (
Let's see.  At 1 million barrels/day and 6.1 GJ/bbl, the production might get up to 6.1e15 J/day or 70.6 GW.  If we assume a 3:1 EROEI for fossil-fired electric or ~9:1 EROEI for the electricity itself, the electrical input required would be 7.8 GW.  Producing this from wind at 35% capacity factor needs 22.4 GW of wind capacity.

That's about 2.5 times the total US installed wind generation capacity; they've got just a bit of expanding to do.

In a question and answer session at Colorado School of Mines, Shell engineers admitted that for equal amounts of energy input, coal-to-liquids technology currently produces more liquid fuels than their in situ oil shale extraction. IIRC, if you scaled their current technology up to a million barrels/day, it would require roughly as much electricity as is currently generated in the entire state of Colorado. I have to believe that either plug-in hybrids or all-electric vehicles would be a more efficient way to use that electricity for transportation.
Thanks for your comments.  I found a new article where they are using radio waves to heat the oil versus the Shell methods.

"The process proposes using radio waves to heat buried oil shale to about 700 degrees, separating the petroleum from the surrounding rock. So-called "critical fluids" -- liquids and gases that will expand and compress -- would then direct the freed oil to wells where it is pumped to the surface and refined into gasoline, heating oil and other products.

Can it work? The Raytheon scientists said this week they have already proved it does. The company, in collaboration with CF Technologies Inc., a Hyde Park company that provided the critical-fluids expertise, recently applied to patent the process and is also actively shopping it to prospective partners in the energy industry."

They make reference to Shell's method as well...

"It's sort of the difference between using a regular oven and using a microwave," Silvestre said.

Shell's method would take 3 years VS a few months with the radio wave method...?

Interesting read...

Oh man. Radio waves.

Keep on dreaming!

Blasting source rock with radios waves. Hmmm. Might as well try for AM modulation of something appropriate. Maybe a continuous rendition of Subteranean Homesick Blues? :-)
A microwave oven is more efficient because it is tuned to the resonant frequency of water. The food absorbs just as many btus as it would in a conventional oven. Rock conducts heat very well so if they use the resonant frequency of kerogen the heat will quickly conduct into the rock negating much of the hoped for efficiency gain.
It's not news because it's a fairy tale, Bradshaw. Oil from shale will never be economically feasible, and always be environmentally disastrous.

Subkommander Dred

Thanks Guys for your comments.  I'm new to Peak Oil and have really just started down this road.  I have read Twilight in the Desert - Matthew Simmons, as well as The Long Emergency - J.H. Kunstler.  After reading these books if any of you know them, I pretty much wanted to "run for the hills."  But then after the shock subsided, I began scouring the web for as much information as possible.  I'm trying to have an unbiased and just really want to know the truth... of course the Saudis are going to keep that a secret until they no longer can :(
Sorry, I should have reviewed my post.. .I meant to say unbiased "view".... please forgive :-P
Funny that the few MSM articles I found on his speech made no mention of this.  Isn't this, like, a big deal?
Gasoline inventories surge by 2.4 million barrels; more than expected. Crude stocks up 300,000 barrels as projected.

U.S. crude oil refinery inputs averaged over 15.3 million barrels per day during the week ending May 5, up 272,000 barrels per day from the previous week's average.  Refineries operated at 90.2 percent of their operable capacity last week, the first weekly average above 90 percent since the week ending December 2, 2005.  Gasoline production increased last week, averaging over 8.9 million barrels per day, while distillate fuel production also increased compared to the previous week, averaging over 4.0 million barrels per day.

U.S. crude oil imports averaged 10.0 million barrels per day last week, up 196,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged over 9.8 million barrels per day, a decrease of 381,000 barrels per day from the comparable four weeks last year.  Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged over 1.6 million barrels per day, the highest weekly average ever. Distillate fuel imports averaged 325,000 barrels per day last week.

Hmm, gas inventories rise by 2.4 million, but gas imports are at 1.6 million barrels per day, the highest levels ever.  Someone put out the call to buy as much gas as possible, but now we're importing much of our gasoline as well as oil.
I have updated my graphs:

Weekly Petroleum Status Report

Gasoline consumption is back up (above average).

How much of the surge in supply was a result of suspending filling the strategic petroleum reserves?
Just so it doesn't get lost in the shuffle, I have challenged our resident ethanol "expert", Stryker, to a debate on the ethanol policy. The challenge is open to anyone who wishes to defend grain ethanol, or wishes to argue that Brazil provides any sort of meaningful lesson for the U.S. Here was the post challenging Stryker:

If you are interested, let me know.


Robert Rapier -

I am not here to challenge your assertions re ethanol, simply because I generally agree with them.

Though I have no first-hand experience with ethanol production, I have read enough about the energy inputs associated with the ethanol-from-corn scheme to have come to the conclusion that it is largely a waste of time, effort, and money.  However, I am far less certain on the ethanol-from-cellulose route, which many ethanol propenents are touting up as the way the go.

While making ethanol from fruits and grains goes back to antiquity, making ethanol from cellulose is recent bio-tech development that appears to be rather difficult and requiring of far more expertise.

You may or may not be aware of several posts a while back by someone who calls himself Pomona96. This person claims to have had many years of R&D experience in trying to make ethanol from cellulose, and his conclusion was that its feasibility is far from established at this time. In fact, he appears to be downright pessimistic that it will ever get off the ground. I have no way of determining whether he is right or wrong, but I am starting to get suspicious of all these claims being made for ethanol from cellulose sources such as switch grass or hemp.

Are you aware of anyone actually making ethanol from cellulose on a commercial scale, or are all such efforts currently in the R&D or pilot plant stage?

I saw someone post that link for the posts from Pomona96, but haven't had a chance to read them. I also have experience in making ethanol from cellulose. It has an advantage over production from corn in that the fertilizer input can be eliminated. But it has the same disadvantage in that a largely aqueous solution must be purified to pure ethanol. That is incredibly energy intensive, and chews up 2/3 of the energy value of the ethanol regardless of whether it is produced from switchgrass or from corn. Currently, ethanol from switchgrass can't yet compete with corn because the cellulase enzymes are still too expensive. In time, biomass ethanol should compete, but I don't believe it is the best solution. It may be part of the solution, though.

A better idea would be to produce a fuel that is immiscible with water. That would save the distillation energy, which is really a killer.

I don't know exactly where Iogen is with their cellulose ethanol process. I know they have a piloting facility, and have announced plans to build a commercial facility. I am not sure if they have broken ground.


Iogen has not yet broken ground on their commercial plant, at least according to their own website/press releases.  It was originally intended to be under contruction early in the 2nd quarter of 2005, according to Iogen VP Jeff Passmore.
Iogen is right next door to my work in Ottawa.  I'll see if they do tours.  What does everyone want to know?  I can answer one question right now.  Yes, it does stink (but not as bad as an oil refinery).
I would like to know the status of their commercial plant. Is it a done deal? What is the hold up?



How can the fertilizer input be eliminated for switchgrass?  All of the studies I have seen have used somewhere in the vicinity of 100 lbs nitrogen per acre, along with substantial amounts of potassium and phosphate to make up for the lost biomass.  Moreover, that nitrogen has to be in the form of urea rather than anhydrous, which is 30% more energy intensive per unit of nitrogen.   It seems to me as if as much or more nitrogen is necessary than is the case for corn.


To substantiate what Kyle has posted:

Assuming a desired average yield of 4 tons of switchgrass (Panicum virgatum) per acre, slightly less than that the optimistic 4.4 tons/acre nominal yield results found in the USDA study I quoted from in the "Limits to Biofuels" topic previously (with regard to ethanol equivalence),
then according to this Iowa State University study,
you need 112.00 kg nitrogen, 8.69 kg potassium, and 102.14 kg phosphorus per acre, per crop.  And that is in good southern Iowa topsoil.

This is definitely an overlooked aspect of most switchgrass arguments. Generally, when they are quoting the yields from switchgrass, they are quoting yields that were obtained with nitrogen fertilizer. However, I read a report a few years ago in which it was argued (in a peer-reviewed paper) that switchgrass can fix at least part of its nitrogen demands. I have read other papers that argued the contrary. Maybe so, maybe not.

In any case, if switchgrass does require fertilizer, then it will not be the answer. There may be some other biomass options that are better. Ability of a source to fix it's own nitrogen is critical. But the distillation problem - which is where most of the energy input goes - remains.


Oh, you can grow your switchgrass without fertilizer, quite true, and even be sustainable while doing it.

But yields fall SIGNIFICANTLY when you do, as has been shown, and in marginal soils (which are often marginal due to nutrient deficiencies, thin, hard, or compacted soil, etc), your yield will be negligible.  That is the real point here.
The most efficient approach tested so far is WITH fertilizer, and simply include these inputs into the overall equation.  But even at that, cellulosic ethanol from massive switchgrass growing initiatives is only going to be a small piece of the pie, unless something changes along the way.

  Unused electricity off-peak production from nuclear hydro or wind can fix nitrogen.  The original purpose off TVA was nitrates for fertilizer.
Well, Hydro power can be stored in off peak hours to deliver more power in those peak hours.  Turbines are closed at night to help garnish the dam.

As for any idea of using off peak hours production for heavy industrial production or plugin hybrid car, it doesn't bode well when scalled up.  One or two percent of car using plugin is maybe remotly feasible.  Unless you live in Quebec (Canada) or Norway, you have no way to know if you are using hydro power or fossil power to energize you car.  I'm sure that system wise, plugin hybrid are just better at keeping bad habits.

Since the whole economical system is build to ensure growth, any efficiency added to the system is working toward accelerated growth.

If you use less gas and then save money from it, you either do one of two possibilities :

  1. You keep the cash and save it in a bank account or invest it in gold, copper (commodities)
  2. You buy something else from an other store or pay some debt.  

