Thursday open thread
Posted by Super G on May 4, 2006 - 10:05pm
Some suggested reads: 1. First off, we received a heads up from someone at the Council on Foreign Relations on this piece of theirs on gas prices (and then we said "holy crap, we're on the CFR mailing list?!"); 2. Good piece from Tom Whipple at FCNP (hat tip: Energy Bulletin); 3. The Energy Wars over at Newsweek; and... 
... let's not forget to remind TOD readers in the Washington DC corridor of the Sustainable Energy Forum 2006 on Peak Oil and the Environment to be held May 7-9 at Washington, DC's Marvin Center. Please attend if you can, it's going to be a great conference. We know at least one TOD contibutor will be there, maybe two. [editor's note, by Prof. Goose] And, while you're there, say "hi" to Megan Quinn of Community Solution for me. She does great work...and she might be pretty close to the perfect woman. (but don't tell her I said that last part, please...)
... let's not forget to remind TOD readers in the Washington DC corridor of the Sustainable Energy Forum 2006 on Peak Oil and the Environment to be held May 7-9 at Washington, DC's Marvin Center. Please attend if you can, it's going to be a great conference. We know at least one TOD contibutor will be there, maybe two. [editor's note, by Prof. Goose] And, while you're there, say "hi" to Megan Quinn of Community Solution for me. She does great work...and she might be pretty close to the perfect woman. (but don't tell her I said that last part, please...)
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I'm curious about something...TOD has been showing graphs on a monthly basis illustrating the "bumpy plateau" that we've been in for the last 18 months or so, but the graphs only go back a few years. I'm curious to know if there have ever been periods in the past, say, quarter century where a similar phenomenon existed? In other words, is this plateau truly new, or has there ever been a similar plateau period in the past?
Thanks!
http://www.avbc.com/visit/boontling.html
P.L. No. 93-577, Section 5(a)(5) part of the Federal Nonnuclear Energy Research and Development Act of 1974
"The potential for production of net energy by the proposed technology at the stage of commercial application shall be analyzed and considered in evaluating proposals."
wondering if we should hire a lawyer and sue Archer Daniels Midland....(of course the details of how broad the definition were never clarified, to my knowledge)
To me: this is just more proof the topdogs in D.C. have known about Peakoil for years. After Pres. Carter's initial efforts, our elected officials have taken us in the wrong direction.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
In fact the predictions of the '70s have been quite realistic. The main error of the authors of "The Limits of Growth" was that they didn't understand the primary role of the energy resources, but treated all natural resources as equally potential constraints of growth. With energy it is possible to substitute one raw material with others and boost food production - but you cannot substitute energy itself. Byt the way, the Club of Rome has developed its World Model all the time, but running it crashes the simulated world just as before... (http://www.clubofrome.org/)
Now, if "everybody knew", why nothing was done? A lot was actually done. There was quite ambitious alternatives reasearch - so we know already a lot. That is why there is not as much interest on that reasearch now as some could expect. There was wide discussion about alternative fuels, but the results were just the same as now: nothing much to gain there.
The Club of Rome and Limits of Growth approach was later discredited by claiming that the expected catastrophe didn't happen. Well, they gave us about 30 years of good time before we would see the impacts of the global resource depletion. So here we are.
If you split the suburbs into three categories
- inner suburbs - on the east coast, many were built during the 50s, 60s and have evolved into satelite cities themselves. Many have (or had) rail systems linking them to the city. Ex. Towson MD, Vienna VA
- outer suburbs - newer suburbs that require lots of driving. Scads of 1 story strip malls etc.
- exurbs - suburbs of the suburbs, communities built far from everything, many of them tiny islands of mcmansions surrounded by farmland. (or farmable land)
It seems to me that the inner suburbs and the exurbs would fare best after peak oil. I suppose it will really come down to the rate of oil's decline. If we have a slow squeeze, the exurbs would be hurt more. With a sudden collapse I wonder whether people would have time to leave the exurbs.I suspect we will have a slow squeeze for a few years and then a sudden collapse.
I believe the exurbs (as I described them) will actually be a desirable place to start a new town. The McMansions can be converted to multi-use or multi-dwelling buildings. Use the streets for open air markets and the surrounding vacant land to grow food.
The economics of the situation very strongly favor keeping the 'burbs alive and adjusting our transportation capital and patterns to match. If the 'burbs "collapse", as Kunstler and many others keep saying, what exactly does that mean? People just walk away from their homes? If they sell, who would buy if things were that bad? About the only buyers I could imagine would be farmers, who wouldn't pay anything near what the current owners would want for the property.
Right now, a lot of people who live far from their jobs are hurting because of high gasoline costs. But they've barely begun to exploit the first-order conservation measures: Trading in (one of) their current vehicle(s) for something with much higher fuel efficiency, car pooling, reducing non-work driving, etc. They don't need a Prius--trading in an SUV or mid-size car for a Yaris or Fit would yield a big drop in monthly gasoline bills.
Those steps will make a huge difference, and will buy the people in the 'burbs several years, very likely enough to stretch until electric cars go mainstream, around 2010, possibly sooner, depending on gasoline prices. Once that happens, expect many people in the 'burbs to take the next step and adopt EV's in droves for their commuting cars, and the 'burbs are effectively saved.
If hydrogen fuel cells pan out down the road, fine. If not, people in the 'burbs, who very often have more than one car/household, can limp along for quite a long time using 150-to-200-mile/charge EV's (and that's a pretty conservative estimate on the range, given recent battery advances) for most driving and a gasoline car for those rare, long trips.
Frankly, I don't think that people like Kunstler realize just how far society in general will have to collapse before we see the widespread disappearance of 'burbs.
