DrumBeat: June 14, 2006

Update [2006-6-14 9:35:28 by Leanan]: Al Gore Mentions Peak Oil on CNN: Former Vice President Al Gore was interviewed on Larry King Live last night, and talked about peak oil. Unfortunately, it was at the end of the show and he didn't have much time. From the transcript:

KING: Gas prices going to go down?

GORE: Well, I've seen a number of -- over the last several decades I've seen this happen several times, where they spike and then they do come back down.

But each time they go to a higher plateau. We almost certainly are at or near what they call peak oil, defined as having recovered a majority of the oil reserves at a certain price, affordability range. And so with the new pressure on the consumption side from China and India, if they come back down, they won't stay down long.

KING: What do you drive?

GORE: I drive a hybrid. Tipper and I got a Lexus hybrid. And we have a couple of Priuses in the family with our children. And I encourage people to make environmentally-conscious choices because we all have to solve this climate crisis.

Update [2006-6-14 9:59:55 by Leanan]: From the production front:

Aging oil wells hold a treasure trove, report finds

EDMONTON - A $1-trillion Canadian oil and gas bonanza awaits production in aging western wells, says a new energy treasure map drawn by industry and government experts.
‘Top five oil companies focus on developing existing reserves’
The world’s five biggest oil companies including Exxon Mobil Corp are focusing on development of existing fields as it becomes more difficult to find new reserves, Wood Mackenzie Consultants Ltd said.
"Existing fields" being Canadian tar sands and Venezuelan heavy oil. But don't worry, the Saudis plan to increase oil production to 12 million barrels a day by 2009.

Update [2006-6-14 10:52:28 by Leanan]: Jeremy Leggett describes what it's like to be a peak oiler at an OPEC conference: Oilmen in troubled waters.

For a bearer of bad news, the Opec conference is less of a lion's den than it was. But some of the speakers still have strong ostrich tendencies.
And the weekly inventory report is out. Gasoline stocks rose more than expected, sending oil prices down. Distillates also rose more than expected, while crude oil stocks dropped more than expected.

Update [2006-6-14 13:7:43 by Leanan]: The right-leaning New American offers An Expert Look at the Energy "Crisis":

Well, our principal energy problem is the same as with virtually all American economic problems: taxation, regulation, and litigation.

Update [2006-6-14 15:31:29 by Leanan]: Low-income families are feeling the bite

Shannon Hill of Barrington, N.H., is angry about rising costs and has taken steps to deal with them, including buying a bicycle to get around town.

“I am absolutely dumbfounded by the price of gas these days and the impact it has had on my everyday expenses,” said Hill, a publicist. “Everything from my drive to the convenience store for milk to my purchasing a home and even my traditional after-work pint (of beer) has been affected by the price of one single good — oil.”

Interesting news out on enhanced oil recovery technology

Sayavur Bakhtiyarov, chairman of Mechanical Engineering at New Mexico Tech and an expert on the use of carbon dioxide to recover trapped oil, said Energy Reclamation's gas-injection system can, over time, produce up to 60 percent of the stranded oil in some of Oklahoma's mature reservoirs.

The portable system generates carbon dioxide, or CO2, at the well site. The gas is pumped into the formation, restoring pressure in the reservoir, and "sweeps" the residual oil to the surface.

Here's a picture of the Happy Camper next to the portable oil getter.

"Sayavur Bakhtiyarov stands next to Energy Reclamation LLC's new oil recovery system Friday -- a system that he endorses."

That looks like a mobile weapons lab to me!
WMD alert! Aaaroooogaa! Aaaroooga! Battle-stations! Dive! Dive!

Dude definitely looks like Al-Quaeda, too. The Real 20th Hijacker.

As we all know here at TOD.  Getting oil out of the ground faster, via increased pressure, does not add more oil to the total.

Maybe having lots of little wells with donkey engines is a good thing.  Takes a long time for the oil to run out completely.  Allows a gentle slope on the backside of the peak for that well.  Add all those wells together and you get a gentle slope for the U.S.

Increase extraction efficiency and we could suck all the oil out of those old wells in 5-10 years.  Then where would we be?

People confuse extraction rate with reserves.  One does not equal the other.  But high extraction rates use up your reserve a lot quicker and in the interim you think you have a lot of reserve because the volume is high on a daily basis.  Classic Hubbert curve impact.  Steepen the front side and the peak comes sooner.  Steepen the back side and you totally run out sooner.

if the total oil in the ground is X, and Hubbert method suggests that world Qt is ultimately 2 trillion barrels, what % of X is 2 trillion? Not 100%.

There will still be alot of oil left untouched, and new methods may be able to tap that. 2 trillion doesnt suck dry the entire planet, only the oil that is 'suckable' through a straw - the slushy parts of the margarita will still be down there...

That's certainly true, there will still be lots of stranded oil. The question is the perpetual Energy Return on Investment. I don't know at what point all burning of oil for energy will become uneconomic, but it is starting to show in such things as GM cancelling the big Hummers
  The Seminole field in Gaines County ,Texas was put on CO2 recovery about 1981 or 1982. The wells in the center of the field are showing increased CO2 production indicating that this first generation tertiary recovery is going to be uneconomic for the operator fairly soon. I'm sure higher prices will extend the life, but still, at some time it will be uneconomical for Amerada Hess to continue to produce. Likewise at Saratoga in Hardin County the fireflood has been abandoned by Mobil. There is only so much oil in any reservoir. I hope that these tactics will buy a little time for the US to start conserving, but they will do no good if we don't get the word out and use level heads.
My guess is that governments will attempt to obfuscate the issue as long as possible regardless of how much hardship it untimately causes.  I can certainly envision a goverment suit getting up at a press confernece saying, "There really isn't any need to worry.  Alternate fuel production has already grown 50% in the last year."  Yea, from 1.2% to 1.8% (or whatever).
Does the issue of EROEI assume a mispricing of, or subsidy for, certain energy types? If all energy was priced correctly, wouldn't it make the EROEI calculation superfluous?

In order to believe that any rational investor could take on a project with a negative EROEI you have to believe that they are:

  1. Using a cheap form of energy to get a more expensive one in return
  2. Are not paying the full price for their energy input, or
  3. Are going to lose money

Am I missing something?



EROEI is a form of accounting.
But it has nothing to do with money.

Instead we are measuring the amount of useable energy that society has at the end of a process compared to the amount it had at the beginning of the process.

First note in the equation to the right that both the top and the bottom values are always POSITIVE. There is no negative energy and there is no negative value for EROEI.

We want to know if EROEI is greater then 1.0 or not.

Let's make up a simple example.
Suppose you own a coal pit.
Suppose that your truck consumes 10 gallons of gasoline to make the round trip from town, down to the bottom of the coal pit to pick up a load of coal and bring it back to town. (The gasoline station is in-town and useable energy for our example means in-town energy.)

Suppose the amount of energy in each truck load of coal you bring up is equivalent to 9 gallons of gasoline. So in terms of in-town useable energy, you are inputting 10 gallons of gas and getting back 9 with each trip. Is that a wise move? The answer is not an automatic no. There can be other factors. But your EROEI in this example is 9/10 (it is less than one). And the question is how long can you keep playing this game, how many round trips?

I understand that EROEI does provide a useful measure of the net energy output of a project and that it does not make sense to put more energy into something than you get out, unless there is a reason not accounted for by EROEI. The same applies for financial ROI, adjusting for time and risk, you wouldn't put more into money into a project than you expect to get out.

However, my question is this:

If energy is priced correctly, is there ever a case where EROEI and ROI diverge? If so why?

In your example, if each input and output were priced correctly, the project should be rejected on either ROI or EROEI terms.

In conclusion, I can not see any circumstances in which EROEI adds to project analysis except for identifying situations in which subsidies or mispricing fool ROI.

So if EROEI is applied to say corn ethanol or tar sands and finds that the EROEI is negative, but financially (ROI) positive, what does it mean?

My claim is that it only identifies a pricing problem.

So if EROEI is applied to say corn ethanol or tar sands and finds that the EROEI is negative? [err, I meant to say, less than unity], but financially (ROI) positive, what does it mean?
My claim is that it only identifies a pricing problem.

There cannot be a pricing problem. "Price" is whatever "value" two arms-length negotiators ascribe to a certain trade. If they decide, regardless of EROEI being <1 that a certain liquid fuel (say corn ethanol) is worth a given number of currency units (dollars), then that is the price. Period. There is no "problem". The market has spoken.

Is there ever a case where EROEI and ROI diverge? If so why?

Yes of course there is such a case, thousands of them.
Anytime the "consumer" is willing to pay a higher premium for a certain type of useable energy from #2 as opposed to what the consumer is willing to pay for the energy form #1 that was consumed to get energy form #2, then there will be profit (a positive $RO$I).

A simple example is rechargeable cell phone batteries. They have a lousy EROEI per recharge. Yet they provide the convenience of mobile communication. People want convenience and are willing to pay for it. They actually do not care about EROEI.

The ones who care about EROEI are the scientists who are studying whether a given practice is energetically sustainable. So if we are depleting enrgy form #1 (say oil) to obtain another energy form #2 (say corn ethanol) and the EROEI is less than unity, scientist can tell you that all other things being equal, that is a dumb move. Even if EROEI=1 it is a dumb move because what are you gaining for all your effort?


Thank you for two good responses. I don't disagree with much of what you say.

What I am trying to accomplish here is to get a fundamental understanding of exactly what EROEI means and how it can be effectively applied in project analysis. EROEI and ROI will be key tools in making energy decisions in the future. My point is that there is a fundamental connection between the two and that they should be identical except in a finite set of conditions that can be defined. Given how frequently the term is used on this site, it makes sense to better understand it.

In some cases - deep sea drilling, a negative EROEI may doom a project. If the amount of oil required is greater than the amount of oil produced, the project is not viable. In others - cell phone batteries - it would not. In a third category - ethanol - it could imply a misalignment of pricing - i.e. energy is wasted, but financial returns are assured through subsidy.

My original post said that there were three reasons for divergence between EROEI and ROI.

"In order to believe that any rational investor could take on a project with a negative EROEI you have to believe that they are:

  1. Using a cheap form of energy to get a more expensive one in return

  2. Not paying the full price for their energy input, or

  3. Going to lose money"

Your cell phone example meets the first criteria, using one form of energy to produce a preferred form of energy. I expect that the corn ethanol meets a variation of point #2, specifically getting paid more than market value of output. I have modified my list to include this as a new criterion.

So I now claim that divergence between ROI and EROEI can be explained by one of the following:

  1. Using a one form of energy to get a more valued one in return

  2. Paying less than market prices for energy input

  3. Receiving higher than market price for energy output

I think we disagree over what I see as a fundamental issue.

"Pricing" and other "Market" behaviors involve men negotiating with men --humans yakking at other humans about mentally contrived concepts like "values" and what is "fair". Mother Nature is not part of this man-o-man negotiation.

EROEI is one of inumerable mathematical expressions that we humans can concot to better understand how Mother Nature works. She does not need our understanding of her. We need it. Desperately. Experiment after experiment appear to verify that Mother Nature does "conserve" this thing we refer to as "energy". Experiment after experiment show that Mother Nature does "conserve" this thing we refer to as "mass". All our economic machinations will not change this.

If we develop a social order that continuously operates on EROEI being less than one (or negative as you keep refering to it), we are simply driving ourselves faster into the abyss.

Mother Nature doesn't "care". There are no "Care Bears" out in the woods. We are the ones who have to care --if we humans intend to continue as a species for a foreseeable future.

Bottom Line: EROEI and $RO$I have almost nothing to do with each other because "$" is a mental fabrication of mankind.

If one of these methods could increase URR by just 1 or 2 % that would be the equivalent of finding a few super giant fields.

If 2 trillion is ultimately recoverable, at least that much is unrecoverable and left in the ground.  So a 1-2% increased URR would equal 20 to 40 billion barrels added to the URR side of the equation.  That wouldn't save us from PO, but every little bit helps.  Might be easier to figure out how to get an extra 1 or 2% out of a field than it is to make new discoveries at this stage.

The portable system generates carbon dioxide, or CO2, at the well site.

Generates CO2 at the site?  I wonder what he's burning.

A very interesting article by Brad Setser. He points out that there is little incentive for the big oil producers to invest much in their oil fields. They have no incentive to significantly reduce oil prices.
"He points out that there is little incentive for the big oil producers to invest much in their oil fields."

By the end of the year, about half of the jack-up rigs in the Gulf of Mexico will be headed for the Middle East.  I think that the number of rigs working in Saudi Arabia has gone up four fold from several years ago.

I suspect that a common theme will be to blame declining production on a lack of investment, despite abundant evidence to the contrary.  Never underestimate the power of denial.

Yes, it's  remarkable how hard it is for even an intelligent, well-informed and honest economist to deal with reality in this field.
To all of you unemployeed and soon to be unemployed UAW members, note that all of Al's cars are made in JAPAN.
Well you have to admit...Toyota (which also makes the Lexus brand) was way out ahead of everyone else when it came to hybrids.  
Toyota also has a significant American workforce, and despite an aggressive ad campaign, most American brands aren't all that American anymore:

The truth is that built means "formed by combining materials or parts." A car assembled in the United States is "built in America." If the artists formerly known as The Big Three (and their stakeholders) want consumers to "buy American," they should decorate every vehicle assembled on American soil with foot-high letters proclaiming "Built in the USA." Of course, the Ford Fusion needs a "hecho en Mexico" sticker, the Buick LaCrosse merits a "Construit en Canada" tag and a Chevy Aveo should sport the appropriate Korean kudos. While they're at it, US automakers should identify models sitting on platforms developed by foreign-based subsidiaries, and plainly label vehicles with engines built in China, transmissions built in the Philippines, electronics from Korea, or hybrid systems designed and made in... Japan.

