DrumBeat: June 18, 2006

Update [2006-6-18 10:1:54 by Leanan]: From the Wall Street Journal: Power shifts to nations with big oil reserves
There is more to today's oil crunch than temporary jolts to supply and demand. What is also roiling the energy world is an enduring shift in the balance of power between the fuel-guzzling West and oil-rich developing countries.
Since World War II, the industrialized world has relied on stable and affordable supplies of crude to fuel economic growth. The United States, Europe and Japan together needed more oil than they could produce. The developing world had plenty of oil, but little use for it and few alternative markets. So industrialized countries tapped the cheap resources of poor ones.

Now this mutual dependency is unraveling and a new order is taking shape, turning the tables on America, its allies and other big energy consumers. Major exporting nations have concluded that they have more leverage than ever before over consuming countries.

Update [2006-6-18 10:38:34 by Leanan]: Also from the WSJ: The fuel supply chain’s weak link
As the hurricane season starts, a little-understood episode from last summer — the shutdown of a massive gasoline conduit run by Colonial Pipeline Co. — underscores how vulnerable the U.S. energy network remains.

And the oil business is booming in Mississippi: As Oil Rises in Markets, Rigs Rise in Mississippi.

Update [2006-6-18 11:10:3 by Leanan]: International Roundup:

Cubans cheer promise of blackout-free summer

Cuba’s sweltering, mosquito-plagued summers have not been kind to its 11m inhabitants since the Soviet Union’s demise. For 15 years, daily power outages left homes in the dark and without fans to battle the heat and insects, while vacationing youths made do for hours without television or music and water pumps went idle.

But in the most significant sign yet that the post-Soviet crisis may finally be coming to an end, the lights have remained on this summer because of what President Fidel Castro calls his “energy revolution”.

Said "energy revolution" involves energy efficient appliances from China and other conservation measures. It also involves lots of cheap oil courtesy of Hugo Chavez.

In Sri Lanka, people are being encouraged to Make love, save energy. They want people to turn off the TV and go to bed early. TV stations are being threatened with fines for airing programming after 10pm. (No World Cup? Now that's a sacrifice.)

Soaring oil prices hurt Thai industry.

BANGKOK - Thailand's Ministry of Industry is preparing measures to assist operators of small- and medium-sized enterprises to survive, as oil prices are expected to continue rising during the third and fourth quarters of this year, a senior ministry official said Sunday.
Food, glass, and ceramics are particularly affected.

India is feeling the strain of high fuel prices, but the Financial Express doesn't think the problem is peak oil: Oil: What Lies Beneath.

And on the climate change front:

The Telegraph worries that We are cutting energy use - but it is dirtier. (The article also talks a bit about peak oil, and the effect of high oil prices on businesses.)

And the Guardian warns that That Sinking Feeling is not reserved for Venice.

The disastrous flooding that overwhelmed New Orleans after Hurricane Katrina highlighted the vulnerability of low-lying coastal cities around the world. A predicted global sea-level rise of up to 88 centimetres over the next century, due to climate change, would put many major cities at risk.
Two TOD related news items from Louisiana.

The Governor has objected to the October offshore leases, following in the steps of Gov. Bush of Florida, California, Massachusetts, etc.  The reason is that Louisiana has sustained large scal environementla damage to our wetlands and the US Gov't will neither give Louisiana a % of the royalities nor fund remediation (as they have in the Eberglades & Chesapeake Bay).

We will get to vote in November on a state constitutional amendment that would allocate any federal royalities to rebuilding the wetlands and better levees.

And it was announced that a lignite (low quality coal) gasification plant will be built to supply gases to the petrochemical industry.  900 jobs at the plant, 300 mining jobs in North Louisiana.

No links I could find yet.


Alan, I know little about LA politics, but my guess is that the Governor really managed to shut down the offshore oil industry, there would be a new Governor come the next election. I know that LA isn't Florida which has very little in the way of an active exploration and production industry, and a whole bunch of Nimbie consumers and tourist and development special interest groups.

The wetlands of LA have suffered from the actions of the Federal Government. I am definitely not a proponent of big government, but mitigation of a mess Uncle Sam created has considerable merit in my estimation. Isn't the Governor just trying to make this point?

The Governors actions will not shut down existing GoM production, but will stop new production from new leases for a protected period (I heard one estimate of a minimum of 5 years with legal dragging of feet before leases happen.  Then take action against actual drilling and make it clear to oil companies that any effort to produce will take some legal efforts and on-shore support permits will be hard to get).

It will, over time, dry up on-shore support servcies here BUT the state is solidly behind her.  $10 billion for Chesepeake Bay, $12 billion for Everglades (from memory) and pennies for the more valuable Louisiana wetlands.

We are NOT playing on this one.  There has been a sea-change in Louisiana politics (corruption is tolerated FAR less as well).  Patriotism and sacrificing for the common good has not been reciprocated from DC so things are going to tighten up down here.

This first chart shows the monthly numbers for crude oil production from the EIA. The upper series is for "Total Liquids." This includes Crude Oil + lease condensate, Natural Gas Plant Liquids(NGPLs), Refinery Processing Gain(RPG), and "other liquids." It also includes Canadian Tar Sands(Oil Sands) - currently about 1 mmbpd.

The lower series contains only crude+lease condensate. I also subtracted oil produced from tar sands.

Monthly Global Oil Production

This second chart includes only the 13-month averages for the two data series and a trendline for each. In order to more easily see how they are diverging, the lower, non-conventional oil line has been "raised" to overlap the total liquids. In 1995 the two figures differered by about 7.5 mmbpd. I simply added 7.5 million to every point on the non-conventional line to raise it.

Non-Conventional Spread

Thanks, very interesting.
My guess is that most of that extra 4 million barrels/day comes from lease condensate that was previously flared (I think some OPEC members began making capture or reinjection mandatory.  Common sense told them that massive 24 hour/day flares were a waste that they would want one day).

Perhaps 1 million from tar sands (1995-2005), a few hundred thousand for "improved asphalt" from Venezula and ethanol.  The rest just better lease condensate recovery IMHO.

