DrumBeat: May 23, 2006

Now for some wise words from the readers of The Oil Drum...
Great article from iTulip.com on energy and economics.
Also makes a good primer for those new to depletion/peak oil, and promises to be a continuing series.
Read it here:
Part I:  Too Little Oil or Too Much Money?
Part II: We Can't Repeal the Laws of Thermodynamics
I am currently having a debate elsewhere with somebody who thinks there has been an oil co. conspiracy to stop the renewable energies becoming widespread, and in particular solar energy.

So if anybody has some links regarding the economics of solar PV technology it would be much appreciated!

Hi there,


cheers, marotti

Good articles on iTulip.

BTW, Good Morning America is devoting most of the program Wednesday morning to stories on the oil industry.



The WHO is considering issuing a pandemic alert.

If I read the story correctly, six of the seven victims are dead already.  

After reading this story, my daughter, a graduate student in forensic genetics, said she is going out to stock up on food supplies.

Epidemic and Pandemic Alert and Response (EPR)
Avian influenza - situation in Indonesia - update 14

23 May 2006

The Ministry of Health in Indonesia has confirmed an additional case of human infection with the H5N1 avian influenza virus. The case occurred in a 32-year-old man. He developed symptoms on 15 May and died on 22 May.

The case is part of a family cluster in the Kubu Sembelang village, Karo District, of North Sumatra. The man is the seventh member of an extended family to become infected with the H5N1 virus and the sixth to die. An additional person, who was the first member of the family to fall ill, died of respiratory disease on 4 May. No specimens were taken prior to her burial and the cause of her death cannot be determined. However, as her clinical course was compatible with H5N1 infection, epidemiologists at the outbreak site include this woman as the initial case in the cluster.

The newly confirmed case is a brother of the initial case. Specimens were taken on 21 May and flown the same day to Jakarta. Tests run overnight confirmed his infection. His 10-year-old son died of H5N1 infection on 13 May. The father was closely involved in caring for his son, and this contact is considered a possible source of infection.

Although the investigation is continuing, preliminary findings indicate that three of the confirmed cases spent the night of 29 April in a small room together with the initial case at a time when she was symptomatic and coughing frequently. These cases include the woman's two sons and a second brother, aged 25 years, who is the sole surviving case among infected members of this family. Other infected family members lived in adjacent homes.

All confirmed cases in the cluster can be directly linked to close and prolonged exposure to a patient during a phase of severe illness. Although human-to-human transmission cannot be ruled out, the search for a possible alternative source of exposure is continuing.

Both the Ministry of Health and WHO are concerned about the situation in Kubu Sembelang and have intensified investigation and response activities. Priority is now being given to the search for additional cases of influenza-like illness in other family members, close contacts, and the general community. To date, the investigation has found no evidence of spread within the general community and no evidence that efficient human-to-human transmission has occurred.

Analysis of viruses

Full genetic sequencing of two viruses isolated from cases in this cluster has been completed by WHO H5 reference laboratories in Hong Kong and the USA. Sequencing of all eight gene segments found no evidence of genetic reassortment with human or pig influenza viruses and no evidence of significant mutations. The viruses showed no mutations associated with resistance to the neuraminidase inhibitors, including oseltamivir (Tamiflu).

The human viruses from this cluster are genetically similar to viruses isolated from poultry in North Sumatra during a previous outbreak.

Did you mean to post this on the beak oil website? Doesn't seem relevant here.
  I have agreed with everything I've read that you've posted. However if 20% of the population dies and the rest locks themselves up and does not travel for a 2 year pandemic that would affect demand of energy and supply of petroleum products.  It is just as or more relevant than all the economic discussions or war discussions.  Energy pervades our economy and many things change it.


Well said, Matt.  This is MAJOR news, top story on CNN this morning.
"The World Health Organization says a cluster of bird flu cases in Indonesia may have been caused by human-to-human transmission."
I heard conspiracy theories from all my friends in Latin America that Avian flu is a plot to sell Tamiflu and vaccines.  I have done quite a bit of research on this since 2005 and spoken to 2 infectious disease specialists at my hospital (they are married) I asked what the plan for the hospital was if this made it stateside and their response was "we drive to north Georgia and stay at our cabin till its over.  Peak Oil is a long drawn out problem but if Avian flu happens international trade and travel will slam to a halt.  

We could only be lucky if it is a conspiracy.

Ah, lucky me, I'm already in Georgia. ^_^  Come on up.
No kidding, all this great discussion of global warming and peak oill will suddenly seem pointless if millions are sick, quarantined, and/or panicked.
As long as Jack is posting, I'm happy. No disrespect to Westexas or anybody else. I wish Don Sailorman would post again. For now, there is going to be vicious infighting. We will work this out. In the end, we will be forced to join forces.

There are fewer of us than is immediately apparent. There are about 200 regular posters and another 1000 semi-regular/lurkers/whatever. This is a small bunch. We better be strong. Would anyone like to dispute my numbers? I'd be very interested in hearing other estimates and explanations.

Where is Don Sailorman? I miss that guy.... :(
He's taking a sabatical, to work on a book, or that was the last info I had.
He should be working on a book.
Yes, that is why my alarm bells are NOT going off.

Intense contact may have caused human-human transmission; not the casual contact that spreads flu in our society.

Intense contact would include sex, contact with vomit, kissing, and other similar modes.  Single human-human transmission of avain flu has been recorded before between husband & wife.

Surprised to hear this. Your source, please?
Same here (lack of alarm bells) - I have a friend who is a post-doc in microbiology at Stanford, studies malaria specifically, but he's my go-to guy when a report like this hits...

he said that this wasn't it, no need to order extra MRE's and duct tape yet.... but he explained genetic drift and shift to me as it relates specifically to this virus - and said when "it" happens, it isn't going to be pretty...1918 with jet travel in the mix?

You would expect Toyota to be very aware of PO, right? So why are they going to build 10 new fabs?

Another question: If oil price triples, then driving a car will become 20% more expensive. That's not a lot. Just switching to a smaller (and much cheaper car) will offset more than the additional gas cost. So why are JHK so worked up about the suburbs?

  1. Maybe they're building new plants to build smaller and more efficient cars to soak up the market share from bankrupt Detroit?

  2. You assume that everyone can and will afford to switch cars. I also doubt that statistic.
I analyzed my own situation, and found that I could more easily keep my existing vehicle and absorb gasoline at $7/gal (USD) than I could purchasing a new vehicle that gets twice the mileage, largely thanks to sunk cost and depreciation. I suspect most Americans are in a similar situation.  
So the real question then becomes - how much less can you(and Americans as a whole) afford to drive?
The common answer in 'man on the street' interviews is that folks 'eat out less' to balance their bugets.  That means more money goes to the energy sector, and less to the local small business economy.
   50% of my income is discretionary (beer, books, woodworking tools) I spend all of it every month on that stuff. Now travel twice from Tampa to Houma, LA a month at around 300$ gas, and another $150 during my off time.  If my electric (currently 200/month) and gas double I have no discretionary money but still get back and forth to work.  However, brewers publishers and my local Woodcraft outlet loose income.  At what gas increase is the average discretionary monies (per capita) overcome? I am not even counting an increase in any other product like food.


It's interesting, isn't it?  We can guess from our own experience, but in the broad (US, from my perspective) economy, we don't really know how people will behave.

At what gas increase is the average discretionary monies (per capita) overcome?

That's the big question.  And even as people still have lots of discretionary monies, they'll 'feel' the gas pinch and cut back someplace else anyway.

To analyse it you'd have to separate out how much people have been buying on credit, much of it equity from their homes.  In other words, people's true discretionary spending ability may be less than what they've been spending.  I suppose that could mean the spending might stop very quickly.
This is the most perplexing question that I have gone over hundreds of times.  What will people do? What will be thier reaction.  I like all your comments.  I guess once you are "on board" for PO your next set of questions is what should I do and what are others going to do.  I will continue reading...this is good stuff
I would surmise this is a reasonable conclusion. Close to 40% of my income is discretionary, most of that goes for eating out, entertainment (music, dvd's, books), hobbies, travel.

As energy costs rise, they eat up a steadily larger portion of that discretionary income, not just from higher gasoline but secondary inflationary effects from higher energy.
For example, my household electric bill still exceeds my gasoline expense in most months, and it has been rising, too.  Food costs are rising noticibly.  Etc.

Eventually, as the discretionary income of most becomes less and less discretionary, folks start to feel it more and more.
Those with less discretionary income, or "leeway", will be the first to feel the pinch (and some are already). When this group becomes the majority, or at whatever point roughly 1/2 discretionary income becomes discretionary, there will be serious economic problems.

There are "breaking points" in oil demamd IMO.

One is at the individual consumer level.  Can I afford this vacation ? Can I afford to commute from Tampa to work instead of moving closer in ? Should I trade in my Escalade for a Honda Insight ? And a million variants of such decisions.

The other is at a larger, national scale.  Can the US afford to import 15 million b/day at $73/barrel ?  16 million b/day at $87/barrel ? 16.25 million at $115/barrel ?

An analogy, each one of us could probably spend 3/4 of our aftertax income on imported goods & services if we tried.  Buy and eat imported food, cars, rent only foreign movies, etc.  We could each individually do this with no personal negative effects (except watching too many French films; one being defined as too many) BUT if ALL of us did this, it would break the system.  Our economy could not sustain the increased imports and loss of domestic demand.

When the sum of all of the individual choices add up to more than what the nation can afford, there will be a break at the national level.

Unemployed people drive less, closed factories and businesses use less energy as well.

I see two modalities where US oil demand could be constrained to what the US can afford as a national economy.

A collapse of the dollar and rising domestic energy and everything else imported prices.  And a very bad recession/depression.


Much higher interest rates that cause a strong recession, thereby preserving most of the dollars value and reducing oil demand via recession.  My preference.

The more each of us reduce our individual demand, the less extreme the "break" will need to be at the national level.

Well I work in deep water drilling so my job is secure, but I may need to move to LA to aford to work. That sucks because then I have state tax so I may just move to a cheap apartment in FL panhandle.  Maybe just wait for drilling off the coast of FL (blasphemy) then my situation will be better.
Louisiana can use the incoem tax revenue and economic activity (book sales and woodworking tools included) from you living here.

It is a short hop from New Orleans to Houna :-)

A little actual data:

A new study from the National Retail Federation (NRF) found nearly half of Americans will combat the rising cost of fuel by driving less, while another 37.2 percent will decrease vacation and 36 percent will cut back on dining out, cspnet.com, the website for Convenience Store/Petroleum, reported.


Looks like restaurants and travel destinations take the hit.

I use 25 gallons/month and I can afford to spend $1000 a month on gasoline before it crimps my spending. I'm fine till igasoline hits $40/gallon. I might not be the average 'man on the street'.
Is $12K/yr spent on gas the most fun you can have for the money?
Actually yes. I'm just saving the money now which is no fun at all.
Well, some ideas then ... instead of $12K for gas:

  • $6K for gas, and $6K on iTunes
  • $6K for gas, and $6k for bicycles
  • $6K for gas, and $6K in time off
  • $6K for gas, and $6K for Habbitat for Humanity
I think the decision comes at the margin.  There are people who want/need a new car soon, and maybe accelerate the decision or the choice based on fuel prices.

I doubt many people who have 'committed' and 'bonded' to a current vehicle will break that commitment based on fuel prices.

Hmmm, before I learned of PO I would most likely have bought a Subaru Forester when one of our current, paid-for, cars died. Now, I can't see buying another gasoline-powered car unless both our cars die, and then I'd probably get a used econobox.
That's more "forward looking" than the fuel-price argument I just made. ;-)

If many people thought peak oil and economic uncertainty were right around the corner, they might do likewise.

Putting on my agnostic hat, it becomes a question of how certain we are and how soon this crash is expected.  If the answer is "maybe in the next 10-20 years" some folks might have room for a new car.

Part of my powerdown decision was to get rid of my big BMW V8 and replace it with a used VW Jetta diesel.  Now not only do I have a car that uses less fuel (and biodiesel to boot), but the excess cash freed up by the swap will pay for a couple of years of that fuel.  Oddly enough, my quality of life wan't affected in the least, though I can't say the same for the peole who have to drive behind me :-)

We still have two cars, and I suspect when the other one dies it won't be replaced in a hurry.  Given the amount we drive now, the Jetta will last at least until TEOTWAWKI.

You know, it's posters to TOD that are a bit less likely to be driving Escalades. But think for a moment about the number of people you know that have placed a very sizeable portion of their income into cars that are newer and/or more expensive than they really need. I own a company where all of the employees drive nicer cars than I do. Most of them have salaries of ~$20,000 per year.

How many people to you know that hurry off to buy a new car as soon as they are done paying off the one before. I never stop being shocked when I drive by home after home of people  who don't otherwise seem to have a pot to pee in, but sure enough have that new Dodge Ram SRT-10 Hemi pickup in the driveway. A nice vehicle is a birthright, just like cheap energy.

It's become a "necessity" in the U.S. to be strung out on car payments (not to mention mortgage payments) to the maximum that banks will grant, leaving little room for things like rising gas prices or rising interest rates. A 50% increase in gas prices may not be a great percentage of total vehicle ownership costs, but if you are tapped out to begin with.......

Yes, it's sad but true.  Many of them are leased though, and frankly, if I had an SRT-10 Hemi I'd sure hope it was a lease - at least I wouldn't be stuck with it!

I think people are just suckers for the advertising, and feel they must display their wealth, real or not, by buying the proper automotive plumage.

Also, in the USA a cool car will increase a guy's marketability with women (ability to get laid). I would assume most of these guys are single.
I would surmize that they are appealing to image only. A fancy schmancy vehicle equates to success, as well as the watch and clothing. their jobs are probably a dime a dozen, but i bet it's all image.
Bingo.  This is a point I keep coming back in my own situation as well as that of friends and relatives.  Getting a more efficient car is basically done on a replacement boundary; there are exceptions, of course, like people who drive a LOT and have a real guzzler now.  But the depreciation is a killer, as is the sinking value of less efficient used vehicles.

I've mentioned here before that I have a 2002, completely paid off minivan that I drive less than 3K miles/year.  I would love to trade it in for something like a Fit, but I'd get killed on the deal (poor trade and a dealer with a red hot product), and I'd be buying into a new round of depreciation, all for relatively small savings in gasoline expense.  There's the argument that if you buy the right car you'll see very little depreciation over the next 3 to 4 years, and might even see some minor appreciation.  This is happening right now with at least one non-hybrid sub-model of the Civic.  But it's a sizable gamble that that trend will continue.