Either way, it will trickle trough the economy and contribute to overall growth.  
Wolfric is right that Hydro power is storable. Little water is spilled from most hydro schemes showing there is little spare energy there. Nuclear power generally runs at nearly full rated power around the clock so there is no unused capacity there. I am not aware of wind turbines being feathered at night so there is no spare capacity there. Some fossil fuel generated electricity is normally generated through the night confirming that there is no spare nuclear of wind energy. The only spare capacity is fossil fuelled and extra nitrogen fixation will require pro rata fossil fuel consumption. This will lower the EROEI of the ethanol and add to its carbon dioxide generation. Night time electrically powered nitrogen fixation saves the need for extra construction of generating plant but not the need for extra fuel.
A much better use of switchgrass production than ethanol production would be to crush and pelletize it, and burn it for heating.  
You get a much better energy return on your investment with this much simpler approach (no ethanol distillation required, and significantly more caloric energy released vs. burning the ethanol extracted).  
The burned biofuel could partially replace natural gas heating in millions of homes, businesses, and industries in the US alone, partially aleviating the coming natural gas shortfall, and freeing up some natural gas for powering transportation instead.  
I hope everybody remembers that you don't have to do any fancy chemistry with switchgrass/biomass.  Just pellitize it as is and use it to switch out gas/liquid fuels presently used in non-transport, like heating houses.  Then you get the equivalent near 100% energy transfer of switchgrass to gas/liquids without much sweat- or dehydration.

I can assure you pellet stoves work just great for space heating, and the ash is little, and readily returned to the soil.  And for a few more measly megabucks, I'll give you a stirling electric generator for that pellet stove of yours so you can float on the grid and maybe even pump some juice back into it.

And how about a really super ground source heat pump run by that same  switchgrass pellet burner, that heats and cools too!  "Easy".  Where are the billionaires??

actually, i forgot!  even though i've made the same argument before, to use switchgrass for space heating, and free natural gas for other uses ... it had slipped from my mind.  i am a victim of the MSM, it's the propaganda i tell you!!!
Doh! I just posted the same thing...should have read on a bit further.  Very correct, wimbi, and an excellent counterpoint to all this "ethanol from switchgrass" malarky.
No problem.  I was just parroting what I had read here a couple weeks before.  We seem to go in cycles about this ethanol thing.  Maybe there should be some sort of automatic heading  "hey, just burn the biomass where you now unnecessarily burn liquid/gas and only in dire straits think about ethanolizing it."

TOD is fun, alright, but not as efficient as "Science" or "Nature" in getting the thinking down for good and all.

No no, I meant I should have read on a bit further! A lot minds here seem to think alike.
Great work Wimbi, excellent post.  
When new houses are designed with bins next to the heating plant for grass pellets, you'll have won.

I've had a question on enthanol distillation for some time.  Do they operate the tower under reduced pressure, that is, vacuum so as to reduce the heat input or do they operate at atmospheric pressures?

When I was in the chemical industry, we stripped unreacted monomer under reduced pressure (we used steam jets for the vacuum)to reduce the heat input.  I would assume they do when distilling ethanol but I don't know.


The distillations are not done under vacuum. You could reduce the temperature requirement, but now you have a vacuum pump requirement. If you had excess steam to drive the jets, then you would probably be OK though. Typically, vacuum distillations are done for reasons other than saving some heat. Most commonly, it is because the molecules are heat sensitive.


I thought the ethanol/water mixture was azeotropic (~95% at 1 atm).  If vacuum distillation isn't used, how is the ethanol purified?  Entrainers?  Mol sieves?
Either with mol sieves, or by adding another component (like a little benzene).


Not sure if you've addressed this anywhere...but what if ethanol plants are co-located with electic power plants. Can the ethanol plants use the "waste" heat from the electric generation to distill the ethanol?  If so how would that change the EROEI?
Again, my question would be "Is there a better use for this cogen energy than removing 92% water from 8% ethanol?"


As I'm no fan of ethanol, my personal answer to that is "yes."  But it would be foolish just to dismiss such options as trivial, keeping friends close and enemies closer if you will.

That being said, I know that communities that use the "waste" heat from powerplants to heat their homes bring the efficiency of a plant up to rediculous levels.

Kyle -

I too have been puzzled by some of these claims that the switch grass route to ethanol requires little or no fertilizer.

As wih all plant matter, the switch grass that is harvested will contain a certain percentage of nitrogen, phosphorus, potassium, and other nutrients. With successive harvest of switch grass the soil will become gradually depleted of these nutrients, and as a result the yields will get smaller and smaller. Unless there is some sort of intense symbiotic nitrogen-fixing bacteria process going on in the upper soil,  I don't see how the use of nitrogen fertilizer can be avoided.

Now, I would imagine that the nitrogen phosphorus, etc in the switch grass will eventually leave the fermenation/distillation process in the form of various aqueous wastes.  If all of these nutrient-rich wastes were reapplied to the land from which the switch grass was harvested, one might be able to pull it off.  But unless the ethanol processing facility were located  relatively close to the area where the switch grass is grown, doing so might be impractical and econmically unfeasible.

I am still puzzled over the required fertilizer inputs of switch grass relative to corn.

I guess I'm puzzled by why people want to even use switchgrass - why not go for something with a high sugar content? Ethanol doesn't care what it is fermented from prior to distillation. It could be garbage, like damaged or excess produce. It could even be raw sugar water, or yam paste or even toothpaste.

I'm thinking that maybe the front end (feedstock) needs to be variable like with thermal adjust your mash based on sugar content anyway.

Why does the answer have to lie in a single crop?  Historically, every time a single crop has become prominent, it screws up the land and the plants. Look at bananas or rubber trees or most any other monoculture farm.

By making the input feedstock variable, wouldn't that let you utilize whatever feedstock was cheaper as well?

Just thinking out loud, not professing to ba an expert. But I do make ethanol from most anything you can imagine...

Switchgrass is popular because it's native to N. America and has a fairly high yield.
What EP said. They are looking for a rich biomass source. They are after cellulose, and not necessarily just free sugars. Switchgrass is abundant. The fertilization issue may be a killer, though.


Another key point is that switchgrass is essentially a perenial, reseeding itself from year to year, further reducing your inputs.  And it grows like a weed because, in a sense, it IS a weed (depending on your viewpoint, of course).
BRI has an ethanol production process based on gasification of the feedstock(s) followed by heat recovery (steam generation) and fermentation of the cooled syngas to produce ethanol.  Here's one GCC discussion on them.

If carbohydrate (CH2O) can be converted to CO2, H2O and hydrogen via CH2O + 1/2 O2 + H2O -> CO2 + H2O + H2, 30 grams of carbohydrate will yield 2 grams of hydrogen.  2 grams of hydrogen will fix 9.3 grams of nitrogen via the Haber process.  Thus, production of 100 pounds (45.4 kg) of nitrogen as ammonia would require only 146 pounds of carbohydrate.  Compared to a yield of tons/acre, that's quite small.

If the end product of the grass is ethanol via saccharification and liquid fermentation, the potash, phosphorus and nitrogen will remain (mostly in the spent yeast).  This could easily be used as animal feed, fermented again as manure (to produce methane, another fuel) and then returned to the grass via sprinklers.

A better idea would be to produce a fuel that is immiscible with water. That would save the distillation energy, which is really a killer.
Hmmm. Surely there is some molecular sieve technology (zeolites, etc) that can select on the difference in size between water and ethanol molecules?
Yup they run molecular sieves as part of the dehydration process for ethanol produced from whey, the by-product of cheese production here in New Zealand.

I'm not certain but I think they only use them to 'finish' the ethanol to a desired final water content, rather than removing the bulk of the water. (for which they just use heat, from burning biomass and biogas in this case)  

Surely there is some molecular sieve technology (zeolites, etc) that can select on the difference in size between water and ethanol molecules?

I would think your pressure drop would be enormous. You are trying to filter out a 92% water solution. Besides that, the solution is very polar, so thinking about it in terms of molecular size might not be the right approach. You will actually have groups of molecules.


RR, two questions concerning the distillation of ethanol.

First, does ethanol for fuel purposes really need to be almost totally anhydrous [I think I got the term right]?

Secondly, since the vapor pressure / boiling point [once again I hope I got the terms right] of ethanol are so much higher / lower than water, why not go for a multistage solar distillation approach to improve the new energy returm?

Your thoughts?

Yes, the ethanol has to be anhydrous. One of the things I mentioned in my blog a couple of months ago is a possible way around this. Here is a cut and paste:

In a 2004 report in Science, Lannie Schmidt's group reported that they were able to produce hydrogen from a mixture of ethanol and water via an autothermal reforming process. This is potentially a very significant development, as it would eliminate the single biggest energy input in the ethanol process - energy for distillation.  

There was more to the story. I blogged on it here:

As far as a solar driven distillation, something like that might be feasible, but I bet I could think of better uses for the energy than trying to remove 92% of the water from an 8% ethanol solution.


As far as a solar driven distillation, something like that might be feasible, but I bet I could think of better uses for the energy than trying to remove 92% of the water from an 8% ethanol solution.

Are you talking about ethanol from cellulosic source? If we start from sugars, solutions up to 15% ethanol are easily achievable, even plain old S. cerevisiae can produce up to that concentration.

From what I have read, 8% is typical for corn. I would expect something like sugarcane to reach much higher concentrations.


8% is the limit because the yeast dies at that point stopping the fermentation process. The feedstock is irrelavent
Hm, most wines are between 12% and 13% Vol., which translates to around 10% Wt, and they are fermented naturally. The limit is between 15 and 20 per cent (Vol.), although the product is no longer drinkable due to the longer chain alcohols produced by the yeast in such extreme conditions.