I believe that high inflation is the answer:
High inflation would do the following:
- Reduce government debt
- Reduce consumer debt
- Fix the housing bubble
- boost sales of US exports
- jumpstart domestic manufacturing (imports would be more expensive, exports would be in demand)
Maybe it is time to buy gold and silver.It won't reduce all consumer debt. Credit cards will just boost the interest rate. The only way you come out ahead is with fixed-rate debt.
Also, if we run electric light rail lines to these communities, they will remain viable to some extent. I would expect them to eveolve into actual towns if they are to survive.
The most dangerous words in financial booms are "This time it's different!". But the bust after the boom is always different. Compare 1900+, 1929+, 1966+, and 2001+. Each was different.
You should have gotten in to silver and gold last year - the price for each has almost doubled this year....and oil companies have also done really well...
I think this up cycle still has a long way to go.
One of the replies to this situation that is starting to occur here, though I am not sure at what scale, and does require you not being up to your neck in debt - i.e. some disposable income that you can maneuver with is:
Buying a third car. I spoke with a couple yesterday in which both used their vehicles for work (not just to commute). Hers was a good Toyota, his a Silverado. He needs his to make deliveries occasionally. That is the operative word - occasionally. So he is thinking of a Prius for his regular work car and call on the Silverado when he needs it (1 day a week?).
To haul your boat or trailer, you need the gas guzzler, so maybe we just up the number of vehicles at home.
Selling is not the only option. You can default on your mortgage and walk away from the home. It's an economically rational thing to do anytime the value of your home falls far below the mortgage amount. Lenders spend a great deal of effort figuring out exactly when, why, and how people "choose" to default.
The "suburban wipeout" theory posits that many defaults would occur simultaneously, flooding the markets with repossesed homes and further depressing prices, leading to still more rational defaults. With their paper equity lost, and their credit scores in the garbage, home "owners" would need to seek alternative living arrangements (renting) and would likely have far less spending power for things like riding lawn mowers, plasma tvs, H-3s, etc. Voila, demand destruction.
If I've lost my service job, or likly to, maxed out my credit cards, and staring down the barrel of Repo. on the house with no equity build up why not "strip" the asset I "own" for cash rather than just give it back to the bank "as is"?
Gut out the water pipes and electrical wires for the copper scrap, sell off the high end bath and lighting fixtures to a "dont ask dont tell" contractor for reuse, same with that high end kitchen stuff like the granite countertops and Stainless dishwasher and cooktop.
Next to go is that "floating floor" system thats wall to wall in the whole place (hardwood plywood strips) they can be removed without destroying them, and sold off.
At this point its pretty much a shell, but you'd never know from the outside...
Now I'm down to the "dive bar" and sell the front door keys to a local hood looking to site his pot "grow" house or crystal meth lab (make sure to leave the main breaker panel in place for him to hook up his sodium lights to he'll pay more that way).
It'll be at least 90 days post default untill "they" send someone around to actually check the house, maybe longer if you get the demand letters fwd'd to a mail "dead drop" and spin them a line of bullsh*t, by which time I'm long gone out of state.
Maybe drug guy has burned it down by then and the fire insurance may actually pay off the bank, "who cares", I'm broke...
We really don't know what "big bad" looks like, but this story goes on now below the radar of main stream media in small quantity, no reason to think it won't scale up" in my opinion.
When the bank finally found buyers, they had to renovate before they could even move in.
this "roving bands" stuff is maybe an exciting idea, but depends on a real production drop-off.
The post-carbon institute/Richard Heinberg vision of re-localization imo is the most realistic future. Either as a conscious choice or even as the end result of simply allowing greater pressure to force us into a shift.
I think there will be "refugees"--not unlike the people who lost so much in Louisiana and fled not realizing that they would never return--who will find that life just isn't working in the SW desert metroplexes. It won't happen overnight, just as Detroit didn't die overnight, but it is basically dead now.
Matt, DC
What does Kuntzler say about enclaves of the super rich?
Another point: EVs, like PVs, even if they pay off eventually, are a method of putting up a large investment up front, for savings years later. People who are in dire economic straits, struggling in an unsustainable exurb, or in a national or worldwide depression, will not be able to make such investments.
As for those people who think Prius batteries etc. will become cheap - not a chance. Powered pallet trucks are used worldwide for loading/unloading 2 ton pallets in warehousing. An old fashioned lead/acid battery for one of those suckers is £1000 - 2000
This is simply not true. Even in gas-guzzling US we can replace all our light vehicle fleet with only a moderate expansion of the electric grid.
US gasoline usage ~ 9.5 mln.bpd = 665 GW x 15% (gasoline-to wheels efficieny) ~ 100 GW net power
So, if electric cars are 70% efficient (including recharging losses etc.) we will need additionally 100 / 70% = 143 GW to power them.
Currently the US electricity grid has 700GW peak capacity and is providing 450GW on average yearround. We will need to expand it by only 32% to handle the electric cars. Sounds too far from impossible, IMO.
Regarding battery costs you are both assuming that they will stay the same after batteries become mass produced by millions and after every car producer in the world starts investing billions in researching and improving them.
But even if we take the 30-40% as a worst case, it will translate in 250-333 GW needed additionaly. By building some additional power plants and utilising the current grid (recharging the cars at night etc.) the task would be well within reach. And of course we will have to learn to conserve - not such a pain to do, or a thing that would force you out of your home.
I don't want to get started on Kunstler here, but I will say: Scroll down a bit in the clusterfuck archives to where he had to endure a day or so without electric power in his hometown.
I have the feeling that many of the neighborhoods in the burbs and exurbs that no longer have viable work within a close radius will have trouble staying viable. It is nice to talk about ripping up the concrete and roads to grow crops, and using 3 acre exurb estates, but I'd have to believe that the people who own them (the rich, the banks, etc.) would have something to say about it.
Does anyone know the historical presidence of the depression? Were families evicted from their homes? Did a higher population own their homes outright? I think that the economic impact of job losses will be more devistating than the personal pain of paying more for a gallon of gas.