Right now, I would not want to be a car dealer with a lot full of SUV's, pickups, and minivans.  

I'm in the same boat with my beater Taurus. I got the bug for a newer, more fuel efficient car recently. Though I'm not too worried about it paying off in fuel savings, I realized that driving less than 5,000 miles per year in the Taurus at 22 miles per gallon for another 5 years will not add up to the ~1000 gallons of oil-equivalent energy that it will take to produce and ship that new Prius before I've even put the first drop of gasoline in it.
> analyzed my own situation, and found that I could more easily keep my existing vehicle and absorb gasoline at $7/gal (USD) than I could purchasing a new vehicle that gets twice the mileage

You are making the assumption that gasoline will remain abundantly available. Its highly probable that  between $4/gal and $7/gal it will be rationed as it was back in the 1970s. The question you need to consider is, can I get to work if I can only fill up once a week? How would gas rationing effect your employer (would you have a job to go to if it was at $7/gal).

Rationing would be smart, IMHO, but I think it's about as likely as a return to milk deliveries. There is too much faith in the invisible hand of the market for that today, in our exceptionally indiividualist "devil take the hindmost" laizze-faire stupidity.
Rationing would be fine with me, as I only drive about 150 miles/week, total.
>Rationing would be fine with me, as I only drive about 150 miles/week, total.

Could you meet ends without working too? What is the likelyhood that your job is indirectly or directly dependant on cheap energy?

Nearly zero.
I'm employed by that bastion of global freedom, the US military machine.

Thirty-seven percent of consumers say gasoline prrices are so high they are looking at replacing their current vehicles with more fuel-efficient vehicles, mainly hybrid models, according to the latest Consumer Reports Auto Pulse Survey conducted this month.


More good stuff from that survey:

42% strongly agreed they will drive less to save gas
38% will reduce spending on restaurant meals and other entertainment
38% will drive more slowly and more smoothly in order to save gas
16% will walk or ride a bicycle more
13% will carpool more
10% will use public transportation mo

But will they support higher taxes on fuel and other means of "taxing bads, not goods"?
You would expect Toyota to be very aware of PO, right? So why are they going to build 10 new fabs?

So what's your point - that the market is somehow prescient?  Ha, you know they were creating brand new monoliths at full tilt on Easter Island even as the last trees were being felled...

One of the sobering aspects of Joseph Tainter's "Collapse of Complex Societies" is that of his three examples -- Roman, Maya and Chacoan societies -- the last two were erecting their  most monumental building projects just before they crashed.

Perhaps that's a society's way of "doubling down" on their denial in order to remain united as they continue speeding towards the cliff.

post of the day....
Hello theLastSasquatch,

I concur as post of the day too.  I just emailed the Chairman of the G8 Org Committee [post below], and I encourage all TODers to do the same--Let our voices be heard!


Sergei Eduardovich, Chairman of G8 Org. Comm.,

Dear Sir,

I sincerely hope that the G8 leaders can achieve a dramatic breakthrough in future world energy security.  I refer you to theOilDrum.com, Dieoff.com, LifeAfterTheOilCrash.net, and ASPO.com as initial efforts for research into Peakoil and Global Warming.  The WWW is rapidly growing with websites and blogs of concerned citizens growing increasing alarmed at the collision of Thermodynamic Laws and Genetic-driven Population Overshoot.  Please encourage the world's leaders to adopt ASPO's Energy Depletion Protocols and promote worldwide voluntary populations controls at a minimum.  Thank you.

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

Hello Bob Shaw,

When you emailed the head of the G8, did you sign your missive "Are Humans Smarter than Yeast"?

Hello theLastSasquatch,

Yes, I did.  All my email includes my tagline.

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

The local pipeline of monumental building projects is dominted by railways, some highways, urban buildings and renovations of nuclear powerplants.
Having just finished the road-rail bridge/tunnel to Denmark !
There is a small increase in lobbying for building an additional rail tunnel to Denmark. The most optimistical suggestion is a three tube one, two tubes for passanger traffic and one freight only tube.

This will make sense if the Danes and Germans build a quite large "shortcut" road-rail bridge/tunnel and the rail traffic continues to increase for an additional 15-20 years filling the current double track to capacity.

What kinds of "monumental" projects would make sense during a depression with slight fuel scarcity?

Last time this happened in Sweden a lot of gravel roads were built with a large percentage of manual labor. Manny of them are still in use in parallell with new roads.

Building tramlines could benefit from large ammounts of manual labour and fairly small, cheap and fuel efficient machines. The same goes for intensified maintainance of roads. Adding to the district heating and district cooling networks. Perhaps also a general make over of leaking fresh water pipes?

Mass renovation of windows and additional insulating of houses could make sense. More intensive forestry with the benefit of a long term increase in biomass production. Wonder if it would make sense with more manual farming labour?

Truly monumental building are nowdays capital intensive and mostly employ highly specialized labour and use lots of resources. But I have limited myself to physical work, we have a large inefficeint service sector.

This make-do work needs to add something of value for the economy to work out on a basic level. It should realy be real work.

The statements from Toyota have been coming out for awhile, and besides the Daily Yomiuri article you linked to there have even been articles in news pubs outside of Japan.

As for increasing annual production of autos, Toyota explains that the addition of plants in the US is to counter possible US government intrusion, when Toyota overtakes GM as the worlds largest manufacturer.   A couple of months ago Toyota explicitly discussed this in public, as they are determined and expect to replace GM at the top; and furthermore, the future of GM is in doubt.   The Japanese Automobile Manufacturers as a whole are aware of this:

Additionally, major plant expansions will be in China, as Toyota add more models to the Chinese market and become a major player there.

While in the minds of many doomers out there the end of the automobile is quickly approaching, Toyota is betting that the near to midterm future is still looking very good for more fuel efficient automobiles:  

Japan itself is in love with the automobile:
"Nearly 20 percent of Japan's population is believed to be connected to the automobile industry, Cho figured, including salespeople, gas station attendants and maintenance workers." (from first link above.)

"You would expect Toyota to be very aware of PO, right? So why are they going to build 10 new fabs?"

It is called "competitive strategy".  There will be lots of cars sold over the next 20 years.  Toyota and Honda may anticipate that, because of high gas prices, demand for smaller fuel-efficient vehicles will increase. In fact the small fuel-efficient market segments may grow substantially - in the US, China, Russia and elsewhere.  Toyota and Honda also see themselves as strong competitors in these segments, and the "Big-3" as very vulnerable.

They are now going for the proverbial "jugular" of the "Big-3".

Japanese assembly lines are some of the most efficient in the WORLD. They operate at nearly 105% capacity.  Those engineers can explain the extra 5%.  They also have some ingenous ways to reconfigure plants.  They have the capability to assemble nearly any car in their portfolio from any factory in the world.  The Tech is in place that allows this ultra flexibility.

They can build a factory that builds cars and it can make almost any car already designed.  I say almost becaause I don't know if the truck factories can convert to cars, but I'm sure they may have figured a way out.  In the end they can build another camry factory and if things don't work out, they simply switch to another design.

Oh and it doesn't take a large effort to re tool an assembly line.  All they need to do is adjust software programs, minor training adjustments, & adjusting their supplies.  The point is that they have planned heavily for this and have already demonstrated their flexibility in Japanese factories.  

Could this be done with a Union Shop?  

Remember in spinal tap when the guy wanted a guitar amp that went to 11?
I'm gonna make you feel old, but I've never seen that movie. What happened?
I am twenty eight is that old? My fiance (age thirty) found a gray hair on my head the other day and has been calling me abuelo ever since.  The guy wanted an amp he could turn "up" to 11 for more noise and the other guy was explaining that it could still only be as loud as it could be.
Not that much older, I guess I just never got around to seeing it.
why don't you just make 10 the loudest ?
Nigel: "You see, most blokes will be playing at 10. You're on 10, all the way up, all the way up...Where can you go from there? Nowhere. What we do, is if we need that extra push over the cliff...Eleven. One louder."

DiBergi: "Why don't you just make 10 louder and make 10 be the top number, and make that a little louder?"

Nigel (after taking a moment to let this sink in): "These go to 11."

Now thats funny.  I might have to find a copy and watch it.
All the movies with that same group are hilarous:
Best in Show, Spinal Tap, A Mighty Wind, Waiting for Guffman, all with the same writer and many of same actors.
Very funny movie. Make it a double feature with FUBAR.
IMO JHK feels there will be a 'synergy' of forces working on the suburban environment. (The fact that he just plainly hates suburbia notwithstanding)

The argument might go something like this.

The McMansion concept is an unsustainable lifestyle from both the perspective of community and logistics. It's too disjointed, it's too far away, and it's too darn big.

If a fully mortgaged suburb dweller heats and cools with NG and long commutes in a large single occupant SUV. He/she is vulnerable on more than one front.  

If he is part of a discretionary-income-dependant segement of the workforce he is potentially screwed in more ways.  Once peak energy's effects truly kick in, the sound of all these forces coinciding will be the large 'thud' heard in the distance.

If these are in trouble then those of us that inhabit the 'farthest outposts' are probably not his favorite option either.

My guess is that once oil makes it to $100 or $150 per barrel generalized inflation would become an issue and the Fed would continue to increase interest rates AND many people in the exurbs have ARMs which would of courese reflect the interest rate increases so between higher gas prices and increased mortgage payments many "house poor" zero savings people are going to be in trouble.  
It's quite possible that the Fed has already lost control of an hyperinflationary aniaml. Continued demand on commodities from China and the sinking dollar could drive inflation way above the Fed's tiny interest rate moves.
maybe the fed secretly planted bird flu. cuz if its real it will be the mother of all deflation and oil will go sub $30
I don't know. I see lots of healthy birds around here and they are crapping on my car. What happens to $40 trillion in debt (assets to the creditors) if bird flu shuts down the economy? It's hard to imagine the dollar gaining value if the creditors dump couple trillion into the market. The dollar is a faith-based currency.
I says so right on it.....
It can be argued that the vast majority of economic transactions are, to some extent "faith based".  If I order a meal at a  restaurant and sit to wait on it I have "faith" that the meal will appear. I would never shop at a store if I had no "faith" that its products were at least somewhat consistent with my needs/wants. Even if I have recourse to return the product or perhaps legal action if a lot of $$ was involved, doing so can be a major hassle and people dont like hassles.  Even if the currency were "backed by gold" such "backing" means something only if I have "faith" that said government would exchange the paper for gold.  To me, the issue really is the basis of said "faith" and our government here in the US may soon be confronting a rather large crisis of faith.  You can only borrow so much before someone is going to begin questioning your ability to pay back.  
Anyone noticing the price of oil 'recovering' at a much higher rate than other commodities, after the recent market correction? It has increased 2 to 3 Dollars over the past couple of days - perhaps the price could be nudging $80 if not for the market correction of last week?
The price of oil never dropped. If you look at longer term averages, like say 10- or 26-week, it continues to rise at the same steady rate of the last 3+ years. It is always fluctuating up or down by a dollar or two in any given week. It had no need to recover.
Seems like lots of craptacular economic news/articles out lately.  Most tie directly into soaring inflation, energy costs, and debt.

"Be prepared: Hard times are looming"

"Russia's MICEX Suspends Trade Over Heavy Losses
Russia's MICEX stock exchange has suspended trading in shares from 1430 GMT after intraday losses of more than 8.5 percent, a MICEX official said on Monday, the Reuters news agency reported."

"Japan stocks fall to nearly 3-month lows"
"Japanese stocks fell to their lowest in almost three months Tuesday, led by banking and steel stocks as foreign investors dumped shares amid declines across Asian markets."

"Crude Oil Prices Drive up Cost of U.S. Addiction"

Hat tip to Tate423 for pointing me to this excellent Salon blog article, on some very interesting (if Canadian-centric) observations regarding the Great Depression.

"What to Expect When the Dollar Collapses - Part One of Two"

"What to Expect When the Dollar Collapses - Part Two of Two"

Worth reading, even if only from a historical perspective.

What makes you think those articles are "excellent"?   To me, it is merely preaching to the choir (the choir in this case being the DailyKos - CodePink type.)   Not very good preaching, either.

Conceptually, if the 21st century will really be defined by the absolute physical limitation of energy availability (peak oil, peak gas, maybe even peak coal, maximized hydro), then the parameters have changed quite a bit since the 1930's.

Of course, while some things have changed, some remain fundamentally the same.
"The one thing we learn from history is that we never learn from history" -Sir Bernard Shaw

Excellent is, as with all descriptors, a judgement call. In this case, mine.

As a side note, a second "great depression" in the post peak period has been a staple of many peak oil writers (Colin Campbell being the classic example), I'm not sure how many lessons can be drawn from the first (other than to learn some of the things not to turn to if the economic going gets a bit tough). As Dave points out, the first depression didn't, for example, occur as a result of resource constraints - and many of the economic actions taken after the Wall St Crash of 1929 are hopefully now textbook examples of what not to do for central bankers.

One possible exception is the dustbowl of the 1930's, it made life much tougher for all concerned, which is one area parallels could possibly be drawn if slow environmental collapse triggers economic problems over the coming years.

Well, those Canadian slave-worker camps certainly got my attention ...
Continuing yesterday's dollar yak...I vote for the proximate cause of the dollar sell-off to be the announcements by the IMF/World Bank/G7 deciding in April that something needs to be done about global imbalances. Who was it that said the most dangerous words are "We are the government, and we are here to help"?


I am hearing many tales of cost overruns from building contractors. They largely blame copper. One said his price came in too high, so they cut back on this that and the other thing and rebid it. Even with all the cuts, the price came in 20% higher.

Last year, I started including language warning of "extremely volatile price changes due to energy costs" in my estimates, but everyone thought I was only doing that because of Katrina & Rita.

I have family in the building/development business who said that they sold many more units in 2004 than 2003 but made less money due to rising costs. Prices were raised significantly in 2005. Also, anti-speculator clauses were added to their purchase contracts -- even on units in the low 200's.
I hope our friend Keithster100 is OK after Pacific Ethanol continued its free fall yesterday. It is down from over $40 to less than $26 in 10 days. Ouch.

Keithster Pumping Pacific Ethanol

I wonder if he is going to come back and lecture us again on how to make money. I do know one TOD poster (not me) who made a nice killing on Pacific Ethanol - by shorting it.


