<strike>Oil</strike> Fuel pipeline explosion outside Lagos

A pipeline explosion killed up to 200 people on the outskirts of Nigeria's biggest city Lagos on Friday, police said.

The Red Cross said the pipeline blew up while vandals were tapping into it to steal petrol, igniting about 500 nearby jerrycans full of fuel. Theft of fuel or crude oil from pipelines is common in Nigeria.

Hat tip: Leanan.

Update [2006-5-12 11:49:31 by Super G]: MEND denies involvement.

[editor's note, by Prof. Goose] Also, we should bring back Dave's (really great) post on Nigeria, which you can find here; I would also direct you to John Robb's piece here. Both are pretty prescient.

This comes on the heels of a threat by MEND to attack the NLNG plant:
Militants threatened on Friday to destroy a $13 billion natural gas export plant in Nigeria.

The Movement for the Emancipation of the Niger Delta (MEND) said in an email to Reuters they were conscious of the potential for an attack on the Nigeria Liquefied Natural Gas plant to hurt nearby communities, and would launch a warning raid on an oil facility beforehand.

Food & Energy Riots

I wonder if food and energy riots are going to be increasingly common events.  Somehow I doubt that the have-nots, unable to buy food and energy, are going to complacently stand by while the haves continue to buy food and energy.

I am also beginning to wonder if perhaps the Energy Tax/Abolish the Payroll Tax idea might be a really good idea, from the point of view of social stability.  In addition, it would be a concrete effort toward reducing our energy consumption.  

If you think that the US is disliked now, just wait until it becomes ever more apparent to legions of poor people around the world that we are outbidding them for food and energy supplies.  Of course, we may also be rapidly approaching the point at which we have convert dollars into something else in order to buy imported food and energy.  

I am also beginning to wonder if perhaps the Energy Tax/Abolish the Payroll Tax idea might be a really good idea, from the point of view of social stability.

Only if people have jobs.  I could envision a future where the employed are the privileged, and a tax break for workers would be seen as "tax breaks for the wealthy."  

This article is about inflation in Zimbabwe;

They're millionaires, but a piece of beef can cost a million

...Inflation, which clocked a record 1,042.9 percent on Friday, is a stark reminder of the southern African nation's eight-year recession that has sparked shortages of foreign currency, fuel and food while three quarters of workers are jobless.

Some landlords now raise the price of rent every month while real estate agents have a three-month rent review cycle. As the crisis deepens and the cost of gas soars, some workers have turned to pedal power, cycling to work, while hundreds others have formed walking groups.

Analysts say most Zimbabweans are just surviving, after cutting down on many basic necessities, with some families living on a single meal a day.

As I have said before, I recommend that everyone plan their affairs based on three assumptions:  (1)  your income has dropped by 50%; (2)  gasoline prices are in excess of $6 per gallon and (3)  US discretionary income has dropped by more than 50%.  

If I am wrong, you will have more money in the bank, less debt and a lower stress way of life.  If Daniel Yergin, et al, are wrong, good luck.

Speaking of riots, I (seriously) wonder if we are going to see student loan riots, when legions of college students graduate with monstrous debts--which by and large can't be discharged through bankruptcy--with no realistic prospect of ever paying off the debt.

What if Zimbawean-style hyper-inflation ruins the dollar here?  Then student loans would be a cinch to pay off, would they not?

As a very general matter, I don't fully understand the constant advice to "get out of debt" when seen in this light.  If hyper-inflation ruining the dollar has a fair chance of happening, then why not run up immense debts now, only to pay them off in the future when hyper-inflated dollars make paying them off a cinch?

You're correct in that paying off debts in future inflated dollars would be easier.  The "get out of debt" advice is based on the reality that many people have large amounts of debt, little or no savings, and are dependent on their current income to service that debt.  If they lose their job or their income declines, they have no margin of safety to fall back on and are at risk of defaulting. Also, many more mortgages these days are for the full value of a home, or close to it, and should property values take a dive homeowners needing to sell might find themselves unable to sell for the amount they owe.

I feel comfortable with a low fixed rate mortgage that's less than half the current value of my house, along with a healthy savings account.  If I was mortgaged to the hilt and had no savings I'd find it hard to sleep at night.  Debt in an inflationary environment can work to your advantage, but only if you're still able to make the payments.