In fact, when it comes to domestic parts content, even the LFI can't avoid the flag-waving hypocrisy. If you scrutinize their list of US vehicles' domestic content, you'll see that there isn't a single vehicle for sale that's 100% American. Aside from the Mazda Tribute and Ford Escape (snap), the "most American" cars you can buy are only 90% domestic. And quite a string of losers it is too: the Mazda B-Series, Saturn L, Chevy Malibu and Ford Econoline. There are a few 95 per centers, but the LFI fails to mention that these models are either dead (Alero, Taurus) or marked for death (Marquis). The LFI lauds GM for providing the most US jobs (more than all foreign-owned automakers combined), but they neglect to mention GM's huge and growing investment in Chinese parts manufacture.


Remember Ross Perot's statement that what's good for the US is good for GM? (yes I know it's been quoted that he said it the other way around- what's good for GM is good for the US- but that's not how he actually said it.)  Perot's statement may have been true in the 70's and 80's and one might say that the average american benefited in clear ways from the US enforcing its hegemony.  But now that it is becoming increasing meaningless to describe a product as American made or a company as an American Company, I wonder how long it will take until the average American becomes more disenfranchised with its governments foreign policy.  After all, the US enforcing its hegemony has always benefited corporatism and it used to trickle down to the average GM UAW auto-worker or the farmer who exported wheat to China, so why would the object to US foreign policy?  But now with globalization and outsourcing, do any benefits of the American hegemony really trickle down in a way that benefits the average American and not just the corporate elite?
The average American farmer is Acher-Daniels-Midlands.
There are extremely few farmers growing anything, they have mostly sold out to agribusiness.
they have mostly sold out to agribusiness.

That's a little harsh on farmers isn't it?  Many farmers around here have lost their farms due to the effects of corporatism (i.e. ADM) and the commoditization of their product.  Many of these farmers kept thing going as long as they could, mortgaging their home and farm before they finally got swallowed up by the big corporation.  Almost all of them would jump right back into farmer if they could.  I wouldn't call that selling out.

Around here, most have sold out to (subdivision) developers, instead.  With former cotton, soybean, and peanut fields going for $20K+ per acre (vs less than $500/acre for any crop they could grow on that same acre) and soaring property taxes, it is little wonder.
Yea, now that is a sell-out. Round here the economy is stagnating so none of these guys are getting rich by selling to developers.
After all, the US enforcing its hegemony has always benefited corporatism and it used to trickle down to the average GM UAW auto-worker or the farmer who exported wheat to China, so why would the object to US foreign policy?

Actually this isn't how it works.  Check out the book Undercover Economist.  It specifically devotes half a chapter to the phenomenon know as DETROIT.  Detroit is actually competing against a farmer in Iowa rather than benefiting from them or vice versa.  It works like this: There's this company that can turn iowa wheat into cars.  I know it sounds crazy, but it's true.  

It's called Japan and we ship out tons of wheat on a ship and sometime later it comes back with cars loaded on it.  While the exact transformation can be argued, the net trade benefit is clearly in Japan's favor.  They buy cheap wheat to feed the people and they sell us cars in return.  On net we are losers.  Of course I'm skipping over some important aspect that makes this so clear, but if you read the entire chapter you'll have a better understanding of how this process works.  In the end we gave the country, and the car company an advantage that they exploited and this crop trade adversly affected another industry (auto).  It doesn't seem intuitive, but when you start to break down (and the book does the work) the numbers, it makes sense.

My Corolla was made in Fremont, California. Though I have no idea where all the parts were made.
Isn't Toyota also building three plants in the US soon?  I have owned Toyotas and Fords in the past and let me tell, there is no comparison on service, price, and dependability between the two.  Toyota gets all my business these days.
I keep on asking what seperates the American built Honda, Toyota & the American built Detroit POS?  I would surmise it has something to do with Unions in the motor city and/or american engineering.  Unions have routinely sought the Japanese owned factories, and they have rebuffed by the workers with over 90% rejection rates.

Clearly the company doesn't need to be told how to treat their people.

Durned furners!
.. but I sure do love my Subaru! 30-32mpg

My car might be 'from away', but my bread and butter is pure Downeast!  I have to find out where the Sushi place down the street gets their fish, but I'd bet a bunch of it is within radar distance.

Maybe we can get a "Buy American!" thing going with fuel.. (OR maybe 'Don't Buy UNAMERICAN'..AND buy American SUNSHINE) I'm less concerned with the capital costs as with the operating costs, where we bleed away our income in lots and lots of dribs and drabs, and don't usually think about how many of THOSE dollars are going offshore.

I talked with a cameraman at a local cable access channel yesterday who commutes 1 hr each way, 5 days a week.  He says he has effectively gotten a $3/hr paycut this year from the fuel costs.  I mentioned the Problems with Ethanol's EROEI, and he mentioned a form of Ethanol mentioned in PopSci or PopMech that is generated by, ahem, Termites.  I'll try to find a link, but I'm distracted by the image of thousands of weensy little Hamster-wheels under the hood, keeping our Woodivores in shape and 'regular'..

"Your search - ethanol popular termites - did not match any documents."

...  oh, ok.  I was looking under 'NEWS'.. my bad.

Brew Better Ethanol - Popular Science

'Termite guts can save the planet', says Nobel laureate

"...  The way termite guts process food could teach scientists how to produce pollution-free energy and help solve the world's imminent energy crisis. Speaking at the Institute of Physics conference Physics 2005 in Warwick today, Nobel laureate Steven Chu urged scientists to turn their attention to finding an environmentally friendly form of fuel. In an impassioned plea to some of the world's brightest minds, he explained how he's leading by example, and encouraged others to join the effort which "may already be too late."

Chu, who shared the Nobel Prize for Physics in 1997, has begun studying termite guts - one place in nature where a key hurdle for carbon-neutral energy supply has already been solved. Termite guts take indigestible cellulose, which makes up the bulk of all plant material grown on earth, and convert it to ethanol, which even today is a versatile and popular fuel.

Chu described how he decided to leave the richly-funded precincts of Stanford University to become Director of the Lawrence Berkeley Labs to kick-start the effort. He has been cajoling his new colleagues, including 56 members of the prestigious National Academy of Sciences, to realise the gravity of the problem and shift the focus of their research. And, he says, it's beginning to work.

The US already subsidises farmers to grow corn to turn into ethanol, but $7bn in the past decade has been wasted because the process isn't carbon-neutral. "From the point of view of the environment," explains Chu, "it would be better if we just burnt oil."

Chu, who shared the Nobel Prize for Physics in 1997, has begun studying termite guts - one place in nature where a key hurdle for carbon-neutral energy supply has already been solved. Termite guts take indigestible cellulose, which makes up the bulk of all plant material grown on earth, and convert it to ethanol, which even today is a versatile and popular fuel.

With all due respect to Dr. Chu, I believe I was the first person to attempt this. When I was working on cellulose ethanol in the early 90's, we were originally using microorganisms from the stomachs of cattle. I reasoned that termites are the most efficient digestors of cellulose in the world, so I got a supply from Texas A&M's entomology department and began experimenting with them. The results are written up in my thesis.

What I found is that the microorganisms from termite guts are notoriously difficult to maintain once they are removed. I reasoned that if a study was done on the exact chemistry of the termite guts, and this chemistry could be reproduced in a bio-reactor, this would be the correct pathway. Or, you could use these microorganisms as a template for genetically engineering something a bit hardier.

To my knowledge, I was the first person ever to attempt this. I couldn't find any references to anyone having done this when I was working on it.


Oh my God! Its not just Windmills killing birds, its people like Dr. Rapier end Dr. Chu starving all the termites and cockroaches!
Oh my God! Its not just Windmills killing birds, its people like Dr. Rapier end Dr. Chu starving all the termites and cockroaches!

Just to set the record straight, I don't have a Ph.D. I have a master's in chemical engineering, and bachelor's degrees in chemistry and math. I went to Texas A&M to get a Ph.D. in chemistry, and during my last year in the program, I decided that the job prospects looked better for chemical engineers. Long term earnings are also typically higher for chemical engineers. So, I transferred to the chemical engineering department and got a master's degree. I had been in school too long to continue toward a Ph.D. in chemical engineering and the job market for M.S. chemical engineers was pretty hot.

The termite idea has merit. They are extremely efficient cellulose digesters. I believe that butanol was the major product from my termite studies (although still at a low concentration). But, it will take some research funds to flesh out details like appropriate chemistry for a bioreactor, determining the specific microorganisms that merit further study, etc. If I had gone on to become a chemical engineering professor, I would probably have continued down that road.


I'm glad to hear you've looked at it.  It's always a dare to take PopSci too seriously, though the other links at least moved it in a fairly reasonable direction..

I was a little nervous picturing the factory that scaled up the 'Humble Termite' into a global powerhouse.  I think I saw Sigourney Weaver do that in a Factory Full of massive eggs and leggy beasts, once, and had to wonder whether it would all be worth it?

Ok, if Sigourney is there, it might make it worth it..
(Aliens, of Course)

Man, I wish President Bush would have mentioned termite guts in his State of the Union speech.

Giving you proper credit, of course, Robert ...

Do you suppose that Sigourney Weaver and the mutant termite guts was his basis for opposing human-animal hybrids or do you think his royal majesty was taking a firm position against stump broke mules?
 All joking aside, Robert, the termite enzymes are an excellent idea. Have you been keeping up with bacteriological enhancement of crude recovery as a tertiary production technique ? It seems to work and I've wondered why the refineries haven't begun to use it to process a bunch of the heavy crude and tar.
Apparently (just ask our primate relatives and many of our non-westernized cultures) termites are delicious too. Try eating your extra oil production machinery sometime or your Sterling engine lol.
I knew a guy in 1966 in my first undergrad year who was doing research on how to cultivate the termite gut microbe outside of the gut (ex-gutro?). If I can remember his name, I'll google around and see if anything came of it. The guy was very smart and went on the the Duke U. MD/Phd program.
My undergrad college (New College, Sarasota Fla) had a number of students publishing some pretty impressive research for undergrads.
Yeah, I would be interested in seeing that reference. Do you remember why he was attempting to cultivate them? Was he just studying them, or was he attempting to develop cellulose digesters? I could also see someone studying them from a pest control angle - that is to say trying to determine where they are vulnerable to pesticides.


Is there such a thing as an American made car these days?  Many hondas and toyotas sold in the US are designed and made in the US and made with parts manufactured almost exclusively in North America.  GM and Ford cars are still designed here but they are more and more being made in Mexico with Asian parts. Delphi is planning on moving virtually all of their manufacturing overseas and their long-term plan is to move engineering and design overseas as well. As GM and Ford move more and more out of the US, Toyota and Honda continue to build new plants in the US.  

From the toyota website:

Toyota currently operates 12 manufacturing plants in North America and will open two additional facilities in the future; Toyota Motor Manufacturing, Texas in San Antonio, Texas in late 2006 and Toyota Motor Manufacturing Canada's second plant in Woodstock, Ontario in 2008.

Additionally, Toyota will begin producing the Camry at Subaru of Indiana Automotive, Inc. (SIA) in Lafayette, beginning in Spring 2007.

In 2005, Toyota produced more than 1.55 million vehicles, more than 1.3 million engines and nearly 400,000 automatic transmissions at its North American manufacturing facilities.

By 2008, Toyota will have the annual capacity to build nearly two million cars and trucks, 1.44 million engines, and 600,000 automatic transmissions in North America.

Annual purchasing of parts, materials, goods and services from North American suppliers total more than $28 billion.

Well, GM and Ford are betting the ranch on big SUVs, and in my opinion those companies are doomed.

I don't see a winning move for the UAW workers here..

The car companies and the auto unions are locked in a wrestling match ... as the SUV they are in heads for a cliff.
car companies and the auto unions are locked in a [WWWF] wrestling match ...

I wonder how the fight will turn out?

We lemmings love a good cliffhanger.

"To all of you unemployeed and soon to be unemployed UAW members..."

Also note reports about Ford's plans to invest huge in Mexico:


Think the UAW will be happy about this?

I know this is TOD, but why do some of you think that UAW membership has declined in the last 3-4 decades?  
Only ".04" percent -- whoopey! That's only half a percent a year! :-)
wstephens -

Great news ..... if you neglect the inconvenient  little fact that the CPI does not include such frivolous consumables as food or energy.

To get a better picture of inflation, it's fairly easy for a person to set up his/her own personal CPI. Just make a list of all the main things that you normally spend money on (exclude fixed-cost items such as fixed mortgage payments or life insurance premiums, etc., but INCLUDE food and energy),  and then record and/or estimate what you paid for these things over the last 6-month period.  Then keep track of your actual expenditures for those same things over the next 6 months, starting now. I think when you do that, you will be in for an unpleasant surprise and that your own personal CPI (let's call it the PCPI) will bear little relation to the one published by the government.

Wasn't it W C Fields who used to say "That's a joke son. Ya missed it"?

The number was 0.4 percent, not 0.04 percent. I was just having a little fun! The 0.4 percent annualized is around 4.8% per year. Also, "core" CPI doesn't include food/energy, but regular CPI does -- get it straight will ya?