It may be that 8% is the practical limit if the product is to be distilled and maximum overall efficiency is sought.

Ethanol needs to be anhydrous if it is mixed with gasoline. Ethanol with as much as 30% water can be used as fuel.
Just a thought here but we seem stuck in the large central located refinery/distillery to have this come about.  Everyone agrees that the heat energy in this way of production is currently wasted.  There must be an economic balance between smaller locally operated distillery and a local use for the waste heat(home, greenhouse, water).

I see problems with the large powers that be(government tax base, corporate power, influence, and profits) that do not want small local control.  

An easy way to use celluose for ethanol production is simply to burn it to heat the fermenter and still. Takes some of the fossil fuel out of the equation. Current economics make coal about 90% less expensive as silage but 50 years from now the situation could be the opposite.
RR:  A little food for thought:
IMO Ethanol production is pure wasted effort and energy. 15% water in shell corn contains 7000 btu's of energy per pound, and 15% shell corn weighs 56 Lbs per bushel. That is 392,000 Btu's per Bushel. Now according to the USDA a bushel of 15% corn should yield 2.68 gallons of ethanol, and ethanol contains 14,000 Btu's per pound and weighs 6.59 Lbs per gallon. That means that a bushel of corn will yield 247,000 Btu's of ethanol.  Why not simply burn the corn in a corn burner for home heating in place of NG or propane, and you can also save the NG used in the ethanol distillation process. The 392,000 Btu's of home heating energy used in place of NG + the NG used for processing could in turn be used as transportation fuel. Switch grass, cornstalks, wood chips, corncobs, could all be palletized and burned in corn burners, Why try to convert all that stuff to ethanol? Just use the propane and NG it saves as motor fuel. In the mean time we should be developing solar electricity sources. They must replace the propane and NG used for transport before the fossils run out. After all the sun "is" the sole source of energy.
It would probably make more sense to burn any of this stuff (corn, switchgrass, etc.) and make electricity instead of trying to distill off an 8% ethanol/92% water solution. That's the real killer in this whole deal.


Absolutely.  This has been discussed here on TOD previously in fact, and at great length. I cannot believe that we seem to have collectively forgotten about this, in all the recent hype (MSM generated) over wasteful biofeedstocks-to-ethanol all-is-well furor.  
I was thinking about Chris Skrebewski's mega-projects list.  Has anyone done a similar bottom-up study, not of upcoming production, but of upcoming depletion?  That is, look at each country that has peaked, calulate their depletion rate, and use this to predict how much less each country will be producing in the future.  Then add up all the countries declining production, and weigh it against the projects that we know are coming on line in the next few years.
The Peak Oil debate was between Matt Simmons and a writer for Reason Magazine (a free market libertarian oriented magazine).  The Reason guy asserted that conventional oil is only 25% depleted--based on what major oil companies, the Oil & Gas Journal and the USGS think.  Matt said that, in regard to reserve estimates, "I think," is a religous concept.  He asked, what happens if "I think" is wrong.

Matt also said that 70% of the oil producing countries in the world appear to be in an irreversible decline.

You've got to love optimism:

Even as world demand has risen, the 11 cartel members produce barely the amount of oil now that they did in 1977, according to a congressional report prepared last year by economist Theodore Boll of Congress's Joint Economic Committee.
"Crude oil is an abundant resource," the report concludes.

Ask not for whom the Boll tolls. It tolls for thee.
Jeez. She must know somebody. "Energy expert" at Rice University.Is she serious? By her logic, when the world is down to the final 500 billion barrels, if you can pull it out for $5 you should sell it for $15. I wonder how much it cost Picasso in paint and canvas? Hilarious.
Sorry to report we have another spammer - vsdsfd534 has hit 276 older threads.  Assume Super G will sort, 2nd such problem this week.  Tks.


Appropriate authorities have been notified and the guilty party will be taken to the courtyard and a virtual sense, of course. mean we can't just return the favor to the guy??? En masse....
Dollars to donuts, it's not a "guy."  It's a spambot.  A software program that is hitting blogs randomly.  Hence the inhuman screen name and the hundreds of messages posted.  

Maybe it's time to consider adding a "Turing test" to the sign up process.

Well, I guess my sarcasm was totally lost on you, Leanan....but no need to get snippy about it.
My super-robotic intelligence discerns that the Turing test remark was aimed at the spam-bot, not you, GeoPoet.
I was not getting snippy.  I was making a sincere suggestion for the improvement of the site.  
Sorry Leanan...

It's been one of those days where the watercooler chat was on gas prices. I was dumbfounded by the ignorance of several of my oilfield colleagues, and regardless of how much I might try, being arbitrarily dismissed makes me edgy. Shouldn't have taken that as a poke...

S'okay, I understand.

And I assure you, I never thought for a minute that you were a computer.  ;-)


I think Leanan was referring to this kind of Turing test in particular, not the more general test described by Alan Turing. Spambots aren't really very smart.

And again it's proven that humor and subtlety are foreign concept to denizens of the Internet.

Oh well humor does not fly well in normal life in Amurrika anymore either. I'm always observing people trying to tell a joke or be funny in some way and getting met with a stony glare if not an actual offer to get their ass kicked.

Jesus, lighten up.
I'm pretty sure that it is a human being and not a bot. The nickname is "vsdsfd534". Note how all of the characters are clustered on the left side of the keyboard. Also, the comments are left minutes apart. I think that if we were dealing with a computer program, the comments would appear to be either simultaneously or seconds apart. Also, we've had several of these incidents (with the exact same spam content), and in those cases, the username was less "random".

I am collecting data on all of the spammers and looking for a pattern that I can use to systematically shut them out. I'm getting there.


a pattern matching won't help you as much and will be far more time-consuming to tweak as inserting a simple captcha in the posting form.

Spamming bots are plentiful, and captchas are such an easy protection...

Thanks...this site is really useful and we don't want the server clogged with garbage.
A suggestion would be to require new accounts to input 'hard to read characters' when posting for (say) 1st 60 days of membership here.  Lots of sites use such routines which generate a random set of 6 characters in such a way that they are really hard for an automated process to character-recognize.  A bit inconvenient to new members, yes but it would hopefully bar automated spamming processes.
That was what I meant when I suggested adding a "Turing test" above. uses one.  It's only a minor inconvenience, and works well to keep the spambots out.  We still get a few human spammers, but they are pretty easy to deal with.
The word you are looking for is "Captcha".
Even a question like "what color is an orange?" works well and it's pretty low tech (this one is used on

You need to appoint(hire for $$$) the guy an attorney first. =)



I think I know just the guy for the job...
Weird, so do I.



Asia Times has a translation of Ahmadinejads letter to Bush up on their site. He hits them on every single issue, but what probably really irked them was that he "called them out" with respect to Christian ethics....

At any rate, I do believe that all should read it to get the flavor of the man and just so we all know what was really said to this administration.

agreed.  it is very important to correlate the actual document with the statements issued by the administration.  the point raised is that there is a fundamental schism between the actions of the administration and the explanations for those actions.  Ahmadinejad points out that when the US wants to discuss items on the agenda, it must respect that the rest of the world does not subscribe to the Bush administration's 'version' of the world and its events.
it appears that the letter is really an attempt to call BS on all the recent rhetoric, in order to clear the air enough to see if any negotiation is possible.  this is an astute move as Ahmadeinejad sees that the recent 'diplomacy' of the US has been nothing more than issuing inflammatory statements, demonizing opponents, and moving in for invasion.  he recognizes the signs and attempts to curry favor with the american people, as well as the international community, by calling the US government out on a number of facts already recognized by many critics of "B/C/R".
It is very awkward when one realizes that he agrees more with the President of a fascist theocracy then with the President of the most important liberal democracy in the world.

Seriously, reading that letter, the vast majority of which makes a great deal of sense, and then comparing it to the simplistic rhetoric that's currently going on in the US is very unsettling.  

How did we get this far offtrack?

Re:  How did we get this far off track?

I previously put it this way, who among us thought that Americans--especially officers in the US military--would be in the same position as Germans in the Thirties, i.e., faced with the prospect of either following orders to launch unilateral unprovoked attacks on other countries or to refuse to follow orders.

In case anyone for thinks that the "H" analogy is overblown, Seymour Hersh quoted (anonymous) officers in the Pentagon as using Hitler as a description for Bush.  

As I previously outlined, retired Lt. General Newbold in effect suggested that senior US military officers may refuse to carry out BCR's orders, because officers swear an oath to "preserve protect and defend the Constituation, against all enemies, foreign and domestic."  They don't swar an oath to follow orders.  Newbold said that "The distinction is important."

When you're in a banana-republic type regime, the language used to describe such and the actions of such is simply the most effecient way to communicate. I was in a sports organization once as an athlete and it was a very tinpot-dictator setup. So, we spoke in term of "regime changes" and "a new regime" etc., and used other such terms in seriousness because terms used to describe the actions of a 3rd-world dictatorship were simply the most effecient. They were used without irony, presaging the latest version of the Patriot Act which no one of the public has been able to read, but which I'm pretty sure outlaws irony.
the analogy is further strengthened by the fact that Hitler decided to break the alliance with Russia and run the risk of fighting a 2-front war, in order to control the oil fields of the SW Soviet Union and gain a degree of energy security from which to project a platform of global dominance........a cunning gamble that in retrospect was simply untenable.............
This is an instance of the "Argumentum ad Hitlerum."  Whoever coined the phrased intended thereby to identify a new type of logical fallacy, but I would contend that use of this logical technique often leads to perfectly sound arguments in the case of BushCo.
Goebbels would be proud, eh?
French newspaper 'Le Monde' also republished it.  
I was amazed at the difference between what was actually in the letter, and the way it was, for lack of a more viable term, "spun" by the US administration and the MSM in general.
For a further understanding how the supposed extreme, "crazy" comments by Ahmadinejad have been distorted from their reality in recent U.S. and Israeli propaganda, check:
I've posted this image already in older thread. Do you have something like this in the US?:

In the EU, all household appliances have to have such a label, and in the near future, houses and appartments, have to have an energy certificate. This helps people to choose an efficient device.