(this isn't so much directed at you fleam, as the rest of the thread. I just had to fit it in somewhere.)
In Phoenix, there is a bias against "old homes" (apparently old starts somewhere between 20 and 30 years) because they are a problem to upkeep and they are "too small". The current standard of construction is quite low and will not "hold up".
My prediction is that once growth stalls in Phoenix, the rate of shrnkage in population will match the prior growth. The 20% of the labor force in construction will move away first. Retirees, with limited transportation needs (and Phoenix has almost zero heating needs) will move close to the VERY limited light rail lines. Existing homes will be rebuilt into multi-family housing. Vast stretches will be row after row of mainly abandoned homes with the odd hold-out here and there.
Who wants to live in a neighborhood with 1/3 of the homes empty ? 1/2 ? 2/3 ? 4/5 ?
Declining urban services will drive more away.
Yes, electric cars will appear, but older, poorly constructed homes in empty neighborhoods will appeal to few.
There is a "stampede" herd mentality in real estate. The herd has stampeded to Phoenix, they will stampede away just as quickly.
Even resodding won't return much topsoil, though it probably makes for a prettier lawn.
It could be even more barren under bituminous driveways and roads. What is the effect of leaching that stuff into the soil for a few decades?
Whoever thought to snag all that topsoil will be sitting pretty.
"Rip up the roads" and start farming again? well fine, you'll find 6" of compacted gravel under the pavement, and infertile "sub soil" under that. I say infertile because it has no "tilth", no large size organic components to hold water, provide PKN to plants, or sustain soil critters (from microbes through to worms and bug larva, all of which are part of the working community that is soil.
Yes the top soil can be "rebuilt", but to do so in a way that will "scale" i.e. not just trucking in "good soil" from some other exburb strip mine, requires Pemaculture methods which are very slow. You need to work back up a sucession of plants species that can grow on marginal and damaged lands until you can get it to the point of being marginal pasture (i.e. goats not sheep or cows) That will start getting some manure on the land which is good!
Then we can start the nitrogen fixing cover crops etc. Think in terms of a few millimeters of net topsoil buildup each year, with hard effort from skilled farmers. Maybe "Grade B" land after a century of proper management a a smile from mother nature!
The legacy of fertile soils is more valuable than we really know how to calculate in an age of overshoot and impending price spike demise of chemical intensive farming in my opinion, and the trashing of the now exburb lands of North America a crime against our grandchildren of huge magnitude.
But at least they will have plenty of work to do < black humor
Planting nitrogen fixing lupines (with a bit of fertilizer) is the usual first step, then shrub trees.
They have only been doing this for ~50 years, so they are still experimenting with the Steps 3 & 4.
The roaming gang theory is just a fantasy of racist enculturation.
Who says they'll be without cars? The "Mad Maxing" around scenario sort of implies that there are still cars.
Where the food is, presumably.
In that case, white gangs will have no trouble at all. ;-)
I don't think that would be an effective defense, anyway. Farmers have a serious disadvantage against raiders. They have a lot of property to protect, and a relatively low population density. Raiders aren't planning to stay, so they'd be willing to do things settlers would be reluctant to do. Shooting missiles at the house from far away. Sabotaging water supplies. Burning forests and fields. Destroying infrastructure.
Tainter found that people moved closer to cities as collapse approached - because isolated farms and villages were vulnerable to raids. I bet it wasn't just gangs of urban teens, either. It was probably the armies of neighboring cities/states.
I've heard that states like Illinois have passed reverse-auction rules for selling electricity (buyers bid on how much energy they want and when they want it, sellers pick and choose the offers) that seem to be written to stamp out the use of things like wind power, which would normally be great for a region like this. What are your thoughts on this? Are there rules like this in other places you know of? Perhaps rules beneficial to wind?
Disclosure: I'm not an energy-economist person. I was told about the reverse-auction effect by someone who is.
It is a perfect example of the "slow squeeze" described earlier at TOD.
Hopefully the message does eventually sink in though. It did, over time, in the past. Look back over the last 30 years or so and you see big cars, small cars, big cars, small cars, big cars (the present and passing SUV craze) and we're just heading into small cars again.
Geopolitical risk is "felt" to be relatively high now, putting upward pressure on the price. Stockpiles are relatively robust(now), putting some downward pressure on the price.
Agree and disagree. Some portion of the price of oil today is directly related to the U.S./Iran situation. If Iran decides tomorrow to stop enriching uranium, a huge risk premium will evaporate overnight. While "geopolitical risks," generally, are part of fundamental picture with oil, any particular geopolitical risk factor, such as Iran, is not.
Hence, it does make some sense to distinguish between the two.
http://www.eia.doe.gov/emeu/cabs/AOMC/Overview.html
Some of the "risks" listed for 1992-1999:
The list of risks that you present makes this clear. I'm assuming those risks were spread out over that (roughly) decade period. The geopolitical risks we face today alone are greater than all those combined by a factor of about 5.
I think part of the problem here is what people are using for a definition of fundamental. Because one feels that geopolitical risk has always been fundamental to oil does not in any way mean that it is "a" fundamental which is the way oil analysts would be using it.
Think of the the tech-stock bubble. When it was all said and done, investors started talking about getting back to using the "fundamentals"(i.e. P/E, cash flow, etc.) to analyze stock prices. Previous to this people were bidding up stocks with no profits and no proven record to astronomical levels based on the notion that the "fundamentals" didn't matter anymore and we needed a "new way" to value internet/tech-stocks.
And that's going to be even more true in the future. The political risk, IMO, won't go down. It's not a coincidence that the political risks are so high right now. The fact that the oil supply is so tight has emboldened the oil producers, from Russia to Iran to Venezuela to Nigeria. They wouldn't be doing what they are doing if oil were $20/barrel.