What a coincidence....two of my coworkers were looking at Pacific Ethanol just last week, as a possible investment. Needless to say, I advised against it, unless they enjoyed speculative investments with high risk (aka gambling).
They took my advice and saved some money.
A short, witty article on oil stock speculation and unintended consequences.
From today's Barron's Online (behind a subscription wall)...

IPO REPORT: Ethanol Maker VeraSun Fattens IPO To More Than $300M
By Steve Gelsi

[excerpts follow]
NEW YORK (Dow Jones) -- VeraSun Energy Corp. on Tuesday doubled the payoff of its initial public offering to more than $300 million after the ethanol maker reported a big increase in first-quarter profit as the U.S. looks to alcohol-based fuels to ease dependence on foreign oil.

VeraSun said it expects to price its IPO of 17.25 million shares at $18-$20 a share in a bid to raise about $328 million with underwriters Morgan Stanley (MS) , Lehman Brothers and A.G. Edwards.

The estimated price range signals the start of the Brookings, S.D.-based company's IPO road show and the likely debut of its stock within the next several weeks.

The company, which plans to trade on the New York Stock Exchange under the symbol "VSE", filed to go public after inking pacts with General Motors (GM) and Ford (F) to install ethanol fuel pumps in the Midwest.

Meanwhile, a second ethanol maker, Aventine Renewable Energy, is also awaiting its stock market debut. Metalmark, a private-equity firm established by former principals of Morgan Stanley Capital Partners, owns about 40% of the company.

The IPOs from Aventine and VeraSun come as financial markets gear up for the growing industry.

The Chicago Board of Trade (BOT) is set to list it ethanol futures contract electronically during daytime trading hours starting May 31.

"Given the recent increases in corn-based ethanol production and attention it is receiving in the market, it is critical to list this contract electronically during daytime trading to expand the contract's availability," CBOT CEO Bernard W. Dan said in a statement.

While ethanol picks up steam, it's not without its negative aspects. It must be transported by trucks, trains or barges instead of pipes. Cars with a thankful of ethanol won't be able to travel as many miles as they do on a thankful of gas because the former contains less energy.

Currently, ethanol costs more than gas, but processes are underway to bring the price tag down.

Full disclosure -- I don't own this, and God knows I have no intent to own it. Go, RR, go -- you make almost as much sense as westexas (i.e., A LOT!)

PO is a long term forecast and ethanol is a short term "stop gap" in America's mind.  There is money to be made in the short term albeit timed correctly.  You can't make money without risk.

I think the reason this is taking off is due to the cost factor.  These are subsidized so much that we will throw a lot, billions of it, away.  America is embracing ethanol, and a smart financial mind would be wise to capitalize on measured risk.  I mean who cares if there are a limited numbers in our belief, that is great because asymetric information creates opportunities to cash in.  People are irrational.

keithster happy today - Pacific ethanol CEO was on CNBC last night and apparently placated investors. Up 20% to 30.5 today
I would look more into moving averages, than a week decline.  Wall Street will always dump new tech in favor of tried and true.  Keep in mind in the last two weeks the DOW started to crash.  When that happens WS moves from "new & risky" to tried and true.

Emerging markets are taking a beating right now as money is leaving there countries (our money really), and it's coming back to America where's it's "safe."  Where does all that extra liquidity tied up in equities go?  Commodities of course!

Depends on whether he had a stop loss on yesterday during the free fall. If you look at the chart, you can see that this happened before. It will slide and slide, recover a bit, and then start sliding again.

I have learned not to underestimate the stupidity of investors, though. I have seen them push stocks to such unrealistic values that it simply boggles the mind. I know a lot of people who sold tech stocks short too soon, and lost their shirts (right before watching them plunge by 90%).

Here we have a company, positioned far from the raw materials they need, in a state that was just granted oxygenate waivers, and they haven't even finished their first plant. Their product is ethanol, a gasoline replacement. Gasoline is not a high margin business. Yet investors are valuing the company at $1 billion.

It isn't like this company has a long-term patent on a proprietary product. If they do start making money, there is a relatively low price for entering into the marketplace. Insanity.


Margin accounts are your best friend.
Facing a full-fledged energy crisis

WASHINGTON -- The uh-oh letter came in a plain white envelope, no indication of the bolt of lightning inside.

It was from the electric company, announcing that the "average" residential customer's bill will increase 41 percent, meaning about $800 more a year. I am not average. My bill will go up about $1,500 a year _ if I use no air conditioning at all this summer.

I love this...

This is like an out-of-work father just about out of money spending his few remaining dollars on lottery tickets instead of investing in training for a new job.

His electricity bill will INCREASE by $1,500/year???  Yikes!  What is the guy doing, growing a huge pot farm in his basement with electric lights on 24/7?

In a 2,400 ft2 house, my wife and I, over the last two years, even with central A/C in the summer and some use of electric heaters in the winter for zone heating, average under $60/month for electricity.  That's less than half per year than this guy's increase.  (And we both work out of home offices, which means we have two computers running all day, and we have to climate control at least our offices during work hours.)

Yes, we use CFL's everywhere, and I'm very diligent about killing off wasted power for standby appliance, etc.  But there's something seriously amiss between that guy's situation and mine.

He did say he was not average, while you are conservation-minded.
My electric bill runs about $110/mo, yet I live in a nearly new very small "GoodCent$" rated home with energy star appliances, not in a major metropolitan area.
If I lived in the same type of house of the size my wife would like (nearly double), I could easily see paying $220/mo for electricity.
If my power bill went up +41%, that becomes $310/mo, or a $90/mo increase (+$1082/year).
If I lived in Washington DC, where everything costs more, yeah, +$1500 might be possible.  Ouch!
Well, here in Texas the electricity comes from some "gas-fired" plants (not all of it but some) and so the oil goes up... and so the cost of electricity does as well...  I know some people here that have well 5K sq ft home but utility bills are 800/mo in the summer (it get's hot here)  A 3500 sq/ft home (newer) will cost you around $400/mo "last summer anyway"...

Who knows this summer what it's going to be... I myself am in a 2 bdrm apartment (the apartments were built about 1 yr ago) and we are not home all day and only run the A/C a little in the evening to cool the place off, our last month (April 06) electric bill was $100.00 (we have about 1200 sq/ft, 10ft ceilings though...)... (we're in a suburb of Houston)...

That's pretty boggling to me, with my california condo bills of $15 electric (120 kWh) and $22 natural gas (17 therms).
Maybe the electric companies here in Texas are price-gouging?  Who knows, I just moved here last October from the suburbs of Chicago... my electric bills on my 3900 sq/ft home were about 30/mo in the winter and around 70/mo in the summer... so the 100/mo for a small apartment really seems high to me... and we hardly run the A/C (trying to conserve)...right now it's 84 degrees inside our apartment... We're in an apartment because my home has still not sold.  I put it on the market last August... It's currently listed about 20K below appraised value... :-(  it's also only 6 years old.

we don't turn the A/C on until it get's about 87...that's starting to get toasty...

Most electricity in Texas (and Louisiana) comes from natural gas.  The % of NG is highest in the summer (NG is the marginal source).  When (not IF) NG prices spike, those bills will double or more IMHO.

Best off will be those in Austin that signed up for Green Power.

thanks for clarifying... the NG part, I said OIL but meant NG...
Well, we in San Antonio use a different utility, with a mixture of coal-fired plants, nuclear, natgas, a tiny bit of wind from West Texas (the region, not the TOD guy).  They consistently brag that our rates are among the lowest in the nation...our 3200sqft house last summer produced about $200 monthly bills with the a/c temp at 82 during the day.  During the winter we can frequently go for many days or weeks without heat or a/c, so bills sometimes go down to $60. I can't imagine what running the a/c at 76 all day would produce--maybe $400 but I've never tried it. Newer homes tend to be more energy efficient, at least here.
I live in Texas also and my electric bill hit $600
last August. I think we pay way more per kilowatt
hour than most other areas of the country. I am
scratching around to find the last bill so I can
see exactly what I paid. How much per kilowatt hour
are you guys paying?
This is the key to the entire above discussion - energy, not dollars.  Try to get used to thinking of your electrical usage in terms of kWh - per day, per month, per year.  Certainly know what your rate per kWh is, but that's what makes comparison in dollars imperfect, to say the least.  Some parts of the country pay 8 cents (less anybody?)  Others pay over 20 cents.  So two households with the same usage would have a 2.5x difference in their bill.  Also, size of house has little to do with usage, except in high AC load areas (sorry, Texas) and anyone unfortunate enough to have electric heat - ouch!  What drives usage is your appliances/systems and your use of them.  Hot water is a biggie.  If it's electric, it makes a major difference in your usage. Rule of thumb is 3 kWh per person per day.  Heating systems vary.  Forced hot air blower uses much more electricity than a circ. pump in a baseboard hot water system.  Old fridge, generally uses much more than a new fridge.  On and on.  Break it down by gizmos and gadgets in kWh, so you're comparing apples to apples.  Then you can see where the improvements can be made.
Thought I'd add a coupla tips.  We're in NC.  Pretty hot summers.  We keep shades drawn on sunny sides all day.  Open windows in eve. when outside temp goes below inside (doesn't happen every night, but most)  Can get through most days in comfortable range this way with no AC.  But when we first started this, we had moisture probs.  So now, when it's really hot & humid, after we close the house up in the early morning,  we run the AC for a hour or two while it's cool out and we can most efficiently dump heat/moisture out, and can generally coast through 'till next morning.  Doing this and many other eff/cons. measures has our base usage down to 5 kWh/day spring/fall, and about 10-12 kWh/day winter/summer.  That's 150-350 kWh/month, or $12-28 month (plus the $4 block of Greenpower we buy).  Lots of little and some bigger steps go into this.
6 cents per KWH here, down in central Georgia.
From late April through early October, the A/C runs pretty much constantly in this part of the country. Heating during the winter time, on the other hand, is not a huge problem.
"Work in an MIT lab may help energy companies withdraw millions of additional barrels of oil from beneath the sea floor.

"Typically, companies recover only 30 percent to 40 percent of the oil in a given reservoir. Since a single reservoir may contain a billion barrels total, increasing that "recovery efficiency" by even a single percentage point would mean a lot of additional oil.

-end snip-


I have said before that an important lacuna - and possible weakness - in the imminent Peak Oil case against the Cornucopians is the lack of attention the imminent Peak Oilers pay to the possibility for significant additional extraction of Original Oil In Place using advanced techniques.  Someone, somewhere, needs to do a comprehensive, systematic study of this issue.
"the possibility for significant additional extraction of Original Oil In Place using advanced techniques.  Someone, somewhere, needs to do a comprehensive, systematic study of this issue."

Been there done that--all over Texas, primary, secondary and tertiary recovery techniques.  High tech seismic.  Horizontal drilling.  Result?  Oil producton has dropped for 33 years.  The real problem is fields like East Texas, which have watered out, and that are producing 99% water, with a 1% oil cut.

What irritates me about things like this MIT press release is that it will then be reported by the MSM and the public will continue to beleive that there is no need to worry about peak oil.  Between this and the "new", vast Mexcian oil field, we've got it made :-)
Hello Westexas,

But could you elaborate on that so as to shut up the Cornucopians who regularly use this as a "talking point?"  The problem is that a layman (such as myself) has no way of knowing why the 60-70% of oil that typically gets left in the ground HAS to stay there.  Why can't we get it out, for crying out loud?  And who is to say that someone might not come up with a way of doing so eventually?  

I have written about these issues myself before using EROEI-type arguments, but it's a speculative argument.  These types of arguments would be a lot more authoritative coming from the empirical knowledge-base of an industry insider - such as yourself or Robert Rapier or Heading Out.

If you can find a new, advanced technology which can be applied in the next couple of years that is not already in use, then you may have a case. The Cornucopians have to make the case in my opinion. They talk about tech, but never specify the technology they are referring to, and they talk about undiscovered reserves of oil, whose location they can't specify. Hard to argue against that.
We who are convinced of imminent Peak Oil can place the burden of proof on the Cornucopians in this way, but it is not reasonable to expect someone who is new to the entire debate to do this.  In point of fact, such people place the burden of proof on US - not without reason - and I don't think that imminent Peak Oilers are meeting this burden adequately at this juncture.
How can we argue with a theoretical? There is no tech there to argue with that I can see. I repeat, they are claiming tech will save us, but there is no tech out there that that is not being used. If CERA says there is tech, they need to say what it is but they never do. The tragedy is no one seems to call them on this, to challenge them to substantiate their claims.  How do you propose to argue with this? I am asking honestly your opinion. For example, I can say "there is abundant oil out there, it's just where we haven't looked" and that is a statement that is impossible to refute. The same is true for the statement that "new (unspecified) technology will provide a large boost in worldwide production."

I suppose one could write a highly technical paper describing all the technologies currently available, their current applications and limitations and show that they are already being used to the fullest, but I am sure such a paper would be well beyond what a novice reader could or would swallow. Simmons has a pretty good discussion in his book of advanced recovery techniques and why they won't solve the problem.

However, the cornicopians go well beyond this with what seems to be fantasy, unnamed tech. Don't know what to say. I have about stopped caring, however, and just feel we will have to wait till reality kicks us in the face.

If it's any consolation, they don't believe this nonsense any more than you do (IMO).
There was a good article on Venezuelan heavy oil/tar deposit at Steve Lendman's blog NEW ESTIMATE OF VENEZUELA'S TOTAL OIL RESERVES
Good Article but I think that the blogger fails to mention that Heavy Oil is much more expensive to extract than light-sweet crude...so for a very long time, heavy-oil was not even counted in reserves...

And Venezuela having an amazing amount of oil is not new news... Here's an article from 2004 http://www.petroleumequities.com/cgi-bin/site.cgi?p=energysecurity.html&t=5

Maybe Hubbert's Bell was on Conventional Oil?  Anyone care to comment?


"Now, here, there existed doubts before with respect to our numbers because the International Energy Agency had not recognized the crude from the [Orinoco] Belt, as conventional crude, and in fact it's not conventional crude, but the report from the International Energy Association... the last report from march... certifies that the production from the belt is petroleum production and from here on out the reports from the International Agency are going to reflect our level of production as 3.3 million."  Ramirez told Union Radio.

So the IEA is now acknowledging that heavy oil is petroleum production and will now be counted... so we could see Venezuela's proven reserves skyrocket to 1.36 trillion?