Yes. Or, well, sort of. The image you have is mcuh more detailed. Here is what they look like in the US:

EnergyGuide labels

Highly efficient appliances are labeled as "Energy Star" products. The exact qualification depend on the appliance. More information here:

Energy Star

Some utilities will give you rebates for getting Energy Star appliances. I would never considering getting any thing else myself, though that is probably just a sign of personal virtue, to use Dick Cheney's wording.
The EU label discourages to buy very inefficient devices, I think that is the main advantage of it compared to Energy Star.


I like the EU label much more, we in Amurikka just have a little star looking thing. But, ineffeciency is our way of showing God has blessed us with infinate oil!

I'm not sure how soon I'll need to buy gas again, but I'm sure I'll pay $3.50 and the cars here in the supposedly enlightened San Francisco Bay area will still be almost half SUVs, vans, and large trucks (the mini-truck, quite popular in the US for a while, has almost disappeared).

Yeah, it seems even the small pickups have gotten larger.  Anyone remember the original Datsun 1200 pickup imports?
More news from Nigeria:

PORT HARCOURT, Nigeria (Reuters) - An executive of the U.S. oil service company Baker Hughes was killed in an apparently targeted attack in Nigeria's southeastern oil city of Port Harcourt on Wednesday, authorities said.

Man, things are getting hairy in Nigeria.

Wonder if this is why oil is up over a dollar today...

I work for a small oil company called Shell, but what I've written below is publicly available in their market presentations this month.

2005 Production: 3.5 mln boe/d
2009 Forecast: 3.8-4.0 mln boe/d
2014 'Aspiration': 4.5-5.0 mln boe/d

Shell senior leaders know this will be challenging, but I think they honestly believe it is possible, even likely that they will achieve these targets. But, I'm on the 'peak is now' side of the fence, so who is wrong?

Given their recent lessons, Shell will not make bold forecasts to the market that they can't meet. They are under immense pressure to forecast growth, but they know their reputation depends even more so on being able to forecast production accurately.

I think they are worried more about how to meet their short-term production targets in 2007 and 2008, and honestly believe that they have enough 'mega-projects' coming onstream after that to meet the longer-term forecast above.

The biggest caveat on the numbers is that they refer to 'barrels of oil equivalent' (boe). So, increasing gas production (and acquisitions) makes it very difficult to discern any oil production trends from company figures.

For Shell, increased oil production is expected to come from Nigeria and Canadian Oil Sands, with other new potential in Algeria and Libya. Shell is also a huge player in Qatar Gas-to-Liquids.

As further evidence that they don't see peak oil, Shell state that the oil services market is over heated. While they know it will remain tight for a year or two, they expect it to cool after that, and are indicating that they may defer some projects accordingly.

Most of my colleagues in Shell are blissfully unaware of Peak Oil, but some of the clever ones, especially in 'sub-surface' disciplines are convinced. I've also pressed a few senior managers over the last year, and it's clear they simply don't believe we're near peak. But, with few exceptions, they are no smarter than the average TOD reader. They live and breathe oil, so it's inevitable that they can only see a positive future - with increasing recovery rates and unconventional oil. And they believe the Middle East has plenty of oil; if only they were allowed in to help develop it.

In the end, big oil companies are just as fallible as the most (in)famous of our politicians - Bush, Blair and Howard or anyone else you care to name. Oil companies are publicly talking up the challenges - especially the shortage of people and remote locations. So, in most cases, I do not think they are blatantly lying, but I do think they could be (very) wrong.

The economists, however, with their profound assertions about high oil prices delivering new production, have no idea what they are talking about!


Most of my colleagues in Shell are blissfully unaware of Peak Oil...

I have had the same experience. I get a lot of "They have been saying that we are running out of oil for 30 years".


I spoke to a Prof of mine who teaches a bunch of graduate economics courses.  He also had a few years experience working in Washington, at the US International Trade Commission, and as the Economist at the Policy Analysis Department at the American Petroleum Institute.

His response to, "What do you think about Peak Oil?":

"What's that?"

Very, very frustrating.  After talking to him about it, his basic answer was high prices will encourage development of comperable alternatives.  Incredibly frustrating.  

Been lurking for a few weeks after finding out about peak oil.  I'm still in college and to make things worse around here I am majoring in finance with a minor in economics.

I've peppered my Econ proff's following my introduction to peak oil and I am met with similar criticism.  My proff's don't care b/c they won't be here to witness.  Most are rather old timers, tenured and not letting go.

If you actually debate the oil problem, economists tend to gloss many theories.  Basic aggregate demand and aggregate supply have so many assumptions, that it creates a parallel universe. I love ceteras perabus...THAT solves it all!  

Unfortunately I am now coming to the conclusion that my own fields have exacerbated our problem.  In addition the economists downplay almost all the hard data.  Even though I continue my studies, I question EVERYTHING I am being taught.  I now have an alternative view of all modern history.

I first learned about peak oil when I was in college, 30 years ago. I read a senate report by Hubbert. From that report I got the impression that peak oil might hit around 2025. Things seem to be moving a bit faster than expected!

Finance and economics might deserve some of the blame for our inability to face reality. But finance and economics are pretty much the foundation of civilization - the oldest written records are financial! What we really need is a better way to make decisions that reflect long range and long term environmental constraints etc. "Way to make decisions" = finance and economics. If you can figure out some new foundations for those disciplines, that could be some of the most important work in the world.

Might be easier to do in an industrial setting rather than academia, just guessing. Unless you can market yourself as a superstar. Academia tends to be very conservative, i.e. slow moving, as you have noticed.

Welcome - you might want to consider changing your major or at least minor in petroleum geology.  But from what you've probably read at TOD the peak oil acceptance rate might be only marginally better in that department...

I think it is Westexas who continually points out that people need to start more carefully considering what they go to school (or not) for...  Be a net producer is how I think he puts it - way too many jobs now that are dependent on discretionary income of others.  I suppose if you're in finance and get in with the right crowd you could be keeping track of their assets while the rest of us work in the fields...  I hope I'm needed for at least a little while - my degree is in hydrogeology - seems like we'll need water just as badly as energy (until some global firm controls the water rights and distribution I suppose...)

Good point!  I never thought about that.  I will do everything I can to be a net producer.  I'm in my Senior Year, so I don't think I'll be changing majors.  I need any piece of paper at this point to advance my career.  I'm pretty stuck right now so to speak.  

It eats at me daily too, because it's like I know what's coming and I can't get out of the way.  I tell others and when someone takes the time to actually listen to me, they are blown away.  It truly is like a total ephinany that so many others have already experienced.

I am reminded of an exchange I had a number of years ago, with   an aquaintance who was finishing his PhD in Econ from the University of California, with a dissertation on the German hyperinflation of the '20s.

I was very interested, and asked him about the relationship between the Versailles treaty (which ended WWI, forced German into war reparations to France and England, which used it to pay off the US banking system, which turned around and loaned it to the Germans to pay off the French....

I probed around a bit, and was dumbfounded to discover that he  had never heard of the Versailles treaty, and knew nothing of the historical underpinnings that created the situation his dissertation was based upon (!) I guess he was designing a series of equations to describe it, or something. IT's hard to imagine that it had much value to anyone, but since that was 20 years ago, I wouldn't be surprised if the guy's teaching university level econ somewhere.

I've been suspicious of economists ever since.

When I first got on the Internet, I debated economics in the newsgroups. So many were so full of solid bull emissions that when I come across an MBA I consider them a "master bull$%#^ artist"!

A classic is the bit of an economist saying there is no inflation in housing if the square feet of houses grows in lockstep with prices. I point out that once the price gets unaffordable all the floorspace in the universe becomes a moot point. They never get it. Similarly, car prices rise as they get nicer with more amenities. But the side impact airbags and ABS brakes are moot when you can't afford it. When ALL houses are built as big as hangars and you can't afford it, you are still priced out of the market. Duh! It's like MBAs are indoctrinated in a religious cult of bull emissions.

You're completely right.  The CPI is a horrible indicator.  My favorite is the subject of computers.  They actually consider computing power in terms of inflation.  If you buy a computer for $1000 one year, and, just to keep with Moore's Law, two years from then you buy a computer twice as fast for $1000, they consider the price to have deflated because your paying 50% less in terms of computing power.  This disregards obsolescence of course.

Who knew the old Apple II that I have packed away in storage was so expensive in terms of real price...

So what do you use in place of the CPI?
Even the old way of calculating CPI would be better.  That whole "hedonics" thing is just ridiculous.  Basically, the CPI now is a scam to keep the government from having to pay COLA.
I guess my question was an attempt to get a grasp on what we are talking about. If we used some other standard to measure inflation, what would that method of measurement show us about both recent historical and current inflation? Would it show something completely different from what we actually see? My personal view is that how people feel about these numbers, very much like how people view unemployment numbers, is heavily politically influenced. That is not a comment about yours or anybody else's views, but rather an observation formed by years of talking to people about these numbers. I can expand on that, but I'll await further input.
If we used some other standard to measure inflation, what would that method of measurement show us about both recent historical and current inflation? Would it show something completely different from what we actually see?

Yes, I think it would.  It's been discussed here before.  Puplava's The Core Rate, and that guy who uses the old ways of calculating economic statistics, so we can really compare them to the numbers in the past.  Inflation is much higher than the CPI shows, if you use the same method of calculating it as they used in, say, the '70s.