This is interesting though -- from WSJ --

"Without the jump in owners' equivalent rent, core consumer prices "rose only 0.1%," said Ian Sheperdson, chief economist at High Frequency Economics. "The story is one of a relative increase in rents."
"Wasn't it W C Fields who used to say "That's a joke son. Ya missed it"?"
It's Foghorn Leghorn.
I thought Foghorn was based on Fields.
wstevens -

Sorry for being so obtuse!  I should have read it more carefully to see 0.4 not 0.04.  

I knew there were several version of the CPI but was unclear which was which.

I still think that if you go through the exercise of calculating your own personal CPI (including in it whatever is important to your particular financial situation), you will get a 2006/2005 ratio that is much different than the 2006/2005 CPI.

Hasn't it been argued that the CPI is kept deliberated low because the COLA of various entitlement programs are tied to it?

The CPI has been, shall we say, "messaged" a bit over the years, but for instance, government employee retirement benefits are typically written with CPI+X% to compensate (govt "scratching back" of govt). Most of the people who use the CPI know its shortcomings and are aware. The MSM and public though never bother with this undertanding, and so social security and other COLA can be victimized.
I still cannot wrap my mind around the whole notion of the artificial concept of "owner's equivalent rent".

Speaking of made-up measurements, I see the US government continues to change the ruler they use. June will be the last month of the side-by-side comparisons.  After that, you'll just have to swallow hard whatever pill is served up.  

"For the first six months of 2006, BLS will continue to calculate and publish selected CPI-U and CPI-W "overlap" indexes using the 2001-2002 expenditure pattern that was introduced into the CPI in 2004.  These indexes will be compiled on a not seasonally adjusted basis.  Comparison of these index series to the corresponding updated series will enable users of the CPI to observe the effects of the expenditure weight change."

I am disappointed that Gore drives a Lexus.  Not very impressive gas mileage.  He is the most well known proponent of the fact that we have a climate emergency and should set a better example.  A Lexus hybrid is for those who want it all but are not willing to really get good gas mileage with something less luxurious like a Prius.  The fact that his children drive Prii isn't good enough.  The issue is him and his lifestyle.

Of course as far as I'm concerned, drving a Prius is hardly a sacrifice. It is the nicest car I have ever owned and that includes a BMW.  

I also recall the Kerry campaign where it was revealed he had a Suburban.  He tried to fend off that criticism by saying it was his wife's car. Nice try. Another hypocrite.  Regrettably, the was the better of the two candidates available.

Of course, for the White House, there is no hope as he carries a fleet of Suburbans around with him around the world.  Not to mention his toy truck he drives on the ranch.

Sorry to inject politics, but it is critical that those who talk the talk walk the walk.

"The issue is him and his lifestyle."

The issue is us and our lifestyle.

You can paint US as hypocrites, too, OR you can try to see that some of us are trying to fill our glass, and there is an empty portion, and a full portion.

I think Gore has put a bunch of water in his glass so far, in large part by trying to send us information and ideas to fill numerous other glasses in conjunction with his own.  Brings to mind the efficacy of 'Teaching a man to fish instead of just giving him a fish'

Gore should just state the wealthy are not going to sacrifice. Global warming is a lost cause and energy conservation probably is to. We are going to ride Hubbert's curve without any intelligent actions to save ourselves. Dieoff is for the poor, so why would our politicians and their rich controllers do anyhting.
I think before you cast the stone at Al's Lexus you need to first ask how he uses it.  Is he doing the single occupant commute of 1 hour each way every day?  Is he making smaller around the town errands?  Is he hauling Tipper and another couple around along with some beach gear?

It is easy to sit back and say that the Prius is a better choice because it gets better mileage.  But if it doesn't fit other needs it isn't the best vehicle for him.  The better question to ask is 'what is the best vehicle in class?' or 'what is the best vehicle that meets my usage requirements?'  If his needs are that of an SUV type of vehicle then the Lexus is a good choice.

I use mine as a battering ram.

Comic relief is good right?

Oh, I'm sorry. I didn't realize Tipper was so big and heavy.  And, oh yeh, all that beach gear.  After all, she doesn't wear a bikini and they have those giant beach balls to carry around. Al doesn't have any children at home, so no, I don't think he should get any slack on this one.  The Prius is plenty roomy, after all's it's a mid size car, and it has plenty of room in the back for beach gear.  I use mine like a mini station wagon. I can haul bicycles, ladders, all sorts of shit.

Look.  Al Gore is the go to guy right now on global warming. We could at least expect him to try just a bit harder.  I don't get a rats ass what is "needs" are. Adjust.  If, occassionally, you need to really haul something big around, rent a truck.

I agree that the 'needs' and 'requirement' excuses that come from most SUV drivers are a crock.  99% of the time SUV drivers could get by with the Prius, but they use the excuse of 'I have to haul this, or that, or the 4X4 for snow. . .'  In reality they don't need it, but could get by with a smaller, more efficient vehicle.

But in the end it is not as simple as saying he should be driving a Prius.  Why not take it a step further and say he should only be using mass transit?  Or riding a bicycle?  Or just walk?

I think it is more important that he has at least taken a step in the right direction.  There are many other polical sorts that have been pushing ethanol, H2 or other technologies, but do not lead by example at all.

It also seems that there are so many willing to fight the people on their side, just because they are not far enough on their side.  Gore is trying to fight a battle, mostly by informing others of the disaster about to happen.  He says we need to reduce CO2.  He has taken one part of his lifestyle (driving) and made a step to reduce CO2, and he gets savaged by people saying he hasn't gone far enough.  Maybe he hasn't, but at least he has done something.

There is some thing to be said for the idea that by slowing consumption now we are making the long term problem worse.
If everyone would just go out and buy a BIG car or truck with major gas hog tendencies we could very quickly ramp up consumption to where it would outstrip production causing a major spike in prices and also shortages/outages at gas stations. These actions would have a much bigger impact on the general publics thinking about the long term peak oil problem.
We need to grossly overrun the oil companies capacity to supply the market very quickly to get major impact.
Another way of looking the problem of getting the "public's) attenetion.
If everyone would just go out and buy a BIG car or truck with major gas hog tendencies we could very quickly ramp up consumption to where it would outstrip production causing a major spike in prices and also shortages/outages at gas stations.

So those GM deals with free gas on their guzzlers should be appluaded by us all....

I find it a bit disappointing too.  But maybe the reality is he would be driving a non-hybrid SUV otherwise?  Maybe he really wants a luxury car (don't ask me why, I feel they are leather seated rip-offs), and he did the best he can all things considered?  

I think it's admiral what Al Gore is doing, but we need to realize that doesn't make him a perfect person.  At least he has taken a step in the right direction, even if we want to argue about whether it's a big enough one.  He could be driving a H2 or something, so it could be a lot worse.  

I love my Prius too, the only reason I have a car is for my small business, and when I'm ready to sell it the next buyer is going to think I have 3 kids, a dog, and a pot-bellied pig to look at the inside. I need to get the interior really cleaned up then douse it with Scotch-Guard and hope for the best - the interior's a dirt magnet.

The future is a bicycle or one-hoss shay or something though. My Prius is not saving the planet and neither is yours.

I saw something today that gave me hope, an older couple, rednecks, and while as an admits-I'm-working-class white I normally bristle at this term, these folks really are. And they were riding on two bicycles, nothing special, cheapo cruiser type bikes, and conversing, in their strong twangy accents. Nothing special, just Me and the ol' lady took the bikes over to so-and-so's house. These are the kind of folks you'd think wouldn't let the Ford keys out of their cold, dead hands but Nope, for this pair, the transistion is probably just a no-brainer and nothing special.

It's funny how people like Al manage to decide that they "need" a genetic cross between a Cadillac Escalade and a Hummer 1 to get around?  Doesn't he own about a half-dozen cars, by the way?  Gross consumption, by any other name, still stinks.
He might drive a great car, but his secret service detail does not.  He is a former VP of the US of A he has secret service protection.  As does mrs Clinton unless she did not want it.  But she will get it again if she is prez.

SS agents do not drive tiny gas saving cars.  

Nor can any US President get out of having a full entourage of Secret Service agents and big tank like trucks and cars swarming around him all day and night.  It the nature of the Secret Service and the people who protect our leaders.  

An IED will take out anything made of 100% steel in some cases let alone 50% plastic.  

I for one am disappointed that Gore would  invoke hybrids -- or energy conservation for that matter. The point of PO is that individual actions to conserve energy do not change the fact that from roughly now on consumption of non-renewable fuels is limited only by the speed with which humankind can physically extract them.  If I drive a Prius, someone else somewhere in the world will be that much more empowered to drive a gas guzzler.  The effect on oil supply and prices is cancelled out. But we all know that, right?

IMHO, Gore is much more effective blowing the trumpet about emerging catastrophes and letting people draw their own conclusions about what should be done about them.

The effect on oil supply and prices is cancelled out. But we all know that, right?

If that were true, oil prices would be back down to $20/bbl.

What we have is proof that a minority of hybrid/efficiency buyers do not empower guzzlers.

(You saw the link on SUVs set afire by their owners right?  Some "empowerment".)
With the huge overhang in the housing market (big bubble, cash-out/refi, moocho debto), I wonder if we'll start seeing the same [cough] empowerment appear in the housing market?
Hi bradshaw
This belongs on yesterdays thread but here it is now. Chicago real estate action hit the absolute peak July-October 2005. July was maximum everything sells anything sells get me properties to sell and September was maximum irrational exuberance on price. With 20/20 hindsight you timed it almost right. If your realtor could not sell then....your realtor is hopeless.
Have you considered a swap? When liquidity goes barter returns. You say you don't want to own in Houston but hey.... and three-cornered and unlike swaps become possible when realtors have time on their hands and inventories are high. Any realtor any good in this market should at least bring this possibility up.
Historically Chicago North Shore is about the most recession proof, even depression proof market there is. So consider all those who have it worse. You are however in a place where buyers are sophisticated--it's like you're playing poker with a table full of pros and you're the action they wait for. And the honest buyers are very very choosy. They can be.
Good luck
Thanks for the info.  I've given my Realtor 2 weeks to sell the house at it's new lower price.  If she doesn't, She's fired (but for a different reason -- and that is so I can list it FSBO even cheaper).

Side Note:
I've talked with several Realtors, they are ALL having a tough time selling homes in McHenry County area.  There was a huge building boom (I'm guessing overbuild) that has a ton of homes on the market there (new homes)...plus a butt load of townhouses just went up not 4 clicks from my home.

My neighbor across from me has the same model as mine, they have a full FINISHED basement (mine is not) and their house hasn't even shown, I've gotten a ton of showings but not a single offer.

So, what else can I do?  It's been on the market since last August, I've lowered it now 50K Geesh!  I'm now at rock bottom with a Realtor (having to pay their fee).  So final step is FSBO and have my neighbor show it for me (I'll toss them 2-3K for showing it if it sells).


Wonder if you'll see this. I had thought in an earlier post you said North Shore. McHenry is much harder. Yes, it's overbuilt. I will stay with saying last August anything could be sold, anyone could close. Bad realtor.
Realtors are finally admitting what has been the case for months. The buyers all bought last year. Every marginally qualified buyer was sucked in. Out in McHenry you are waiting to get lucky or waiting for markets to clear. It could be a long wait. Unless you want to land bank (& you probably have taxes too high for that) my best (only) guess is advertise for innovative trades. Is there anything at all you want? If someone has that thing and also wants a house.... Yes, it's a long shot but so is finding a conventional buyer.
In any case stay on best terms with neighbors. Untenanted houses are vulnerable.
Bringing us to tenants. From Houston. Ouch.
There's also family. Giving it away for a song will feel better if it's a relative in need.
Well, I'm fresh out of ideas. Good luck
Thanks oldhippie,

actually we have awesome next door neighbors and they are keeping my lawn mowed for me (I sold them my riding mower when we left) before that I actually would mow his every time I mowed mine...just a nice guy ya know.

Anywho... we'll see how it goes.  If it doesn't sell, we're planning on moving back into the house.

I only came down here to Houston to start my business and see it off well.  We only need to continue here until next spring, I can then go anywhere in the US I please, I would of course rather go to the Ozarks but if I must go back to McHenry I will.  It's a beautiful town, feels like country but still not far from city life ya know.

Thanks Again.


I was expecting that this would start to happen sooner or later.
"If I drive a Prius, someone else somewhere in the world will be that much more empowered to drive a gas guzzler."

How do you figure that?  If you're driving something more efficient to reduce your fuel costs, your fuel dependency, OUR fuel dependency.. ie, getting more miles of 'work' done for the gallon consumed, then you stand to benefit, regardless of what happens to that theoretical oil you 'would' have burned with the old guzzler.  You will figure out your own economics, of course, on whether you save enough with a Hybrid, or you choose to carpool, or work closer to home, bike more, all of the above.. etc.

The reason your statement sounds off to me is that, while you've gone and left a few gallons lying around unused that Someone Else is then going to grab up (and it also implies 'Stolen'.. hey, I was gonna use that!).. that their 'empowerment' is really more driven by price and need as well, and that if their desire to grow their economy, or get to work, or 'fit a desired cultural image they want to fill' calls for buying fuel to do so, that they will doubtless be doing so thinking 'what does this cost me?' how does it affect my bottom line.