I'm a little more optimistic. I don't think the risk will go away, but our tolerance for it may strengthen greatly. And, personally, I think
$60$70/barrel is very cheap, by about $90.I disagree. I think supply constraints are essentially geological. Saudi Arabia or Kuwait can no longer open up the taps and drive prices down. That's the essential difference.
"You just like to argue."
If you admit you've heard that, then we know each other. If not, I'll respond to contraints, essentially, and geological by Monday morning, Professor.
Let's look closer at "P/E, cash flow, etc.". Earnings and cash flow are "numbers" babbled out by so-called accountants who claim to be following GAAP (Generally Accepted Accounting Principles). Well guess what? The accounts at Enron, at WorldCom and lots of other companies were spewing out comforting "numbers" ... so-called fundamentals. But everything was a lie. They used "numbers" to perpetrate a fraud.
The next time you hear a TV pundit start babbling on about "fundamentals" and the "numbers" and "expectations", these words should feel like finger nails scratching across the blackboard for you and not like a pigeon's comfort coo's. They should be red flags that you are listening to a fraud.
No disrespect to you Oil CEO, but even from the times that wooden ships were sailing across the oceans to deliver spices or other exotic commodities, business people have been obtaining insurance policies so as to hedge their gambles and thereby account for the above ground risks of storms, pirates (terrorists), etc.
Almost any argument in support of the TV psycho-babblers can "sound" good. It's "sound logic." However, when it is parsed and looked at under a microscope, one can see that it is filled with the seeds of horse manure.
As I said, if you hear a TV "expert" pontificating about the "fundamentals" being solid, the "numbers" being good, and "expectations" being met, alarm bells should go off in your head. Enjoy the show. But understand the sound of bullshit even though you can't smell its stink.
Secret Post.
A perfect example is what happened to Natural Gas Futures in the California Energy Crisis engineered by the traders. The companies raked off huge profits both on driving up the price and watching it collapse. Hogs are slaughtered and sheep are shorn by their parasitism.
Sincerely,
Jack Bauer
Is it possible that governements can participate directly in hedge funds or would they have to work anonymously through a third party?
When the value of the dollar drops (as it has been recently), but the price of oil valued in dollars ($70.30 right now) stays the same, what is happening to the true cost of that barrell of oil valued in US dollars?
What is behind the recent loss of US dollar's value? You would think this would be front and center news on sites like http://www.bloomberg.com. I haven't heard much in the way of explanations.
Say, 80%?
But we will probably overshoot to 90%.
Some of the increase in the price of oil is due to the decrease in the value of the US dollar. It is taking more dollars to buy the same unit of oil, but it's taking fewer euros to buy the same amount of oil.
I believe some of what is going on is the decreased holdings of US dollars at various national banks throughout the world. What's replacing those reserves? Gold, euros, and a basket of asian currencies? You bet. As I've heard a millions of times...to understand the real driver of global activities....FOLLOW THE MONEY!!!!
The MSM (and the federal gov't.) do not want people to recognize this due to its ramifications.
And even though the IOB seems to have lost some steam, I keep feeling it's lurking below the noise. Something is afoot here that is under the immediate radar.
So here we have a South American Energy Pact to guarantee supplies with perhaps an exclusive regional price to be negotiated. I think this makes a nice corollary to westexas' net export capacity theory. Brazil, Argentina, Bolivia and Venezuela will be looking out for number one (or is that number one through four?).
With the Iranian Oil Bourse back on the table, regional conflicts in the Middle East, China's locked in deals and today's discussion about Russia, I'm wondering if this may be a signal that OPEC's days are numbered in favour of regional arrangements and perhaps the end of a single worldwide oil price.
Thoughts?
.
In the thread about Friedman's call for a Third Party, you gave me this link,which I have given much thought to.
Re: Texas Oilmen
http://www.energybulletin.net/14606.html
Subject: What Are Two Texas Billionaires,
Richard Rainwater & T. Boone Pickens,
Saying About Peak Oil & Why Aren't You Listening?
As someone who leans towards being a "green democrat," I should be in favor of revenue neutral gas taxes, paid for by cutting the regressive payroll tax.
I should also be in favor of it because my wife and I are homesteaders with a fixed income, are not dependent on fossil fuels but are threatened by out of control urban sprawl.
We built our modest adobe house, off the grid, with our own hands; and we have a small orchard/permaculture garden. But though we are 100 miles from Tucson, the bulldozers are only 15 miles away, and, barring a property crash and/or peak oil, they'll be wrecking our quiet stretch of desert within a year or two.
I would love for gas to hit $5/gallon, for the yahoos who race down our country roads in their huge pickups at 70 mph to be constrained, and for the leading edge of urban sprawl to go bust. In fact, I see it as inevitable.
But I would prefer it be an "act of nature" rather than being something I needed to campaign for.
Let's face it, if we raise gas taxes, and Ford and GM gobust, we will be blamed, not nature and decades of bad management by Detroit.
Think of the hundreds of thousands of auto workers who would lose pensions and health care; the millions of car buyers who paid premium prices for gas guzzlers, the property speculators who would go bust, the construction workers suddenly unemployed.
If I was a senator I wouldn't want these multitudes thinking that I was responsible for ruining their lives. Ditto with the bond holders, and victims of a possible risk market meltdown.
In any case, politicians are scrambling to lower gas taxes; I think gas tax increases have no chance of becoming law.
Also, with Bush dead in the water and Congress in chaos, I don't see much coming out of Washington before 2009. And by then presumably gas taxes would have become so erratic and expensive that people will start to put 2 and 2 together.
Unfortunately, without education they are liable to come up with the wrong answer.
*
Mr. West Texas, I believe the best thing that can be done is continuing education, by people like you and your friends, who have credibility and clout. And that is going to be extremely challenging. Peak oil goes counter to virtually everything we have ever heard from the media, political and economic authorities, and from the daily deluge of advertising.