Besides Puplava, noted economic historial Andre Gunder Frank also raised quite a fuss over the fudged CPI numbers (and others) before his death last year.

Remember that first and foremost, "true inflation" (referred to as monetary inflation) is an increase in the money supply. This includes: the increased printing of fiat currency, any bank loaning money it does not currently have possession of (either to another bank, a country, or an individual), and simply by paying interest on these loans with money that has been printed for this purpose.
From this perspective, a simple approach would be to compare the amount of money in circulation today, vs. any point in the past you use as your origination point, or benchmark. Unfortunately, the Treasury Deparment's decision to no longer publish the M3 monitary index makes this harder in the future.

Alternately, you can look at the change in cost of commodities which have not fundamentally changed, in relation either in utility (such as a postage stamp, dental crown, or ice cream cone), or in substansive need (such as an average sized American home or a gallon of gasoline).
The grandfather report makes a compelling case for this approach, here:

From a gold bug perspective (which I am not, btw), one could argue that you should compare the cost of goods and services today with what they cost in the past, in terms of precious metals. Good sources of info along these lines include:
Just ignore the "invest now" ads, the rest is comparitively sound economic analysis.

Just a correction.  It is not the Treasury who defines the money supply, but the Federal Reserve, a private for profit bank.  I think it is worth noting.
Ah, quite right, and it is the Federal Reserve (not the Treasury Dept.) that publishes the numbers.  
Thanks for catching that.

I have often wondered just who holds the various Class A shares in the Federal Reserve Bank.....

I just took Banking & Econ theory.  What I got out of the reserve's a private bank that hasn't been audited EVER!  That should scare people, but alas it's ok by everybody but me it seems!

In addition they make so much cash that they are indepedent of any federal agency oversight.  There is no one that can stop them from getting paid, ITS A PRIVATE BANK.  The fact that one strong powerful, private bank controls the money supply should scare enough, but it doesn't.  Everything about the FED is secret...not to get to far off, but there is some interesting HARD data on gold manipulation by the FED.  When taking macro economic factors into account, it would have made sense to keep the value low in relation to the dollar!

Now the chinese are buying up massive amounts of gold.  There's so much liquidity in the current markets, that the true M3 money supply would probably make everyone faint.

The reason Americans have a negative savings rate is because real wages have been dropping for most of the last 30 years. A working family may start to put away a few bucks but as soon as someone gets sick savings go to pay deductibles and copays. It's even worse if it's the breadwinner who gets sick.
Interesting enough...happiness peaked more than 30 years ago back in the 60's.  
How do one measure happiness?
This might be a start.

Consider this:  People (aggregates) who live in poverty in this country, live in a home with either a/c and/or heat.  They have this year round in most cases.  They also have food, clothing, & water.  I used to work in a sleazy industry that milks welfare cash from these people further.  I'm talking about rent to own.  These "poverty" stricken people have big screen TV's, microwaves, furniture, & telephones to talk to whoever.  

Now tell me if those people in poverty are happy.  I would argue that their "quality" of life has improved, but they are not happy people.  

These guys study it:
The National Opinion Research Center.
More here:
OK, so next question. If we accept the notion that we are inaccurately calculating inflation in the United States, how exactly does this effect money, the economy, people, the nation, society? In other words, why should one care? What are the risks of the policy of using one method versus another?
That's a harder question, Oil CEO, and one that I only loosely comprehend. But I'll take a stab at it.

Simply (simplisticly? simple mindedly? lol!) put, intentionally manipulating or mistating such key economic data would give an inherent advantage to the controlling interest in the same said entity, in that it allows them to, in a sense, manipulate economic fundamentals related to the same entity.  In the parlance of Adam Smith, it allows the sending of false or misleading market 'signals', and the disguise of true market 'signals' by masking with 'noise'.

Enron, Worldcom, and the like used similar approaches, to leverage an advantage that did not actually exist, pump up the apparent worth and strength of their companies, and then use this to leverage other advantages.  Pump and dumpers use similar tricks. Think of it as a 'confidence game'.
How often, in your own personal experience, has perception of an issue been as important, if not more so, than actual fact?  

Deliberate control of inflation is a useful economic tool.
Manipulation of the perception of the same said factors is equally useful, for the same reasons outlined above. Such is the basis for the field of advertising.
One of the most obvious benefits of this understatement of inflation is reduced COLA payments (which are tied to the reported CPI), as government spending now makes up 44% of US economic activity, an reduction in expenditures in this area results in substantial dollar savings.
There are obviously other advantages, such as propping up the value of the US currency as much as possible, and in encouraging the "faith" in the world reserve currency, the $USD.

Here's some further reading material:
"On the Manipulation of Money and Credit" by Ludwig Von Mises (a whole school of economics is named after this man)

One other point.  From an Economist POV, their are two inflation indexes because Energy & Food (the two key pieces missing in the CPI) is viewed as too volatile.  Economist like to smooth things out, so they distinguish between two different kinds.  Basically pay attention to the higher number b/c it is the "real" inflation that households are forced to deal with.  
I would assert that both are fudged, especially the so-called "core rate".  
Even the notion of discounting or ignoring inflationary effects on food and energy (because they are volatile?!?) smacks of idiocy.  Food and energy costs make up MOST of what an average person spends money on, in any given month.
Groceries? Check!
Fast Food/Take Out/Eating Out? Check!
Gasoline? Check!
Electric bill? Check!
Heating bill? Check!
Water bill? Check! (yes, that's mostly pumping and sewage treatment costs)
Transportation (such as bus fair, train tickets, air travel)? Check!

What exactly, on a monthly basis, does that leave?
Clothing, housing, and....what, exactly?
Even clothing and housing have an element of energy costs in them, thanks to manufacturing and transportation costs (amorticized into their purchase price).

Your preaching to the choir!  I agree totally, but I'm just pointing out that differences between CPI and real inflation.

In the end only one thing matters.  Not understanding which one is accurate is simply more control of your perceptions.  It does reak of idiocy that we would exclude energy and food.  But to uninformed people they prefer to hear everything is safe and doesn't that lower number SOUND better?

You should look into the Jay Hanson theory of economics. Basically it's like astrology. Back in the day (medieval day) the king would hire an astrologer to justify his self-interested behavior. The astrologer would go to the people and say, "Well the stars say the king is the best. . ."

Economists are the modern day equivalent.  That's not to say it's total bunk, but that it's primary role in our society is to justify the pursuits of the wealthy and powerful.

The economists have to ignore hard data and real life just like the astrologers do.



Some of the hoops the quants jump through are amazing given that the models only lika sorta work and then only part of the time. There a several [I suppose respected by some] market forecasters including Arch Crawford and I believe the Aden Sisters who base forecasts on the alignment of the heavens.

All things considered, I would sooner gaze at the entrails of a chicken than read / listen to an Alan Greenspan speech.

I cannot help but be reminded of the old adage -
When you are a hammer, everything looks like a nail.
Part of the reason St. Jimmy of Plains Georgia does not rank as any sort of hero in my estimation. The message of the parable of the boy who cried "wolf" was not that there are no wolves, but the that warnings absent facts [e.g. an actual wolf sighting] are not helpful. If Jimmy had just had the sense to focus on what was foreseeable 15 to 30 years in the future, the world might have been a lot better off.
Hello RWR,

I assume you are talking about former Pres. Carter.  His famous sweater speech predicted almost exactly what is happening now-- He just easily extrapolated what Dr. Al Bartlett taught using exponential equations!  Here is a link to Carter's Speech [feel free to compare with today's news]:

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

Howdy Bob.

We may just have to agree to disagree on this one. James Earl Carter overstated the case in general. He wasn't far off on North American natural gas, but IIRC he had the world running out of oil [not peaking] fifteen years ago. Fifteen years is not a gnatt's posterior in geologic time, but it was not acceptible analysis for a political or economic movement. The projected end of oil was so close and unlikely based on an analysis of the facts that it was in no way helpful to the cause of preparing for peak oil.

In short, JEC cried "wolf." If he had limited his wolf sighting to natural gas, and talked of a "peak" in oil circa 2000 he would have been part of the solution.

His objectives may have been noble, but the result was one more cry of "wolf!"

Matt Simmons used Shell as an example this morning of the problems with reserve estimates.  He said that a couple of years ago, Shell thought that they had 21 Gb (perhaps Gbe); they now think that they have 13 Gb.  

My favorite example is the North Sea, where the majors, using the best data, best engineers and best technology available, couldn't see the peak coming, while the humble little HL technique was dead on correct.

"2014 'Aspiration': 4.5-5.0 mln boe/d"

Should be easy to achieve if they buy the right companies.

Exxon and BP??
In a previous thread, it was mentioned that BP, among all the oil majors, had increased its reserves, primarily through acquisitions, rather than increased production.
You mentioned it yourself - acquisitions would seem to figure in their plans to increase the "boe" figure.

So, can Shell increase their production, even when all the evidence is that glabally we are at peak (or at leastat plateau)? Yes, but only by buying it up at source.

'2005 Production: 3.5 mln boe/d
2009 Forecast: 3.8-4.0 mln boe/d
2014 'Aspiration': 4.5-5.0 mln boe/d'

There is another possible aspect to this. If institutions know that things are going bad soon, what does it matter what predictions they make? If there are real oil supply problems, say in 2008, who is going to remember/care what was said?

it's really weird to go for a four mile walk, to starbucks and the market, and then come back to read this stuff.  i saw some small signs of change (scion xb's used as industrial (micro) vans, by a courier service and a interior plant care company), but for the most part it was driving as usual.

(while i was at starbucks i read that a local investment company sees a 'soft landing' for our real estate ... how nice.)