How much more lease condensate can be captured ?  And how long before oil recovery slows to such a low point in a field as recovery drops off and production shifts to NG and condensate that was reinjected years ago.  The condensate may actually jump the "All Liquids" recovery for a while.

I suspect that, as Peak NG approaches, many oil fields will shift to reinjected NG, further dropping oil recovery.

Actually the lease condensate is included in the lower series,  so it doesn't account for the 4 mmbpd change. It is all an increase in the percentage of tar sands, NGPL, RPG, and "other liquids."
Somebody is very wrong.  Using your same definitions, ASPO shows the divergance as 16-mbd in 2010, not 6-mbd.
Freddy, it's June 18th, 2006. I think. I'm not trying to predict the future. I added the trendlines for visual effect. The numbers are EIA's historical data, not projections.
Actually... just eyeballing it, there appears to be a roughly 5 year doubling period, with approx 4mbpd difference at 2005...so by 2010 just blindly following the trendline would find the difference at 8mbpd.  Then add back in the 7.5mbpd that you originally took out for visualization's sake... 8 + 7.5 = 15.5mbpd.  Which is pretty close to Freddy's ASPO number of 16mbpd.
There is nothing to hint that this might increase exponentially so the application of a doubling time is highly suspicious.
You say potato, I say potato...(ok, so that doesn't exactly work in text)

It's a nomenclature snafu and quick writing.  I was simply after the fact that 5 more years from 2005 (aka 2010) that by following the trend line, the number will have doubled (from 4 to 8mbpd).  Also that Oil CEO had artificially closed the gap in 1995 by 7.5mbpd.  So adding the trendline number and the artificial gap closing number, it comes CEFGW to the ASPO number, whether that means anything or not.

Could you plot the conventional oil as a percentage of the Total liquids? I think that this would result in an almost constant line.
I will do that maybe sometime in the near future, but that is basically what I was trying to show with the widening spread. It hasn't been constant. To give you a rough idea, the percentage in 1995 would have been about 90%, it has moved down steadily to about 86%. How significant this is is up to you.
Meet the Press focuses on oil this morning

It will be interesting to see if Tim Russert mentions the "P" word, or raising the gasoline tax, offset by cuts to the Payroll Tax.  

I think that Tim is interviewing three oil CEO's.  I predict that they will stay with the party line, "Don't tax us, we need the cash flow to bring on new sources of oil so that we can lower the price of gasoline."

IMO, we need to tax energy consumption, offset by eliminating the Payroll Tax.

Tim has the CEO's of ConocoPhillips, ChevronTexaco and Shell Oil (I think this is the US subsidiary).

IMO, the ConocoPhillips CEO was the most rational--talking about the need to reduce demand in the US.  He only talked about fuel efficiency, but I wonder if he privately might support a higher gas tax.

IMO, the ConocoPhillips CEO was the most rational--talking about the need to reduce demand in the US.  He only talked about fuel efficiency, but I wonder if he privately might support a higher gas tax.

I have listened to and spoken with him in a small private group. He was also advocating fuel efficiency, and he was quite concerned that high oil prices would hurt the economy. I actually asked him about Peak Oil, and our need to prepare, but he didn't think it is imminent.


Robert, do you think the CEO would tell his own mother about imminent peak oil if it was not deemed to be good corporate strategy to do so?

BTW, there was a quick reference to an oil discovery "in the gulf" [presumably GoMex]at 32,000 ft!!! I repeat 32,000 feet. Reported 600 feet of pay. The only source I have for this was a very sceptical comment by George "Zapata George" Blake in an interview at about 1:50 of the third segment of this week's Fiancial Sense News Hour. Blake reported that he had talked to some of those involved and that "yes" it was oil at 32,000 feet. Blake stopped just short of dismissing the whole thing, but his punchline was after they drilled some offsets he was prepared to reconsider. Until then?

Have you heard anything about this "discovery"?

Robert, do you think the CEO would tell his own mother about imminent peak oil if it was not deemed to be good corporate strategy to do so?

Well, he was speaking to small group of employees. My impression was that he did not believe peak oil was an imminent problem. I was asking specifically whether it might not be a good corporate strategy to pour my R&D into sustainable alternatives.

Have you heard anything about this "discovery"?



SOBeR on Big Oil

When Son Of Biggy Russ took on the Big Oil 3 this morning, I was focusing on the language the threesome were using to "frame" the issues.

They were talking about "recovering" oil from National Park lands. What an interesting choice of words by the extractionists, "recover". It's sort of as if they had it, owned before, and now they are merely getting back (re-covering) that which was rightfully theirs.

Since Katrina, Meet the Press has been bumped off for a local interview program (much higher caliber Q & A & more informative than the national media.  Cutbacks in local bus service & their financing was first, then trash and flooded car pick-up status & plans, and then a brief on fires).

Tim Russert comes on at 10:30 PM here.  Is it worth the time & trouble to stay up watch ?

It's all party line stuff from the oil chiefs. You won't hear anything new. I just like to listen to how they phrase their answers, you know, America has to become "independent" (with liberty & justice for all) from "foreign" oil. We are just licking our lips waiting to get a hold of offshore US sites and ANWR. Just think of the $RO$I at these prices. Yipee.

Then again, Congressman Murtha was on also, but I missed that part.

Thailand was recently covered in a TOD case study.


Ther eis no doubt that they are suffereing from high prices in ways that richer societies do not.

However, I was QUITE impressed with the way that they are attacking the problems.

1) US$16 billion allocated for mass transit.  This puts the MUCH larger & MUCH richer US to shame !

There are political disputes as to where and what to build (democracy at work) BUT, unlike the US, they agreed to start with three elevated high capacity rail lines in Bangkok for $4.4 billion to get something built ASAP while they argue over the rest.  Bidding to start in a month.

  1. They are going to a largely renewable grid and use very little coal or natural gas to generate electricity (except in dry years).  The national grid currently buys a bit over half of it's power from "others'.  The largest source is Lao hydroelectric plants.  They now have a project to build a 1,070 MW hydroelectric plant with 990 MW going to Thailand.  This should supply half of Thai electricity in an average year.