America has a monumental amount of waste which will need to be wrung out of the system; but every person's waste is another person's job.
Most people have yet to reach the "anger and denial" part of Elizabeth Kubler-Ross's stages of coming to grips with reality. And when they do, I don't want to be in the way. And actively raising their gas prices is getting directly in their way.
Instead, how about an advertising campaign that shows the peak oil curve, and then superimposes that on the supply/demand price curve; then asks something like "if you know that your personal energy costs are going to skyrocket in the next few years, what will you do right now to prepare?" Or, "If you knew that gas will soon be $6.50 a gallon (which is what other countries pay right now), how would that knowledge affect your decisions?"
Or something like that. The solution - if there is to be one -- must be based upon the actions of hundreds of millions of consumers; and these actions need to be based on reality, rather than myth. On personal responsibility, rather than government sponsored boondoggles.
Perhaps an educational foundation could be set up, with a whole list of very influential names attached, backing a very simple graphic message? And that image, with the right advertising, could become ubiquitous, unavoidable.
The message could be framed around Hubbert, to show that oil people have been working on understanding this problem for half a century. And now that the pieces of the puzzle are finally put together it is imperative that the knowledge be promptly disseminated -- as a public service and a patriotic duty.
I'm afraid that in the absence of a very frank dialog, we're setting ourselves up for a massive "stab in the back" syndrome in the future.
As I'm sure you are aware, in World War I the Germans told their people up until the moment of surrender that they were winning. That massive break in the credibility of authority set the stage for the rise of the Nazis, who blamed the sudden and inexplicable defeat on Jews, socialists and other traitors.
Imagine what will happen after peak oil sets in, when the anger and denial in our country boils over. Much of what they've been told (and are still being told) will prove to be wrong. Years of work and investment will prove to be largely wasted, going in the wrong direction. The rage of tens of millions of citizens will most likely be aimed at oilmen, investors, the wealthy in general, the Republican Party (because they are in power), and George W. Bush. I suspect that Bush will become the scapegoat for peak oil, just as Nixon was scapegoated for Vietnam.
I urge all oil people to get massively involved in public education, or you risk becoming the primary scapegoats.
Yours sincerely,
Jim Burke
My premise is that all of the negatives associated with a much higher Gas Tax/Energy Tax are going to come to pass anyway; therefore, why not accelerate the response, so that we can start preparing now?
Also, we can now do a carrot and stick approach. Note that I am not talking about a net increase in taxes. I am talking about taxing energy consumption to fund Social Security/Medice instead of taxing the wages of lower and middle income taxpayers. If we do nothing, we will have both higher energy prices and our existing Payroll Tax.
In the recent NYT article on how people were responding to higher gasoline prices, I was struck by the fact that just about the only people who sharply curtailed their driving were the ones who were financially incapable of buying gasoline. I suspect that this is the pattern that we will see going forward.
There have been some polls suggesting that if we present the Energy Tax the right way, i.e., as a way to sharply curtail our oil imports, the Energy Tax idea actually gets some positive responses. As you said, the key is eduction. We have to confront the myth that we can have infinite growth against a finite resource base.
For a description of the "Iron Triangle" forces aligned in favor of the status quo, see the following article:
"What the mainstream media are not telling you. . . "
http://www.energybulletin.net/15126.html
Thank you for the response and added link.
From your energy bulletin report, it seems clear that oil imports are falling rather steeply, which accounts for the recent run up in gas prices. I would imagine that if this trend continues, gas may be $4/gal or greater by summer. If speculators try to profit by cornering the market (if they aren't already), this summer could see huge price spikes and gas lines -- and a lot of enraged people.
Let's assume that at some point this summer prices go above $5/gal. Do you really think many of these people will see the benefits of a large tax on top of what they are already paying? Do you really think any any congressman or senator will commit professional suicide by proposing such a thing?
Do you really think Mr. Bush would sign a $1/gal gas tax into law?
What I am suggesting is that the huge price increases, which will change people's behavior (and possibly bankrupt Ford & GM) may be inevitable anyway. And could come our way much faster than any possible gas tax increase.
Pushing for any remedy is very consuming of personal time and energy, and it is clear that you have given a great deal of thought to this, and have put an immense amount of yourself into this.
I am merely (and sympathetically) suggesting that you might reconsider the object of your attentions.
I am suggesting that by the end of the driving season, people's driving behavior may already be reconsidered.
I am also suggesting that tens of millions of people will be enraged, and it is of the utmost importance that this rage be redirected, or mollified by the understanding of what is really happening to them.
Right now, as you so clearly pointed out, the MSM is not telling people what is really happening. SO naturally they are going to suspect some sort of conspiracy, some sort of "stab in the back" by oil companies, businessmen and Republicans.
What I am suggesting is that you and your friends and contacts pool your resources, create an educational foundation, to bring the truth to the people.
Otherwise I fear an enormous, powerful, irrational, and very negative reaction, focused at all people involved in oil production and investment -- unless those people follow Matthew Simmons' example and innoculate themselves through public education.
Yours sincerely,
jim burke
The reality of Social Security/Medicare is that it has to be paid for somehow, so why not tax energy consumption instead of wages?
However, I am actually pushing two things: the Energy Tax/Abolish the Payroll Tax idea and Alanfrombigeasy's Electrification of Transportation Proposal.
In regard to imports, IMO we are in the early stages of a global bidding war for a declining net export capacity. Time will tell, but what we do know is that no large region has ever shown higher production than what they had in the vicintiy of 50% of Qt, based on the HL technique. Deffeyes' work puts us past the 50% of Qt mark worldwide (for crude + condensate) and the top exporters are farther down the depletion curve than the world is overall.
"Moscow has always suspected that the USA needs an enemy to maintain its identity. Now we have proof of it."
Things are heating up.