Couple points.

I posted about the ecomomists link (Hotelling) in The Extraction of Exhaustible Resources a while back.

Glad to see people quoting the Asian Times. I often cite their articles. They're the best source I've found on what's happening in Asia. They've been saying for months now that the US is getting its ass kicked in Asia. The Russian & Chinese alliance and the Gazprom monopolistic practices are the source and origin of Cheney's incredibly provocative, self-defeating remarks in Vilnius. Sorry, Dick, you can win this one and you can't invade the Caspian region.

I had a one on one with Jim Kunstler last night. You know, he gives one hell of a speech but when you just sit down and chat with him, it's a different story. He's an off and on reader here at TOD.

Obviously should read "Sorry, Dick, you can't win this one....

Just an additional thought. Both Kunstler and I agreed that 2006 would probably represent the tipping point I've been referring to lately. Of course, we could be wrong but the inexorable unfolding of events lately seems to be making peak oil a bit more main stream. It can no longer be ignored.

I hope TOD gets more traffic and the attention it deserves.

Hey, we've got spambots now. Definitely getting more popular.

Just a little historical note: Vilnius is the site of the largest mass grave of Napoleon's Grande Armee, with which he launched a disasterous attack on Russia in 1812.
Those who do not study history are doomed to repeat it.

Dave, the "tipping" point you and Kunstler speak of seems remarkably close, given the links at the top of the page.

I presume the new Russian ruble oil exchange will pave the way for everyone else to make their own local currency dominated commodity exchanges. Col. Karen Kwiatkowski (who worked in Douglas Feith's office of special plans), thought the primary reason we went to war was because of Saddam's plans to price oil in Euros. But if the Russians do it, the precedent is set, and the dollar will be in trouble.

The other relevant link, to Asia Times, was brilliant. It inspired me to write my monthly letter to the editor, which I send to the papers in my county, and the main ones in the state. They publish about half the time.

Dear Editor:

The Bush administration is presiding over one of the greatest foreign policy catastrophes on human history.

When Bush took over, most of the world was composed of a political, economic and military hierarchy, with the US firmly at the top. The U.S. was the most powerful, most all encompassing nation in history.

Now our nation is nearing bankruptcy, our army is completely mired in Iraq, and the rest of the world is beginning to unite against Bush. Even Britain is backing away, leaving Israel as our primary ally in the world.

Bush is an out of control gambler and alcoholic. He is having a very bad run of luck, but he continues to double down to win back his stake -- unfortunately the assets he is blowing through are not his. They are ours.  

It is truly sobering that Bush has nearly three more years in which to gamble away our nation`s heritage and assets.  

Jim Burke

Last month I sent the following letter, "three reasons not to bomb Iran."

I want to thank TOD people for providing the info on Russian anti ship missiles, which Iran can clearly use to keep tankers from using the Straights of Hormuz in the event of a war.

Dear Editor:

There are many possible objections to waging war on Iran. Here are three.

1) War with Iran will inexorably merge with the war in Iraq.

Iran has been instrumental in keeping two-thirds of Iraq -- the Shi'ite portion -- relatively quiet and peaceful. Once war is waged on Iran, Iraq will explode and our ground forces will be swamped.

2) Iran can easily stop nearly all oil exports from the Persian Gulf region.

Oil tanker traffic from the Persian Gulf must go through the Straights of Hormuz. Tankers are slow, huge and highly flammable. Iran has purchased large numbers of portable, fast (mach 2.5) and accurate anti-ship missiles from Russia. All they have to do is declare that trespassing oil tankers will be sunk, and what ship owner or crew member would want to commit suicide?  

    Without Middle Eastern oil, the global economy will grind to a halt.

3) Iran has a large terrorist network which can be unleashed against us.

They have not used it much these past several years (they hate Saddam and al Queda far more than we do; so they have sat back and watched us assault their enemies). But once war is begun, they have no reason not to unleash it on American interests around the world.

Bush has the ability to inflict enormous suffering on Iran. It is clear that Iran (unlike Saddam) has the ability to inflict suffering on the US.  

Jim Burke

A fourth reason is "Custer syndrome": the uniting of the whole Middle East to shut the valve.

If BCR has half a brain after pooling what brain cells they have, they would pick an easier target: Venezuela. But doing so is real inadviseable. Here's why:

Attacking Venezuela will "succeed" in that its military is crushed, but they'll shut the valve including by sabotage of oilfields. (think of Saddam's oil fires)

Attacking Venezuela will only rile up the rest of the Latino world, making it as unstable as the Middle East. Given Colombian drug gangs, guerrilla fighters, and other insurgents, it'll be easy for them to be a bunch of new "Hispanicist" terrorists. With our Mexican border being all but open, the Hispanicist terrorists will get EASY entry - and escape notice until it's too late. We can profile an Ahmed, but there are too many Pedros for a Hispanicist terrorist to camouflage with.

Attacking Venezuela AND Iran could cause the two groups to do a merger of convience a la Custer. With Custer, he lost against 7 tribes who normally bickered between each other. Custer united them against a common enemy until Custer was vanquished. Then they resumed bickering!

BCR painted themselves into a corner. No matter what they do they lose - even if they do nothing. By doing nothing, they embolden the two oil bullies and Iran get its nukes. Any attack opens a Pandora's Box of terrorism. Wait too long, and terrorists can get a nuke once Iran is attacked. Even vanquishing the two bullies doesn't work. Destroying Iran and Venezuela shuts the valve by default. Since the only ways to deal with bullies is avoidance and vanquishment and neither will work, BCR is screwed.


   Hispanics are not as cohesive as muslims when threatened. Shiites and sunnis hate each other but they hate us much more.  The populations of South America are very much American drinking Coca Cola and dreaming the american dream.  This populace is not determined to jihaad against the infidels.  It wants to be more american. If (and I'm not suggesting it at all) we crushed Venezuela's army the people would probably be OK with it.  Police and Military are disliked there.  I don't see terrorism from latin america as a threat and our southern border can be shut on a moments notice. The current administration prefers it open for business but it is easy country to snipe.


Dream on.
Police and military are unpopular when they do the US bidding.
Kinda like sitting down with Senor Cardgage eh? "See if you can stand to talk to me for more than 4 seconds".

I like his blog ok but I wish he knew the difference between the words essay and assay.


The blogpost

Has a recent posting with a couple of excellent diagrams (in English and click able for improved viewing) illustrating how oil production in Norway now is declining.

One of the diagrams illustrates how fields starting to flow post 2001 partly have offset the declines from the mature base. The mature base, is in the posting described as those fields that were flowing prior to Dec. 31 2001, have experienced accelerating decline rates that presently is documented to total between 12 and 15 % year over year (second diagram). The diagram for the year over year decline rates also includes a 12 MMA smoothed curve.

Norwegian oil (regular) production peaked in 2001 at 3,12 Mb/d.

Preliminary data from NPD (Norwegian Petroleum Directorate) puts production at 2,22 Mb/d for April, lowered mainly due to scheduled maintenance.

Both diagrams are based upon the latest published NPD field-by-field data.

Profiled energy analysts, like Matthew R. Simmons, have for a while predicted this would happen to fields that have applied the latest "state of the art" technologies assist drainage.

As of now it is hard to tell if this accelerating trend of production declines will continue into the future.

It is the prediction of the decline rates that makes it challenging to predict the down slope from the "Peak", which also Hirsch so elegantly has expressed.

Noticing the posts about Shell aspirations to grow output, the decline rates in Norway may serve as an illustration of the challenges facing oil companies.

This makes one wonder what shape the initial down slope for global oil production will look like; a smooth decline or more like a wave crest?


This is my second post. I've been reading about peak oil for a year now. I appreciate everyones input, analysis, and comments on this site. I've sold my house in Florida, live on my 65 foot utility boat(ex oil field), and do various ocean jobs. I believe change or awareness will not come without pain in this country. I talk to people about peak oil and largely they don't want to hear about it. I convinced my brother and his wife to sell their house in Mass. and we are looking to build some monolithic domes off the grid. We spent the winter looking at land in the Bahamas. Now I am headed to Honduras, and Panama looking for the right property. In an attempt to look into the future, I suspect the U.S.A. will be hit the hardest by peak oil. I also wonder about the safety in third world contries as the world economy melts down. Any thoughts about a future safe place in a changed world?
Costa Rica. Keep your money in the Caymans.
i haven't looked at this seriously, but costa rica seems like the place to me.  and coffee is a local crop ;-)
If you have specific questions re:Costa Rica, I'll try and help. We bailed on our cube drone jobs and moved our family here two years ago. We have a real democracy down here, access to good affordable healthcare, and where we are the temps stay between the 50s and 80s year round. Currently living in a valley at 1051 meters above sea level. The bus system where we are is superb. There are about 9000 people living around my small town yet we have 40 daily buses each way, the first at 0430 and the last at 2230. Costs less than a buck and little more than an hour to get to the capitol city, San Jose. My daughters, 12 and 16, are already fully bilingual, despite not speaking Spanish when we got here.

The downside is it's very difficult for a foreigner to get a job down here, so most of us operate small B&Bs or restaurants, teach English, or work for ourselves over the internet. Work will be easier if we are lucky and obtain permanent residency in a year or two, which we hope to do.

What town are you near? I have visited Puriscal,San Ramon,Grecia, Aluejua and a few others.
I am in Orosi, south of Cartago. It is a rural area, with coffee, fruit, and vegetable farms.
Nice place.
Thanks for all the above comments. I would like to dialog more about Costa Rica.
A lot of the monied, Hollywood types (Woody Harrelson and Arnold Schwarzennegar comes to mind) have invested in Costa Rica over the last decade and a half, bought vacation homes down there, even started side businesses.  It seems to be an up and coming hot spot, for sure.
Feel free to email me off list.