  2. They are encouraging small scale biogas (animal manure) on farms, biogas small tractors, and either biogas or CNG cars (goal 300,000*).  Small steps, but worthwhile.  Converting 1,000 Thai farmers to biogas should keep several Hummer drivers in gas.

* I assume that when Thailand burns little natural gas for electricity, they will expand the #s of CNG cars.

All in all, I see a society that is perhaps not doing "enough" but is doing about the maximum that they can.

I would add Thailand to the nations making great efforts, along with Brazil & Switzerland.

Build our way out NIX
Fusion our way out NIX
Ethanol/Grow our way out NIX
Spend our way out NIX

Here I can only speak for the US. It seems that most people here would agree that building our way out of a depression by doing road projects etc. will only drain more energy that we no longer have.

Fusion is at best 20 years away and one can only assume that fusion will allow our population to grow and that is something that can't be allowed to happen.

It appears that growing fuel also fits in with diminishing returns. To grow we need farmable land, sunlight, water and sustainable fertilizer. Farmable land is shrinking while more homes are being built. Global warming is adding to deserts not shrinking them. All of the drinkable water in the US is spoken for. Keep in mind the government lowered the standard of what is considered drinkable water.

For those that don't understand how the US dollar and energy are linked together odds are that you never heard about the gold standard. Yes back in the day money was based on precious metals. As supplies of oil fall the costs of everything rise since money is linked directly to oil! We can't spend out way out since that would mean barrowing money from the future.

So we are running low on all sorts of energy. It is more expensive to build things and more expensive to move around things we already have. As well as peak energy we are no longer able to feed the world. We have reached the peak capacity of water too. This does not even exclude contaminated water.

Please can we discuss actual options to extinction here or perhaps we might as well Party Like its 1999

A question for you Alpha Omega. Suppose we, you, I and others on this list, could come up with an option that, if implemented by the entire world, just might work. That is, suppose we could come up with a plan, that if followed, would NOT lead to the end of the world as we know it. What would we do with it? In truth it would get as much attention as yesterday's newspaper.

No, that is not how Homo sapiens operate. They will listen to no warning from Cassandra. That is because for every Cassandra there is a Julian Simon or a Bjorn Lomborg telling everyone that everything is okay, nothing to worry about. For every position taken by anyone there is an opposite position taken by someone else. Only evnets change people's minds, never dire warnings.

As Francis Bacon once wrote, "People desire to believe what they desire to be true." So there is one expert telling people one thing while another expert tells them the exact opposite. Which do they believe? Why the one that tells them that which they most desire to believe of course.

That's how the world works. All options require action before disaster strikes. But only the actual disaster will convince people that disaster looms. Sorry to be the bearer of bad news but there are just no options that will save the world. There is no plan B that will actually work, Lester Brown's book notwithstanding.

I've concluded long ago that the only way to reduce the impact of PO is to work from within the system. You must do the bidding of the Greedy Hand. You must figure out a way where "they" will make large profits (high $RO$I) and nonetheless there will be a slow shift away from an oil-based economy to a solar-based economy.

Are not the people and societies of Thailand, Brazil, Switzerland and Sweden homo sapians ?

One can nitpick the efforts of each, but all seem to be making significant, even dramatic, efforts to modify their economies and societies towards sustainability post-Peak Oil.

I think your judgment is clouded too much by the society you live in and you are over generalizing.  The list of nations above have little otherwise in common.  (Even Sweden & Switzerland; one ultra-liberal & big central gov't & homogenous population; the other very conservative and very minimal central gov't. with 3.5 languages & two religons)


One thing that Son Of Biggy Russ (SOBeR) did explore with the Big Oil 3 was Brazil.

Big 3 argued that Brazil is becoming independent of what they consider "foreign" oil mostly because of huge increases in oil extraction in Brazil itself (deep offshore as well as onshore).

One of the Big 3 (forget whom) mentioned that GM's E85 program is going to produce a fuel that gives fewer MPG and costs more. They are testing the concept to see if the sheeple will buy into it despite the poor MPG performance.

Big 3 argued that Brazil is becoming independent of what they consider "foreign" oil mostly because of huge increases in oil extraction in Brazil itself (deep offshore as well as onshore).

I am writing an article on this right now for World Energy Source. The breakdown of Brazil's energy independence "miracle" is 90% domestic oil/10% ethanol. This is hardly the story you get from ethanol proponents.


Other than Brazil, which is cutting down the rainforest and planting it in sugarcane, none of these countries are doing anything that will really help replace liquid portable fuel. They are doing nothing that will feed the masses as world food production begins to fall, which will happen soon after peak oil.

This is a worldwide problem, local solutions will not work. Well, they will not help unless countries with the most resources build a wall and arm it with machine guns every hundred yards or so. Even then that would only be a temporary solution. The world is deep into overshoot. Only a massive reduction in population offers any long term hope.

Has anyone read "The Camp of the Saints"?

I disagree.

Thailand is going to an almost 100% renewable grid (fossil for backup in dry years), encouraging farmers towards animal manure > biogas > tractors, small trucks & cars (interhcangeable with the NG that they were using to make electricity), AND making it so people can move around bangkok (their only big city) by hydroelectric Urban Rail ($16 billion is a LOT of money for an upper 3rd World country).

Thailand is a rice exporter and biogas seems a good step.  (AFAIK, manure is a better nitorgen source after produxing biogas).

Switzerland today is 100% hydro + Nuke.  Sweden is almost 100% hydro + nuke + bio.

Switzerland is spending the US equivalent of $1 trillion to improve their rail system and get frieght off trucks and onto hydroelectric rail.  Sweden is talking about an oil-free society in 14 years and taking a number of concrete steps to get there.

Perhaps not enough, but in the future they can do even more.

If one is already doing 72% of what is needed, it is easier to take that last 28% than if one is currently doing 5% of what is needed (US).

Alan, we are talking apples and oranges here. You are talking electrical grid and I am talking about the juice that sustains life on this planet, portable liquid fuel.

The US, if it wished to, could very easily use NO portable liquid fuel for its electrical grid. We have more coal than anyone else in the world. But as far as feeding the world this would not help one iota.