Geologist announces proven gold reserves of 60 billion pounds


Hahaha!  Good one, westexas!
can we use a fishnet to sift through the ocean and get all that Gold? :)
Just give me my 9 pounds now and IOU...this sounds fair.
You take a check?  Hmmm... let's see 700.00/ounce * 16 * 9 1 gozenta... carry the 4, eh... $100,800.00...
Just an FYI... I was being sarcastic with this article...:-/
Why is it that we are always underestimating global warming?

A new study by Torn and Harte concludes that we have seriously underestimated the feedback mechanisms by as much as 2 degrees Celsius.


Climate change: the debate is over
by Alex Steffen

This is the way the debate ends: not with a bang but a press availability. President Bush today in a backhand way admitted that climate change is here, but said we shouldn't get caught up in discussion about what is causing it and instead focus on solutions:

"And in my judgment we need to set aside whether or not greenhouse gases have been caused by mankind or because of natural effects and focus on the technologies that will enable us to live better lives and at the same time protect the environment."
We're all about solutions, of course, but this is no time to ignore science, because, as this Op-Ed notes, scientists are saying that none of the solutions we're yet considering are even vaguely on a par with the magnitude of the threat we face:
Here's the truly inconvenient truth: Scientists have long been warning that the world must cut back on greenhouse-gas emissions by as much as 70 percent, as soon as possible, if we're to have a fighting chance of stabilizing the climate. Yet even with full participation by the United States, the controversial Kyoto Protocol -- the only global plan in the works -- would hardly begin to do that. Its goal is to reduce emissions by 5.2 percent below 1990 levels by 2012. And so far, the best plan offered by American politicians -- the Climate Stewardship act sponsored by Senators John McCain and Joseph Lieberman -- has an even more modest goal: it aims to cut emissions in the United States merely to 2000 levels by 2010. And the Senate has rejected it twice.
Last June, Gov. Arnold Schwarzenegger of California became one of the few elected politicians with the courage to talk about climate change in the language it requires by promoting a plan to reduce his state's greenhouse-gas emissions to 80 percent below 1990 levels by the year 2050. But Mr. Schwarzenegger has since warned of the need to move slowly so as not to "scare the business community."
While the California governor backpedals, a team of scientists, economists and business executives have put forward a potentially revolutionary plan. Outlined by Ross Gelbspan, a former Boston Globe reporter and editor, in his book "Boiling Point," the so-called Clean Energy Transition [an update of the World Energy Modernization Plan we discussed back in 2004 - ed.] would start by turning over an estimated $25 billion in annual federal government payments now supporting the fossil-fuel industry to a new fund for renewable energy investments. It would also create a $300 billion clean-energy fund for developing countries through a tax on international currency transactions, while calling on industry to get in line with a progressive fossil-fuel efficiency standard, forcing greenhouse-gas emitters to immediately work on conservation. ... If megaproposals like the Clean Energy Transition, which would get the ball rolling on a global level, still strike us as romantic and implausible, it's only because our politicians, including the well-intentioned Mr. Gore, and smart, well-financed groups like Environmental Defense have denied us the leadership we need to achieve global warming solutions on par with the problem.
Indeed, it is precisely because the climate crisis is so profound that we need to encourage the American debate on the subject to move on, finally and for good, and start to focusing on how to build a bright green future as quickly as possible. The science, after all, is pretty unequivocal at this point. Indeed, essentially the last remaining credible skeptic, Scientific American columnist Michael Shermer announced this month that, despite his dislike for environmental groups
[D]ata trump politics, and a convergence of evidence from numerous sources has led me to make a cognitive switch on the subject of anthropogenic climate change. ... Because of the complexity of the problem, environmental skepticism was once tenable. No longer. It is time to flip from skepticism to activism.
In other words, the debate it over. It's just over. Climate change is here, it's scarier than we thought, we're causing it, and (especially in combination with other large-scale environmental and social problems) it's going to demand radical innovation and major reforms.

But how do we get the word out to a wider audience? Maybe we need some sort of slogan ("It's here, it's human, get movin'" is the best I can do without another cup of coffee). Maybe we just need to make An Inconvenient Truth the number one movie in the USA [it opens this week in select theaters].

Maybe, though, we in the blogosphere should start at home.

Over the last few months, we here at Worldchanging and our allies at related sites across the blogosphere have seen a noticable uptick in comments and trackbacks from climate denialists. Some folks I've talked speculate that this is an organized effort to try to inject one final round of Fear, Uncertainty and Doubt into the debate in advance of what is likely to be a summer where climate dominates the news. I don't know that that's true. What I do know is that having this debate online is no longer helpful: many of the folks making these comments seem most interested not in learning more about the science, but rather in spreading propaganda and disrupting conversation about how to take action. Climate "skeptics" have become a new brand of troll.

But how do you deal with climate denialists? This has been a subject of great debate here at WC Planetary HQ this last week.

Ignoring them (which is the usual practice for dealing with those who would disrupt an online conversation) will in this case leave unaswered what are essentially lies (often lies whose funding trails we can trace back to Big Oil). And we all know that a lie, unaswered, is often taken for the truth. That seems contrary to the mission we're all pursuing, of putting forward better answers.

Nor do we feel comfortable deleting these comments: though many of them are clearly made in order simply to disrupt rather than add in any way to the conversation, and they are (as Joi Ito argues) a form of spam, and thus fair game for deletion, we feel that simply deleting them is a bad precedent, and that on principle the answer to bad speech is better speech.

So ignoring and banning are both bad ideas: where does that leave us? We think it leaves us with the responsibility to answer these comments with better information.

But that's time consuming, and we're all busy people. So here's our proposal -- and we'd like your help:

  1. We want to build a post for WorldChanging with a simple, clear list of resource links and easy explanations for what climate change is, why scientists know it's real, and why we're no longer interested in having this debate.

  2. We would then like to come up with a clear, no-more-than-one-paragraph message which can be posted after trolling comments a) informing the commenter that, if they are serious in looking for more info, that info is available and they can access it on this page, and b) letting other readers know that the debate is over, and those questioning the scientific consensus at this point probably have another agenda, and we're moving on. That message could even begin "The debate on climate change is over."

What links and information should be in that "Universal Climate Skeptic Response Post"?

What should that message say?

We'd really like to hear your ideas. We will make the final product available under a Creative Commons licence for all bloggers to use on their own sites. Indeed, the more folks working on it and using it, the better.

The debate is over. It's time to act.

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Alex writes:
Feel free to encourage your readers to help build this resource page
- we can use all the smart folks working on this we can get...
Published on 22 May 2006 by WorldChanging. Archived on 23 May 2006.


The best resource I have seen for issues of climate change and answering skeptics is at http://www.realclimate.org/


"Last June, Gov. Arnold Schwarzenegger of California became one of the few elected politicians with the courage to talk about climate change in the language it requires by promoting a plan to reduce his state's greenhouse-gas emissions to 80 percent below 1990 levels by the year 2050. But Mr. Schwarzenegger has since warned of the need to move slowly so as not to "scare the business community.""

If Schwarzenegger really would like to reduce the greenhouse-gas emissions he probably should start by endorsing the plans for a high-speed train system in California instead of working against it:

"Imagine traveling from Los Angeles to San Francisco in two and a half hours without ever leaving the ground, and for less than the price of a single tank of gas. This is the future of a California connected by a high-speed rail system, part of an innovative proposal that would place California at the vanguard of finding a solution to the nation's growing transportation and energy crunch.

Despite the obvious appeal of high-speed rail, Gov. Arnold Schwarzenegger is seeking to have a nearly $10 billion high-speed rail bond measure scrapped from the November 2006 ballot. The bond measure was originally approved in 2002 and was to be on the November 2004 ballot but the budget crisis postponed the measure to 2006."


The high-speed rail system would save up to five million barrels of oil per year.


5 Million...that's it?  I know we need solutions, but I would have thought it would save far more in any year.
I know several transit professionals & activists in CA and all express doubt about the HSR project.  "Too much" seems to be the consensus (and it WILL cost more to build, take too much land (HSR is loud and no one can live too close).

It also uses large amounts of electricity due to air resistance at sea level.

CA needs more freight rail capacity, especially into LA.

A better design would be 110 mph for pax service and running higher value freight (no coal, but veggies and fruit, packages, mail) on the tracks at night at 80 mph.

If I lived in CA I would vote "No".

Actually it won't use much electricity. The trains are extremely streamlined and have regenerative braking. If you cut the engine power to a TGV train traveling at 165mph in level terrain the slowdown is so gentle that you can't even feel it.

110mph is too slow to compete with air travel, negating much of the oil savings.

Sure the cost is high, but the $33B figure is in line with costs for similar lines in Germany, per mile. It is also a small fraction of the $222B being used for mainly roads in CA the next 10 years.

It is about as noisy as a highway but the capacity is several times larger for the same land use. Twin tracks can carry 26,000 passengers each way per hour.

110 mph uses far less.  Figure aerodynamic resistance as square of speed.

Zero extra freight capacity with HSR, which is where the "big bang" is economically and in energy savings.  Semi-HSR gives CA extra, badly needed freight capacity.

LA & SF are too far apart to take a very large market share from aviation.  Spend/waste billions on an unachievable goal.  Billions that could be used for Urban Rail (Red Line to the Sea, BART to San Jose, etc.)

In Japan, HSR gets a small market share past 400 km (250 miles).  

London-Brussels HSR gets ~50% market share.  197 miles straight-line) miles straight line (with a ditch to discourage cars).

London-Amsterdam (209 miles Straight line) will get twice a day service when/if it starts vs 9/day to Brussels.  Very small (~10%) market share.

London-Frankfurt (386 miles) Two major financial centers and HSR track all the way.  No plans or even discussions of a single seat HSR service.  No percieved demand.

LA-SF (337 miles) No hope for more than a few % of market share unless Californians are more likely to ride rail than Japanese or Europeans.

Mileage measured from airports LCY (London City), FRA, BRU, AMS, LAX, SFO

California semi or HSR's real market is NOT LA-SF but Bakersfield-LA & Bakersfield-SF and similar smaller city service.  And 110 mph is just great for those shorter markets (without good air connections BTW) so you are competing with the car, not air.

Not as sexy but that is reality.

California does NOT have enough $ (or time) to waste on HSR.

Build semi-HSR or just more Urban rail.  Vote "No" for HSR !

And that is from a rail supporter.

Roads are infrastructure that is here now, already financed, doesn't need all the fancy stations and destruction of houses etc.  I think that we need eletric trams or buses.  OH wires.  Quicker to install, cheaper too. Utopia will have to wait until we can afford it- because we have not planned in advance for this.
Extending the Red Line subway in Los Angeles is the best single use of transportation infrastructure $ in CA.  At least to UCLA in Westwood.
This subway, if completed to Santa Monica, could be the second busiest subway in the US and one of the dozen or so busiest in the world.  Only the 4 track Lexington Avenue in NYC would eclipse it here.

Many other rail lines could feed off of this transportation artery.  It would become the backbone of rail in LA.

Expensive but worth it !

But cheap compared to HSR.

And quite possibly save more than 5 million b/year.

The problem is not the palausibility of the Climate Change. The problem is what to do. Energy forecasts show that we will quite likely have quite a big reduction in the world (fossile) energy use anyhow in 50 years perspective. But it seems that this is a problem. We don't even know how to cope with this. No bright green future.

The Peak oil is as well, or even better, grounded theory as the Climate Change. But no real action here either. Even the very modest Kyoto agreement has been meaningless and the targets are not being met. It is obviously very difficult to accept even the necessary consequences of oil depletion. Everybody talking about supporting programs that will reduce CO2 emissions several tens of percents in few decades is lying.

So far "Kyoto" has been an European codeword for energy problems, coal depletion and Peak Oil. It has been a way to ration energy between EU members etc.

I think the real challenge is to meet the Peak oil without recoursing to very low EROEI solutions that mean producing more C02 and getting very little net energy. Tar sands, Venezuelan extra heavy, CTL, ethanol mean just this.

Go back and look at Al Gore's tome for the 1992 campaign. Earth In the Balance. That book by Ozone Al. Maybe even lok at the reviews it got. Who was prescient, Al or the critics?
(Actually that book was mostly staffwork and contained little that could ever have been controversial.)
Now look at the advance reviews for An Inconvenient Truth. Has anyone learned anything? Or does Big Al just continue to get loopier & goofier as the years go by?
Simple extrapolation from current data gives better GW prediction than models created by those who must defend themselves from rearguard attack.
Colbert is exactly correct when he states that reality has a well-known liberal bias. Unfortunately we exist in a time when questions of fact are ideological and unverifiable.
My personal feeling is that GW will not be accepted until after repeated catastrophic crop failures. If such a calamity is not imminently forthcoming the issue will be "debated" ad infinitum.
Greg Palast chimes in on Peak Oil.  Not sure if this has been posted yet.  Peak Oilers compared to alien enthusiasts.  
Nevertheless, like believers undaunted by the failure of alien spaceships to take them to Mars on the date predicted, Peak enthusiasts keep moving the date of the oil apocalypse further into the future. In the new, revisionist models of Hubbert's prediction, the high point in the curve of discoverable oil on our planet will come in a decade or so. Though we have a reprieve, goes the new theory, still, we're running out of crude, dude! There's only another twenty years left in proven reserves! Oh, my! "It's true that there's only twenty years' supply left--and that's been true for the last hundred years," Lewis Lapham told me over a decent sauterne at Five Points. (He more often sups at Elaine's, but I don't rate that.) Lapham of Harper's magazine is the only editor in the hemisphere with hard knowledge of the petroleum market, insight he inherited legitimately: His family helped found Mobil Oil, the back half of what is now Exxon Mobil.

He asked, "Why in the world would oil companies, or any company, announce that there's lots of its product out there? You'd bust your own market. It's better to say the cupboard's bare." As Lapham noted, we have been "running out of oil" since the days we drained it from whales. OPEC's big headache before the war shut down Iraq's fields was that there was way too much oil. We were swimming in it and oil prices stayed low. The last thing oil companies want is more oil from Iraq, any more than soybean farmers want more soybeans from Iraq. Increasing supply means decreasing price.

"He asked, "Why in the world would oil companies, or any company, announce that there's lots of its product out there? You'd bust your own market. It's better to say the cupboard's bare." As Lapham noted, we have been "running out of oil" since the days we drained it from whales."