Hi Boat Bob.

Just a recollection.... back during the 1970s I remember reaeding that a group of Bahai's in Northern California decided that nuclear war was inevitable, and were "scientifically" researching the globe for places to survive it. Their criteria was that it had to be in the Southern hemishere (to avoid fallout), it should be English speaking and with a strong democratic tradition (so they wouldn't jump out of the fire, just to live under tyrrany in a strange land), and it should be a relatively small island (so as to reduce the chances of invasion post nuclear war).

Very logically, they moved from N. Cal to the Falklands Islands, about 5 years before the Argentinians invaded and occupied it; after which the Brits landed and reconquered it.

I guess that goes to show you something or another....


Boatbob -

Unfortunately, there are no 'safe places' anymore.

The world has become so small that the chaos from one place eventually gets widely distributed all over the world in one form or another.

Furthermore, if you are an American, then any place outside of the good 'ol US of A is going to be pretty dicey when (not if) the proverbial shit hit the fan. It's sad, but some people I know who were traveling recently, tried to portray themselves as Canadians rather than Americans. They were too embarrassed to admit they were Americans.

I personally would not want to be living in any foreign country if the US starts a major war over Iran. It's always the 'auslanders' that get blamed for trouble.

Nor would I want to be living near any major American city when THSHTF.  Possibly going rural might be an answer, but going that route has its own set of problems.

No, I'm afraid that in this day and age there is no Shangri-La that one can excape to. There IS no escape, so just hang on and try to make things better.

We were vacationing in Costa Rica during Shock and Awe of 2003 (being out of the country then is what convinced us that we wanted to be ex-pats). I wore my American apology tee shirt that has "My president is an idiot. I did not vote for him" in five languages, and wore a few Peace buttons. When I noticed people looking at us, I proactively explained to everyone, locals and tourists, that we did not support this conflict and had done everything we could including going to numerous DC rallies to try and stop it before it started. They understood and were sympathetic to our situation. People seem to find it very easy to separate the actions of a government or a military from those of ordinary citizens. So far, the rallies that have taken place here have been anti-war, anti-Bush, anti-globalization, pro-peace, and pro-union, but not anti-American. Ex-pats sometimes participate in these things. I don't know what would happen if we use nukes though.

Most folks here were dumbfounded when W was re-elected though, but then again, who wasn't.

If we start another war or two, I would much rather be here than Alabama, where we used to live.

Joule said: "It's sad, but some people I know who were traveling recently, tried to portray themselves as Canadians rather than Americans. They were too embarrassed to admit they were Americans."

I'll admit that I've been doing that since the 1980's, Joule.

You know.. I'd try that, except I'm horrible at accents, so they'd see right through it.  I, unfortunently, have a slight Texas accent, so I'd sound like a Texan attempting a bad Canadian accent.  And if there's group that Europeans dislike even more than Americans are Texans.
I just finished listening to the latest Matthew Simmons interview on Financial Sense Newshour.  This is a very good discussion on current events and Mr. Simmon's latest take on world events, the Canterell field decline and much more.  You can listen to it here:
From the Asia Times story, which is pretty scary...
"Now it is taking on the dimension of what 'one former US defense secretary' rightly calls a "geopolitical nightmare" for the United States."

Which former secretary would you guess this is?
-Matt, dc

I don't know if anyone else had posted a link to this or not, but it's a superb analysis of just how badly the NeoCons have screwed up internationally.

A few quotes:

The SCO and Iran events

The latest developments around the Shanghai Cooperation Organization (SCO) and Iran further underscore the dramatic change in the geopolitical position of the United States.

The SCO was created in Shanghai on June 15, 2001 by Russia and China along with four former USSR Central Asian republics-- Kazakhstan, Kyrgystan, Tajikistan and Uzbekistan. Prior to September 11 2001, and the US declaration of an Axis of Evil in January 2002, the SCO was merely background geopolitical chatter as far as Washington was concerned. Today the SCO, which has to date been blacked out almost entirely in US mainstream media, is defining a new political counterweight to US hegemony and its `one-polar' world.

At the next June 15 2006 SCO meeting, Iran has been invited to become a full SCO member.


US out in cold in Central Asia

The admission of Iran into SCO opens many new options for Iran and the region. By virtue of SCO membership, Iran can now take part in SCO projects, which in turn means access to badly-needed technology, investment, trade, infrastructure development. It will have major implications for global energy security.

The SCO has reportedly set up a working group of experts ahead of the June summit to develop a common SCO Asian energy strategy, and discuss joint pipeline projects, oil exploration and related activities. Iran sits on the world's second largest natural gas reserves, and Russia has the largest. Russia is the world's second largest oil producer after Saudi Arabia. These are no small moves.


In the space of 12 months Russia and China have managed to move the pieces on the geopolitical `chess board' of Eurasia away from what had been an overwhelming US strategic advantage, to the opposite, where the US is increasingly isolated. It's potentially the greatest strategic defeat for the US power projection of the post World War II period. This is also the strategic background to the re-emergence of the so-called realist faction in US policy.

Hello Karavans,

Yes, hopefully this global realignment will ripple back to the US and a huge push for 'No thanks--I like Empty Tanks' will grow preventing the '3 Days of the Condor' scenario.  A brief comment about the growing numbers of riots in Third World countries over energy blackouts: because their food supply is mostly grown locally, they can 'afford' the luxury of rioting against infrastructure.  America is the opposite:  long before we experience rioting against the electric utilities, we will be looting the grocery stores and food warehouses because our food supply is not localized.

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

100 million gallons of BioDiesel coming to the Washington Coast.

After a morning presentation to the Port commissioners and an overflowing commission room, the Port and John Plaza, president and founder of Seattle Biodiesel, signed a 25-year lease to build a biodiesel production facility on 12.6 acres of Port property at "Old Slip 1" near the former Shaw Boats building off Port Industrial Road.

The company -- Imperium Grays Harbor (like Seattle Biodiesel, a subsidiary of parent company Imperium Renewables) -- will build a $40 million facility that will produce 100 million gallons of biodiesel annually, making it the largest biodiesel facility in the nation, Plaza said.

He said the plant will produce 50 direct jobs plus 250 to 350 construction jobs and "using the Port's job figure analysis of seven indirect jobs to each direct, another 350 (trickle-down) jobs."

The facility will include a production plant from which the company will take imported virgin food-grade oil (from crushed soybeans currently, but canola or any vegetable oil is possible) and turn it into biodiesel by using methanol to extract the gylcerines from the product.

lordy,lordy...will wonders never cease?..on the op-ed page of the wall street journal (yes, virginia, i did say the op-ed page!) today is an article by John Deutch, former undersecretary of energy in carter's admin, c.i.a director,etc.
his article titled "Biomass Movement" actually disses ethanol as a fuel substitute.. when talking about EROEI without saying it, he states:
..."Thus,one gallon of ethanol used in gasohol displaces perhaps one-third of a gallon of oil or less....Surely, it is worthwile to look for cheaper ways to eliminate oil."

i don't think RR will get a debate from this guy.
Indeed.  Good find, Steverino.
Put Deutch and Warren Buffet on RR's panel.
The "formers"

Too bad they have no say in our country's future.
Damn do we need a new federal Governmant and quick!


At my office, we still haven't finished with repair and cleanup from Rita/Katrina. We were wondering today if this strom season would wipe out the damaged platforms so we wouldn't have to spend money removing them.

Got this link from a friend of mine who has no link to the oil patch - in fact, he lives inthe Caymans. But he saw this and it definitely got his attention:

I wonder what exactly this means for the coming season...??

If the Gulf Stream is slowing down, more heat is staying in the tropical regions, thus stronger hurricanes, and less heat is being transferred to the UK and Northern Europe (same latitude as Siberia), thus colder winters in the UK and Northern Europe.  
God...I hope anyone that can move out of "Hurricane Alley" is doing so now.  You would have to be INSANE to stay in New Orleans this summer.  I do not think it will be pretty in the Gulf this season.
You would have to be pretty insane, or rather desperate, to drill for oil in there. Oh, wait a minute.
Heading back there in a few days from DC and the conference there.

A disaster zone with limited medical care, limited fire protection, and two days/week postal service; but still a FAR more livable city than most of Suburban America.

We have a large amount of "social capital", i.e. love for our unique city, and will struggle on.


New Orleans has an amazing culture and population.  Unique to the US.  I did not mean to imply otherwise, but with forecasts like I've seen for hurricanes in the next decade, I would seriously have to rethink any plans to stay in an area that may be repeatedly struck by > Cat 3 hurricanes year after year.

It is exactly my concern for the unique people of NO that I would like them to get out of the "bowl" and move to higher ground.  But, I know how much people are tied to "home" too.  Those that have survived in NO are shining examples of what we may all experience in the near future albeit for different reasons.  We can all learn from the good and bad stories of survival in the Big Easy.  

One of the most important is that we will not be able to rely on the federal government to save us.  It will take local cooperation and organization to weather the coming storms.  

I appreaciate your sentiments, but New Orleans can only exist "in situ".

I shudder to think of what a reconstructed, FEMA directed, new New Orleans would be like.  Much "improved" no doubt !

I, and MANY others would never move there !

I have seen the best examples of New Urbanism in person and displayed during the ~90 hours of planning workshops I participated in.  The best examples are FAR short of the Old Urbanism that I live in.  And with the influence of oil money in the political process, I doubt that we would even get the pale shadow of New Orleans that relocation might promises.

The cost of the lost infrastructure is immense and is MANY times higher than the cost of 1) building Cat 5 levess and 2) rebuilding our wetlands.