What does Thailand use to power its motor vehicles, its tractors, its ships or its locomotives? What will Thailand and other overpopulated Asian nations do when the world starts running short of grain? Will they use their grid to produce more?

I am reminded of the man who lost a silver dollar on one block but looked for it on another because the light was better there. We are deep into overshoot and peak oil is about to send us right over the edge. Yet "the grid" is something we can power with nukes, with coal, with hydro, so people will talk about a total renewable grid because such a thing is possible. But totally renewable liquid fuel to power the world's food producing industry is not possible.

> What does Thailand use to power its motor vehicles, its tractors, its ships or its locomotives?

Motor Vehicles & Tractors ?

Right now 300,000 CNG cars is the goal while small biogas powered mini-tractors are being promoted (still in it's early days).

Once animal manure is at full potential, wood and agricultural waste can be a biosource.

In addition, Thais can take a "step back" from the motorcycle and go to bicycles & cargo carrying tricycles with or without (hydro) electric assist.

Ships ?  Heavy bunker oils, coal, LNG, biofuels (wood pellets), sail assist are all possibilities.

An alternative to ship is rail for many shipments, since Thailand is on the EurAfAsia land mass.  Connect with Chinese and Indian rail and from there to "many places".

locomotives ?  Hydroelectricity (with some wind turbine supplement in the future).

> What will Thailand do when the world starts running short of grain?

Charge more for their rice exports and, with the help of their renewable grid, grow more rice than before.  Trade rice for oil & natural gas.

You have a focus on what was done and there are other ways of doing things.  You are fixated on "your solution" (Dieoff if I remember correctly) and refuse to see positive steps others are taking, aince they do not meet your standard of "enough".

Thailand is doing, say, 72% of what needs to be done.  Very close to their maximum effort.  But as circumstances evolve, they can step up their efforts to, say, 88%.  And then 94%. etc.

I am sorry Alan, I am deeply sorry, but as far as the big picture goes, all this small stuff will not make one whit of difference. Read this essay and you will understand why.

Energy and Human Evolution by David Price.

A sidenote. I am not sure but I think this essay was where Bob Shaw got his byline "Are Humans Smarter then Yeast?".

A fascinating read.  Full of good information mixed with misinformation and bad logic.  Perhaps I can put an end to this source of pessimism (that's truly optimistic, I know).

There are several main errors: the analysis of renewable energy, the use of laws of physics, and analysis of population growth.

First, energy: "

Visionaries support the potential of wind, waves, tides, ocean thermal energy conversion, and geothermal sources. All of these might be able to furnish a portion of the energy in certain localities, but none can supply 75% of the world's energy needs. Solar thermal collection devices are only feasible where it is hot and sunny, and photovoltaics are too inefficient to supplant the cheap energy available from fossil fuels."

Well, this is just not true. Wind is already in the same price range as conventional energy (with an E-ROI of 80:1!) Solar thermal and PV work anywhere in the world.  They're only cost-effective in some places at the moment (because of labor required, not E-ROI), but they're dropping in cost (not price, but only because demand is increasing even faster than supply) quickly.  Solar has a E-ROI of 10 to 20:1.

Second: the laws of physics.  The article tosses in the 2nd law of thermodynamics: this only applies to an isolated system:  the earth gets each hour the energy humans use in a year.  That's a system that WILL run down....in several billion years.

Third, population: first, the article suggests we'll grow like reindeer, or yeast, without end until resources limit us.  Then it admits that's not the case, but interprets it as a bad sign!  (similarly, it interprets a slowing in energy use as a bad sign).  In fact population growth is slowing because of affluence, not poverty.  Women are getting educated, getting careers, and being free of unplanned children.  As children have the affluence to be independent of their parents, and parents are not supported by children in their old age, the economic pressure to have children falls away.  As it is, most of the countries of the world are below replacement fertility levels (the laggards are the poor countries and some big oil producers which keep their women uneducated), and global population is on track to level off in 2050, and then decline.

Now, no question that greater energy efficiency, and lower energy use per-capita is driven by a recognition of limits and higher oil prices.  But, it's a rational change, driven by improved technology, and is not a sign of economic decline (not to say that it's painless).  It's an optimistic sign!

No, there's nothing in this article that provides a solid foundation for a solid understanding of the world.

Please don't mistake me:  I think peak oil and global warming are big problems, that could be very painful to deal with, if we're not smart. But, to think that doom is inevitable is just not realistic.

 "I think peak oil and global warming are big problems, that could be very painful to deal with, if we're not smart. But, to think that doom is inevitable is just not realistic."

Good post, good point.

As children have the affluence to be independent of their parents, and parents are not supported by children in their old age, the economic pressure to have children falls away.

Requesting elaboration on this. Not seeing it in my numbers.

Ahh, what are you requesting elaboration on?  The overall description of the demographic trends, or this particular explanation for them?

I believe there is a general consensus among demographers that part of the pressure for children in rural societies is the need for children to take care of their parents in their old age, and that urbanization, pensions and wealth accumulation have mostly broken the link between parenthood and old-age security.

Does that help?

Strangely, the issue in many European countries today is the affordability of pensions.. due to the falling population growth. Their discourse effectively comes down to the point that we need population growth or the pensions won't be affordable anymore.
Well, their economies are growing faster than the ratio of pensioners to workers, so the problem isn't overwhelming.  Probably the larger problem is that people are living longer than the pension actuarial projections assumed.

People are living longer because they're healthier, thus reducing the need to retire.  The obvious answer is for people to work a little longer, in order to keep the ratio of pensioners to workers stable.

It's hard to adjust people's expectations, but really it's not a big problem: live longer, take some of the additional lifespan as a worker, part as a pensioner.  A few people identify longer lifespans as a problem aparently to be avoided, which seems just loony to me.

I think peak oil and global warming are big problems, that could be very painful to deal with, if we're not smart

But there is the rub.
We are not "smart".
We only "believe" we are.
Makes us feel good about ourselves.

Ever watch the ants in an ant colony?
Maybe you thought to yourself:
"Poor wretched creatures. Each is programmed to do its job and all they are doing is moving food stuff from one place to another, or they are out in an exploratory venture looking for new reserves. What a meaningless existence."