I would say the "get out of debt" advice is based on the assumption of relatively low inflation.  It has been a very reasonable assumption since WWII, but it is still an assumption.
IMHO inflation will occur to basic necessities (food, transport, heating, consumer goods), but that doesn't mean that wages will rise in pace with them. Real wages will decline and you will need a higher percentage of your salary/income to pay for the daily necessities. Jobs that are available will be lower quality. That's not a good situation to hold debt in.

I think absolute deflation will occur in most housing and stock market assets (choose wisely), so holding that probably won't help too much.

The best advice I have heard is that you should stay flexible and be able to adapt to changing situations. Debt seriously reduces your financial flexibility.

Timing is everything...

Maybe first the housing prices take a dive,
then the banks get very conservative,
then the rates go up to both protect the banks and to sell all of the other securities,
then inflation takes off,
then we all riot for higher salaries to pay for stuff,
then time passes,
then we start getting daily indexed salary increases,
then, if we were able to avoid defaulting on our old low interest/fixed rate loans, we can pay them off easily.

It seems like a lot depends upon our savings, ability to keep a job, but very importantly, how quickly we can get our salaries indexed on a short-term basis.  I'm going to start writing my representatives now!

Some think that economic slow downs will cause deflation and we will all be investing in zero-coupon bond funds...


Because you won't have the money either way.

If you don't have the money now to pay a debt you won't have it in the future either.  

Hello PhilRelig,

I think the 'poverty draft' will kick-in bigtime first-- the only way to pay off your college debts will be to become cannon fodder for the elite's '3 Days of the Condor' plan.  Same for homeowner's upside down on their mortgage-- your child's future military service will be the only way to payoff this debt unless you are still young & fit enough to go yourself.  But then a revolution might preclude this...

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

I am a holder of 23,000 dollars of student loan debt. I have no degree and last time I checked I was unemployed and also not fit for service, deaf in one ear and on blood thinners due to blood clots and over 40.  Though I do not own a home, Have little chance of ever owning a home and can for the most part be a vagabond,  though walking cross country is not in my plans guess if i have to, i have to.

I still do not see conspription as a big issue, you put a gun to my head and tell me i have to fight for my country then you teach me how to kill, I am likely to kill you.  That makes for a very bad way to get troops to do the work.

I talk to a lot of young people who if you took away their fun time, they are just as likely to cause as much chaos as they can rather than bow down to the status quo of no fun time.  Look at the photos of the streets of India, fairly well dressed people carrying sticks.  Mad!

A large scale draft is going to get us in trouble,  In this day and age, we have bred to many trouble makers, People willing to hurt others for the small gains, Our prisons are over crowded, step it up a notch with draft dodgers and you get more chaos than you would want.

As all systems go toward chaos,  so will our nation.

Ur I have about 2X the debt you do, and frankly, if I'm never going to get it paid off, and "they" told me, go play Army for 2-3 years and the debt goes away, I might consider it. It might be good practice for the nice game of "last man standing" we're setting up here.

Although over 40, one bad eye, no degree either, we'd have to be really in the shit for them to come and ask me.

I expect to see inflationy deflation, or stagflation I suppose.  In any case, I think that we will see very powerful deflationary forces at work as Americans attempt to unload highly leveraged assets of all types, especially real estate.  I suppose we may see what kind of helicopter pilot the Fed ($100 bills from helicopters) Chief is.
Gasoline prices are in excess of 6 Dollars a gallon in a number of european countries (Norway, Netherlands, Germany, Portugal, Italy, Belgium, France...) UK,..http://www.oeamtc.at/netautor/download/document/preise_in_europa.pdf)
but life continues as usual. For instance, car sales in Europe in the first four months of 2006 are up in Germany, and for the whole of Europe only down by 1%.
I think we have a long way to fall. The problems:
Unemployment is likely to soar.
The real value of the dollar will drop.
Energy will be expensive.
I recommend preparing for having no income, and the value of the dollar dropping 80%. I'm not predicting when, but when the energy available for the economy starts dropping 2-10% a year SHTF is virtually guaranteed at some point.
How can this be accomplished?

I would recommend owning at least an acre or two of land to farm. Those who think they will be able to sit around watching TV while the government provides are likely to starve.

this is a way to steal gas in the usa , it must be better that a siphon hose ...


Does it seem strange that the oil pipeline explosion did not affect the market at all, but news of 1 person being shot or 3 people being kidnapped sends oil skyrocketing 2-3 dollars a barrel?

One would think that a pipeline supplying fuel exploding would raise more ruckus...