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/05/05/wus05.xml&sSheet=/news/2006/05/0 5/ixworld.html
So the CFR mailed TOD this info? Interesting, did they say why? I read the article and related links, as far as possible: yada,yada,yada-- all stuff we have flogged before on this forum. It seems that, if anything, they are trying to discount our analysis efforts:
Quote from initial CFR article: "Leonardo Maugeri, an executive at the Italian energy company ENI, recently wrote in Foreign Affairs that this is already starting to happen:"
generates this next CFR link:
http://www.foreignaffairs.org/20060301faessay85212/leonardo-maugeri/two-cheers-for-expensive-oil.htm l
---------
In other words, what little is known about the world's underground oil resources justifies a positive view of the future, not the alarmist vision of oil catastrophists. The pessimists assume that the world has been fully explored, that neither the dynamic of crude prices nor technological progress has any bearing on the "finite" nature of oil resources, and that consumption is bound to increase more and more, inexorably depleting the existing oil stock. Their pseudoscientific fatalism, camouflaged with quasi-sophisticated models, has ...
--------------
The article continues behind a paywall, so I did not go any further. But it seems clear that they give no credence to the Hubbert Linearization Method and other statistical graphs that the widely admired TOD data freaks work so hard to generate.
So, do they know something 'special' about Peakoil, and are trying to clue us in, OR is it just run-of-the-mill elite propaganda trying to sidetrack our efforts?
Now what would be really interesting is if the CIA/NSA emailed TOD something to counter the CFR email!?!
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
Yeah, how can the US military have official position papers talking about Peakoil, and then the CFR having an opposing view? Where does the IMF, WTO, CIA, NSA, KGB, MI6, MSM, OPEC, PNAC, MOSSAD, World Bank, Bilderbergers... endlessly on and on---> just where do all these groups stand on Peakoil, and why won't they give us the crucial data and the answers?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
What I understood is that Robert Rapier has some knowlegde that convinces him that at present we are NOT at PO, yet. Some may just have amazingly interesting information of not publicly known new oil to come on line in a few years. RR has also stated that he cannot reveal that info, unfortunately.
Let's hope it is true.
The bottom line is that all of the large oil fields in the world, except for the Caspian Sea stuff, are old, and the Cantarell Field is a ticking time bomb about to go off right at our back door. We are looking at the prospect of losing about 20% of our daily imports (from Mexico) by about the year 2010 (Khebab has posted some very good info on this).
Clearly demand outpacing supply(up- or downslope)should cause higher prices; I just argued, IIRC, that according to RR we have not reached PO.
But just as you & Khebab showed, the world is around 50% of Qt. I think we have reached PO. I thank you for everything you have posted here; it is very important to me. ELP advise in particular.
And indeed the USA is in trouble with shrinking net export capacity. But so are we in Europe, especially now the play on Iran is deteriorating. My guess is, and has been, war is inevitable, and high prices as well as diminishing US imports will be blamed on the consequent fall of ME oil production, not PO. I won't give a time lime, but expect the first nukes about the time Ghawars' spectacular collapse becomes appearant.
Once production is in fact clearly declining, I hope that the alarm bells will go off and the issue will be taken with the seriousness it deserves. I think there is a significant psychological difference between an ongoing, relentless decline and an ongoing, gradual increase that falls just short of demand. People only really react to a crisis, it seems.
Look at the North Sea. Peaked in 1999, but many did not believe it for several years. Some are still hoping that production can be raised with the right combination of technology and tax incentives.
Quotes like this one do nothing to change my view.
I assume you have not googled the CFR yet:
http://www.cfr.org/about/people/board_of_directors.html
http://www.apfn.org/apfn/cfr-members.htm
Sorry, looks like a topdog group to me!
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
But there's nothing inside them.
taxes currently account for about 19 percent of the retail price Americans pay for gas... That 19 percent is down from a 27 percent national average in 2003. But given the near doubling of the price of gasoline, the number of tax dollars collected from gasoline sales has risen in both real and absolute terms.
What the heck does "both real and absolute terms" means? Did they mean relative and absolute perhaps? (Great editing?) And AFAIK, both federal and state gasoline taxes (in most states) are a fixed number of cents per gallon, not a percentage (wish it was!), which helps explain that drop from 27 to 18 percent they mentioned. And which has led to the absurd idea in Oregon to tax drivers by the mile instead of the gallon, in response to a DROP in gas taxes collected (due to slightly decreased demand) while highway maintenance costs are soaring. And never mind that taxing by the mile instead of the gallon would eliminate the bit of tax incentive we have now to drive smaller cars.
Alas the sheeple are mostly against the gas tax. We had a big fight recently in Vermont over a proposal to raise the tax 4 cents a gallon (and specifically to pay for highway maintenance). What we've seen in "letters to the editor" and call-in shows seems to indicate that people do NOT understand "revenue neutral", do not get that "fees" come out of the same pocket as "taxes", and so forth. It's a completely emotional debate, and alas an indication of the stupidity with which this society will try and handle the real crisis ahead.
In other works, getting email from someone at the CFR, NSA, or CIA is no big deal. No reason to lose sleep.
WHAT THE HELL!!! Can some members from down under tell me this clown is not serious?
http://www.abc.net.au/news/newsitems/200605/s1627164.htm
Bob Shaw in Phx,AZ Are Humans Smarter than Yeast?
"What you have to ask is: do I turn my head and allow another country exploit my resource or do I position myself in such a way as I'm going to exploit it myself before they get there?"
:Barnaby Joyce.
Hi Bob,
Mr J is a real 'Lord has given us dominion' kinda fella...
You have to love his 'logic'... though I believe that the Antarctic (unlike the Arctic) has an International Treaty covering it... but then they don't seem to mean much sometimes. I think recently countries without an offically recognised territory on the Antarctic have established some bases (on other territorial claims). Anyway, with GW starting to kick in he'll be able to get at all that coal all the sooner! I was about to say that his electorate might be underwater - but he's from waaaay outback in western Queensland
Well if 'we' did take it, perhaps this time the concept of terra nullius might actually apply - unlike the first time.