Well what do you think we wretched humans are doing as we explore for new reserves? How smart are we? Isn't it true that we are programmed by the "educations" we receive to become specialist ants --performing one task or another in our Adam Smith driven ant hill?

Now don't get me wrong. Just cause I body slam Adam Smith to mat every once in a while does not mean that I think a capitalist economy with specialists is all a bad idea. It has done remarkably well in many areas. However it falls flat on its face when the perceived needs/wants of the individual diverge greatly from the actual needs of the collective.

I'm not entirely sure how to reply.

No, I don't think we're ants.

Yes, I'd agree that our society isn't nearly as flexible and thoughtful as it could and should be.

I think we'll probably get through the next 100 years ok.  I think wind and solar will develop pretty quickly, and PO and GW will be manageable, but there are risks.  I would never have thought that we (the US) as a country would handle the post 9/11/Iraq situation, and energy problems in general (I consider the whole middle east situation as a sub-set of our energy problems) as badly as we have.  On the other hand, most countries have done much better than we have.  So...who knows.  I still think we'll probably be ok, though I agree there's absolutely no room for complacency.

there's absolutely no room for complacency


I'm not sure how long you have been a TOD reader. The "We Were Warned" thing goes back to 1956 (50 years ago) when M. King Hubbert warned that world oil will peak around year 2000. Since then, many experts have been refining the prediction. Deffeyes says it was Thanksgiving 2005. Others say the precise moment will be more like 2010. We'll know for sure when we see it in our rear view mirrors.

Point is, the warnings were there and nonetheless we ARE complacent.

Have you seen Al Gore's movie: Inconvenient Truth? He talks about the same thing as applied to Global Warming. Scientists were warning about climbing CO2 levels from back in the 1970's. And yet the world remained complacent. Why?

No we are not ants per se.

But each of us is a "specialist".
One person is a fireman and his job is to learn all the ways to safely put out a fire. Another is an electrician and knows how to hook up circuits. Everything looks like it's going splendidly with this system. Yet something is horribly wrong. Our non-negotaible life style in the USA is built around suburbia and worship of the automobile, of the SUV. We are complacent. We think it will just keep going and going. No preparations are being made to switch course and begin rapid deployment of a Plan B. Don't you see it?

The US DID lead the world in the first major limitation on Global Warming in the 1970s.  

We banned chloro-fluorocarbons from non-medical aerosal use; about half of the US useage.  And, AFAIK, established required recovery of freon.

We urged other nations to do this, but we "just did it".

A SWAG is that without these steps, GW would be 5% to 10% more today than it is.

Times have , unfortunately, changed.

Good point. CFC's were banned due to their depletion of the ozone (O3) in the atmosphere not due to their being GHG's. But yes it worked. Matter of fact, Al Gore brings this point up in his Inc.Truth movie. We did it for ozone, why can't we do it for GW?
It is too bad that the hole in the ozone layer continues to grow along with the risk of skin cancer.
Wow. I learned something new:

I thought we were making progress. Guess not.
The curves revert after year 2002.
Thanks for making me aware.
Ignorance was bliss.

Well, there's a lot here. I think your points are this:

1)  We were all warned 50 years ago about peak oil.  2)  We've done nothing to respond.  3)  Preparations must not only exist, but be rapid.  4) The reasons we've not responded include 4.1) over-specialization 4.2) insistence on inappropriate lifestyles and 4.3) complacency.

I would agree with #3, and a little with 4.2 (I hate SUV's), but while I would note that I think PO and GW are real, and that we're going to have real problems, and that the US response has been inadequate, I really don't think the rest of the points give quite enough credit and respect to people's good sense, and that it's a bit too pessimistic.

On #1:  A warning was indeed given 50 years ago, and it had a fairly compelling analytical basis, but there wasn't a strong real-world validation until, maybe, the early 1980's, when the US had clearly peaked despite higher prices.  There had been many predictions of oil crashes before, and the argument was that oil is just one of many commodities which run in cycles of boom and bust due to investment lags.  Just look at all the other commodities spiking in price right now: copper, silver..the list is long, and includes things like concrete, which no one can credibly argue is peaking (and despite a significant energy contribution to concrete, my understanding is that the price spike is primarily due to lagging capital expenditures, not energy prices).  All of these commodities are following, and have followed strikingly similar boom-bust patterns in the past.  I think we can now see that this is not the case for oil, but this wasn't at all clear until fairly recently, and the picture still isn't absolutely obvious.

On #2:  Most of the rest of the world has been preparing for scarce oil, and GW, for quite a while.  Oil prices have only been high for a couple of years, and there have been a lot of responses.  The private sector in the US is in fact responding pretty well, at least in the area of renewables.  The automotive sector is responding...in Japan.  (Detroit is notably bad - sigh).There has been quite a bit of response, just not enough, which leads to

3#:  The most striking problem is the lack of response of the current US presidential administration, and to some extent congress (as well as administrations going back to 1980, and congress going back to 1994).   It's a complex question, just why the US political establishment has been so....obstinant.  This appears to be in part a problem of corruption (the best politicians and media one can buy), with the buyers being the car industry and the oil and gas industry. The general public is way ahead of the administration, despite years of misinformation.  Beyond that, it's an interesting question, but it deserves better than simplistic comparisons with yeast, ants and lemmings, which brings us to the points in #4.

# 4.1:  Overspecialization?  This suggests that something has fallen through the cracks between specialties.  Perhaps I don't understand your point, but it seems to me we have plenty of specialists on oil supply issues, but they're badly divided, even anti-peak oil.  The leading spokespeople for the specialists include spectacular deniers, organizations and people like the EIA, IEA, Lee Raymond, Sheikh Naimi.  The problem seems to be one more of dishonesty, rather than lack of expertise, or attention to the problem.