I would just like to say, before I get blasted for the comment.  I'm just trying to put into perspective the fact that oil pipeline explosions (you would think) would cause more disruption in the market than a kidnapping or loss of life. I don't mean to be insensitive... I'm just very confused as to why the stock market reacts the way it does to information...  ok now, proceed with the verbal ass whooping.
The explosion looks like an accident. The kidnapping and shooting were terrorist acts.
I agree with you bradshaw. The mind of the traders is often mysterious. Many wonder and have wondered. The IEA report only said the increase in demand would be a little smaller. Anyone know where the demand is allegedly destroyed? Efficiencies, conservation, weakening economy, or poor countries opting out?
The mind of the traders is often mysterious.

I believe it's non-existent. It's a fairy tale told to scare
children and adults alike. Watch out for the Mind of the
oil trader!

The so-called trader Mind is in fact just a bunch of damaged
synapses burned-out on too much caffeine, tobacco, cocaine
and 24 hour cable news.

You forgot beer, or bread and vodka..

By the way if Russia opens a stock exchange on Oil, are they going to open one on Vodka.  I Might need to buy stocks.

Yeah, you are correct... AND hooch!
I think it did affect the market.  The market was heading down, on the IEA forecast of lower demand this year.  The news from Nigeria prevented a larger drop, basically.
The fire was for a small pipeline taking gasoline into Lagos for sale in the local market.  It has no affect on oil export capability.

BTW, these fires happen in Lagos all the time.  Poor people breach the pipeline to get gasoline because they cannot afford it.  

Someone asked a few threads ago about who owns the FED since it's a private for profit bank.  There is 117 pages (it was a published book), and in the 4th paragraph it gets into WHO really OWNS the bank.  It's worth a read since through history this book was burned and most every copy was destroyed!


so enlighten: who owns the fed?
Turns out it was a teaser...still reading...
Baron Alfred Rothschild of London
Does that mean he owns America, or does he have to sell America off to the Chinese to pay off his debt?
Anyone going to the FREE Singularity Summit at Stanford?


Long-term, we may end up downloading our "self" into the net.  Long live the Web!

Hard to say how an exploding technology level will affect our energy balance...

AOL reducing workforce by 7%

NEW YORK (AP) - AOL (NYSE:TWX) is laying off about 1,300 employees - about seven per cent of its worldwide workforce - and is closing its call centre in Jacksonville, Fla.

Other cuts will come from call centres in Ogden, Utah, and Tucson, Ariz.

The layoffs represent the first major cuts since the Time Warner Inc. Internet unit cut about 700 positions last fall.


Whirlpool to Eliminate 4,500 Jobs, 3 Plants at Maytag

May 10 (Bloomberg) -- Whirlpool Corp., the world's largest appliance maker, will close three factories and cut 4,500 jobs as it reduces costs after the $1.68 billion purchase of Maytag Corp.

 Maytag, acquired by Whirlpool in March, was slow to move production to lower-cost countries and improve the efficiency of its U.S. factories amid competition from makers in China and South Korea. Its hometown Newton plant was running at 40 percent of capacity. Whirlpool seeks to trim production costs from factories each year and said it is shutting the Maytag plants because its own more efficient facilities have room to grow.


Bernzomatic Layoffs

Buffalo, NY (WBEN) - Nearly 200 employees got some shockingly bad news late Friday when they were handed pink slips at the Bernzomatic plant in Medina in Orleans County.

 The plant produces hand held torches. Bernzomatic is a division of Newell Rubbermaid but says it will now move those operations to China. That leaves the future of the Western New York plant in limbo. The company is leaving open the possibility of keeping some distribution jobs in the area.

Bernzomatic handed out the layoff notices to 190 of its 286 workers, some who had been at the plant more than 2 decades.


Recession is when your neighbor loses his job, right? Our neighbors have been losing their jobs for several years now, but "our economy is strong."

Maybe not for long:

Consumer mood buckles under high gas prices

CHICAGO (Reuters) - Consumer optimism in the United States buckled in May to its lowest since Hurricane Katrina, a survey showed on Friday, hit by $3 per gallon gasoline, rising mortgage interest rates and a souring political climate.

Then there's article:

Oil prices vulnerable as hurricane season nears

If even one of the nine hurricanes predicted for the 2006 season were to wreak the havoc of Katrina, Rita or 2004's Ivan in the U.S. Gulf, prices would likely spike above the record $75.17 per barrel price set in April.

...Crude oil prices are within $10 to $15 of the $80 to $90 price range executives think would likely trigger a recession.