We have several hundred million tons of silt each year that can be "sprayed" around the wetlands and build them up, even if the sea level rises.  Just divert a portion of the Mississippi each spring and new dirt will be added.  Unlike other coastal cities, we have this defense ability.

We had been pushing for this for decades, and got the first funding a few months before Katrina.

The cost of Dutch quality levees (multiple layers of defense, 10,000 years mean time between failures) is perhaps 1% of the cost of rebuilding a lower quality New Orleans in an economically nonviable site.  Sewers, water, roads, houses, schools, railroads are not cheaply built !

Just relocating the railroads would cost more than Cat 5 levees in all probability.  (We have the world's busiest rail bridge over the Mississippi, several billion for that bridge and miles of elevated approaches alone. The Huey Long Bridge and approaches is an immense steel structure with tracks in both directions).

If this was an average American city, we could move to another average American city or cities.  Little of value in the average US city, so no loss in going to another fungible city.(other than spending 30x more to build new vs. rebuild)

Just give us half of the offshore oil & gas royalities and let us do it ourselves.

"Just give us half of the offshore oil & gas royalities and let us do it ourselves."

I agree...or all the money FEMA received to "assist".

Good luck this summer.  I will pray to Neptune to keep you safe.

And yet, the Dutch people I've seen posting here and at all seem to accept that global warming will make their dikes useless.
Dude, New Orleans has a humdinger of a viable site to relocate to: anywhere along the river upstream.
The image from that story needs to be reprinted here.
Here is the most recent nighttime SST anomaly for hurricane alley as observed by satellite NOAA-17. The scale may be cut off on some monitors. The Texas coast looks about 2 degrees celsius warmer than usual. The waters around the Lesser Antilles look about 1 degree warmer than usual. In potential good news for the rest of the East Coast of the United States, the Atlantic Ocean northeast of the Bahamas looks to be about 1.5 to 2 degrees coole than normal.
I was wondering if anyone read this yet?
I may be wrong but my gut tells me that the educated one, the responsible one, the articulate one and the one with vision is not the addressee?
The intended audience is clearly not Bush, but the American people.  The themes througout the letter are similar to those being expressed by the disgruntled masses in the US, and the clear aim is to garner sympathy for Iran's plight among citizens of western countries, particularly the USA.
It's working.
A few years ago The Sneer stated that "the American Way of Life is non negotiable."

Well, Arundhati Roy explains why it will be negotiable in very clear terms in this documentary

And make sure you've paid your fealty to Bill Gates because there is not a Quicktime file. (Quicktime-readable files actually seem to be the standard outside of the Evil Empire, er, I mean God's Country, the US, while in the US the standard is .avi files, readable only with Bill Gates' Windows, which everyone in the US bitches about but still stands in line to pay for and to hand over all their personal information to.)
aAnd make sure you've paid your fealty to Bill Gates

from Freebsd's ports collection:
avifile-0.7.41_1,2|usr/ports/multimedia/avifile|/usr/local|AVI player/converter
 with numerous codecs, including MPEG-4(DivX ;-))|/usr/ports/multimedia/avifile


Google has just released another product called Google Trends. I punched in "peak oil" ... search volume appears to have hit its own plateau but news volume is on the rise.

Check it out

If you look closely, the "peak" in the search volume category comes right at the time of Katrina/Rita crisis.
What is especially fascinating is the results by language, with swedish coming a strong second behind English. I doubt it is a coincidence that the country with the highest knowledge of Peak Oil (Sweden) has the most forward thinkng policies (their goal to be 100% renewable energy by 2020).
OK I've been having fun playing with this :)

What is really SOBERING though, is to compare search and news volumes between 'peak oil' and 'gas prices'. 'Peak oil' hardly shows a blip compared to 'gas prices', which implies to me that most people are still not making the connection.

Peak Oil vs Gas Prices

Again, check the distribution of languages - in English 'gas prices' have far, far more results, but the Europeans seem to "get it", with 'peak oil' having more responses in Swedish, Finnish, Dutch & German (in that volume order).

even further, New Zealanders search for "peak oil" more than Americans do, not percentages, but in raw freaking numbers!

Yeesh, if only we were that aware percentagewise (and did the Haka with a quarter of the verve...)

yeah, I am front paging this.
Hello Stiffpicken,

I wonder if Portland and Seattle being so high on the list has to do with the growing secession movement:

and of course a lot of other google links.

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

Speaking of power outages, yesterday morning my regular coffee shop was out of power. It was a block-wide outage, perhaps related to the major construction going on nearby, perhaps just some other random failure.

When I arrived the power had been out for 45 minutes. Of course the espresso machines were out, but they still had some drip coffee, plus ice coffee (which is recycled drip coffee from yesterday).

It was fascinating to watch people's responses! Wow... all I can say is "It ain't gonna be pretty!" I managed to get a cup of drip coffee and settled in to watch the endless stream of bewildered customers ("Why's the store so dark? What? Wha...?") and watch the interactions.

All the regulars were totally understanding, but you knew they weren't happy. There were quite a few people who seemed to lack basic social skills when confronted by the situation, and some were downright rude, just frowned and/or said some expletive, turned on their heels and left.

While I sat and drank my coffee the drip coffee ran out completely, and now it was basically ice coffee and ice tea, that's it. Even more unhappy people.

When massive powerdown becomes mandatory rather than exceptional, when people don't have the option to toodle a few blocks away to another coffee shop, things are really going to get hairy in America!!

Assuming coffee gets shipped from Costa Rica in the first place :-O
I have been reading this blog for four months now and marvel the extent of masochism of the majority of american contributors. I think TOD lacks a bit of healthy american nationalism.

Russian reader.

It's definently learned helplessness.  
   I think a good portion of posters here wish the worse.  They want society to fail as their own lives have.  Peak oil is a real problem.  America faces it alongside the rest of the world.  I am an optimist and love the US but I do believe the next two decades will be difficult. Under no circumstances do I expect an apocalyptic future.  Americans are resourceful and will be making moonshine and burning hybrid poplar before they give up and die.  
   Where are you in Russia?  In 1994 I taught economics for a summer in Rybinsk.  I toured through Moscow, Uglich and Yaroslavl.  Beautiful country, beautiful girls it was a great summer.  
That's like talking about Armin Meiwes' healthy appetite ...
I think TOD lacks a bit of healthy american nationalism.

'nationalism' would mean supporting GW Bushes goals.  'Nationalism' - like how 9/11 is all the evil terrorists fault which is why America is fighting in Iraq?
'Nationalism' would bew supporting the Carter Doctrine or statements like 'the American Way of Life is non-negotatble'.

Are you REALLY sure you want 'American Nationalism'?  Or do you  have some definition that doens't bankrupt the nation with entaglements in foreign wars?

REGIONAL FX HEADLINES Wednesday, May 10, 2006

Iran: Euro to replace dollar as oil currency

In July Iran will ditch the dollar in favour of the euro as the currency in which it will accept payments for its oil and natural gas exports, Iranian president Mahmoud Ahmadinejad announced Friday.

The switch, first mooted months ago, was expected but Ahmadinejad's decision comes just as Washington is stepping up pressure on other United Nations Security Council members to act against Tehran for flouting agreements taken with the UN's nuclear watchdog.

Ahmadinejad's announcement, made in Baku, Azerbaijan where the Iranian leader is attending a regional economics conference, appears aimed at weakening the United States' resolve to seek sanctions against Iran if it does not comply with the UN International Agency for Atomic Energy's demands.

Some observers beleive the Iranian move could deal a severe blow the the American currency as many central banks from oil importing nations could choose to stock up their currency reserves with euros rather than dollars- AKI.

Ethanol forms an exceptionally stable azeotrope with water at 95%EtOH:5%H2O. It only mixes with alkanes reluctantly, and given any water at all in the environs, the ethanol instantly comes crashing out of the gasoline. That's why it has to be trucked to the formulator - the small amount of moisture in the pipelines is sufficient to make it separate.

It's an enormous energy burden to get that last 5% of the water out; the vapor pressure of the azeotrope is much lower than that of either the water or the ethanol. Sure, we can make solar stills to get to 95%, but then you need a trick like zeolites or fractionation in benzene to dry it.

However we slice it, we're talking about lots and lots of human-tended real estate devoted to the non-negotiability of the American way of life, as the Veep might say. So many - a billion? - of the world's people live hand-to-mouth, on less than a dollar a day. How do you feel about bidding up the price of their water, farmland, and fertilizer, just so we can keep on keepin' on for a few more years?

The Engdahl is a fun read but he smells way too much like a run of the mill conspiracy theorist.  According to him, bird flu is a hoax, or at least the concern about it is.  He calls it Rumsfeld flu.

I say the guys a crank.  I find some of the articles at Asia Times interesting, and provoking, but I have many concerns about the reliability of the authors who write for it.

I have a feeling everywhere he goes, he sees strings, not along the lines of string theory, but along the lines of puppets, as the masters of the universe execute their political theatre.

Actually, the Rumsfeld flu thing is not that much of a stretch. By the way, have you noticed how bird flu(which in its present form can only be caught by handling birds) is promoted vigourously while oil depletion is downplayed by the MSM? The contrast is striking.
Rumsfeld was once chairman of, owned a controlling interest in, and still owns a sizeable interest in Gilead Sciences, the company that developed "Tamiflu", before selling production rights to Roche.  He's personally made millions from stock sales of Gilead while in office.  Go figure.

Side note: Anyone remember the name of the fictional fascist police state in "The Handmaiden's Tale"?  Yup. Gilead.

Interesting article addressing estimated reserves vs. proven reserves:

Jim Jubak, May 10, 2006, "Strike Oil Profits with the SEC's Help".

As I was reading it, I kept thinking of Bubba's post from a while back, on just what the heck reserves are. Have to go back and re-read it now...

Speaking of which.....where has Bubba been lately?