4.2:  Insistence on inappropriate lifestyles-suburbia, SUV's, etc.  Well, I hate SUV's, and I don't like suburbia much, but it seems the height of something (disrespect, arrogance, something), to suggest that we have the wisdom to say that personal transportation and suburbia are inherently bad.  Whether we will be able to sustain them is something else.  My suspicion is that we will gain the wisdom to reduce to some extent subsidies for cars and suburbia, and the combination of that and higher gasoline costs will slow them down or even reduce them somewhat, but I think we should shake off the influence of people like Kunstler, who have an obsession with condemning them.

4.3: Complacency.  Well, this goes back to the discussion of #'s 2 and 3.  We've had a kind of weird sargasso sea of obstinate resistance to progress in Washington for the last few years, ranging from energy, to social issues, to..most things.  I don't think most people are any more complacent than could be expected given the misinformation they've gotten from their leaders and the media.  Maybe this also goes to the point about specialization: I agree that most people don't have the time to research PO.  But that's reasonable -  people don't deserve disrespect for that.  The question is, why has their leadership in government, industry and media dropped the ball?  And why especially in the US?  Again, this deserves real thought and analysis, not simplistic pessimism about human ability to handle things well.

this deserves real thought and analysis ... about human ability to handle things well.

Thank you for your counterpoints.
On "thought and analysis" --I think we are doing that as we speak --err scribe here.

On "specialization" --Don't get me wrong, I'm not anti-specialization. Specialization has done an amazing number of good things for society as a whole. But it has also led to a number of tragic system failures. You say that reasonable people don't have "time" to learn about Peak Oil or about Global Warming. If they don't make time for information that is vital to the survival of their children & children's children, how can we tag them as being "reasonable"? Yes, they have "faith-based" belief in the system. But they are not using the reasoning part of their brains.

I don't consider myself any "better" than any of the sheeple and I don't disrespect them. I am a sheeple. I am dumb, ignorant and often asleep at the switch.

Occasional appreciation of this concept keeps me from gloating too much over my half-chewed cud.

I don't have any answers. Wish I did. I see a mindless machine driving itself towards the edge of the precipice and I don't see any easy way to make it alter its course. There are a lot of smart people here at TOD. Maybe collectively we can figure out some ways to start turning the Titanic before she strikes ice.

Hello Darwinian,

Well said!  If events are the only things that will change people's minds, the world's leaders should be engaged in creating energy events that will encourage conservation and voluntary population controls; the rapid growth of the 'No Thanks--I Like Empty Tanks' mindset.

A decree by Putin that all Russian businesses and houses will be individually metered ASAP will create a drive to conserve, downsize, and super-insulate.  Heavy taxes for a third child can limit population levels over time.

The proposed US energy consumption taxation plan can accomplish much the same for the US, and 'created events' can rapidly create a public demand for this plan.  For example: if Phx, and its surrounding mega-suburbs are CIA/NSA deemed unsustainable--the early implementation of constantly re-occurring blackouts, fossil fuel pipeline breakdowns, and water shortages during the summer heat will rapidly halt the asinine growth of the Asphalt Wonderland, and start a huge migration to areas better suited to a postPeak paradigm.  Far better for our leaders to surrepticiously impose a strict regimen upon ourselves than wait for Nature and Entropy to do it for us. These 'optional' events can rapidly induce action before true disaster strikes; an orderly withdrawal to lifeboats before the ship hits the iceberg.

The national televising of the fairly rapid 'ghost town' conversion of Tucson, Phx, Vegas, LA, San Diego, Albuquerque, etc will shock most Americans into conservation action too.  This is far better than waiting for the dire Thermo-Gene scenarios as suggested [but not advocated] by Jay Hanson and Jim Kunstler.

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

Bob, great post and thanks. On the old lists, Running on Empty, Energy Resources and such, we used to hear a lot about William Catton's classic "Overshoot". I haven't heard it mentioned once lately however.

It should be the bible for all peak oilers. Written about 25 years ago it is as pertinent today as the day it was written. But what have we done in the over a quarter a century since Catton's great work? Nothing! That is because events have not dictated that we do anything. The price of oil, up until a couple of years ago have been stable and low. The cornucopians have been saying "I told you so".

People respond only to events, not dire warnings from us peak oilers. When it becomes quite obvious that world oil is in decline then governments will spring into action. But by then it will be far too late. Hell it is already far too late. We are already so deep into overshoot that nothing can save the world from a catastrophic population collapse.

But lets do the minor things, like producing ethanol from corn and sugarcane, and where we can, develop electrical trains instead of diesel. Of course these things will not help very much but they will make people think they are doing something. They will feel better as the world slides into chaos anyway.

What was your handle on those lists, and were you ever a resident of Huntsville alabama?

Tag my name if you were.  Thanks.

Let's hear it for population collapse.  Too bad we have to do it the hard way.  
Wow, this thread received a lot of replies. I was hoping that we could list and explain possible solutions as a response to extinction. I'm sure Alan will disagree with me and I hope he is correct. My thinking starts from the worst case scenario solutions then to low energy situations.

I already offered the free housing and free food option.

Any other ideas that seem fair and doable to you guys?

Grow more food and less houses.  Any land that has in the past 50 years grown food on it, can not be used for growing houses.  Any house farm now, must offer plans to help house a second family in any home over 1,000 square feet, and a third family in any house over 2,500 square that has at least 3 bathrooms.  Family size limitations would be 4 per family, if the owner's family has more than 4 people in it, then the other families have to reduce their number by that amount.

No car allowed on the highways that does not have 2 or more people in it.  All inner city streets of cities become walkable areas.  No more building of homes that do not meet low energy use standards.  All cars produced in america to have have at least 30 miles to the gallon of gasoline.

If these solutions seem harsh and un-american, You are free to move.  And though I am sure none of this is possible given the climate in this country concerning "mine" and "me first" I do think that if it were a prefect country we could weather most of the storms ahead of us.  

Chances are that very little positive feedbacks catch up with were are heading and poofy it all goes poofy.

I am a positive person, but I don't see a lot of others being as positive as I am, they are stuck in their own little realities.