Interesting that Palast contradicts himself in one paragraph.  What is the prevailing opinion?  That we have lots of oil, or that we are running out? He, or whomever he's quoting, asserts both as being true.  

In any case, IMO some major oil companies are afraid that, if they come out and admit that they can't replace their conventional reserves, they will be inviting punitive taxation.  Instead, they assert that they need every dollar of cash flow they can get in order to bring abundant supplies of oil production on line.   This is one leg of my "Iron Triangle" theory.  Some major oil exporters and energy analysts (working for the major oil companies and exporters) can be found in the same leg.   The oil exporters, IMO, are afraid of being taken over by militarily more powerful importers.  

No Peaking - The Hubbert Humbug

Hubbert's predictions may have been astonishingly wrong but his little forty-page research report is, nevertheless, astonishingly important in understanding the mindset of Big Oil.

Almost everything you need to know about Hubbert and the agenda behind his crucial 1956 study is contained on its cover page. The oil doomsday pronouncement is "Publication No. 95, Shell Development Company, Houston, Texas." Hubbert was the chief Consultant on general geology for Shell Oil and his "end of oil" paper was presented to the Texas meeting of the American Petroleum Institute. All else flows there from.

Look closely. When Hubbert spoke, oil reserves worldwide were zooming heavenward. Despite the tide of petroleum rising around us, Hubbert declared that oil discoveries in the USA had begun to peak "as recently as 1951 or 1952" and that the world's reserves would follow not long thereafter. He didn't need to wink. His oil industry audience understood what oil giant Shell wanted America to believe: Oil isn't abundant, it's a scarce commodity and therefore...

  1. It's too cheap--so oil companies should, for the public's own good, raise the price to conserve this precious resource.

  2. We need to find an abundant alternative to fossil fuel.

  3. We need to protect our access to dwindling sources of crude, by force if necessary.

Shell Oil, through Hubbert, sought, successfully, to change the way America thought of oil's price, alternatives to oil and access to oil.

Look closely. When Hubbert spoke, oil reserves worldwide were zooming heavenward. Despite the tide of petroleum rising around us, Hubbert declared that oil discoveries in the USA had begun to peak "as recently as 1951 or 1952" and that the world's reserves would follow not long thereafter. He didn't need to wink. His oil industry audience understood what oil giant Shell wanted America to believe: Oil isn't abundant, it's a scarce commodity and therefore...

  1. It's too cheap--so oil companies should, for the public's own good, raise the price to conserve this precious resource.

  2. We need to find an abundant alternative to fossil fuel.

  3. We need to protect our access to dwindling sources of crude, by force if necessary.

Shell Oil, through Hubbert, sought, successfully, to change the way America thought of oil's price, alternatives to oil and access to oil.

So I ask the question...

Are all of the big oil companies keeping a global secret that we have an infinite supply of oil, the Hubbert Bell paper was just a ruse so that shell could charge more for oil and justify?


Is there a finite amount of oil and we will or have peaked?

Ockam's Razor?  Anyone?

I am beginning to understand how I could become a modern neurologist. The next patient who comes for his beginning Alzheimer disease could get my following conclusions :

  1. What, you think you are loosing your memory ? Well, you don't have a problem. Look, you remember the name of your wife, your own name and so on. There is plenty of memory left in your brain. In fact, no one has ever proved a specific mechanism for memory loss, so I don't believe there you have a specific problem, nor a specific disease.

  2. In the future, 10 to 20 years or perhaps earlier you might benefit from stem cell research and apply for some stem cell injections in your brains. It already works for some aplysia and it worked for one mouse in a russian laboratory.

  3. From now on, you can take some anticholinesterasic medication which will definitely enhance your condition.

So I will repeat, you don't have any problem.

So goes our modern rhetoric. However, the paper you linked to is less subtle. It is full of errors, to begin with a false presentation of Hubbert's theory. I can only advice people here to not read this article, it's a pure waste of time, not even funny to debunk.

Again this is the point I'm trying to make.   I always provide links to whatever I'm commenting on so that people can always read for themselves and not take "my opinion" as the written word.

I merely wanted to make the point that the idea we have infinite oil is ludicrous.

To refute the article is doing justice, even if you feel it's a waste of time or not funny to do so...

I also think maybe you would enjoy debunking the article...

Greg Palast "Journalisim and Film" -- He was on CSPAN as well...

I call on the TOD experts to set him straight.  He's not just some small internet blogger getting the facts wrong...

Well err, I must confess that I didn't know who greg palast is. So I apologize for beeing a little fast in calling all this a waste of time.

However I didn't mean to attack you, bradshaw, because I think you do quite a good work with all the documents you collect. My remarks were directed to the author of this piece.

This article is too replete with approximations, false statements, to be correctly adressed. It reminds me of the way clerics tried to debunk scientists in the renaissance period. For instance when a physiologist tried to show that blood circulates in the body, the clerical answer was : so then why don't I spin around all the time ?

I will only recall the first gross error I think in this absurd text : the word culmination, at least in a scientific setting means "apogee" and not "nadir". Of course, there is an ambiguity because "culmination" in a litterary sense can also mean "termination". However Hubbert was a scientist. But playing with words won't make a case.

Thanks Neuroil, I didn't think you were attacking me as I didn't write the article.  I do appreciate you taking the time to post further on the subject.
Neuroil, thought you would like to know...I'm glad EnergyBulletin called him out!
Mr. Palast just got "owned"-- :-)

Why Palast Is Wrong
And why the oil companies don't want you to know it


Now that I've convinced you that the Peak Oil crowd is crackers [in his previous column: No Peaking: The Hubbert Humbug], let me disagree with myself. We can't understand the new class war unless we understand why oil, a certain kind at least, has in fact "peaked."

We've long jumped over Hubbert's predicted peak and, in 2006, rolled our SUVs right through the "culmination"-- that is, used the last drops of the one-and-a-quarter-trillion barrels of liquid crude the good Earth can provide according to the Hubbert jeremiad.... The Shell/Hubbert predictions were dead wrong. Those are the facts.

I somewhat misinterpreted the portion of the article I read, because if never occurred to me that someone could be stupid enough--or deliberately deceitful enough--to seriously propose that Hubbert was part of a mainstream effort to convince the world that oil is scarce.  In addition, how can anyone with working brain cells conclude that Hubbert was predicting complete world oil depletion by 2006?

As most of us know, Hubbert was pretty much alone, at least in the Fifties, in predicting that Texas and the Lower 48 would peak around 1970.  

Even today, the Peak Oilers are still in the minority, even with evidence of all of the regions that have gone into terminal declines.

However, this  conspiracy theory is a direct consequence of the ExxonMobil, Peter Huber, Daniel Yergin, et al,  propaganda that Peak Oil is decades away.   If oil is abundant, then higher oil prices must be the result of a conspiracy.

I totally agree with you.  The whole point of posting this article what to point to such a goofy concept riddled with errors (as pointed out above).  

I just wanted this brought out on TOD... this guy really needs a wake up call from some seasoned TOD'ers -- if anything to get his facts straight.

The gentleman from Texas yields to the floor the remainder of his minutes...I watch way too much C-SPAN :-/

>However, this  conspiracy theory is a direct consequence of the ExxonMobil, Peter Huber, Daniel Yergin, et al,  propaganda that Peak Oil is decades away.   If oil is abundant, then higher oil prices must be the result of a conspiracy.

I am pretty sure Exxon, Huber and Yergin know very well PO is imminent. I know Exxon is well aware of it, and refuses to publically acknowledging it because of further nationalization of their foreign investments, which would kick off a full worldwide energy crisis.

Wide exceptance of PO will result in an premature economic collapse. Which is better: tell people today that their way of life will soon be over, or just to sit quiet and let enjoy what little time they have left?

If you were going to die in a couple of months, would you rather be told and suffer with the knowledge of your doom, or would you rather live out your remaining time unaware of your pending doom? In either case your going to die, the knowledge of your pending death will not affect the future outcome. By having knowledge of your pending doom your likely to dwell and experience emotional pain.

No good can come out of widespread knowledge of PO. There is insufficient time and oil reserves remaining to prepare for a smooth transition. Whether you inform the public today or after the energy crunch comes, it will not improve our future, only shorten the time remaining, by prematuring inducing panic. People are irrational, especially when they flock together. We can see this with the stock market bubble of 90's and current housing bubble.

I would definately prefer the knowledge.

There is at any given time an opportunity to make a better transition then no effort at all.

>There is at any given time an opportunity to make a better transition then no effort at all.

Sorry, there isn't. As soon as the public is informed, banks and wealthly investors stop lending to begin their personal prepations and preserve their wealth. Exporters cut back or end exports completely (to preserve reserves for domestic use). How can you make a transition without capital and energy?

Presume that your a wealth investor, would you continue to invest your money with the higher risks associated with global declining energy production, or would you act to preserve your existing wealth, and make your own personal prepations.

Presume your a high ranking gov't offical of an exporter. Do you continue to except american dollars and run huge trade surpluses that have little value? Do you invest your capital in america or at home making your own prepations for your nation? Do you continue to export at capacity or do you preserve your oil reserves?

Consider the american politician. Will he or she take away oil from the public (making them angry and less likely to re-elect) so that nation can replace infrastructure? Or do they fight to get gas and home heating fuel to their voters? Would they vote to ban all personal car travel to free up resources? Politician will be surely granted privileges that provide abundant access to fuel. However as a out of office politician, they face the crisis like everyone else. Do you think they will choose what is right for the long term (at the expense of re-election) or what is best for themselves, their friends and their family? I don't see them doing it now, and I am less likely to believe they will change in the future. When the crisis begins expect even more finger pointing and less progress.

There are dozen more issues to consider that once peak oil is globally recognized the economy will collapse.

You realy would like to party a little longer do you?

I locally see a fair amount of possible preparations. Locally as in a few reasonable business ideas, municipiality investments and adjustments in state investments and how our local state is run. I know less about what is possible in the USA but it cant be impossible to do constructive things.

You see PO as a cliff edge, I see it as a gradual transition. Perhaps this means that USA will commit economical suicide leaving quite a lot of resources for other countries?

>You realy would like to party a little longer do you?

No, the point I was trying to make is don't wait for the gov't to take action, and don't expect widespread knowledge of PO to help either. They best option in my opinion is use the time left wisely to make your own preparations. To simply hope for the best to waste your efforts explaing the dangers of PO to the masses is counter productive.

>You see PO as a cliff edge, I see it as a gradual transition

Yup. Virtually all of the large fields use advance Oil recovery technics. We know that these technics do not increase the amount of oil that can be recovered. They only temporary postpone output declines. When these fields become watered out, production will drop like a rock. The belief in a shallow decline is probably unrealistic.

We are already behind the curve on convential production. All of the increased production from the last four or five years as come from unconventional oil sources, such as the tar sands and GTL conversions.

>Perhaps this means that USA will commit economical suicide leaving quite a lot of resources for other countries?

No. All countries will suffer the same or worse faith. The US has huge reserves of coal which will permit it to fair better than countries that don't such as most of Europe.
When the effects of PO kick-in, Oil will no longer remain fungible. Any nation that is dependant on Oil imports (which is every industrialized country) will face major economic declines.

No, the point I was trying to make is don't wait for the gov't to take action, and don't expect widespread knowledge of PO to help either. They best option in my opinion is use the time left wisely to make your own preparations. To simply hope for the best to waste your efforts explaing the dangers of PO to the masses is counter productive.

All three strategies seems to function in Sweden. Our current government have for some time taken relevant action and our next government will most likely continue the action but in a more market driven way. Spreading the word about Peak Oil do change local political agendas in municipialities and encourages both public and private investments. I have not concluded this with any scientific method but it seems to work, I find small positive news all over the spectrum.

If it works here, why cant it work in other places?

I do not know if enough is done or if things are done too late or too soon but it will anyway ease our problems when oil gets expensive. Fungibility or no fungibility. If you have something valuble to trade with you will get the oil you need and if your infrastructure and industry are efficient you will need less oil per unit of value you produce.

Mitigation can be done in a 24 to 30 month time span.  

Existing rail systems can order more vehicles and even make short extensions to existing lines.

Wind turbines can be added to existing wind farms and a few new ones completed.

Production of fuel efficient cars can go to 4 shift (24/7) production. Close in, energy efficient condos can be built.

Not NEARLY enough, but better than nothing.

I agree with Magnus, it will be a downslope more than a cliff.

>Mitigation can be done in a 24 to 30 month time span

No, it will take decades. I try to explain below.

>Existing rail systems can order more vehicles and even make short extensions to existing lines.

This is a microscopic piece of the probably. Consider that the number of rail lines that have been torn up all over the country and replaced with freeways and roads over the last 50 years. Very few US cities have mass transit systems, and virtually all of them lack the capacity to provide transportation for everyone. For instance, NYC has some of the best public rail transportation, yet if you walk top side, the streets are absolutely jammed with car traffic.

Public transportion is the least of the issues. The more important transportant issue is transporting goods and materials that are required to sustain infrastructure and to provide food and heating. The existing freight rail system is already at maximum capacity. It takes a mile long train just to provide enough coal to fuel a singe coal fired plant for a single day. It will be a huge undertaking to replace the existing system road infrastructure with rail.

>Production of fuel efficient cars can go to 4 shift (24/7) production. Close in, energy efficient condos can be built.

Once PO kicks into high gear production of cars will end. Construction of new housing or upgrading infrastructure consumes large quantities of energy and resources. You need lots energy to build homes. For instance do you know much energy it takes to make a ton of concrete? How much energy does it take to ship it from the plant to the construction site? It also takes a large amount of capital to finance the construction of a new home or even retrofit an existing dwelling. Few americans can afford the costs without financing. Today, household debt has nearly reached the maximum limit. Few will be capable to afford retrofits or purchase more energy efficient homes and vehicles, even if a downslope is shallow.

Instead of take a macro view of the issues, take some time to examine the details of what it really takes to make a transition. By looking at the surface your ignoring the dirty under the rug. The devils in the details!

>I agree with Magnus, it will be a downslope more than a cliff.
See my response above why its not likely to be a slope.

To sum it up. It has taken us fifty years to build an oil dependant, private transportation network. Its going to take considerable time to replace it. Consider for instance Boston's Big Dig project which has been over twenty years in planning and construction and it still is not yet finished. This is a relative small project since it was only an upgrade, not a replacement with rail. Its far easier to build new construction in an undeveloped region that it is to upgrade or replace developed infrastructure.


Well said, Techguy
> Mitigation could take place in 24 to 30 months.