I understand the argument that 'using less' is still using.. that all it does is buy us some more time (maybe) before it still runs out.  Well guess what?  It's time that we're going to need, that we do need because we're pinched to get through this, if we can at all.

Leanan talked about everything eventually devolving into 'Lower Quality' fuels the other day.  I have to wonder if that includes Solar Wind Hydro, which I see as extremely high quality energy supplies.  If we can buy this time and start using more of those to get by, have we really degraded our energy future, or improved it.  Though it would be predicated on a Lower Energy lifestyle and very likely a much smaller population, I don't doubt that those looking back in a hundred or two hundred years will hardly long for such "High Quality" fuel as what has so fouled our air, water and food for the last two centuries.

"I understand the argument that 'using less' is still using.. that all it does is buy us some more time (maybe) before it still runs out.  Well guess what?  It's time that we're going to need, that we do need because we're pinched to get through this, if we can at all."

I don't see that conservation buys us any time in this case.  A Prius is worthless without fossil fuels, which are finite resources that are now essentially being drawn down as fast as we humans can extract them, right?

The only way I see the world actually gaining more time to wean itself of oil is if some catastrophe (Global financial crash? Bird flu?) destroys enough demand to reduce global production to something less than flat out.

Admittedly a depressing view. I'd like to be proved wrong.

Don't know that I could prove you wrong, but while I can't definitively show you that conserving WILL buy us time, I'm certain enough that NOT conserving won't.  

There are benefits to conserving that don't have to show up in the global energy balance sheet.  Finding ways to economize is going to give you tools and experience for how to do with less, how to improvise and get by, how to start distinguishing the essentials from the frills how to think outside the tank, if you will.  

Thinking economically, or more specifically, endorsing actions that encourage consumers to ACT economically is fundamentally at odds with a "MUST.. BUY.. MORE" addicted-consumer business model, and we've all risen to that expected image as if on cue.  We've got a well-crafted routine in this country that defies being smart and sensible, that ridicules and resents people who step out of line and show us an improvement, particularly if it looks inconvenient, hard or just a little silly.  A little silly usually does the trick, though.

Finally, cause I see this one too often..

"...finite resources that are now essentially being drawn down as fast as we humans can extract them, right?"

..as opposed to?  Didn't we always extract all that we could?  How does this refute conservation?  Isn't conservation, by definition, 'not using all of it right away, with reckless abandon'? AND, a Prius is NOT worthless without fossil fuels.  At least it has an electric motor and batteries in it, and which would run even more efficiently if you could finally yank all the Gasoline Hardware out of it's mass.

We don't need more time.  People never do anything to solve their problems until it's already an emergency.  At least that's how it is here in the U.S.  I do notice that Europe and Japan have already done much to wean their dependency on fossil fuel.  

Anyway, driving a Prius helps because it means there is demand for battery technology.  And that demand will lead to more research and eventually better, and cheaper (through mass production) batteries.  The hybrid itself is just an evolutionary step toward electric cars.  The future is electric, not hybrid or hydrogen or any of that other crap.  Usually the simplest solution is the best, but no one would fund the research on the simplest solution, so we have to get to it by going through the back door.  

Everyone jumped you cwilbur, so let me come to you're defense.  I don't disagree with your basic point that buying a prius (saving gas on net) empowers others to buy gas guzzling suv's.  This is absolutely true because price rations scarce resources.  If we talk about 1M American's that switch to Prius' simultaneously.  We would have to determine an avg mileage for this group and the corresponsing new avg after the cars have provided the info.  Now the difference btw these two is our savings.  

Those savings translate directly to the price b/c those people who saved would (aggregate) lower the price due to a smaller demand.  Now this new price will be lower due to demand being lower so either supply gets cut to bring the price back up, or more drivers see cheap gas and they buy an SUV with this short term outlook.  Heck even some of those 1M Prius owners may sense that it wasn't worth it and go back to a gas hog.

This is what I think cwilbur2000 meant, but please correct me if I am wrong.

Yes, that's it.  Thank you very much.

I agree with you completely and have been saying similar things on TOD for months now.  Lead by example.  Show your neighbors that using less energy is good for the world but also good for your own economic balance sheet.

For the record I own a Prius but have to drive 35 miles one way to work.  I signed up for the Prius in February 2004 and had to go to multiple dealers at that time just to get on a waiting list.  Most dealers tried to talk me out of a Prius because of my commute.  They didn't know anything about the car at all at that time.  I get great gas milage driving rural interstate on the commute.  Average between 45-51 over the last 2 years .

And lest anyone ding me for driving so far daily.  It's a need to stay enployeed with a good salary.  So I set up a car pool with another person driving the same route.  We both benefit now, no matter who drives.  And my passenger sees the benefit of the Prius and compares my fill up cost to hers.  Same miles but I pay less than half and the comfort level is about the same between the two cars.  

You can change the world one person at a time but you have to put out the effort and do the right thing.

I agree with this wholeheartedly.  We need to lead by example.  Too many people sit around here complaining and harping about the end of the world, saying that "Americans will never adjust".  I can't help but wonder how many of them have made some sacrifices.  I am sure many of them have, but I have also met many individuals who were quick to complain and harp on others' actions, and yet slow to do anything about their own actions.  

We are the ones who have to make a difference.  Saying "Americans need to do this" or "Americans need to do that" is crap, if you yourself are not willing to follow the course of action you are preaching!  

Sacrifices ?

Perhaps that is one of my key messages.  A low energy life style is (or can be) a BETTER, more enjoyable lifestyle, as well as being a healthier one.

I thoroughly enjoyed the quality of life I enjoyed before Katrina and value it enough to be willing to work to help restore it instead of "bailing out".

I was wondering about these hybrids and what they cost to build.
Since they have a higher monetary cost to build does that logically mean they have a higher energy cost to build and how far would I have to drive one to save the extra energy it took to build them?

Economically it's not viable for me to buy a Hybrid because the distance I drive never repays for the higher price. I'm wondering if the Energy balance is similar.

No, it doesn't necessarily mean that at all.  How much power does it take to program some sort of software?  Yes, there is the power used to run the computers, etc, but it's still generally going to be less than making a physical product.  This is where we get the whole "service economy" using less power.  

The cost of something is not directly related to the energy involved in producing it at all.  Energy is just one of the inputs.  The cost of people's wages is another.  The cost of people's wages to do research, the cost of doing tests, etc.  I believe people here are too fixated on power sometimes and really tend to overestimate its impact on a lot of things.  


This site has a pretty good discussion on this topic.

Also a great deal of a vehicles 'dust to dust' energy cost is in it's pollution per mile times it's life expectancy. Then we are concerned with the needed recycling energy. I'm figuring that our Prius will go as far as a Hummer, and take a lot less heat to melt down. Some would argue the point about the miles hence they'd get different results. But I'm gonna get 200k+ outta it, 'lord willin' and the creek don't rise'.


This site gives the greenhouse emmission rating. EPA says hybrids contribute way less to GW. I've seen all kids of ways to bash this statistic but I think the bottom line is if you have to drive, a hybrid puts less crap in the air per mile than other mid-sized cars.

I find it hard to believe that the cost of recycling the few extra parts cancels that.  Then I can't seem to find a starter, alternator, or any transmission friction clutches
in the design, so some savings there.

To me the car is still way too overbuilt but until some of those big 'ol heavy pavement pushers are off the highway I'll take the added protection.

BTW base price was $22k and the xtras pushed it to just under $24k. Can't find too many comparable mid-sized cars  below that range. Nothing with a $3150. tax credit (down to half that now)

Yeah and we use the thing like a pick-up truck too. Don't like to waste a trip. Maybe we do better by the planet to save a good old Moped or a Corolla from the crusher and help to stop building the darn things new.

We'll probably have to do plenty of that too.

I bought a 1982 Mercedes 240D a few years ago, ~77,000 miles. $10,500.

Manual transmission, well taken car of.  31 mpg city, 35 to 42 mpg highway (depending upon speed).  Perfect biodiesel car.

At my low annual use and good care, I expect this to be my last car (I am 52, soon 53).

All things considered, I think it is lower energy choice than the 2005 Prius, but it is an interesting question.

Sure is.
It's a possible sign of some kind of paradigm shift that 'we' are striving for lower energy choices in our transportation rather than bragging about cubic inches.

Course your rail ideas are a great expession of this sort of efficiency.

BTW I'm trying to figure out how to keep our local rails from being torn out. Burlington Northern seems to see the salvage value but not the potential for revival of the transport system post peak.

I listened to the interview with Art Spinella (he invented "dust-to dust") on theWatt.com, and in my opinion, a big error in his reasoning was including the R&D costs in the equation. They divide the R&D costs by the number of vehicles sold? Obviously, the hybrids seem equivalent "dust-to-dust" to a Hummer now only because hybrids are new technology. If someone developed a 100% efficient solar panel, it would seem worse "dust-to-dust" (during the first years) than a 20% one, and this only because the R&D.

The "conclusion" of the study is misleading to the general public, which will only think that hybrids are as bad as Hummers.

For me the telling thing is that they not only used questionable assumptions for the hybrids, they ignored the National Highway Safety Administration's data for trucks:

For light trucks, the mileage rose from 128,000 to 180,000, reports NHTSA, but longevity remained 14 years, largely because more trucks were being used like cars.


Note that those 'dust to dust' goofs used 250,000 miles for the trucks and SUVs ... totally unsupported by the highway data.

BP 2005 Energy review now out.
Commenting on this probably deserves its own thread.
The first thing I noticed:
From 2004 - 2005
OECD -4.7%
OPEC +2.5%
non-OPEC  -1.1%
World  +1.0%
Interesting math, I though that OPEC produced less than 50% of the worlds oil (30 M barrels?) How can world oil grow by 1% if the largest portion declines at 5% ?
One of the predictions of the ASPO was that right before the global peak, there would be the "rush to OPEC" to make up declines.  It looks like this is occurring as non-OPEC was down last year, and the global situation was up only because of OPEC.  I wonder if it is safe to say that non-OPEC has peaked?  First we had the light sweet peak, now the non-OPEC peak, OPEC and global peak is in the headlights.  It's all playing out just as us PO-ers have been predicting.
I saw the Larry King show too, and would have mentioned it had you not already posted it at the top...

He gave a rather muddled definition of peak oil though:

defined as having recovered a majority of the oil reserves at a certain price, affordability range


The Lexus hybrid doesn't impress me much either.  It may be buzzword compliant, but there isn't any sacrifice involved.  Thus the message is that we get to keep the car culture?

Is it possible that secret services force him to drive a SUV (if they are still protecting him, that is).

I know that here in Canada they recently forced the prime minister to start moving around in big SUVs.

Of course they are protecting him.. trust in Big Brother.

He gave a rather muddled definition of peak oil

OK, so Gore is a stiff.

That's the way God made him,
and it probably ain't going to change.

Stiff or not, Gore is right.
Right to have focused on Global Warming as the bigger crisis.

What good will it do us to solve the PO problem
if the planet sizzles to death from GW?

Gore was there to discuss Global Warming.
He was not there to discuss Presidential aspirations.
He was not there to discuss Peak Oil or high gasoline prices.
Give the guy a break.

No, he is not the "decider man".
He is no Joe cool or Snow job Jerry.
He is not the next American Talent Idol.
He is merely one guy trying to get an important message across.

I thought Larry King was the one who did a bad job
--by worrying about TV ratings for the CNN/LK show
--and not realizing the survival of mankind is at stake.

Anyone seen this?

Top five oil companies focus on developing existing reserves

The world's five biggest oil companies including Exxon Mobil Corp are focusing on development of existing fields as it becomes more difficult to find new reserves, Wood Mackenzie Consultants Ltd said.
Oil explorers are considering developing areas including Venezuela's heavy oil deposits and Canada's tar sands, David Morrison, chairman of energy at consultant group Wood Mackenzie, said at the Asia Oil & Gas Conference in Kuala Lumpur.

``The super majors are clearly taking the view that there's a lack of good prospects and that drilling won't be the only way to replace reserves,'' Morrison said in an interview. ``It's more an issue of commercializing'' discovered deposits.

Hmm... I wonder why they are focusing development on existing fields?  

I see Leanan just posted an "Update" above about it :-/
Sorry, didn't see your post.  

It's my first day doing this.  I'm afraid I'm going to screw something up, so I'm working very slowly.  

You're doing just fine :0=

Saw this in my local paper. (see below)

Seems simulaneously encouraging and odd. Might it be a sign of the new perspectives that will open up as more and more people become aware of the energy problems?

Greg in MO

Developer plans energy college in Tarkio
Published Sunday, June 11, 2006

TARKIO (AP) - A Florida oil executive plans to transform the old Tarkio College campus in northwest Missouri into a science-focused private college, school officials said.

Chad Meek currently runs an oil and gas exploration company in Orlando, Fla. Now, he said he's ready to assume a new role as chief executive officer of a private school to be called the Midwestern Institute of Energy.
"We want to be known for doing research and development across the world," Meek said Friday to a crowd of about 60 Tarkio residents and county officials.

Meek said the school will open in the fall of 2007, and he hopes enrollment will peak at about 300.
One of Meek's goals is to promote research to find solutions to the energy crisis. Institute students will be able to earn bachelor of science degrees after fulfilling two years of general education requirements and two years of coursework in physical science, fuel-cell technology, petroleum geology and alternative energy, he said.
Tuition, room and board will cost $33,000 per year, and a pioneer will replace Tarkio College's owl as the school's mascot, Meek said.