Dan Ur, AKA Charles Owens

I am part owner of a rental house in New Orleans (elevated, new insurance survey shows living space at +7.0 feet above sea level).  1,100 sq ft, one bathroom.  We rented to a flooded out family.  they asked if they could move in a soem friends, also flooded out, since they were in desperate straits.  We agreed , same preKatrina rent.  4 adults, two chlidren, 1,100 sq ft, one bathroom.  Middle (perhaps upper middle) families.
Technically, we are not really short on farm land.  It is more like we are short on water and/or fertilizer (based on price).
I'm a day late to this ... but I think Treasury Secretary Bernake's closing paragraph in his June 15, 2006 remarks nails it:

[...] in the long run, market forces will respond. The higher relative prices of energy will create incentives for businesses to create new, energy-saving technologies and for energy consumers to adopt them. The market for alternative fuels is growing rapidly and will help to shift consumption away from petroleum-based fuels. Government can contribute to these conservation efforts by working to create a regulatory environment that encourages the growth in energy supplies in a manner that is consistent with our nation's environmental and other objectives. Given the extraordinary resilience of the U.S. economy, I am confident our nation will be up to this challenge.

Note the closing emphasis on energy-saving, conservation, and "[shifting] consumption away from petroleum-based fuels" !!!

We discussed Bernanke's comments previously, and some would have hoped for a more forceful cry of concern ... but I think he tells people right up what they will face: higher prices, and a shift from petroleum.

And what is NIX?

Is it...

A general reference to UNIX-like operating systems?

An over-the-counter preparation for human lice infestations?

Nothing, a quantity of no importance?

A water creature in German and Scandinavian folklore?

All definitions courtesy of Googling define:NIX


"'When I use a word,' Humpty Dumpty said, in rather a scornful tone, 'it means just what I choose it to mean--neither more nor less.'"

NIX = Cross off the list Example: I'm nixing him off the insurance plan
It's gangster talk from 30's movies ;-), for "no"

Also def #2, from: http://www.answers.com/nix&r=67

Instead of  growing fuel, we need to change our agricultural system based on corn and soybeans with the massive energy inputs that entails, and transition to a more solar and grass based economy that improves the soil while at the same time providing food.  The key here is taht the corn and soybean based industrial agricultural economy is heavily subsidized while the more substainable grass beased agricultural system is not subsidized.  

Making  this transition would save a lot more fuel that would be available if we try to convert much of our corn/soybean feedstock to ethanol and other  biofuels.

The sad part is that the U.S. is actively subsidizing systems and activities which are anathema to a more solar based economy.

The current paradigm is to assume that our current economy grows forever with our current mix of inefficient systems and living patterns.  Just add some miraculous and magical energy source and everything can go on as before.  Of course, we will be tapping sources that have increasingly marginal EROIE, but we will let someone else worry about that later.  

Just as an example, we should immediately place a moratorium on all new road construction and divert those funds to mass transportation related activities.

Speaking of water, there is no end in sight to the planned sprawl that is the  future Tuscon/Phoenix megacity.  Yeh, that's definitely where we should be planning to live and grow  and use water; the hottest part of the country. More and more air conditioning  and cars to connect all  those suburbs carved out of  the Arizona desert sounds like a great way to deal with peak oil, global warming, and water shortages.

The road to Armageddon will not happenby accident.  . We are actively planning and spending in such a way as to all but ensure that  we travel that road.

You asked for actual options.  I know we have options; it's doubtful, however, that they are "actual".  By actual, I assume you mean politically feasible in the corrupt, feckless, short term oriented, and corporate controlled political system that we currently have.  

I think that there is a place for significantly enlarged orchard farming.  The return of the American chestnut soon will vastly expand the possibilities.

Trees, instead of their epoch long rivals grasses, are often more sustainable and may be the only practical alternative in  as one example, abandoned suburbs.

Pecans even grow in Phoenix with some irrigation (they have DEEP tap roots once mature).

If we could manage to cut farm and energy subsidies as we phased in a carbon tax, we'd be there (on the first half).

The interesting question is how long we will (in the US) avoid a carbon tax.

"we will be tapping sources that have increasingly marginal EROIE"

Wind and solar have perfectly good E-ROI (80:1 for wind, 10:1 and up for solar), and are still improving.

Do you agree?  If not, could you give sources?

Re:  WSJ Article

As I noted in an earlier thread, this was a kind of odd article.  The writer had a dimissive comment about Peak Oil, but then he went on to all but admit that we are at Peak Oil.

My feeling is that he really didn't understand peak oil.  To him, peak oil means we're running out of oil.  To us, it means we're running out of cheap, easily accessible oil.
So, the solution to the problem, according to the oil co ceo's on Russert, is to open up drilling on the continental shelf.  Oh sure, they'd love that!  Funny how they never mention ANWR...and I didn't hear a word about shale oil, either.  Of course Russert was only asking about the profits, being the "tough guy".  Representing us, I guess, what a hoot!
I'm doing my little bit to promote a newly-published book by one helluva ballsy man. Ramor Ryan, to be precise. The book chronicles his experiences in real life TAZs around the globe. Why is this relevant here? Well, if PO does lead to the collapse of the state, we may all be living  autonomous zones. Anyways, this is an area of fascination for me: What will life be like if PO leads to the death of the state?

Reading Ryna's book, you can't help but conclude that it might not be so bad. http://karavans.typepad.com/karavans/2006/06/pirate_utopias__1.html

When we talk about US energy usage, the energy embodied in imported goods is never mentioned muchless included.  It seems to me that if our trade deficit is around $650 ex imported petroleum, that there must a significant amount of energy in those goods.  Does anyone have a guess as to what it might be?

This could be an important point if global trade winds down and the US again begins to manufacture stuff.

I don't think I've ever seen an estimate, but you're right, it is important.

I have seen estimates that 50% of the efficiency gains made in Western countries since the '70s oil crisis are due to offshoring energy-intensive industries.  IOW, not really efficiency gains at all.

I would like to recommend the book, "Big Coal" by Jeff Goodell. It illustrates the short-sighted greed of the companies that influence our energy policy. There is no chance of the Bush administration doing anything that would cost these companies a nickel. They will spend millions on buying politicians to keep polluting. Blowing up mountains and pumping mercury into the air doesn't bother them at all.
Can anyone tell me what large wind turbines cost? I can only find vague numbers like $1.000/kW.