I was NOT talking about complete mitigation; but SOME mitigation. Enough to reduce US demand by 1 or 2% without excessive pain.  It we start just a little bit before the curve starts down, that gives a bit more time to do more mitigation.  A race that we are unlikely to "win", but enough to seriously soften the blow.

The Texas Peak had two almost flat years after that (-0.1%, -0.3% or close from memory).  If we start 30 months before Peak, are down -2% at Peak (putting the savings into SPR) and are lucky enough to have a "flat Peak", that gives two more years for longer lead time items to come on-line.  A desperate race indeed; but better than "hitting the wall" at full speed.

If one builds "tram systems" with the French process rather than the US federal process, they can go from concept to opening in 36 to 42 months.  Rarely does a French system take more than 4 years from conceptual design to opening and many less than that.

Subways are longer lead time items, but they can be built quicker than SOP here.  I really think that the 24 mile Dulles extension to DC Metro could be open by 2011 or 2012 if red tape was cut and more money spent.

I think the Pentagon was built in 16 months.  Could not Miami take existing blueprints for, say, their 9.5 mile long elevated "subway" North Line (goes to border of Ft. Lauderdale) and build it in 30 to 42 months ?


And continue the existing, in service design towards the SW, just build more of same for a dozen miles on the old Florida East Coast Rail ROW ?  How long would that take ?

Smaller housing units close in take far less material (even if built for high efficiency) than McMansions.  Think 780 sq ft for a family of four; single room efficiencies for one or two people at the extreme.  Not saleable today, but if they are next to a rail stop and 1 to 3 blocks for almost all shopping; it works in an economic crunch.

If we start just a bit early, the first units will be substantially larger.

As I noted in Miami in 2004; 15 of 23 building cranes were within 3 blocks of a Metro station.  But 38, or 50, cranes in, all close to stations.

I am aware of the details; and removable delays that slow us down today.  Some lines will take time regardless (2nd Avenue Subway in NYC) but most others need not to.

>If we start 30 months before Peak, are down

We are already past peak energy production if you examine the declining EROI on global production. Since about 2003 global energy production has been on the decline as declines light sweet crude is being replaced with tar sands, and heavy/sour crudes. We are also faced with a tight supply market as more of the developed world has become adicted to oil. We should probably have started 30 years ago.

>If one builds "tram systems" with the French process rather than the US federal process, they can go from concept to opening in 36 to 42 months.

What methods that apply to one country do not necessary apply to the US. Unlike France, the US has several regions that are fully developed. For instance in the Northeast, their is little remaining undeveloped land. Any transit system will require demolition of existing contruction while not significantly impacting the existing transportation infrastructure. The land that is currently set up for rail is already well utilitized.

>The Texas Peak had two almost flat years after that (-0.1%, -0.3% or close from memory).  If we start 30 months before Peak, are down -2% at Peak (putting the savings into SPR)

Thats because Texas was the one of the first places to introduce advanced oil recovery. When production peaked in Texas they started using water injection or other methods to keep the pressure high which permitted production to remain flat for an extended period. Since then, the use of Adv. Oil recovery has been used on all of the large fields (Gharwar, Burgan, Samotlor) which make up the bulk of global production. Most of these large fields peaked decades ago, but with the use of Adv. Oil production, they were able to maintain a flat production curve, while new production was developed with smaller fields.

 For instance in SA, the Gharwar field peaked in the early 1980's at about 5.5 MB/d. For the past 20 years Adv. Oil Recovery (Water injection) has been used to sustain production between 3.3 and 4.5 MB/d. When it's watered out (probably less than a couple of years) production from Gharwar will drop to less than 1 MB/d and production will not recover. The decline is likely to be pretty rapid (probably less then a year from about 4 MB/d to less than 1 MB/d)

If we examine all of the super giant oil fields, they have all deployed adv. oil recovery more than a decade ago. Therefore, its extremely likely that global production will decline down a steep curve once these large fields deplete since they remain the backbone of global production. Since about 2001 all of the increased production has come from non-convential sources (tar sands, GTL) and small fields under < 500 MB. These smaller fields tend to have very short lives and the use of Adv. oil recovery methods is less effective.

This is somewhat complex and I probably haven't done a great job of explaining it. Please take the time to read the above carefully and spend a few minutes thinking about what it means. I believe once you give it serious thought you will understand why global production will decline much steeper then you've been lead to believe. Once the decline is globally reconized, I fear that all remaining traded oil exports will be nationalized and global exports will decline.

>Think 780 sq ft for a family of four; single room efficiencies for one or two people at the extreme.

Actually this is common in NYC, Chicago and other large cities. See Craig's List for NYC for instance. The issue is going to moving 100+ Million from their current dwellings in the suburbs into these packed apartment complexes. Then setting up the infrastructure to support them. Simple tasks like garbage disposal, sewage, plumbing, all become herculan pretty fast when forced with a sudden growth. In the past rising population drove housing construction over periods of decades. Now imagine all the sudden you need to change the infrastructure for 100 million people in the US. Its not going to happen over night. Even if you started today it would probably take over 20 years before it has a slight impact and probably over 75 years to complete the project. Now apply that to the rest of world all completing for resources to accomplish the same goal at the same time, during a period of declining energy production.

>but if they are next to a rail stop and 1 to 3 blocks for almost all shopping; it works in an economic crunch.

Not too many people will be able to afford to go shopping during an economic crunch. The only thing that allows the majority of the population to go on shopping today, is easy credit. Virtually all Americans have significant debt and very little savings. With a economic crunch, no lenders will continue to sending them money to spend with out the expection of economic growth in the near future.

>As I noted in Miami in 2004; 15 of 23 building cranes were within 3 blocks of a Metro station.  But 38, or 50, cranes in, all close to stations.

Imagine taking 90% of all the people living in the suburbs and moving them into cities near mass transit.

>I think the Pentagon was built in 16 months.  Could not Miami take existing blueprints for, say, their 9.5 mile long elevated "subway" North Line (goes to border of Ft. Lauderdale) and build it in 30 to 42 months ?

The Pentagon, while a very large building and huge project is just a drop in the bucket, and was constructed during a time when the military had nearly 100% control over all US oil production. I would recommend that you not using large-one off projects as a comparsion to the challege that lays ahead.

Ft. Lauderdale does not represent the majority of US cities, because its laid out in a grid. Most of the US cities are defined by uneven landscape or poor planning. Have you ever been to Boston, Philadephia, Seattle? Any major infrastructure changes will need carefull planning that will probably take six to ten years before contruction can begin. In addition, unlike previous contruction, it must be designed to last hundreds of years. Fast and poor planning contruction is bound to end in disaster. For instance consider construction in New Orleans or Seattle where surface (soil) or environment (hurricanes, earthquakes, erosion) can affect construction. Lets not forget the financial issues of the problem. Perhaps other than the construction jobs, tax revenues will fall and wealthfare expenditures will rise as the economy folds under rising energy costs and shortages. There will be no money available to finance the such projects in the future. We can readily see this if we examine infrastructure construction and mainance during oil shocks of the 1970's and early 1980s. Investment in the the infrastructure was cut as tax revenues fell and expendures in wealthfare rose.

As I stated earlier the devil is in the details. Before you can invision the projects to replace the infrastructure, you must first examine where the resources and money will come from. Then pile on the politics, resistance from the general public for change, and economic issues that will further prevent these projects from every happening.

In my opinion, forget about waiting for the gov't to take action and start making your own preparation. Waiting for action to happen is like hoping to win millions by investing in lottery tickets. Why gamble on your future?

[Look closely. When Hubbert spoke, oil reserves worldwide were zooming heavenward. Despite the tide of petroleum rising around us, Hubbert declared that oil discoveries in the USA had begun to peak "as recently as 1951 or 1952]

I thought it was the 30's

[and that the world's reserves would follow not long thereafter.]

it happened in the 60's

you have to be pretty skilled to ignore what's looking you in the face.

>This is one leg of my "Iron Triangle" theory.

Would you mind posting what the other two legs are?

>In any case, IMO some major oil companies are afraid that, if they come out and admit that they can't replace their conventional reserves, they will be inviting punitive taxation.

Or nationalization, especially with overseas projects. Once the world recognizes Peak Oil has arrived the current game of free trade of oil ends, and a new game of nationalization begins. Exporters will tightly control exports and many exporters will probably just stop exporting entirely (such as Australia, Canada, Norway, and Russia). Australia and Canada already have bills drafted to end export. It will be interesting to see how the US reacts if Canada does stop exporting Oil.

"Would you mind posting what the other two legs are?"



 I remember reading this, but I didn't recall the "Iron-Triangle" phrase. As far as the MSM is concerned, I think you're giving them too much credit. I don't think they are that smart to get the connection. Consider all of the attention played on global warming. Any policies enacted on climate change will likely have a similar affect as PO, yet they are embracing it big time. Most of them also try to convience the public that higher taxes would be good thing, which is also counter productive to ad-sales.

The media agenda is to sell more newspapers and can accomplish this by singling out industries such as big oil which are easy targets for them. This is a tactic they probably learned from Congress.

There's an R&D outfit called Oil Tech that claims to have a working oil shale installation that is efficient, scalable, economic, and environmentally friendly. Sounds too good to be true, right?

I don't find any TOD posts on Oil Tech.  They have an informative site (http://www.oil-techinc.com).  As a mere plebe :-), I'd be interested in other reactions to this organization's claims.

I wrote up an evaluation of Oil Tech for someone a year or two ago. I will have to find it. My impressions were that it was not viable, but I can't remember the details of my analysis. If I find it, I will post it.


Here is part of an e-mail I sent to someone who asked me about Oil Tech:

The whole thing sounds very fishy. They put out this "Proprietary and Confidential" 2005 document and post it on their web site. Doesn't sound too confidential to me. Sounds like slick marketing. I notice a distinct lack of Ph.D. and MS degreed scientists and engineers associated with the project. They have several advisors with BS degrees. Is that really the best they could do? Most of the senior management has legal and marketing type backgrounds.

They claim on page 9 of their document that the energy investment is low. Considering the steps required, I seriously doubt that. The energy return on tar sands is pretty paltry, and tar sands are currently being processed and sold. I have to presume that shale oil is worse off than tar sands, or it would have been developed first.

Finally, when the Chairman and CEO of the company lists his e-mail on a document that can be accessed by anyone with Internet access, then it really comes off sounding like a 2 bit operation.


Beginning of phase 2 of the global systemic crisis: the phase of acceleration

Apparently we're in Phase II...?

LEAP/E2020 therefore estimates that these sectoral losses of confidence will converge in the course of June 2006, and
induce the acceleration of the crisis process. The acceleration should elapse over 3 to 6 months and convey seven
concrete consequences:
  1. accelerated collapse of the Dollar
  2. internal social and political crisis in the US
  3. Iran/USA/Israel military conflict
  4. increased global inflation
  5. stop of the process of trade and economic globalisation
  6. accelerated emergence of new regional/continental blocks
  7. rebalancing of world assets’ comparative value.

Global Systemic Crisis / NATO 2006 - Year of global dilution and of EU/USA decouping

Riga, November 28-29, 2006 - The upcoming NATO summit [1] which chose to take place on former soviet soil in order to symbolize the success of the North Atlantic Treaty Organisation, is likely to be remembered as the Summit where two opposite trends thrust the Alliance into the ongoing global systemic crisis, and as the symbol of the end of the western world we have known since 1945.
Wait....this is the second time/place I've heard this in the last week.  I'll see if I cannot find the original spot I came across this rather odd phrasing.
Steve Forbes on Fox:  

    ASMAN: Al Gore's new documentary, An Inconvenient Truth, it hits the theaters this week. If people buy into his global warming hysteria, will it put him in the White House and our economy on the skids? Steve, first off, is it gonna get him in the White House?

    FORBES: No, if he believes that's gonna get him in the White House, he needs to rub on something stronger than this sunscreen.

    ASMAN: Alright, but if his global warming agenda somehow gets mixed up into our agenda, the national agenda, what'll it do to the economy?

    FORBES: It will ice the economy. And after all, some people do believe the DiVinci Code, so some will believe the DiGore Code. [Laughter] But the fact of the matter is, the policies that result from it would hurt the economy, would create unemployment. It's a real recipe for more socialist regulation.


So, if we do anything in response to GW hysteria, those responses will take the blame for the effects of GW and energy depletion.

I've read a few left-wing pundits that think Gore could run again, but I can't see it, myself. Gore must realize by now that the MSM despises him. The right wing has been doing all they can to draft Hillary Clinton. I read that even Rupert Murdoch is donating to her war chest. But I guess they'd be satisfied attacking Gore's wardrobe again.

Mr. Forbes needs to go back to school.
The only thing Steve is good for is his ideas on a flat tax.  Somewhere I've read a thought provoking idea on how to integrate GW controls (coal scrubbers and the like) and make it into a competitive advantage in the free market to be "greener" than your competition.

I do believe it required gov't subsidy.  However what is more expensive, the money spent now or no one left to spend money?  I know it's extreme, but to say it can't happen is like saying the dinosaurs aren't dead.

Gore would hurt the "Iron Triangle".  Hillary would maintain the "Triangle" as long as possible.  Simple as that.

Without a grassroots groundswell, Gore will go nowhere.

It is possible if Gore were to adopt some of Howard Dean's internet campaigning without the insane whooping.

I bet Hillary HAS an iron triangle...
I think it had something to do with the finance companies wanting to keep financing cars with the automotive companies who advertise heavily in the Main Stream Media.  These three sectors are firmly entrenched to keep the game going for as long as possible to maximize profits.
Read the details here:

Basically, you have the home and car builders (suburbia) in league with the finance sector (lending for above) in league with the MSM (advertising), working to keep the existing paradigm of plenty-for-all-no-worries-here going as long as possible.  It behooves them not to tell the truth.

Thanks, and it makes complete sense.  I wonder to what extent "Big Oil" has a similar motive for not telling the truth, ie potential for rapid demand destruction if PO was widely accepted.  
Forbes said it?  It must be right!  Of course, he's still waiting for $35 oil.


Maybe attacking Iran will help.


Forbes is an absolute moron.  Yes, ad hominem, but I feel justified.   Even his supposed "flat tax" idea was a fiasco. I read his book (aka "Flat Tax Revolution").