Tarkio College went bankrupt and closed in 1991. A Maryland-based firm, Youth Services International Inc., turned the facility into a home for juvenile offenders in 1994. Before that operation closed in 2004, Tarkio Academy was the largest employer in rural Atchison County.
Earlier this year, North Central Missouri College in Trenton and Linn State College briefly considered starting a robotics program on the campus, but those plans never moved forward.

Meek said he plans to develop an online program in the future and hopes to help fund expansions by attracting corporate donors and grants from the Department of Energy.

with more info on Meek's company Clarity Resource

Iraqi oil shipments to Turkey stopped

Associated Press
BAGHDAD, Iraq - Iraqi oil shipments to the Turkish port of Ceyhan have stopped pending a report on the condition of the pipeline, an Oil Ministry spokesman said.

Exports from Kirkuk had restarted Saturday after months of no activity, and Iraq had managed to pump around 250,000 barrels a day of Kirkuk oil to the Turkish port. The shipments from Iraq's North Oil Company were the first in months due to militant attacks on oil facilities.

"The North Oil Co. started pumping oil to Ceyhan as a test to check the condition of the pipelines and they pumped all the crude oil stored for that reason late Tuesday. There was no problem at all and we are waiting for the reports," spokesman Assem Jihad said.

He did not say when oil pumping would resume.

I had just posted in the past that they started pumping oil through the pipe (a trickle)... well I guess it was just a test...


from Energy Bulletin

The 2030 challenge (see www.architecture2030.org/) is predicated on the fact that buildings and the construction industry account for about half the energy consumed in the United States.
(10 June 2006)
I've not heard that figure before! It's surely overstated. -AF


Apparently the figure comes from the EIA. In a service economy, is it really so surprising that constructing and occupying buildings uses a lot of our energy?


Weird, we're in downtown Frederick, but there's a nervous-looking, young buck right outside our office window.

My sister wants to ban dry-cleaners for environmental reasons.  No dry cleaners means no wool suits in the middle of summer.  If you were allowed to wear season-appropriate clothing, air conditioning wouldn't be necessary, at least where she lives (Sacramento).  But since everyone's wearing suits and ties (or suits and nylons), the buildings have to be airconditioned.

And I came across this article yesterday:

Milford tries to brighten classrooms

"The windows at these schools were installed in the 1960s and '70s, years after the buildings had been constructed," Woods said. "During the 1950s when the schools were built, energy was cheap and the windows were very large, but in the '70s, when the first energy crisis hit, about 50 to 60 percent of the window walls were filled in to save on the costs."

Now, however, with new energy saving techniques, the window walls are being restored to provide more light and save on fuel, Woods said.

"These new designs and techniques will not only provide more light and be far more aesthetically pleasing, they will save a substantial amount of money over the long haul," he said.

Lame.  And short sighted.
Windows are literally 'holes' in the otherwise reasonably well insulated envelope of a building. At best, triple pane low-e glass with inert gas fill windows have an R factor of around 3-4 (per National Fenetration Council), compared to even a hollow 2x4 stud wall with brick facing at R-11.
Facility artificial lighting costs are an order of magnitude smaller than climate control costs, except in the most temperate climates.  
I suppose the old windows were even worse, insulating-wise.
You better believe it.
Just touch an old single glaze aluminum frame slider or jalousie  window from before the 1970's energy crisis during hot or cold weather, and see for yourself.
We hear a lot of talk about cars, but not near as much about buildings which really suck up the energy.  I guess that's because this is all about oil, but really, we talk about energy and global warming so the building issue needs to be addressed.

Of course, if you use propane or oil, the issue is spot on.

How to keep demand from destructing...

Gas surcharges all the rage

Why a gas surcharge, instead of just raising prices?

Economist Dr. Farrokh Hormozi, of Pace University, says, consumers today are more willing to accept price increases than they were in the past, and that those prices can sometimes stick.

"Surcharges are a diplomatic way of raising prices," he says. "The producer is telling the consumer this price rise is temporary. It has a psychological effect on consumers who won't look to change their habits because they'll get used to it."

Thank God, Leanan, there's no inflation, just some surcharges!
More on the EIA's weekly report:
  • domestic production down 7.3%
  • total imports (crude + product) up 3.5%
  • Prod Supplied for Domestic Use up 0.3% to 20.548 Mbpd

(all figures YTD 2006 v YTD 2005)
domestic production down 7.3%

Interesting.  Is that production still shut in from the hurricanes?  

Shut-in production is a number that can be fudged, too. Part of how an oil and gas company is valued is by their reserves per share of stock. This makes them reluctant to write off unrecovered oil and gas that is uneconomic to extract because the production facilities have been destroyed. All oil leases and farm-ins(sub leases from another company) have a "force majure" clause which allows a lease that is held by production to be extended without commercial production if the lapse is caused by an "act of God" such as a hurricane, or war, or other circumstances outside of the control of the operator. This is probably how they are justifying the shut-in to their partners and the Lessor, in this case the government. It will cause a finacial shit storm if they write the reserves down or off as many of them have money borrowed against the oil as well. I personally doubt that many of the shut-in production platforms will be redrilled especially with the current shortages in experienced personel and rigs.  
Leading F.C. Realtor Reports Homes Selling 10% Below Assessed Values

A leading real estate agent in the City of Falls Church has reported to the News-Press that, with the cooling off of the residential property market throughout the region, single family homes here are now selling on average "for about 10 percent below their assessed values."


Fed Report Shows Rich Households Getting Richer Under Bush

The Federal Reserve Board has completed a preliminary analysis of its latest Survey of Consumer Finances (SCF), considered one of the most useful household and general economic indicators, and as a result, at least one thing has become crystal clear: since 2001, when President Bush came into office, the rich have definitely been getting richer but everyone else is economically stagnant at best.



Bankruptcy filings up despite reforms

Increase comes even though more stringent standards were adopted in October; lenders watch closely.

A new U.S. law to deter American consumers from seeking bankruptcy protection made filings plunge to a 20-year low in the first quarter of 2006, but a rapid rise in new cases since then raises questions about whether the law is working as expected.

Alas, poor credit card issuers.  Looks like their plan didn't work. If they want to reduce their losses, they're going to have to do something crazy, like, I dunno...not give credits cards to people who can't make the payments?

I don't think the picture surrounding the new bankruptcy laws will focus until at least 13 months after the law was enacted.  We need a full year to see how people and lawyers respond to the changes. That other month is due to one month lag.  
An Entertaining Read...
A Hearty Mogambo Thank You

Federal Reserve bought up $1.423 billion dollars in government bonds last week, after first creating the money to do so.

What a racket!   This is the ultimate in fiscal fraud and they all should all go to prison for it.  And if the American government was not filled with (being as nice as I can manage) stupid, ignorant, untrustworthy, lying, corrupt, cheating bastards and whores, that's where they would all go.

But if I dare to show up at the Federal Reserve to make a citizen's arrest, dressed for the occasion in my best Rambo outfit, complete with headband and .30 caliber, belt-fed, air-cooled machine gun under my brawny, manly Mogambo arm (BMMA), the cops come roaring up with sirens blaring, not help me round up the economic terrorists that have taken over the Federal Reserve, but to arrest ME!  Like I'M the one guilty of something!  


Check my math...Fed debt outstanding is less than 40% of GDP, GDP is $12T, so this was less than 0.03% of the debt.
Your math is good... I posted a snipped of this article... you should read the whole thing.  As I said "Entertaining"

Entertaining--Like masturbating with a cheese grater


Might want to work on those numbers a bit more.
As of today, June 14th, 2006, the total U.S. government debt was $8.38 trillion.
Most important is does not include the money owed to Social Security beneficiaries in their future lifetimes--an amount much larger than the official debt.

The CIA's World Factbook estimated the U.S's 2005 GDP at $12.49 trillion, ranking it at the time as the 35th most indebted country in the world by percentage of GDP at 64.7% of GDP.

According to our fair Treasury department


The May 31 numbers (in millions):

  • Debt Held by the Public is $4,807,517
  • Intragovernmental Holdings is $3,549,260
  • For a Total of $8,356,777

    So I agree that the total is $8.36T, but a big chunk is "intragovenmental holdings".

    "There are two sides to the National Debt. Public Debt and Intragovernmental Holdings. The Bureau of Public Debt defines the Intragovernmental Holdings as money borrowed from trust funds, revolving funds and special funds."

    So this does include money owed to SS benficiaries.

  • The Fed accepts the rubber checks from Treasury and treasury accepts the funny money from the Fed. It's been going on for over 50 years.
    Some other countries public debts ratios for comparison

    3    Japan                170.00    
    8    Greece                108.90    
    9    Italy                107.30    
    14    Belgium             93.60    
    30    Germany             68.10    
    33    France                 66.50    
    35    United States       64.70    
    36    Austria         63.30    
    41    Netherlands         55.00
    49    Sweden                 50.30    
    51    Spain                 48.50    
    61    United Kingdom         42.20    
    62    Finland         42.00    

    The rate of increase in debt may be more important than the absolute level.  And the US is a world leader in that ATM.
    from the WSJ
    Surging individual and corporate income-tax receipts in May continued to help the federal government shrink the budget deficit to $227 billion for the first eight months of the fiscal year, down 16.6% from the same period a year earlier.
    That $227B annualized is $341B or about 2.8% of our economy.

    I understand the nature of politics is to borrow from the future to spend today, but people like this "Mogambo" guy are screaming that we have a problem right now -- when we don't have a problem right now. Yes, we may have a problem someday, but not right now.

    There is also a crowd out there screaming about M3, but if M1 and M2 are reasonable, then why worry about M3? You can't buy anything with M3. It's just an accounting thing.

    The screamers out there usually don't put their numbers into proper context. I advise people to be very suspicious of these types of doom-sayers. Not that doom won't come, but these perma-bears have only one mantra -- regardless of the data.

    I am not a doomer. Having said that, the US current account and trade deficit is the 800 pound gorilla you have chosen to ignore (or forgot about). Japan, Germany and France are not in this situation.
    That's a different series of data. And I'd say he's about 1000 lbs. :-O

    Japan, Germany, and France are worried about our trade deficit too. Possible currency and spending adjustments would nail them.

    April is alway the "good month" when it comes to federal budget deficits.  And the last month of the federal fiscal year (October ?) sees an uptick in spending as bureaucrats "spend it or lose it".  So annualizing 8 months to 12 is just plain wrong !  Not worth the time to input the data into Excel.

    Per memory, the Euro requires the annual budget deficit to be not more than 1% of GDP.  A limit too often broken, but not on the scale that the US is in deficit.

    No, the US is a world leader in adding to it's fiscal (and trade) deficit.

    The 8 into 12 month annualizing was quick and dirty. Obviously a more detailed analysis would be better. I'm not saying the fiscal deficit will not get worse, just that it's not incredibly bad right now.

    Also, from that table above, Japan would be the "leader" at 170% of GDP. The U.S. is just the trade def "leader".

    IMHO, the rate of deficit growth is more important than the absolute amount (unless one is starting from a near zero national debt and suddenly need to borrow for understandable reasons*. Lenders are easy to find then).

    One of several underlying reasons, is that existing debt tends to get rolled over to similar holders, with slow shifts in holding classes typical.

    OTOH, massive new debt requires finding new lenders and this can be quite disruptive to the system.

    The other is expectations.  The US is expected to run MASSU+IVE annual deficits "as far as the eye can see", 1999 now being forgotten.  And some of that new holdings can be inflationary printing by the Fed.

    The US leads, AFAIK, in new debt being issued.  Very worrisome and a budding problem today and as we hit multiple bumps in the road ahead.

    * German unification.  Iceland has paid off most of their debt so that if a volcano goes off (3 major eruptions in last 1100 years), or any other disaster, they will be seen as "good risks".

    You're right that this isn't a problem NOW, but why does  that matter?  I'm going to be here (or at least it's my plan) for the next few decades at a minimum. Rather than burying my head in the sand because the consequences can't be felt now this information is stil cause for concern.  The fact that the FED can monetize our debt to no end is enough to get pissed.  You mean to tell me that you think it's OK to monetize our debt, no matter the significance?  Even a 2% annual growth includes 102% of last years total.  So just because they aren't doing it on a massive scale now, doesn't alleviate the uneasiness of the future.
    "bumps in the road ahead" - AlanFromBigEasy

    "uneasiness of the future" - tate423

    I fully expect it to become a problem in the future. When it happens there should be ample evidence -- not this 2% stuff. That is way too close to long term real economic growth.

    There can be "dips" in the road ahead too. Timing is everything.

    Agreed but my bigger point was that monetizing debt is wrong period.  Who cares if "it's only,"; it's wrong.
    If you do not monetize economic growth then the general prices of things and wages must fall, and this has essentially been determined to be unacceptable by the public. People do not appear to like the idea that their wages would fall even as their output rose.
    You don't need to monetize debt when you don't have a fiat money system.  We are using a busted system.  

    Think logically about what you said. Basically "it's ok to print money based on debt to satisfy the people."  That mindset is WRONG.  You print money based on an asset, anything else is a gross distortion of reality.

    You would need to monetize even if no debt existed as long as economic growth existed. It's simply the ratio of currency in the system to total ouput. If total output grows and currency doesn't grow then prices must fall.