I am most interested in the cost of the larger ones, the 3 MW and up onces, like the Vestas 90

Demand Destruction? Yesterday a group of my friends and myself made what is a mid-June tradition for us, a hike from Cades Cove in the Smokies up to Spence Field on the AT. It was a clear beautiful day and the flame azaleas and the rhododendrons were in full bloom. These trails have been opened to horses and we are usually passed  by several groups of riders on the way up. This time we saw none. Normally we are one of several groups lunching on top.  This time we were alone.  On the way out, we walk through a horse camp which is normally crowded with the big monster trucks, self contained rigs and trailers  that well-heeled horse owners `camp' in. This time there were only three rigs and  half a dozen horses.  In the campground while we were getting cleaned up at one of the bath houses, one guy talked to the ranger who was patrolling the area. He said that the traffic around the Cades Cove Loop was only moderate that day where it usually is bumper to bumper on such a pretty day. We could think of no other reason for visitation to this very popular area to be 'off' except possibly people reducing their discretionary driving/gasoline usage.
TN Granny,

    I drive a hundred miles a day usually for work (not to) and so usually hang out at the house or in town on the weekend. This Sunday I went to Parkfield, the earthquake capital of California, and was on highway 41 which is the route used for weekenders from the valley to come over to the coast. It was packed! My Prius was passed by lots of big Ford Excursions.

    It has not dropped off here.

I attended the Bike Summit yesterday in Portland, Oregon:


Metro Councilor Rex Burkholder mentioned peak oil as one of the motivations to promote bicycling. He was one of the founders of the local Bicycle Transportation Alliance ( http://www.bta4bikes.org ) & recalled that the BTA got started back in the first Iraq war, recognizing that that war, too, was largely motivation by the desire to access / control petroleum.

Hello TODers,

From the latest official news release from the upcoming G8 Conference:

June 15 - The G8 summit final statement on energy security will stipulate ways of ensuring the energy demand security, Andrei Kondakov, director of the Russian Foreign Ministry's department on economic cooperation, said at a news conference in Moscow Thursday.

He said the partners had initially rejected the energy demand security issue suggested for the first time by Russia. "They have accepted it now," the diplomat said.

Kondakov said at this stage "Russia wants to rally political support for the notion [of energy demand security]." When it attains this goal, the discussion will focus on ways of ensuring this kind of security.

"There can be different measures and approaches to a greater market transparency," he said. "The G8 partners are currently discussing various mechanisms of ensuring the security of the energy market."


Hopefully, this signifies a data-sharing breakthrough whereby all importers and exporters fully agree to full audits of all energy sources and dispersal infrastructures, along with a massive study of fossil fuel and alternative fuel ERoEI.  I agree with Matt Simmons that we need to know just how much beer is still left in the bottle.

The 'energy demand security agreements' is quite vague, but I hope that it includes raising energy prices far faster than inflation so that demand security results in the rapid shedding of non-paying customers to prevent blackouts, brownouts, fuel shortages, etc;  this way the remaining infrastructure spiderweb can maintain optimal uptime and functionality, with the necessary funding of a strong military component to prevent attacks by detrito-terrorists.  Recall my earlier postings on this subject.

Most detritovores will not willingly convert to a Powerdown biosolar lifestyle.  Strong energy pricing measures and worldwide non-procreation education from the G8 leaders that adopt most of ASPO's Energy Depletion Protocols can go a long way to peacefully induce most of the addicted unwashed masses to conserve, conserve, conserve, and have fewer offspring.  Time will tell.

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

If you think the G8 summit will produce a world-historical breakthrough, or indeed anything worthwhile, I fear you will be disappointed.
Hello Smekhovo,

Alas, you are probably correct in your assumption, but one can still hope for a unified worldwide mitigation effort.  I am clearly on the record as a fast-crash Doomer, but I believe postPeak that some attempts to implement Isaac Asimov's Foundation concepts of predictive collapse and directed decline will be tried to optimize the Dieoff.  Time will tell.

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


the Norwegian blogspot


posted recently a post with a diagram based upon BP Statistical Review 2006 showing developments in oil and natural gas production from the North Sea (Denmark, Norway and UK). Natural gas converted to oil equivalents.

Since the North Sea oil production peaked in 2000, it has lost a capacity of 1,2 Mb/d due to depletion induced declines.

Seems like natural gas is starting to decline, even if natural gas production will continue to grow from Norway it is probably not enough to offset declines from the other two countries.

I found this sight referenced on the EnergyBulletin blog.  Anyone here see it and what did you think?  


New York Times article re a serious oil environmental disaster in North Central Iraq due to Iraq's inability to export so called "black oil" over the past several years.  They're dumping it into mountain valleys and burning it.  

"The dumping and burning has embarrassed officials in the Oil Ministry and exposed major gaps in the American-designed reconstruction program."

"An environmental disaster is brewing in the heartland of Iraq's northern Sunni-led insurgency, where Iraqi officials say that in a desperate move to dispose of millions of barrels of an oil refinery byproduct called "black oil," the government pumped it into open mountain valleys and leaky reservoirs next to the Tigris River and set it on fire.

The resulting huge black bogs are threatening the river and the precious groundwater in the area. The suffocating plumes of smoke are carried as far as 65 kilometers, or 40 miles, downwind to Tikrit, the provincial capital that formed Saddam Hussein's base of power.

An Iraqi environmental engineer who has visited the area described it as a kind of black swampland consisting of oil-saturated terrain and large standing pools of oil stretching across several mountain valleys. The clouds of smoke, said the engineer, Ayad Younis, "were so heavy that they obstructed breathing and visibility in the area and represent a serious environmental danger."

At Iraq's damaged and outdated refineries, as much as 40 percent of what is produced pours forth as this heavy, viscous substance, which used to be extensively exported to more efficient foreign operations for further refining. But the insurgency has stalled government- controlled exports from the area containing Iraq's major northern refinery complex at Bayji, the officials say."


Super G - we still have 2 spammers hitting UK threads:
http://www.theoildrum.com/user/daydaytop2008  and

Both making multiple posts of garbage.