Forbes inadvertently calls for two federal income tax rates: a progressive tax on income (after personal deductions) and continuation of the regressive social security tax, also a federal tax on income. To see the problem, let's take a look at the prototypical (if also increasingly rare) two-parent, two-child family. Under Forbes's plan, their federal income tax rate changes, depending on the family's income. He starts by proposing exemptions, deductions, and tax credits, undercutting his claims that this is a "simple" flat tax and his argument that the whole point of a flat tax is to eliminate personal deductions, exemptions and the like. Then, below $46,165 a year, this family's effective federal income tax rate is zero. At an annual family income of $92,330, the effective or real tax rate it is half of Forbes' nominal 17% `flat' rate, because the family pays no taxes on the first $46,165. And at $138,495, the rate is two-thirds of Forbes' nominal rate. You get the picture. The rate approaches the nominal 17% flat rate Forbes proposes, but never reaches it. This is called calculus, or approaching the nominal rate asymptotically. But it is not a flat tax. It is flat on the margin, but only for those who pay taxes, and with a $46,135 cut off, many families would pay no Forbes federal income taxes at all. A progressive tax structure, not flat.

But wait! The Forbes `flat' tax isn't really fair either. On page sixty, right after Forbes proposes his "flat" 17% federal income tax rate and those exemptions and deductions), he decides to leave social security taxes out of the equation ("It does not supplant Medicare and social security taxes..."). Social security taxes are federal taxes on income, no matter how you slice it, lock-box it, or play with it. It is a federal tax on income. Back to that prototypic, four-person American family. In addition to Forbes' flat tax, this family will pay about 15% (including the "employer's share) on all of their income up to $90,000 (as of 2005), at which point basic social security taxes stop and the rate on income drops to about 3%.  A regressive tax structure, not flat.

So we have one progressive tax and another regressive tax. Put these two tax plans together - which is exactly what Forbes perhaps inadvertently does on page sixty - and you have the worst of all possible worlds, a middle class nightmare, Going back to that prototypical family and at $46,165 you add together rates of 0% (Forbes' "flat" rate) and 15% (social security, Medicare, Medicaid). Then they pay 17% plus 15% (a 32% marginal rate) on the income between $46,165 and $90,000. Above $90,000, the social security tax disappears, so the marginal rate drops back to about 20% for all income above $90,000. Worse, if this is a two-income family, with both adults earning $90,000, the social security tax on the family persists up through $180,000 in income. And no one ever pays the 17% tax rate on income!

The Forbes plan would also encourage employees to seek "non-income" perks, like health benefits, corporate apartments, company cars, uniforms, subsidized cafeterias, club memberships, and other benefits paid by the employer. Forbes also too quickly dismisses a national sales tax as regressive while ignoring the regressive social security tax. In fact, some targeted "sin" taxes on consumption are effective and -- at high enough rates -- able to dampen demand on consumption based on bad habits, e.g. smoking. Regressive taxes on unproductive or dysfunctional behaviors are laudable or at least worth considering. Some argue these sin taxes to be paternalistic, maternalistic, or simply moralistic without realizing that all tax plans have these three elements. Is taxing income any more or less moral or maternalistic than taxing consumption? Forbes' plan could perhaps fit on one small card because something significant is left off the card, but not off your tax bill.

Am I missing something? Or is Forbes as dumb as he seems?

I was refering to a national sales tax, not anything to do with income.  I'll dig some info out and post it up when I get a chance.  Basically you tax everything you spend money on.  I think it's easy to agree that the rich spend more.  Imagine your money before ANY taxes touch it.

There are several problems, one of which is those same rich people have access to other countries to import thing, but I'm sure something can be done to blunt any major violators.  I mean there are thousands of people who simply don't pay up and continue on their lives, but if you had to pay a 10% tax on everything you buy you would adjust accordingly.  This would encourage savings, at least in theory, due to the high cost of using your money.

I could also argue (and support with references) that a national sales tax would be regressive in the extreme, that poor people, by and large, spend a greater percentage of what they have, especially on consumables, than the wealthy (aka idle rich).  They are the ones most in hock.  
Heck, even the bible makes reference to this fact (Jesus's parable of the rich man and the poor man), making it ancient knowledge.
Maybe, but if the poor are being given handouts anyway (welfare etc), then let's create a system whereby they are exempt (certain cards that their free money comes on) and they do not pay taxes.  I know of several people who routinely receive aid, and in turn receive roughly $5-7k on their tax returns.  I don't think the poor are all that poor, rather they spend more poorly.

I mean they have big screen tvs.  If you don't believe me, take a trip into N. STL, MO and I will gladly show you how the poor live here.

IMHO, your position on this is crazy. Most OECD countries have flat sales tax like the thing you are talking about. I didn't realise that USA doesn't. Anyway, they are clearly very regressive.

If you have a card for exemption, what is the cut-off point? Wherever you place the cut-off, you will have very high effective marginal tax rates.

This perspective needs reviewing.

IMHO you're taking this out of context.  I am not saying this is my position.  I'm brain storming and trying to get intelligent responses.  I have no idea where the cut off should be.  I'm asking for other solutions.  I don't have an answer and I haven't heard a great reform to the current system.

So in that vein if you have an idea, I'd love to hear it.

Go to any large city.  You will find people who are starving and living on the street.  This country is not an easy place to be poor.  The welfare systemm is deplorable, and it is being cut back.  Any country with as much wealth as our own should be able to feed its population.  
Hello RainsofKilimanjaro,

Consider Zimbabwe, once the breadbasket of Africa, now claiming the destitute are not entitled to anything.  Then extrapolate to a future postPeak America:

British economist Thomas Malthus (1766-1834)
"A man who is born into a world already possessed, if he cannot get subsistence from his parents on whom he has a just demand, and if the society do not want his labor, has no claim of right to the smallest portion of food, and, in fact, has no business to be where he is. At nature's mighty feast there is no vacant cover for him. She tells him to be gone, and will quickly execute her own orders, if he does not work upon the compassion of some of her guests. If these guests get up and make room for him, other intruders immediately appear demanding the same favor. The report of a provision for all that come, fills the hall with numerous claimants. The order and harmony of the feast is disturbed, the plenty that before reigned is changed into scarcity; and the happiness of the guests is destroyed by the spectacle of misery and dependence in every part of the hall, and by the clamorous importunity of those, who are justly enraged at not finding the provision which they had been taught to expect. The guests learn too late their error, in counter-acting those strict orders to all intruders, issued by the great mistress of the feast, who, wishing that all guests should have plenty, and knowing she could not provide for unlimited numbers, humanely refused to admit fresh comers when her table was already full.
British economist Thomas Malthus (1766-1834)


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

I'm in a large city.  People will always starve and will always live on the streets.  I'm not talking about the people who choose to live on the streets.  I'm talking about the people who are poor defined by a povery line on income.  A vast majority of those in the streets choose to be there amd if they are motivated enough, they can get out.  I've witnessed it first hand and I've talked to to poor who live in my large city.  They all line up at the soup kitchen on Tucker Blvd.  Go to a soup kitchen and ask people to tell you there stories.  Then tell me if a MAJORITY (not ALL) have chosen to remain homeless.

I'm not saying it's EASY being poor here in the US, I'm saying it's better being poor here than a whole lotta other places. It's all relative.

Gore has said publicly that he is, and I quote "a recovering politician", and that he is "not planning" to be a candidate again.
Check out "The New Republic"'s review of Al Gore's new film, "An Inconvienent Truth".

The Plank
I hope this doesn't sound too Arianna-like. But last night, I went to a screening of the Al Gore movie. And I found myself walking out in a strange mood. I had just seen a movie featuring a politician ... and there wasn't a trace of snark or cynicism coursing through my body. The film has genuine rhetorical power. It builds an incredibly frightening case without hints of fear-mongering or over-wrought moments. Because Gore is truly self-deprecating, the movie doesn't ever feel like an ego-trip--although it does occasionally look like a giant product placement for Apple. At any rate, I walked out of the movie and decided to sell my car and begin otherwise preparing for our planet's impending doom. I know this praise isn't so unexpected coming from TNR. But I think the movie has the potential to become a seminal political document--a cinematic Silent Spring. It will certainly change elite opinion."

--Franklin Foer


It will certainly change elite opinion.

That's a start...

Also, choose "single page" at the bottom of the first page, or you'll get registration.
New Zealand will be totally broadband?  I'm so moving there now!


And now, as Hillary prepares for the Iowa caucus...


How many villages will it take to grow all that ethanol?
How many villages will it take to grow all that ethanol?

All of them:


Here's another sober way of looking at it: if every car in America was powered 100 percent by ethanol, it would take 97 per cent of U.S. soil to grow enough corn to support it.


Excellent.  As I said on gristmill, most new tech gets the "hype" word thrown at it, and some fare better than others as a result:


How many gallons of corn-ethanol can 1 acre produce in one year?
350-400 gallons of ethanol per acre in the top corn-producing states. A national average would be substantially lower than this, though.


Thanks. I am writing a piece on ethanol now and am trying to get a grasp on the numbers. Just to let you know, Wikipedia is giving 200 gallons as a number. Don't know how they got that. They use "gasoline equivalent" as the units.

Wikipedia Ethanol

Also, have you read this BusinessWeek article from last month?
it is excellent.

Ethanol: A Tragedy in 3 Acts

That 200 gallon number may be a reasonable national average, although it seems a little low. But since they are reporting in "gasoline equivalents", what they may be doing is saying the average ethanol yield is 285 gallons/acre, but since ethanol has only 70% of the BTUs of gasoline, that equates to 200 gallons of gasoline.

The reported numbers from the best corn-growing states are 140-150 bushels per acre, and 2.5-2.6 gallons per bushel. I have seen reports of 2.8 gallons per bushel, but I have also seen reports that stated that this is greater than the theoretical yield, and that they get 2.8 by including the gasoline denaturant in the yield calculation.

I had seen the BusinessWeek article. He must be an oil company shill. ;)


I'd need two acres worth, per year.
Two acres in a top corn-producing state. Plus, lots of natural gas to drive the distillation.


after reading yours' and other's articles on the ethanol question, more than ever I think it should just be made into fine single-barrel bourbon - MUCH better use for that corn, and it's a high-value added product we can ship abroad to help the trade balance...and it can drown my Doomer-powerdown belief system....pleasantly and with much flava....

Maybe the Kentucky reps to Congress can pass some sort of Bourbon Preservation Act?

China will raise retail gasoline and diesel prices by a larger-than-expected 10-11 percent from today - the second increase this year - in a move that could help boost refining margins but dampen domestic demand.


On a related note, Nature News has a sobering perspective on China's Three Gorges hydro project, which has already started to generate power.

Electricity started to flow from the dam's first turbine in mid-2003. But when all 26 turbines are running, it should produce a mind-boggling 18 billion watts of power, which is roughly equivalent to five large coal-fired power stations. The Hoover dam, by contrast, has 17 main turbines producing a maximum 2 billion watts of power.

Yet, despite the enormous power output, Three Gorges will be only a tiny drop in the ocean of China's energy needs. China is currently increasing it's generating capacity by the equivalent of the United Kingdom's entire consumption every year, and this dam will only contribute a few per cent of China's total energy requirements.
Demand might grow as a result of the higher prices; this alice in wonderland result comes from unwinding socialist policies.

China has been controling the price of crude products such that refiners make losses in the home market in an attempt to minimize social unrest. Accrodingly, refiners have been exporting product, especially gasoline, because exports are not limited. As a result, there have been shortages and lines, with consumers unable to purchase what they want at any price - just as happened in the us during nixon's wage and price controls - and which has led to social unrest. This unrest has finally become sufficiently prevalent to allow the state to raise prices, which should shortly result in more product becoming available.  (There are two ways to ration products; the usual way, through price, and the socialist way, through price controls. Both do an effective job, but the socialist way encourages waste of both energy and time.)

If chinese refiners can now make money in the internal market, more product will stay there and less will be exported. Product importers, not least the us, will therefore see less product available, firming product prices worldwide.

I've read in a number of places that the life expectancy of a modern windmill is around 25 years. I was wondering how that estimate is arrived at in more detail. I can see the moving parts (generator, gearbox, bearings, etc) having to be replaced every number of years along with some of the electronics. How about the mast and blades? Does the mast become mechanically unstable over time? Do the blades succumb to an increase in aerodynamic drag over time?

Could the estimate be based on how many years it takes for maintenance costs to match the original price? Does obsolescence vs. newer versions factor in? I have zero idea how accountants come up with numbers like this so any help is appreciated.

As of ~4 years ago when I looked into this, the blades typically lasted 10 to 12 years depending upon the site (turbelence and varying wind speed NOT good for blades).

The mast can last longer than 25 years.  50 is often possible for land based WTs.

The generators and bearings are relatively lightweight (unlike hydro) and are life limited.

With improvements in technology, probably best to junk everything but mast after 25 years (or 2nd blade replacement) and put something new up.

If it is a good site, may be best to junk mast as well and put up larger unit.

For land based WT's larger is a problem; roads limit size of cranes used to erect WTs.

So, we may reuse existing masts in 25 years because a larger WT cannot be mounted on site.

How is turbulance and varying wind speed specifically not good for the blades? Are you referring to standard mechanical stresses that can lead to growth in fractures and ultimately mechanical failure?
Yes.  The blades are LONG lever arms.

One fatigue factor is every time they pass the mast, wind speed drops and there are wind eddies created by the mast.

Ten to twelve years actually looks fairly impressive, given the duty cycle.

% availability varies dramatically with model and site.  Some windfarms are close to 99%, others 65%.  The market will sort out the good from the bad IMHO.

This is one area where vertical axis spiral helix type windmills really shine.  
Since the blades don't pass the mast (they circle it instead), fatigue and eddie loading is significantly reduced.
Other advantages are that most of the mechanical parts are in the base, at ground level (easier to service), they rotate regardless of wind direction (but not as efficiently as horizonal axis windmills), do not require as much clearance, and are low speed, high torque, versus high speed, low torque (less noise).
Are 3 MW vertical turbines possible?
I do not think so, at least at this time. That seems to be their inherent weakness....smaller size, which contributes to a lower power production rate overall.
One Finnish maker claims that their design can be scaled up to "multiple MW" size.  Of course, they have not yet done this.

The "Danish design" of 3 blades upwind, horizontal axis has "won the day".  Operating experience and economies of scale make any other design very unlikely in commercial operation.

I dont know how they come up with it. I am assuming that it is a depreciation figure arrived at for accounting purposes Entry cost / 25 years coming off the books annually is better than Entry Cost / 10 years. In which case it is hypothetical accounting but looks pretty on a balance sheet.