    Let me try this...if my economy produces 10 items and it has $10 in money then the average price of items is $1 per item. If increased output (growth) exists and I get 11 items, then with constant money, I have an average price of $0.91 per item. However, if the Fed creates 1 more dollar then the ratio stays at $1 per item. This is very Milton Friedman.

    Ok, Ok....in that case you're dollar would be backed by what?  You're still using fiat money and I'm strictly speaking in a non fiat sense.  

    This might better explain my position:

    The process of debt monetization is too complicated to summarize in a 10-second sound bite on the TV news, so most people don't understand it. However, it's essentially no different from the historic practice of "coin clipping," whereby kings would reduce the amount of gold or silver in a country's coins and keep the extra gold or silver for themselves. When that happened, the coins were worth less, so the people lost purchasing power and it was transferred to the king.

    Likewise, when a modern national government monetizes its debt, it reduces the value of the country's money, thereby -- in a sneaky way -- taking money out of the pockets of working people and giving it to government officials in a kind of "hidden tax."

    It's a financial tool that is destructive and inflationary.  I'm not talking about monetization in the sense you described, but specifically debt monetization like below.

    The government sells its bonds to the Federal Reserve, which creates new bank deposits out of thin air and uses them to pay for the bonds. This process creates new money and expands the money supply: hence it is called "monetizing" the government's debt.

    It's VERY Friedman, but I should be clear that I am only talking debt monetization leading to price inflation.  I did say monetization is wrong period, but I stand corrected as debt monetization is the true evil here.

    It depends on who is doing the fiat.

    The Swiss franc is fiat money, with no negative implications except that it's desireability has sometimes hurt Swiss industry.  Very little inflation, very low interest rates, etc.

    Of course they also own about 300 million oinces of gold, just in case.

    Right. Good example. The U.S. dollar bought 1.25 Swiss Francs in 1988 and buys about 1.25 Swiss Francs now. In between, the dollar bought as many as 1.75 Swiss Francs, but has come back down to the same level as 18 years ago.
    Ok and we have 500 million ounces last time I looked.  So the swiss plan better, no argument there.  So they are on a defacto gold standard?  Are the people led to believe the gold values their money?

    My focus is this countries debt monetization which takes money out of your pocket.  If you don't think that's bad, you don't value money.

    Amazingly, (1) the dollar doesn't have to be backed by anything. And, (2) it doesn't matter whether you monetize directly (giving everybody cash in the mail) or by debt (buying the public's debt from the Treasury). It's all mathematically the same. The ratios are equivalent. If done correctly there is no "inflation".
    "Inflation is always and everywhere a monetary phenomenon, in the sense that it cannot occur without a more rapid increase in the quantity of money than in output" -- Milton Friedman
    In a practical sense the dollar is backed by interest rates. So we have moved from a gold standard to an interest rate standard. This is why when people deflate the dollar by CPI then they think the dollar's value has "fallen", but since they've failed to include interest rates, they've made an enormous error -- like calculating the return on a stock while ignoring the dividends.
    Oh yeah, if we annualize this weekly figure, it comes to 1.56% of outstanding federal debt -- which is about spot-on for real GDP growth for the last 100 years (using 30 years time averages, about 1.7% as I recall). So this about what Milton Friedman would be doing, no?
    Actually I was a little quick here on the calculator. The Fed needs to step up their buying to $3.9B a week to make 1.7% money growth.
    Is a US Depression inevitable? Peak Oil and the threat of WW3

    The situation isn't made easier by the possibility that we're facing Peak Oil - the start of a secular decline in world oil production. Or the fact that Americans, both individually and collectively, are deeply in debt and living on the kindness of strangers.


    From the UPI:

    Rising Gas Prices Lead to Conservation

    Source: United Press International
    Publication date: 2006-06-14

    U.S. motorists are cutting fuel use to offset the impact of higher pump prices, an industry group said Wednesday.

    The American Petroleum Institute said May gasoline deliveries, a proxy for demand, plunged 3.3 percent from May 2005 levels amid a 35-percent rise in retail gasoline prices.

    The API also said diesel deliveries rose 1.2 percent in May compared to year earlier levels and included a significant amount -- about 400,000 barrels per day -- of ultra-low sulfur diesel for the first time. Those numbers should continue to rise because since June 1 refiners and importers are required by federal law to produce or import enough of this cleaner fuel to provide 80 percent of on-highway diesel.

    On the supply side, with all refineries idled by last year's hurricanes now operating, albeit not all at normal rates, the national capacity utilization rate rose to 91.7 percent in May, the highest level since August 2005 before hurricanes Katrina and Rita pounded the Gulf Coast. Though refinery capacity lagged May 2005's 94.1 percent, strong product imports have filled any supply gaps.


    Last year's floods give way to drought

    Less than a year after suffering one of the most disastrous floods in U.S. history, the Gulf Coast is in the midst of a drought.

    For a region defined by hurricanes Katrina and Rita and the floodwaters that came with them, this summer has become about jagged cracks in the soil and the constant threat of fire.

    The dry conditions in Louisiana, Mississippi and southeast Texas have hit rice, crawfish, sugar cane and soybean farmers the hardest.

    Ricky Gonsoulin, a sugar cane farmer in New Iberia, La., says he lost about 50% of his crops to the hurricanes last year. He's worried the drought will claim 25%-30% of this year's yield.

    Could put a crimp in any plans to gear up sugarcane production to make like Brazil...

    This sounds like an interesting gadget.   Wonder how much power it can really produce?

    From SpaceDaily.com    

    Compact Tidal Generator Lowers Cost Of Producing Electricity
          http://www.terradaily.com/reports/Compact_Tidal_Generator_Lowers_Cost_Of_Producing_Electricity.html /

    We have another spammer, Oriflame1.  "It" is putting up ads for viagra, warez, porn, and ponzi schemes in the older threads.
    Hey, how's he giving titles to his posts?  
    Super G, I'm sure you logged his IP when he signed up... do a DOS Attack on his ass...
    Of course if he's half way intelligent he spoofed someones IP so...
    My guess is that the titles mean it's a bot. If I look at the source for a standard post, I see that there is this form input:

    <input type="hidden" name="subject" value="Untitled" >,

    Meaning that the post has a default subject of "Untitled" and there isn't any place on the form to change that.

    A spambot, on the other hand, just submits inputs directly to the server without any typing being done. It can submit any sort of input it wants, though the Scoop host would no doubt catch some of the wilder possibilities.

    so if it's a bot doing an http POST/GET to the page TOD should just only allow post by authenticated users...any found to be spamming get blocked... Problem solved?
    As soon as Super G sees this thread, "OrinFlame1" will no longer be an authenticated user. But I'm sure there will be others ... it's a tradeoff between making it easy to sign up but leaving an opening for spammers, and doing extensive background checks or charging a credit card or something.

    We discussed a Turing test before, and that's a small thing that can prevent totally automated attacks. But of course, spammers will employ humans when necessary, so there's still that tradeoff.

    Put in the Turing test, make them employ people.
    LOL, jobs for unemployed spammers! Take the turing test for $0.00003 per test...
    This has been an extremely good day in Sweden regarding Peak Oil. We now have active competition about the best policy for the election this fall.

    Here is my sum up and translation of the Swedish right wing liberal opposition line regarding energy and peak oil. The originals 12 pages can be found on http://www.maktskifte06.se/

    I warn you again, this is not a complete litteral translation.


    Political stability is a priority, market principles are to be used and it should also be good for companies and unions and S (our socialist party) is invited to join the agreement. (The idea is that the most important decisions should last for several 4 year terms to encourage investments. )

    The most important goal is to limit global warming.

    The increasing use of limited coal and oil resources is a threath to our climate.
    The strong dependency on oil has led to international conflicts and ecomical crisises and it has also made EU and Sweden vulnerable.  

    The (climate) threath must be solved on a global level and the developed world has due to its large emissions and technical knowledge a special responsibility. By developing new technology for savinge energy and producing enviromentally friendly energy can Sweden and Swedish industry lessen the (global) impact and at the same time create jobs and prosperity in our own country.

    We will follow the EU goals and ambitions for research, development, efficiency and market competition and sustainable development with robustness in energy supply, competetiveness and protecting the environment. Renewable energy should be 12% of the total energy use in 2010 with 22,1% of electricity (A nonsens goal? We have about 45% hydro power.) and 5,75% of wehicle fuel. The energy saving goal is 20% to 2020 compared with a prognosis with no extra saving efforts.

    We will work for a new step after the Kyoto agreement.

    1. Energy alternatives and polical goals.

    We have in an internation comparision an electricity production system with very small contaminations of water or air. But especially the transportation sector leads to significant harm to health and environment when we sum up all energy use.

    All sources of energy has benefits and drawbacks. (A good list for fossil, nuclear, hydro, wind, solar and biomass power follows. )

    Climate and energy politics is one and the same. We need more environmentally friendly energy even if or electricity production is almost emissions free. We need stable rules for the energy business and a common EU policy and preferably global international agreements and cooperation. We expect this to be an export business.

    Plenty of electricity and other energy is a basic requirement for our modern society and the competetiveness of our industry.

    It is an important part of our foreign policy in making us less dependant on instable or undemocratic governments and for our aid to other contries by providing them with know how aid and high technology exports.

    2. Environmentally friendly transportation.

    Working transportation and infrastructure is a requirement for our society. But traffic is at the same time a major source of air pollution, mostly nitrous oxides, particles and CO2.

    Non fossil wehicle fuels are critical for our environment.
    Wehicle procucers and consumers need incitaments to choose fuel efficient wehicles and to encourage devlopment and (fuel) distribution.

    It must be easier for our industry to use enviromental friendly transportation. This may mean new railway lines and national and international multi modal transportation to lessen the road use.

    The less energy efficient road and air transports will still be important. It is therefore vital to stimulate the use of enviromental friendly fuels such as ethanol, RME, biogas, environmental-diesel and hybrid wehicles. Fuel cells and hydrogen could be intresting in the future.

    The change to a more environmental friendly transportation system requiers research and development at traditional universities and private corporations. No specific fuel or technology shall be prioritized. The investments made today in infrastructure shall not bind Sweden to one or a few solutions but be technology neutral to give future freedom for action. The likely long term solution will probably be a combination of different fuel systems.

    Transportation should be included in EU CO2 trade. All of EU must work towards a better infrastructure, Sweden shall be a leading nation in this work to show the way forward.

    Our combination of large forest resources, modern and efficient farming and strong wehicle industry gives us an opportunity to be a leading nation for development of renewable fuels. This can strenghten our competitivenes and export.

    3. Energy research for environment and growth.

    Prioritization of reasearch must be made with enviromental studies made according to scientific principles. The focus should be on environmental performance, commercial potential and natural Swedish competitive advantages. No research should be excluded on political grounds including nuclear research.

    Close cooperation with industry is required and research spanning from basic research to demonstration plants. This strategy will be made and constantly updated by state industry and  independant researchers.

    The state must provide large funds for this research. The energy sector have a large intrest in this development. (Means, we politicians expect corporations to invest a lot. ) The business climate is very important for innovation and investments so that this development gives growth, jobs and a better environment. (This is where our Socialists have their main problem. )

    4. Efficiency

    Efficency needs to be encouraged, taxes and rules that hinders efficent energy use will be abolished.
    This includes encouragents for house renovations and no tax on added house value due to energy efficiency.

    The use of oil for heating is already drastically reduced but it should be possible to make it completely insignificant.

    Introduction of new energy efficient technologies while renovating the "one million apartment program" (We were more socialistic around 1970 and manny of those so and so built houses are now due for renovation. ) can lead to an increase
    in environmental awareness.

    Incentives for individual energy efficiency will make the market find the most efficient solutions.

    Energy savings should aim to reduce the use of primary energy resources. Different energy sources and energy carriers have different environmental impact. Saving a kWh of electricity from a condencing coal powerplant is worth much more then saving a kWh of industrial waste heat or solar heat.

    5 Making it easier for environmental energy production.

    Most of the decisionmaking about energy forms should be made by market forces. The political tools should focus on minimizing environmental impact and encouraging savings but not to select specific technical solutions.

    Stability is imperative for investments.

    The green electrical certificate system will be kept to 2030 due to stability reasons. (3 out of 4 parties dident like it but it is a major encouragement for wind power, small scale hydro power and small scale combined eletctricity and heat power. ) But details in the system might be changed and it would be better with an equivalent EU system. Small scale hydro power will continue to be included in the system.

    The four non developed rivers will continue to be protected.
    Recertification of hydro powerplants will prioritize electricity production. (Our greens had that changed to other priorities loosing 5-10% of the capacity per recertification. )

    Natural gas, a fossil and limited fuel source, may be an asset during a period of chage provided it overall leads leads to a better resource use and lower climate and environmental impact. (Its even less specific in Swedish. The probable optimistical translation is "Dont displace biomass fuels, complement them and displace liquid fossil fuels here and coal power abroad". )

    The probable outcome of state incentives and EU rules is that natural gas primarly will be used for combined electricity and heat production and to replace oil and coal in old powerplants. The political security problems must be taken into concideration. (Can be interpreted as "plese no gas" or please build a pipeline to Norway or a LNG terminal to complement your proposed pipeleine to Russia. ) We will not give any state subsidies for establishmnet of natural gas. (Note, municipiality or state owned power company investments in natural gas use is not regarded as a subsidy if it is purely market driven. I interpret the policy as: Bring your own pipeline and secure supply and we will use your gas as long as it does not hurt our devlopment of biofuels. )

    6. Competition on the energy market.

    Lack of competition and true market economy has together with taxes and a clumsy CO2 trading system made electricity prices too high.