You can send him an email through his website:
http://www.barnabyjoyce.com.au/Contact.asp
I should add that he probably is serious but he does add colour to the local political scene.
Water Supply A Mirage In Phoenix Arizona
Phoenix, a desert city, is becoming infamous for its conspicuous consumption of water.
"As cities in other parts of the West struggle to conserve water in the face of a drought that has been gripping the region for years, Phoenix is going about business as usual....Not only are there no mandatory water restrictions, but some people who let their lawns die from lack of watering are ticketed. Some homeowners associations are requiring lawns even to be kept up during winter....Phoenix isn't as vulnerable as some cities to running out of water because multiple sources supply the metropolitan area of about 3 million people....But even with the searing temperatures, including days on end of triple-digit heat in Phoenix and a lack of rainfall, you can sometimes almost forget that the nation's sixth-largest city rests in the middle of miles of sand."
Thxs for responding. I have posted for several years in the Yahoo forums about Phx's water wastage, and also here on TOD where I have broached the subject covered in the Humanure Handbook. I have posted info on AZ's water distribution system, specifically the Central Arizona Project [CAP], and our continuing drought and fire hazards. I have emailed officials, local media, and posted on a local Phx forum. It is very difficult to overcome denial here because the economy is booming and the ever-shining sun puts most people in a optimistic mood. 500,000 have moved here to the Asphalt Wonderland in the last five years. Kunstler predicts we will be mostly ghost town in the future along with Las Vegas. I can only do so much to warn the locals, but I keep trying.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
And to both of you here are some links on Melbournes (pop~3 M) response to water shortages.
Melbourne Water
Southeast Water
Savewater Initiative
From one of these sites...
"Are there penalties for breaching the Permanent Water Saving Rules?
The penalties are in the order of:
1. First offence $1,000."
Will similar intiatives by started for PO??
As much as I would like to attend this weekend's conference in DC, I am afraid that the price is admission is a bit steep for your humble working boy (that's me). Having been out of work for the past several months, funds are rather tight at present. As it so happens, I have just started work again recently, and look forward to being a part of our dynamic, global economy. Why, just the other day our glorious leader said the American economy is doing great. Now, if only the doom and gloom, liberally biased media would report that news, instead of all the "for sale" signs on homes and increasing foreclosures they seem to have fixated on, at least in my town. Damned commie sons'a'bitches!
Subkommander Dred
I guess it is cheaper to maintain 2 steel rails and rubberless wheels, than 18 wheeled trucks which can only carry relatively small loads and require lots more fuel to run.
http://www.hemp4fuel.com/nontesters/hemp4fuel/main.html
http://www.mapinc.org/norml/v06/n557/a05.htm?134
http://www.fuellessflight.com/
OK, the last is a joke.
There is no reason to think it will require any less cultivation and fertilizer than the others -- meaning, you're going to be doing less combustion in the future than you do now. Of whatever variety.
I suspect that corn talk is a result of ADM, Monsanto, and Cargill exerting political influence. Had this exchange with a friend on another site...
Soybeans ~40 gal/acre
Corn ~60 gal/acre
Mustard ~140 gal/acre
Jatropha~160 gal/acre
PalmOil ~650 gal/acre
algae 10-20000 gal/acre
Do a google on GreenFuel Technologies Corp ..
They've got a continuous bioreactor going commercial ..
The 'algae' folks claim that all motor fuels and
heating oil can be replaced with the equivalent of
500,000 acres of closed-loop algae production ..
who knows .. Ford also looked at Mustard plants as
a source of biofuel back in the day ..
and my answer, re hemp...
Hemp is a viable source of woody biomass, no deforestation necessary. In fact, while an acre of trees is about 60% cellulose, and acre of hemp is nearly 75%. How much hemp is necessary to meet current US energy needs? Somewhere between 10 million and 90 million acres, depending on how efficient the production is. Every year, the US government pays farmers (in cash or "kind") to not farm what they call the "soil bank", which happens to be about 90 million acres of farmland. The math is pretty simple.
Hemp seed oil is very similar to petroleum diesel fuel, and produces full engine power with reduced carbon monoxide and 75% less soot and particulates. Hemp stalk (different than the part that can make paper and textiles) can be converted into 500 gallons of methanol/acre. US energy consumption is responsible for 80% of the world's air pollution. The use of hemp biomass fuel would be a globally responsible evolution.
http://mit.edu/thistle/www/v13/2/enviro.html
======Hemp as Biomass for Energy
Tim Castleman
© Fuel and Fiber Company, 2001
----
Industrial hemp can be grown in most climates and on marginal soils. It requires little or no herbicide and no pesticide, and uses less water than cotton. Measurements at Ridgetown College indicate the crop needs 300-400 mm (10-13 in.) of rainfall equivalent. Yields will vary according to local conditions and will range from 1.5 to 6 bone dry tons of biomass per acre. California's rich croplands and growing environment are expected to increase yields by 20% over Canadian results, which will average at least 3.9 bone dry tons per acre.
Hemp seed oil for BioDiesel
Production of oil
Grown for oilseed, Canadian grower's yields average 1 tonne/hectare, or about 400 lbs. per acre. Cannabis seed contains about 28% oil (112 lbs.), or about 15 gallons per acre. Production costs using these figures would be about $35 per gallon. Some varieties are reported to yield as much as 38% oil, and a record 2,000 lbs. per acre was recorded in 1999. At that rate, 760 lbs.of oil per acre would result in about 100 gallons of oil, with production costs totaling about $5.20 gallon. Sales of the remaining stalk material at $72 per ton will provide another source of income. It is estimated that a crop grown for both seed and fiber will produce about 3 tons of stalk, which is selling for about $72 per ton, resulting in a $216 per acre credit. This will reduce the cost of the oil to about $3 per gallon. Further reductions will accrue as the agronomic knowledge base is enlarged, and economies of scale are realized, lowering production costs while improving yields.