I am not sure that they will make 25 years without major refurbishment. One Wind farm lost a machine in the UK last year when a roter blade came off. I sometimes pass a major wind farm when going over the southern uplands of Scotland.
On the one hand, they are striking and impressive, making good use of relatively barren uplands, on the other hand, about 25% always seem to be stationary.

Hope it is not pay back in Money or EROEI though...

I've been thinking of it for a while and the more I ponder it the more it feels like Europeans might be able to outbid US consumers for gasoline. In the EU we already have twice as high prices as in the US, we drive more efficient vehicles on the average and we drive only half the vehicle miles per capita. We've already "picked the low-hanging fruit" and our demand might be even remarkably less elastic.

Of course we could lower our consumption a lot with relative ease, but I think EU demand would not be weakened nearly as much as US demand, if, for example, gasoline retail prices doubled from the current situation. No one here really even feels any "pain at the pump"; our lower class does not depend on the automobile nearly as much as US lower class. Even trucking companies seem to do relatively well; they have of course increased their rates due to the increased fuel costs.

Note also that for gasoline retail prices to double in EU they would have to at least triple in the US due to the tax differences.

Great observation and that would provide a further argument for the Euro's acension against the dollar.  The marginal increases in gas create exponential increaes throughout our (US) entire economy and born on the bottom up.  Without the critical rail infrastructure, we will languish far longer than our Euro friends.  

I mean it took WWII to pull us out of the depression and the US led the way from then on.  Once we are beaten down enough, Europe may lead us into the next "era."  

You won't be outbidding China. China is currently getting 23% of their energy from oil and is moving big into CTL. China will boom at $100 oil.
In the end I think we agree that we will not lead once oil does balloon.  I haven't gotten into the CTL argument yet, but what is the EROEI of it?
Robert Rapier is the guy to ask for that. According to the story I read today on LATOC( Alpha Doom's site), China feels they can break even on CTL at $22 oil.  
It depends on how you are computing EROEI. If you take the term "energy invested" as the energy from other sources than your primary energy source, like the electricity or finished fuels necessery for the process, EROEI is very good, about 6 if you include the energy for mining which is about 2000 J/cc as HO told us in his recent tech talks. But if you look at the overall energy dissipated in the process, then you see you dissipate more energy than you can get out of it which doesn't mean the process isn't viable. With a good quality coal, you can get about 1,5 barrel of oil with a short ton of coal. But keep in mind that the price spread between average coal and oil isn't such big. The price of coal increases. Further the process is very costly (it requires a lot of catalyst and maintenance operations for instance) and the initial investment is really huge. But of course, the chinese have all the iron, aluminium and other metals directly at hand. Heavily subsidising this industry will make it look as if it was beneficial but how will this work out in the long term ?
Well, CTL is about coal. The Chinese coal production is already growing nearly 10% a year. This is already unsustainable - and in fact they are now building new mines in Mongolia and importing coal from elsewhere. If they want CTL they will have to cut coal use for other purposes. China has a huge nuclear energy program - so in fact the additional energy will come from uranium - and China doesn't have very big deposits of that. We will see.
"If they want CTL they will have to cut coal use for other purposes."

This is the key point about GTL and CTL--different sectors of the energy industry will be competing against each other for the same fossil fuels.

This is analogous to food for fuel producers competing with food for food producers for available land.

GW venture capitalists investing in the future...albeit misguided at times, but at least someone is putting their money where there mouth is.

http://www.forbes.com/home/entrepreneurs/2006/05/22/venturecapital-kleinerperkins-environment-cx_eb_ 0523everythingventured.html

Largest 1 day upmove in copper trading history today.

Not sure why. (but undoubtedly Peak Oil related....;)

Monthly chart even more impressive

FYI. a little pointer for TOD readers. pre 1982 pennies at today copper spot prices are worth 2.31 cents each. Post 1982 pennies are worth 1.45 cents (they are more zinc)

I figured out the ROI of hiring someone to sort pennies gotten by rolls from banks into pre 1982 and post 1982 and hoarding the high copper ones and decided Id have a better ROI buying a gun and going to a house full of copper piping post peak oil.

It takes alot of pennies to add up to serious money. There are of course, positive externalities from such a venture. My brother, a large fan of Scrooge McDuck comic books and practices, for example, would enjoy taking baths in coins...

Oil futures are up nearly $2 today.
Reports of the "bursting" of the commodity "bubble" were premature.
Hey TODers!
Seems that just as JHK predicted, Fannie Mae has been up to shady accounting practices. What could result from this? since so much of the middle class suburban lifestyle is dependant on government sponsored loans, insolvency in that sector could cause a signifigant economic shock. any thoughts?

Fannie Mae fined $400 million
Regulator cites 'arrogant and unethical' culture that led employees to lie about earnings; recommends review of current management.
May 23, 2006: 1:14 PM EDT

WASHINGTON (Reuters) - Mortgage finance giant Fannie Mae agreed to pay a $400 million fine after a U.S. probe into its $11 billion accounting scandal blamed management and the board for an "arrogant and unethical" corporate culture that led to massive manipulation of earnings.

A scathing report from Fannie's regulator, the U.S. Office of Federal Housing Enterprise Oversight, found employees massaged earnings to trigger bonuses for senior executives, and that the board of directors contributed by failing to act independently.

More accounting woes for Fannie Mae
Mortgage finance company said the restatement process will likely cost more than $800 million this year. (more)
Fannie CEO: major accounting issues already found
Mortgage buyer still reviewing accounting problems which will likely result in profit restatement up to $11 billion. (more)

The 340-page report laid out a litany of accounting problems and failures by Fannie Mae's management and directors, including current Chief Executive Officer Daniel Mudd.

It also said Fannie used its enormous power in Washington to lobby Congress in an effort to interfere with the federal examination of the company's accounting problems.

But the report did not unveil any new, material accounting errors.

It said a large number of Fannie's accounting practices and policies did not conform with generally accepted practices. According to the report, Fannie overstated income and capital by about $10.6 billion, in line with the estimates of the company's potential restatement.

"A combination of factors led Fannie Mae senior management, through their actions and inactions, to commit or tolerate a wide variety of unsafe and unsound practices and conditions," the report said.

"Fannie Mae's board of directors contributed to those problems by failing to be sufficiently informed and to act independently of its chairman, Franklin Raines, and senior management, and by failing to exercise the requisite oversight over the enterprise's operations."

Critics of Fannie Mae, and its sibling company Freddie Mac, immediately jumped on the report to renew their calls for Congress to advance legislation that would stiffen oversight of the government-sponsored enterprises.

"This report makes it clear that Congress must refocus the GSEs on their mission and minimize their ability to take advantage of their special status by abusing their charter," said Senate Banking Committee Chairman Richard Shelby, an Alabama Republican.

GSEs are government sponsored enterprises such as Fannie Mae, which was created by Congress to buy mortgages from lenders and boost home onwership in the United States.
Restrictions set on mortgage holdings

Fannie agreed to pay the $400 million fine to settle matters with its regulator, known as OFHEO, and the Securities and Exchange Commission.

The company did not admit or deny any wrongdoing.

As part of the settlement, Fannie agreed to restrictions on its mortgage portfolio -- the holdings that have become the central focus in the legislative debate on Capitol Hill.

The portfolio will be limited to its Dec. 31, 2005, level, according to the agreement. Other capital requirements and restrictions on dividends remain in effect.

OFHEO said Fannie's corporate culture encouraged a false perception that the company took so little risk and was so well managed that it could hit announced earnings per share precisely almost every quarter.

That view, OFHEO said, led to the belief that senior executives deserved to be handsomely compensated for the company's "extraordinary performance."

The regulator found $52 million of former Chief Executive Raines' $90 million in compensation was linked to earnings.

"The OFHEO report shows that Fannie Mae's faults were not limited to violating accounting and corporate governance standards, but included excessive risk taking and poor risk management as well," said Treasury Undersecretary Randal Quarles.
Mudd and current management

OFHEO said Fannie Mae should review any current executives mentioned in the report. CEO Mudd was among those mentioned.

Mudd, the report said, ran afoul of the company's code of business conduct by not going to the board's audit committee with concerns about the company's accounting expressed by an employee in 2003.

The report also said Mudd "missed an opportunity" to recognize the similarities between Fannie's practices and accounting problems at Freddie, which led to a $5 billion profit restatement.

Fannie Mae's chairman, however, expressed confidence in Mudd's leadership after the OFHEO report.

Also mentioned were Chief Operating Officer Michael Williams, Chief Business Officer Robert Levin, Executive Vice President Peter Niculescu and Linda Knight, executive vice president for capital markets.

Fannie's shares edged lower after opening for trading at around 12:50 p.m. ET on the New York Stock Exchange.

Who is Fannie Mae and does she live up to her name?

Sorry, English word use joke in poor taste.

I'll get me coat...

Nighty Night.

Last week, the US Government borrowed $12 billion dollars and put that money in permanent circulation. The US Government will never repay this money, so it will remain a permanent part of the money pool.
This week, the US Government will place a little bit more in circulation.
World energy production did not rise to meet this new high in the pool of available dollars. It is all inflationary.
Packaging materials and rising energy costs

Just read an article in yesterday´s Handelsblatt: You won´t believe it, but plastic packaging is the winner. Less embeded energy than in cans (you have to work metals at 1500 C ) or than in paper (which you have to dry at high temperatures, to get rid of the process water) or glass (also energy intensive  production and higher transport costs due to weight) !!. In low tech plastic bags without printing, 70% of the endprice is the raw material (plastic)price, in high tech plastic packaging only 30% of the endprice is the material cost.
For example Kraft foods replaced the aluminum and paper wrap of the truly delicous Suchard chocolate with plastic. Added benefit: the printing on plastic is more brillant.  

Here's a fun one - perhaps you should be investing in sugar:

"Scientists build caramel-powered margarine-making fuel cell...."


(yes, it is genuine - the following article is slightly more in depth)


IEA worried about Russian natural gas

May. 23, 2006 at 11:31AM

 The International Energy Agency says Russia won't be able to meet Western demand for natural gas unless it hikes investment and reforms its economy.
      Claude Mandil, head of the International Energy Agency, the energy watchdog for the world's leading industrialized nations, said Russia needs a politically independent energy regulator to control the sector, the BBC reported Tuesday.
      The problem is both structural and cultural.
      The Kremlin cut natural gas supplies to the Ukraine in January, which had a domino effect on supplies to Western Europe forcing a near quadrupling of the price. Such actions reflect a non-capitalistic culture that impedes investment, the report said.
      IEA said Moscow must find a predictable and transparent way to attract the foreign capital that is essential to develop the nation's vast natural gas resources.
      Mandil wants his concerns addressed by the Group of Eight nations meeting in St. Petersburg in July.
      "We are afraid that Gazprom will not have, in the coming years, enough gas to supply even their existing customers and existing contracts. This is our data," said Mandil. "Gazprom is not investing enough."

I am sure Putin is terrified when Claude starts giving orders.
New (modified) definition of terrorist states:  oil exporters--without nukes--who won't sell oil for dollars.
Such actions reflect a non-capitalistic culture that impedes investment, the report said.

Perhaps this is one form of conserving reserves for the future - through lack of investment, and simply let the production fall on its own.

IMO, we see this happening in Iran as they persue nuclear power instead of investing in their oilfields.

Any thoughts?

If we are near peak oil than there is no better investment than a capped oil well. It is utterly foolish for oil/gas exporters to run a trade surplus. I think Russia knows it. Trade oil for dollars, bonds, US financial stocks? The dollar sinks, bonds yield 5% and give you back depreciated dollars, US financial stocks are at the peak of the greatest credit bubles in history and could sink dramatically.
Sen. Clinton pitched ethanol today at a National Press Club speech.  Looks like she's trying to take the lead from Pres. Bush.  Couldn't get the link to work.
(See my link provided earlier.)
Still slamming An Inconvenient Truth:

Sterling Burnett is a senior fellow at the National Center for Policy Analysis, an organization that has received over $390,000 from ExxonMobil since 1998. This afternoon on Fox, Burnett compared watching Al Gore's movie, An Inconvenient Truth, to watching a movie by Nazi propagandist Joseph Goebbels to learn about Nazi Germany.

"That's the problem. If I thought Al Gore's movie was as you like to say, fair and balanced, I'd say, everyone should go see it. But why go see propaganda? You don't go see Joseph Goebbels' films to see the truth about Nazi Germany. You don't go see Al Gore's films to see the truth about global warming."


Funny hearing anyone on Fox complain about propaganda.

Donal -

I just love all these corporate-funded think tanks that always seem to come up with findings in accord with the entities doing the funding.

As one of Mark Twain's characters said, "You tell me whar a man gits his corn pone, an I'll tell you what his 'pinions is."

That's a great line!  Do you know which character said it, and in which book?
PhilRelig -

My Bartlett's Familiar Quotations cites that line as coming from Twain's book 'Europe and Elsewhere' (1925).

Not really sure if it was one of his characters who said it, or whether it was some opinion piece by Twain himself.

 Anyway, it's one of my favorites, and so true.  I know, because I once worked for one of those think tanks, and believe me - we somehow always used to come up with the 'correct' findings.

For some reason, the right wing prop-pundits (CEI and gang) are running scared from Al Gore's Inconvenient Truth. They are more scared than they were of Michael Moore's Farenheit 911. You gotta ask yourself why.

In the upcoming movie about the making of Inconvenient Truth, I see Clint Eastwood playing the part of Al Dirty Gore, holding a blow torch to the rear end of a Global Warming detractor and asking: "Are you feeling the warmth yet punk, huh are you?"

ha! When PR folks proceed directly to nazi analogies you know they are running scared.
Who knows about Matt Badiali on the OIL REPORT on the oil shale drilling in Wyoming, Utah, Colorado and Canada?  Is this new drilling going to save us for the time being?  2 TRILLION barrels are supposed to be in the ground there.  And how great is this new technology extracting the resources there?
The oil-shale extraction/break-even point is currently around $33/barrel. Reports suggest that the waste generated by the process would not fit back in the hole you created to get the stuff in the first place. We don't need saving for the time being. The technology is still being "developed." If end up needing to be "saved" the long run, it is hard to see, given the example of the tar sands in Albert, how production can be ramped up quickly enough to save us. Not to mention the fact that the process itself is incredibly energy-intensive.