    The grid capacity to neighbouring countries need to be strenghtened to better use the production resources. (And this will increase grid redundance. )

    The "green tax change" that should transfer another $1,8G from other taxes to energy taxes will be stopped.

    The problems with high electricity prises will not be solved with a reregulation of the electricity market. The solution for runaway prises is an increase in supply, savings, more companies on the market and no tax increases.

    State owned Vattenfall AB who has 50% of the Swedish market and 20% of the nordic market will not be sold during the next 4 years.

    The three large electricity companies Vattenfall, E.ON and Fortum collectively own most of the nuclear powerplants wich is bad for competition. The Alliance will analyze if this can be resolved to get better competition.

    7. The continous use of nuclear power.

    The release of greenhouse gases must be lowered while the need for energy and peak power increases. The supply will not equal the increased need for the forseeable future even with the increase of renewable electricity production.

    No nuclear powerplants will be closed during 2006-2010.

    It is ok to uprate and life lenght extend the current 10 plants as long as the stringent security standards are met.

    No new nuclear powerplants will be built 2006-2010

    This document is so good that I almost cry. (Ok, it could have some more nuclear power. ) This is our answer to Göran Perssons Oil Comission and the goal of no oil use in 2020, top this with your greens if you can!

    In short:

    We have a socialist government that wants more nuclear power as long as it is provided with upgrades and a replacement of oil for peak oil and global warming reasons.

    And we now we have an opposition that wants more nuclear power as long as it is provided with upgrades and a replacement of oil for global warming and peak oil reasons.

    The critical part was for the opposition party C to back down from turning of any reactors for the next four years and accept large upgrades and life lenght extensions for the ones left. On the other hand the other opposition parties had to accept that two closed reactors will stay closed and they are probably now doomed since they get more out of code for each year.

    We have a Socialist minority government S that mostly is supported by a small green party Mp and the leftist former communist party V. Mp is adamntly against nuclear power, V is against nuclear power, S has for a long time been divided in the issue but has gone from pro to con, probably to please Mp and V.

    The opposition has been bickering for a very long time and has won elections a long time ago but then been unable to keep governing togeather. But now we have a four party coalition with a nearly complete common political agenda. This was the last big problem for our bid on renewing our government. M is pro nuclear power, Fp is very pro and wanted a rector or two ASAP, Kd is pro and C has for 30 years been the leading party against nuclear power.

    Some bickering continues, Fp talks about research on the 4:th generation of nuclear reactors and C about biomass. The nice thing is that it actually is quite reasonable to do both, it even makes both environmental and economical sense.

    Preem will build an $800M coker for their Lysekil refinery in Sweden to make petrol, diesel and coke for the export market from Russian heavy oil. They plan to have it completed in 2011. I have no idea about the capacity.

    Preem have recently started blending 5% RME in all diesel for the Swedish market from their own RME plant.

    If I have gotten it right Preem can with their two refineries in Sweden produce 130% of the light oil products the Swedish market currently needs.

    I realy like the strategy of building local biofuel capacity and capacity for upgrading heavy sour oils to sulphur free fuels for export. Preem is definately a nice neighbour!

    Thanks for the update, Magnus, it's encouraging to see that things can be done. I think the USA is still headed for the precipice, however ...
    Deep in the Heart of Texas
    Hot, Dry, and Hazy

    Yesterday the temperature here reached 101 degrees. And summer, according to the calendar, doesn't start for another week. It has also been very dry, but that seems to be fairly normal for these parts.

    No clouds in the sky, the sun seems very hot, yet there is a haze that is ever present. Last night I went for a walk at about 11 PM when the temperature was down to about 90. There was no moon at that time. I was able to see only about 15 stars pretty much in the region directly overhead.

    The stars at night are NOT big and bright deep in the heart of Texas.

    Before it gets to late in the day and it gets lost again, I'd like to bring up the thoughts from another drum beat thread.

    The so-called TPTB putting folks in camps because of some energy related crash crisis and the need to control folks.  Several people pointed out that in 1940's the Japanese were housed, and its easy to move people and we are all a bunch of sheeple anyway.   But my bone of contention is that in this current age of high population and crime and gangs and drugs and everything else that makes some of our cites just the pits to live in.  Rounding up 1000's or even 1,000,000's of people to put in camps will not work as well.

    In 1945 people trusted the gov't a lot more, they were more polite to their common fellow on the street.  More of an farmer and homesteader mentality and life style.

    Today we have little trust of gov't and less of our fellow citizen.  We have needs that a camp will not be able to meet,  ( if they are sold as places good for our safety, and not sold to us as prisons ).  We have a few generations of kids and adults that have every toy and computer needed to never leave the house, and that is not to mention great fast food and other things that you will not be able to provide in a big camp.

    The riots would start within days in any size camp.  especially if once they are placed there they think its a prison.   Just the logistics of housing any more than a few 1,000 people gets mind boggling and very hard to manage.  If you have made them prisoners you have a lot of control issues and even if they are free, you will stil ahve control issues.

    City B gets cleared out to got to detention camp X,  That city unless totally distroyed will be crime scene #8 in seconds after word is passed down that its getting cleared.

    Sure it might have been cool for joe army dude to kill an Iraqi, but well he kill Ma Kettle??  Military order and Civilian unrest and death and taxes all seem to hinge on things little understood until they are past crisis mode.  

    If you think we are headed to Gulags and Controled by Guys fresh from Iraq or the inner city,  Then you need to reascess the chaos factor and the idea that nothing ever goes totally as planned.  

    The USA's prison system is filled with millions of inmates and has more organized crime in them than out of them in most cases.  It would happen to a Gulag just as fast and be just as hard to control.  Unless you are willing to Kill Ma Kettle.  And I don't think you can find that many people willing to kill the Regular US citizen yet even in our own police and military forces.

    Dan Ur -

    Though I wish it were otherwise, I'm afraid I have to totally disagree with you on this one.

    First of all, one has to look at the most likely scenario by which mass detention camps might be set up. I really don't see it as a case of having some place to put all those poor unemployed people. Rather, I think it much more likely that economic collapse will lead to civil unrest in a variety of forms, from which will spawn all manner of virulent anti-government activity. Therefore, I see the main purpose of these camps as a means to deal with a breakdown of civil order and as a means of preserving control by TPTB. The camps will be for 'trouble-makers', as defined by the Commander in Chief.

    This is not an unprecedentedl concept. Just look into Richard Nixon's plans for the mass internment of war protesters  during 1969 -1970, when it looked like the anti-war movement was 'getting out of hand'. Power is extremely afraid of losing control.

    So, any mass internment program would more likely involve several hundred thousand 'malcontents, anarchists, anti-American radicals', and whomever else the gov deems unworthy, rather than several million plain 'ol poor folk.

    Yes, you are are absolutely right: there would very likely be riots at such internment camps. But the authorities have ways of dealing with such. There would be carnage, but guess who would come out on the losing end?

    And lastly, the thing I disagree most about is this notion that Americans would never treat fellow Americans badly. Rubbish, I say!  To some stressed-out Iraq-theatre veteran who has now become a cop or prison guard, these trouble-makers are nothing more than rag heads who look like Americans but are really the enemy deserving of all the abuse I can legally get away with.  Yes, a shaved-headed young cop WOULD shoot Ma Kettle and not think twice about it. Just doin my job.

    Just remember, the Gestapo consisted of fellow Germans, and the KGB consisted of fellow Russians.

    As you may have gathered by this point, my faith in my fellow countrymen is next to non-existent.

    I sincerely hope you are right and I am wrong, but I think we are headed in a very bad direction.

    Hey you can't totally dissagree with me then later tell me you think I am absolutely right about something.  SMILES.

    I try not to fool myself that my Father's Charm passed down to me through Genetic Traits and Nuturing will save me from getting my smart mouth shot off the first time I open in when they come to round me up cause we have been living without power and the sewers are backed up.

    But I also live within spitting distance of an Army-National Guard base, and miles from the C-130 training Little Rock Air Force base.

    I agree with some that it will be in the midst of Chaos that things might be pushed to the limits.  Rounding up Rag-heads or sheks or Indians or Arabs or Hispanic citizens or trailer bob and his six kids and 4 dogs, is not going to be an easy task no matter what you think.

    By the time it gets that bad,  I'd figure the bad folks will just get shot, and a lot of good folks will get shot too.  The True predators will be on both sides of the Law of the land and any sane person will just want to hole up with his women and his guns and wait it out.

    I guess my main intent was to get AlphaOmega to respond, it's his posts that have gotten to me.  Nothing bad about him as a person.  I just don't understand the whole thinking process that there is some guiding single group of old men in a confernce room directing traffic.  Ala The X-Files smokey back room.

    I think a curfew is more likely. With the excuse of restoring or keeping order and reducing gasoline use after an 'event'. The camps are for those who don't obey, and since no one else notices..

    Those who do obey, are just where they need to be to be briefed by the Ministry of Information. "We'll be right back, after the Ten Minutes of Hate."

    Come on now.  If the worst case scenario comes to pass (what you describe) there will be plenty of people willing to support the government and abuse their fellow Americans.  Most people don't believe in our rights, or really much of anything.  They are very quick to give them up when they are scared or threatened.  Look at how little has really come of the various erosions of our civil rights over the past 5 years.  Most people simply do not care.  

    When it comes to rounding people up, there will always be people with bad mentalities that are willing to do it.  The guards at Auschwitz were humans too, much as we like to pretend they are not (think about it, we use the word "inhumane").  There are plenty of sick and demented people out there-- just as many here in the U.S. as in Nazi Germany, or Rwanda, or anywhere else.  Don't think we're "too good" to do bad things.  

    I do think, however, that the U.S. would probably fracture before we get to the point where you are describing.  Things would not be the same everywhere, as the Central Government would more or less have collapsed.  California, et al, would take care of itself.  Also, this won't happen overnight, we'll see it coming.  

    Hopefully a terrible event like this does not come to pass, but if it does, or if it looks like it's going to, we each need to take steps to protect ourselves and our loved ones.  Don't just sit back thinking things won't really get that bad, or you're going to find out that you're wrong at the end of a gun or in the gas chamber.  Don't deny the possible, and historically documented, inhumanity of man, because you are just deluding yourself if you do.  

    Migration would be the most logical choice in this scenario.
    As soon as I secure my financial future, I'm going to one of the best prepared states or worse case I'm leaving this country.  I understand the limits of political will and the intelligence of basic American's.  Both are totally f#cked.
    I'm starting to see the appeal of locking you all up somewhere with no keyboard.

    The fact that everyone thinks every plot and conspiracy is relevant to peak oil proves to me that this group of posters is a bunch of paranoids who are attracted to peak oil because of its promise of doom.

    Why don't yuo start a website called "They are going to put us all in concentration camps". It sounds like you would have enough participants and plenty of fun.


    It'll be interesting if someday TOD is turned into a book (pub rights?). I expect the incorrect doomsday scenario ideas to be the very best material for it.

    On second thought, since retro-spective stock bubble books never succeeded, this book would probably flop also. No book, just a footnote somewhere.

    There has been a rash of "day of reckoning" folks since Y2K (remember that one?) got going. Y2K, stock market, now housing, and soon Peak Oil -- all came or will come to pass and the doomers, IMHO, will be incorrect again.

    Here are some interesting predictions everybody's favorite doomster made about Y2K. But he's got to be right this time about "Suburbia," right?

    James Kunstler on Y2K

    Good one. I like reading Kunstler, but he argues like a defence lawyer or district attorney. He takes a position and tries to sell it, ignoring or downplaying any facts that disagree with it. He often goes on rants that are ludicrous, yet usually entertaining.
    You sound just as absurd when you use, "...everyone thinks every plot..."  I don't think concentration camps are real, and furthermore the fact is clear that the financial aspect of our card house is flexing at a minimum.  There are other countries better prepared especially in the face of the main topic of this board, PO.  So if I'm a doomer b/c I'm pragmatic, so be it.
    I get a marketing report every day. I have been watching West Coast ethanol prices creep up day by day. Check this out:

    -------------- WEST COAST SPOT PIPELINE PRICES -------------

    WEDNESDAY, JUNE 14, 2006


    UNL.-CLEAR: 215.50-216.50
    PREM-CLEAR: 229.00-229.50
    JET:        216.50-218.00
    JET-LAX:    216.50-218.00
    CARBOB-R:   226.50-227.50
    CARBOB-P:   240.00-240.50
    Ethanol:    380.00-390.00

    Holy cow! That's the equivalent of $5.82/gal gasoline. Don't the ethanol advocates claim that it takes $1/gallon to make ethanol? Don't they keep claiming that it will be competitive with gasoline? Reality says that the price will rise as gasoline prices rise, just as it always has. But $3.90 for something with less than 70% of the energy content of gasoline is eye-popping.



    Any theories as to why ethanol is creeping up day by day?

    I guess this is going to put a bit of a crimp into GMs "go yellow" campaign.  All those happy faces in the commercials are going to turn to frowny faces.  

    Apparently, it must be time for the ADM supported politicians to jack up the subsidy even more.  We obviously need another 20 years of subsidies before they get it right. New evolving technology and all that.

    They just can't keep up. When you mandate something, and there is insufficient supply, this is the situation you get into. That's why we are headed for more trouble down the road with ethanol. The energy bill mandated more ethanol usage, so this is the situation we will find ourselves in again and again.