This oil could be used as-is in modified diesel engines, or be converted to biodiesel using a relatively simple, automated process. Several systems are under development worldwide designed to produce biodiesel on a small scale, such as on farms using "homegrown" oil crops.
Production of Bio-Diesel
Basically methyl esters, or biodiesel, as it is commonly called, can be made from any oil or fat, including hemp seed oil. The reaction requires only oil, an alcohol (usually methanol) and a catalyst (usually sodium hydroxide [NaOH, or drain cleaner]). The reaction produces only biodiesel and a smaller amount of glycerol or glycerin.
The costs of materials needed for the reaction are the costs associated with production of hemp seed oil, the cost of methanol and the NaOH. In the instances where waste vegetable oil, or WVO, is used, the cost for oil is of course, free. Typically methanol costs about $2 per gallon and NaOH costs about $5 per 500g or about $0.01 per gram. For a typical 17-gallon batch of biodiesel, you would start with 14 gallons of hemp seed oil; add to that 15% by volume of alcohol (or 2.1 gallons) and about 500g of NaOH. The process takes about 2 hours to complete and requires about 2000 watts of energy. That works out to about 2kw/hr or about $0.10 of energy (assuming $0.05 per kw/hr). So the total cost per gallon of biodiesel is $? (oil) + 2.1 x $2 (methanol) + $5 (NaOH) + $0.10 (energy) / 14 gallons = $0.66 per gallon, plus the cost of the oil.
Hemp Cellulose for Ethanol
Another approach will involve conversion of cellulose to ethanol, which can be done in several ways including gasification, acid hydrolysis and a technology utilizing engineered enzymes to convert cellulose to glucose, which is then fermented to make alcohol. Still another approach using enzymes will convert cellulose directly to alcohol, which leads to substantial process cost savings.
Current costs associated with these conversion processes are about $1.37 per gallon of fuel produced, plus the cost of the feedstock. Of this $1.37, enzyme costs are about $0.50 per gallon; current research efforts are directed toward reduction of this amount to $0.05 per gallon. There is a Federal tax credit of $0.54 per gallon and a number of other various incentives available. Conversion rates range from a low of 25-30 gallons per ton of biomass to 100 gallons per ton using the latest technology.
In 1998 the total California gasoline demand was 14 billion gallons. When ethanol is used to replace MTBE as an oxygenate, this will create California demand in excess of 700 million gallons per year. MTBE is to be phased out of use by 2003 according to State law.
In this case we can consider biomass production from a much broader perspective. Sources of feedstock under consideration for these processes are:
We will address these in turn and show why a dedicated energy crop holds important potential for ethanol production in California, why hemp is a good candidate as a dedicated energy crop, and how it may represent the fastest track to meeting 34% of California's upcoming ethanol market demand of at least 580-750 million gallons per year.
http://www.fuelandfiber.com/Hemp4NRG/Hemp4NRG.htm
I'm still looking for BTU figures, and petrochemical and water inputs for the various biocrops. I'm also thinking about a weed called teasel, since I'm hacking down plants taller than me in the garden. Problem is, that it is a biennial.But, in Cal,you can walk on it for a year, and then it shoots up during late winter/ early spring, right when fields get planted. Maybe in the rows?
There is currently a hemp industry bill in the Calif. lege.
Problem I have pushing hemp is everybody says "But it will seed my crop." :-)
======Algae appears to be the best.
http://www.energybulletin.net/2364.html
10-20,000 gals/ acre yields claimed
Rat
Then there's the fertilizer and water biofuel crops require - which we may need to save for food crops.
Perhaps the best argument against biodiesel is that turkey parts plant. In theory, they figured they could make oil for $15/barrel. In reality, it was more like $80/barrel. They lost money on every barrel until the government offered subsidies.
And that was with a ready-made feedstock - slaughterhouse waste. Having to grow your own feedstock would make the numbers significantly worse.
Not that I'm entirely against biofuels, mind. But it's a huge mistake to think we can use biofuels to replace petroleum and continue on with the happy motoring lifestyle.
I think the key phrase in your comments is "the happy motoring lifestyle". It's our massive consumption for both personal travel and transport of goods via highways that are the source of our "addiction".
Assuming we wanted to change, the only change available to most of the US is to change to a Hybrid; EV's are not for sale yet, commuter rail is not viable except in certain areas of the country, long distance rail is also shot, there isn't enough ethanol to make a dent in our problem, mass conservation isn't possible without government intervention, etc.
So, we have a problem, we know how to work around it, but the tools aren't there.
This is the crux of our problem, and why we are so incredibly vulnerable to societal chaos. What nobody seems to be acknowledging is that this problem is one of overshoot. You can say population overshoot, or you can say resource depletion. Each is dependent on the other, two sides of the same coin, thanks to the Gods of Growth Eternal.
And that is one of the reasons I fear collapse is inevitable. I'm just hoping for a slow one.
People have other options. Move closer to the workplace, for one. Doesn't work for everyone, of course, but every bit helps, and the government doesn't need to lift a finger.
From March 15, 2004:
(Despite that beginning, the article does take peak oil seriously.)
For some reason, PO came to mind.
http://www.thenewyorkerstore.com/assets/1/52630_m.gif
All of us are wondering what might happen in the Gulf of Mexico this hurricane season - will we get one that kicks us up to $7/$8/$10 gas?
I think these two satellite images (365 days apart) speak volumes about the potential for hurricane strengthening in the Gulf of Mexico...
http://www.standeyo.com/NEWS/06_Pics_of_Day/060504.pic.of.day.c.html