I have been reading for several years that is $70 will tip the economy into recession. Why do they think it is now $80 to $90 ? Or, they don't have a clue and round the price to the next $10 value until they hit a value that turns out to be correct.
There's a time lag before the effects of higher energy prices are fully felt in the economy. We are probably nearing the point where the combination of price and time are kicking in. The unexpectedly weak consumer confidence number reported today, and the poor stock market performance the past few days may be an indication of impending economic weakness.
they are just trying to comfort people.
comparing a bad situation to a trumped up worse one makes it essayer for people to grin and bare it.
when it was $50 they said it would be $60
when it was $60 they said it would be $70
"Grin and bare it" as in being stripped down to having nothing left? LOL --good way to explain it.
it's also funny that when ever they talk about oil prices they never fail to mention that it's not as bad as (insert year here) when adjusted for inflation. which to me means they made up the number..
Inflation is underestimated. That means that they are underestimating how high oil used to be. Oil really was more expensive in 1980, which is why we had a depression back then.
Might be worth noting that the IEA just revised it's daily demand forecast downwards by 220,000 barrels. The rational offered is demand destruction.

http://today.reuters.com/investing/FinanceArticle.aspx?type=businessNews&storyID=2006-05-12T1443 03Z_01_SP277526_RTRUKOC_0_US-MARKETS-OIL.xml

Here's the Bloomberg story on the pipeline explosion.  MEND says they are not responsible.

Jomo Gbomo, a spokesman for the Movement for the Emancipation of the Niger delta, denied involvement in the explosion. MEND's attacks on pipelines and an export terminal run by the Nigerian venture of Royal Dutch Shell Plc earlier this year halted output of as much as 631,000 barrels of oil a day, more than a quarter of Nigeria's production.

``All this works to our advantage in some ways,'' Gbomo said in an e-mail to Bloomberg. ``We wouldn't want to kill so many innocents in any attack,'' he said. ``I'm not a part of it.''

 The explosion comes a day after three foreign oil workers were kidnapped in the southeastern city of Port Harcourt. The workers, one of whom was an Italian, were released today, the Italian Foreign Ministry said. On May 10, an American employee of oil-services company Baker Hughes Inc. was killed in a drive- by shooting.

``It's a hell of a week,'' said Antony Goldman, an analyst at London-based Clearwater Research. ``It shows the full range of challenges that are presently facing the oil sector at time when the politics in Nigeria is already volatile.''

I'm not sure what to make of "the Liberty Dollar" - a silver-backed currency that is being pushed as an alternative to currency issued by the Federal Reserve. This is either a serious threat to the U.S. dollar, or a total scam. But it does seem to show that there is an increasing dissatisfaction with fiat money and rising inflation.
Remember when gas was only 25-cents a gallon? You could take a dollar down to the gas station and buy four gallons for a buck! At that time our dollar was backed by REAL money, real silver. Guess what? That same amount of silver still buys four gallons of gas!
The biggest problem with non-fiat money IIRC is there is not enough precious metal in the world to back the large quantities we have in circulation today.

A possibly better idea is Leitaers idea of a basket currency made up of many different kind of essential goods. It's been a while since I read his proposal though, I'd need to re-read it to refresh my mind.

The last time I heard how much god there was in the world it could fill a cube 64 feet on a side, which puts it at about 315 million standard (US) pounds of gold. If anyone has better numbers please let me know.  So Yeah, not enough gold to even base the US on a gold standard, at the current est. of 700 bucks an ounce, the world would have a bit under 4 trillion dollars.


I've been doing reasearch on this subject, and there is not enough God to fill the head of a pin... or was it to fit through the eye of a needle?
Having had real gold sitting in my hand, I know there is at least enough to fit on the head of a pin.  sorry to dissapoint you
Well, yeah, you base your money supply on gold, and you can get weird effects.  Case in point: late 19th century USA.  The actual economy was expanding faster than the gold supply, as immigrants came in, and more land was settled and put into productive use.  This caused deflation, as the money supply shrank with respect to the overall economy.  Politically, this injured farmers especially, contributing to the founding of the Progressive Movement.  The only relief to the deflation came with the discovery of gold in Alaska in the 1890's, which finally led to some inflation, benefiting farmers and thus much of the population at large.  This should not be viewed as some kind of divine recompense for the farmers' previous suffering, but as an entirely arbitrary event, an economic act of Nature.  