    I was just going over this on another post.  All the material available says that the East coast is still dealing with issues getting the new gas to market.  The fact that spot prices are rising so hard would seem to confirm this.  Again - it's supply and demand stupid!
    NASA Admits Wrongdoing In Not Allowing Top Scientist To Discuss Climate Change Research

    NASA admitted that they wrongly denied the media access to Dr. James Hansen.  Sen. Joe Lieberman was just on CNN, saying he was going to call for an investigation into whether the White House has suppressed information on climate change.  

    hey guys, I want to see how you feel about this article by Palast about Iraqi oil reserves... something feels fishy as I have not heard anything about this before:

    Keeping Iraq's Oil In the Ground
    By Greg Palast, AlterNet
    Posted on June 14, 2006, Printed on June 14, 2006

    World oil production today stands at more than twice the 15-billion a-year maximum projected by Shell Oil in 1956 -- and reserves are climbing at a faster clip yet. That leaves the question, Why this war?

    Did Dick Cheney send us in to seize the last dwindling supplies? Unlikely. Our world's petroleum reserves have doubled in just twenty-five years -- and it is in Shell's and the rest of the industry's interest that this doubling doesn't happen again. The neo-cons were hell-bent on raising Iraq's oil production. Big Oil's interest was in suppressing production, that is, keeping Iraq to its OPEC quota or less. This raises the question, did the petroleum industry, which had a direct, if hidden, hand, in promoting invasion, cheerlead for a takeover of Iraq to prevent overproduction?

    It wouldn't be the first time. If oil is what we're looking for, there are, indeed, extra helpings in Iraq. On paper, Iraq, at 112 billion proven barrels, has the second largest reserves in OPEC after Saudi Arabia. That does not make Saudi Arabia happy. Even more important is that Iraq has fewer than three thousand operating wells... compared to one million in Texas.

    That makes the Saudis even unhappier. It would take a decade or more, but start drilling in Iraq and its reserves will about double, bringing it within gallons of Saudi Arabia's own gargantuan pool. Should Iraq drill on that scale, the total, when combined with the Saudis', will drown the oil market. That wouldn't make the Texans too happy either. So Fadhil Chalabi's plan for Iraq to pump 12 million barrels a day, a million more than Saudi Arabia, is not, to use Bob Ebel's (Center fro Strategic and International Studies) terminology, "ridiculous" from a raw resource view, it is ridiculous politically. It would never be permitted. An international industry policy of suppressing Iraqi oil production has been in place since 1927. We need again to visit that imp called "history."

    It began with a character known as "Mr. 5%"-- Calouste Gulbenkian -- who, in 1925, slicked King Faisal, neophyte ruler of the country recently created by Churchill, into giving Gulbenkian's "Iraq Petroleum Company" (IPC) exclusive rights to all of Iraq's oil. Gulbenkian flipped 95% of his concession to a combine of western oil giants: Anglo-Persian, Royal Dutch Shell, CFP of France, and the Standard Oil trust companies (now ExxonMobil and its "sisters.") The remaining slice Calouste kept for himself -- hence, "Mr. 5%."

    The oil majors had a better use for Iraq's oil than drilling it -- not drilling it. The oil bigs had bought Iraq's concession to seal it up and keep it off the market. To please his buyers' wishes, Mr. 5% spread out a big map of the Middle East on the floor of a hotel room in Belgium and drew a thick red line around the gulf oil fields, centered on Iraq. All the oil company executives, gathered in the hotel room, signed their name on the red line -- vowing not to drill, except as a group, within the red-lined zone. No one, therefore, had an incentive to cheat and take red-lined oil. All of Iraq's oil, sequestered by all, was locked in, and all signers would enjoy a lift in worldwide prices. Anglo-Persian Company, now British Petroleum (BP), would pump almost all its oil, reasonably, from Persia (Iran). Later, the Standard Oil combine, renamed the Arabian-American Oil Company (Aramco), would limit almost all its drilling to Saudi Arabia. Anglo-Persian (BP) had begun pulling oil from Kirkuk, Iraq, in 1927 and, in accordance with the Red-Line Agreement, shared its Kirkuk and Basra fields with its IPC group -- and drilled no more.

    The following was written three decades ago:

        Although its original concession of March 14, 1925, cove- red all of Iraq, the Iraq Petroleum Co., under the owner- ship of BP (23.75%), Shell (23.75%), CFP [of France] (23.75%), Exxon (11.85%), Mobil (11.85%), and [Calouste] Gulbenkian (5.0%), limited its production to fields constituting only one-half of 1 percent of the country's total area. During the Great Depression, the world was awash with oil and greater output from Iraq would simply have driven the price down to even lower levels.

    Plus ça change...

    When the British Foreign Office fretted that locking up oil would stoke local nationalist anger, BP-IPC agreed privately to pretend to drill lots of wells, but make them absurdly shallow and place them where, wrote a company manager, "there was no danger of striking oil." This systematic suppression of Iraq's production, begun in 1927, has never ceased. In the early 1960s, Iraq's frustration with the British-led oil consortium's failure to pump pushed the nation to cancel the BP-Shell-Exxon concession and seize the oil fields. Britain was ready to strangle Baghdad, but a cooler, wiser man in the White House, John F. Kennedy, told the Brits to back off. President Kennedy refused to call Iraq's seizure an "expropriation" akin to Castro's seizure of U.S.-owned banana plantations. Kennedy's view was that Anglo-American companies had it coming to them because they had refused to honor their legal commitment to drill.

    But the freedom Kennedy offered the Iraqis to drill their own oil to the maximum was swiftly taken away from them by their Arab brethren.

    The OPEC cartel, controlled by Saudi Arabia, capped Iraq's production at a sum equal to Iran's, though the Iranian reserves are far smaller than Iraq's. The excuse for this quota equality between Iraq and Iran was to prevent war between them. It didn't. To keep Iraq's Ba'athists from complaining about the limits, Saudi Arabia simply bought off the leaders by funding Saddam's war against Iran and giving the dictator $7 billion for his "Islamic bomb" program.

    In 1974, a U.S. politician broke the omerta over the suppression of Iraq's oil production. It was during the Arab oil embargo that Senator Edmund Muskie revealed a secret intelligence report of "fantastic" reserves of oil in Iraq undeveloped because U.S. oil companies refused to add pipeline capacity. Muskie, who'd just lost a bid for the Presidency, was dubbed a "loser" and ignored. The Iranian bombing of the Basra fields (1980-88) put a new kink in Iraq's oil production. Iraq's frustration under production limits explodes periodically.

    In August 1990, Kuwait's craven siphoning of borderland oil fields jointly owned with Iraq gave Saddam the excuse to take Kuwait's share. Here was Saddam's opportunity to increase Iraq's OPEC quota by taking Kuwait's (most assuredly not approved by the U.S.). Saddam's plan backfired. The Basra oil fields not crippled by Iran were demolished in 1991 by American B-52s. Saddam's petro-military overreach into Kuwait gave the West the authority for a more direct oil suppression method called the "Sanctions" program, later changed to "Oil for Food." Now we get to the real reason for the U.N. embargo on Iraqi oil exports. According to the official U.S. position:

        Sanctions were critical to preventing Iraq from acquiring equipment that could be used to reconstitute banned weapons of mass destruction (WMD) programs.

    How odd. If cutting Saddam's allowance was the purpose, then sanctions, limiting oil exports, was a very suspect method indeed. The nature of the oil market (a cartel) is such that the elimination of two million barrels a day increased Saddam's revenue. One might conclude that sanctions were less about WMD and more about EPS (earnings per share) of oil sellers.

    In other words, there is nothing new under the desert sun. Today's fight over how much of Iraq's oil to produce (or suppress) simply extends into this century the last century's pump-or-control battles. In sum, Big Oil, whether in European or Arab-OPEC dress, has done its damned best to keep Iraq's oil buried deep in the ground to keep prices high in the air. Iraq has 74 known fields and only 15 in production; 526 known "structures" (oil-speak for "pools of oil"), only 125 drilled.

    And they won't be drilled, not unless Iraq says, "Mother, may I?" to Saudi Arabia, or, as the James Baker/Council on Foreign Relations paper says, "Saudi Arabia may punish Iraq." And believe me, Iraq wouldn't want that. The decision to expand production has, for now, been kept out of Iraqi's hands by the latest method of suppressing Iraq's oil flow -- the 2003 invasion and resistance to invasion. And it has been darn effective. Iraq's output in 2003, 2004 and 2005 was less than produced under the restrictive Oil-for-Food Program. Whether by design or happenstance, this decline in output has resulted in tripling the profits of the five U.S. oil majors to $89 billion for a single year, 2005, compared to pre-invasion 2002. That suggests an interesting arithmetic equation. Big Oil's profits are up $89 billion a year in the same period the oil industry boosted contributions to Mr. Bush's reelection campaign to roughly $40 million.

    That would make our president "Mr. 0.05%."

    A History of Oil in Iraq

    Suppressing It, Not Pumping It
    # 1925-28 "Mr. 5%" sells his monopoly on Iraq's oil to British Petroleum and Exxon, who sign a "Red-Line Agreement" vowing not to compete by drilling independently in Iraq.

    # 1948 Red-Line Agreement ended, replaced by oil combines' "dog in the manger" strategy -- taking control of fields, then capping production--drilling shallow holes where "there was no danger of striking oil."

    # 1961 OPEC, founded the year before, places quotas on Iraq's exports equal to Iran's, locking in suppression policy.

    # 1980-88 Iran-Iraq War. Iran destroys Basra fields. Iraq cannot meet OPEC quota. 1991 Desert Storm. Anglo-American bombings cut production.

    # 1991-2003 United Nations Oil embargo (zero legal exports) followed by Oil-for-Food Program limiting Iraqi sales to 2 million barrels a day.

    # 2003-? "Insurgents" sabotage Iraq's pipelines and infrastructure.

    # 2004 Options for Iraqi OilThe secret plan adopted by U.S. State Department overturns Pentagon proposal to massively in crease oil production. State Department plan, adopted by government of occupied Iraq, limits state oil company to OPEC quotas.

    This article is excerpted from Greg Palast's new book, "Armed Madhouse" (Dutton Adult, 2006).

    © 2006 Independent Media Institute. All rights reserved.
    View this story online at: http://www.alternet.org/story/37371/

    A bizarre congeries of misinterpretation and free invention.
    So, is there any substance to Palast's bloviating, or does it fall in the same category with cars that run on water, zero-point energy, and abiotic oil?
    A bizarre congeries of misinterpretation and free invention.

    So, is there any substance to Palast's bloviating, or does it fall in the same category with cars that run on water, zero-point energy, and abiotic oil?

    To dispose of history as happenstance and not understand the motivations of countries prove the total ignorance of some people.

    I take it based on these posts above, that based on the author his point is being tossed aside. Palast hasn't said anything more than a brief history lesson that some of us have already read.  I've read this history lesson before and it's fact.  

    Now to use this as a reason for the war not being over oil is illogical.  It's more logical to assume that intelligent people see a big picture, even if someone needs to point it out first, and they plan accordingly.  People are generally selfish and seek to enrich their own self interests.  Align your interests with those in power and at least secure your future even in the face of hypocrisy.  Remember always follow the money.

    I hope this isn't too long to have posted (we see again various factors come together to make dealing with PO a complex issue):

    Imperial Oil expects final cost for Mackenzie Valley pipeline to increase again
    Last Updated Wed, 14 Jun 2006 18:32:42 EDT
    CBC News

    Imperial Oil said Wednesday it was recalculating the price tag on the Mackenzie Valley natural gas pipeline in light of soaring construction costs.
    The proposed Mackenzie Valley pipeline would stretch 1,220 kilometres (CBC)

    Imperial Oil senior vice-president Randy Broiles said total costs for the proposed pipeline would likely exceed the previous estimate of $7.5 billion.

    That estimate was made by Imperial 18 months ago. With costs of labour and materials rising, some analysts predict the cost could ultimately be as high as $10 billion. The first estimate for the project pegged its cost at $5 billion.

    Megaprojects already underway to develop northern Alberta's oilsands have already put enormous pressure on skilled labour rates. Statistics Canada reported last week that the average hourly wage in Alberta was rising at an annual rate of 7.3 per cent -- twice the national average.

    Broiles said the company will have a better handle on the project's cost by the fall. He also warned that rising costs could delay the pipeline's scheduled startup date of 2011.

    A consortium led by Imperial Oil wants to build a 1,220-kilometre pipeline along the Mackenzie Valley in the Northwest Territories to southern markets.

    Imperial's Broiles said the current cost uncertainty has led Imperial to put fiscal talks with Ottawa on hold. Those talks were dealing with royalty and tax rates, among other issues.

    Just got the Zap newsletter - apparently the Smart Car appeared in the DaVinci Code:


    White House Press Secretary Tony Snow, left, and White House Counselor Dan Barlett, ride in a military helicopter wearing helmets and flak jackets for a trip from Baghdad International Airport to U.S. Embassy in the Greenzone Tuesday, June 13, 2006 in Baghdad, Iraq. Snow and Bartlett traveled with President Bush who made a surprise visit to Baghdad.

    Is it me or does Tony's face sort of say, "I wish I never took this frikkin job!" It's kind of cool how everyone hooked up at the new US Embassy. I was looking it over and I must say that that building is built for a King. (I'll bet that is going to be Bush's new White House as the US falls apart!)
    He looks like he's about to loose his lunch.