Advocates of gold-based monetary valuation astutely realize that money as it is currently valued benefits certain countries, classes, sectors of the economy, and sections of countries, over others.  What they fail to realize is that by making the value of money dependent upon gold, they would substitute arbitrariness for favoritism.

You should choose a commodity that doesn't get used up in a practical purpose.

Gold and Silver were just decoration value and easy to purify/assay - until the 19th C. Now they are useful raw ingredients eg in electronics. So the quantities will be used up instead of being hoarded.

Why not store Carbon as a currency reserve? Real Carbon - the black powder. Keep it wet though, or your currency might go up in flames!

How about at 7000/oz? 70000?
Sure there is.  The price of precious metals just has to go up significantly.  I was just playing with some numbers to see how undervalued precious metals are. In 1900, the average salary in the united states was $450/year. This is 450 silver dollars, or 23 gold double eagles. This is 348 ounces of silver or 21.8 ounces of gold. At current prices, this is equivalent to a salary of about $4900/year in silver or 15700/year in gold.

Looking at these numbers, I would say that silver should triple in price compared to gold in order to reach its proper historical value. After silver triples, then both silver and gold should double in order for both to obtain the same value they had in 1900.

In other words, if the dollar collapses, I would expect silver to rise to $90/ounce, and gold should rise to $1400-1500/ounce.

I would have to agree. We all understand that there are definate limits to all things and in this case, even all the gold and silver in the world couldn't back the massive scale we operate on.

Although I could see a transition into this currency and those who get in first will be far better off than those forced to fight over what's left.  I mean think about it...there's a max upper limit than this could reach, and I'm sure it's far lower due to the allocation of gold/silver resources.

The coins are 1oz .999 silver, but not much of a bargain as bullion -- if you shop around, you can find folks selling rounds and bars of various mintage or old silver coins, for slightly over the going price.

The same company also prints paper certificates for bullion, but I doubt you can buy gas with any of it.

... currency that is being pushed as an alternative to currency issued by the Federal Reserve. This is either a serious threat to the U.S. dollar, or a total scam.

In direct answer to your query, it is neither.
  • It's not a total scam: as long as you can get hold of that dufus in Evansville, you can claim your metal.
  • And it's no threat to the Fed.

Oil pipeline explosion outside Lagos

Is the post title accurate? Wasn't it a gas/petrol pipeline? Not to nitpick, but that seems a pretty significant distinction.

You're right. I changed the title.
Seeing that the govt fully understands the circumstances of peak oil and also the impending ramifications of such a scenario, It is highly likely that they are aware of the potential for the "have nots" to wreak much havoc going forward. However they have effectively been monitoring our phone conversations and patterns per the attached article


Surely being aware of the vectors of it's population will prove to be a useful tool when the "have nots" develop a large enough base to cause any significant disruption.
At what point does the public realize that the Emperors new clothes do not exist? The American public is a big Sucker!!!! I am included in that group and am not happy about it. I guess I'm a little more pissed off than usual today about this crap!!!

As the have-nots get bigger, they use less phones and more word of mouth.  Look at any inter-city of the US and you will see a lot of have-nots.  We have been fooling ourselves for a while now, we gave the poor cell phones and they are on them all the time, we gave everyone cheap mortgages and two jobs to support them.  We gave them service jobs helping their fellow citizens.  We give them Bread at 75 cents a loaf, and dollar menus at the fast food places.  The have-nots are just a paycheck away for nothing, and what has become scarier still is, so are the haves.  

 Paycheck to paycheck, who do you know that does not live like that.  How high up the income brackets does it go?  How many of those people have enough savings and enough skills that in a recession or a depression they can weather the times?

  True its something to get pissed about, but in all of it, are we not a bit responsible too?  You ahve a credit card, and you use it,  You buy things that you can't afford,  You live a life you dreamed of in college, or highschool.  I dreamed of having 3 kids and a nice farm, living off the land.  Been married twice, no kids, no farm, none of the dreams I had as a kid, except one,  I still write.  Some people like my poems.  

 My brother makes 70,000 dollars a year and I am sure his credit is maxed out.  He lives paycheck to paycheck.  We all know others, both in the have's and the have-not classes.  

As recently as a year ago, these MEND guys used to be a gang that couldn't shoot straight. The only mayhem was caused in their communiques. One has to wonder whether they have become a real danger thanks to help from someone outside Nigeria, and I mean not just $, but technical help.
Uncle Sam getting some of his own medicine?  That sounds like poetic justice.