DrumBeat: June 20, 2006

Update [2006-6-20 12:38:9 by Leanan]: Saudi ambassador: World oil prices could triple
WASHINGTON, June 20 (Reuters) - World oil prices could triple if the diplomatic standoff over Iran's nuclear program escalates into a military conflict, Saudi Arabia's ambassador to the United States said on Tuesday.

"The conflict itself ... will shoot up the price of oil astronomically," Prince Turki Al-Faisal said at a press conference. "We think military conflict would be counterproductive in Iran."

"The whole Gulf will become an inferno of exploding fuel tanks and shot-up facilities," Al-Faisal said.

Update [2006-6-20 15:1:6 by Prof. Goose]: Same quotes, a bit more of an in-depth story at USN&WR.
Update [2006-6-20 11:2:53 by Leanan]: Worldwide oil consumption seen soaring
WASHINGTON (Reuters) - World oil demand should soar from this year's almost 86 million barrels per day to 118 million bpd by 2030, even though higher fuel prices will cut back some petroleum usage, the U.S. government's top energy forecasting agency predicted Tuesday.

Much of the growth in global oil consumption over the next quarter century will come from the non-industrialized nations in Asia, where the strong economies of China and India will gobble up more barrels, according to the Energy Information Administration, the statistical arm of the Department of Energy.

"Much of the world's incremental oil demand is projected for use in the transportation sector, where there are few competitive alternatives to petroleum," EIA said in its annual long-term international energy supply and demand forecast.

Update [2006-6-20 9:23:14 by Leanan]: Saudis to Supply Oil to China Strategic Reserves

BEIJING - China is in talks with Saudi Arabia over importing oil to fill its planned strategic reserves - building on an April meeting between their two heads of state, Chinese and Gulf sources familiar with the situation said.

A deal would see large volumes of Saudi crude imported by China, although the first shipments would be unlikely to take place before the end of this year, a senior Chinese industry official told Dow Jones Newswires.

Update [2006-6-20 9:52:42 by Leanan]: Mother Jones has an interview with Michael Klare called The Permanent Energy Crisis.

From Global Public Media: an interview with Donald Fournier, on Oil Depletion and the U.S. Army. Some interesting info on how much energy the Army uses.

The San Francisco Chronicle has an article on how America was changed by the interstate system: The Interstate Highway Systeam at 50: America in fast lane with no exit.

Whether we'll be able to maintain it is another story: Blame oil prices for those potholes:

WASHINGTON — Drivers, be prepared for some bumpy roads.

Asphalt prices are skyrocketing as costs for oil, a key component of the paving material, are near records. In some parts of the country, there are asphalt shortages.

..."Some roads are going to continue to get worse and worse, and eventually some will be converted to gravel whether we like it or not," says Dirk Rogers, highway superintendent in Brown County, S.D.

Free Market News is printing more and more articles that seem to accept peak oil:
The commodity boom currently underway in all areas is due to shortages. Shortages are the result of different circumstance depending upon the commodity. Different commodities will be examined but all stem from a common thread and will only be amplified by its shortages: Energy.
More on energy and population... Cut fuel use and curb population:
...there is near-total silence about the role of global population growth and the need for population stabilization. Serious discussion of population stabilization was absent from international climate meetings in both Kyoto and Montreal, and from almost every other public forum.
EV World has an interview with Basil Gelpke, on his new 90-minute documentary on peak oil, A Crude Awakening: The Oil Crash. The 15-minute interview is downloadable in MP3 format.

In Chile: Lawmakers Promote Wind, Water Energy to Ease Gas Shortage. Argentina has cut natural gas shipments to Chile by half. The article has some interesting information on how mining has been affected.

In Iran: Ahmadinejad laments waste of energy. They export oil, but they import gasoline. President Ahmadinejad is encouraging conservation, pushing public transportation...and nuclear power, of course. He points out that if Iran uses less, they can export more.

And researchers are working on alternative jet fuel. The solution may be decades away, but they are working on biodiesel fuels for commercial aircraft.

Given that Pacific Ethanol is down 30% in 2 weeks and 50% in a month, I wonder if Keithster has any more investment advice for us? Is there another bubble he recommends that we all hop on?

Looks like some investors are finally starting to wise up. You are going to have a tough time profitably making ethanol that far outside the Midwest - unless of course you charge $6/gal for it. There is a reason that they position ethanol plants within 50 miles of corn supplies.


Someone here at TOD turned me on to The Truth About Cars.  They had an article yesterday:

Alternative Fools: E85

... nope, it doesn't look like ethanol is getting a totally free ride.

Someone e-mailed me that article last night. That guy must read TOD. :) It combined elements of my E85 article with the article on Brazil, and even mentioned what you had stated that inspired the E85 article: It makes far more sense to roll out E10 everywhere than to push for E85 everywhere.


That guy is great. Thanks for reminding me. I have to bookmark  that site.
Oil CEO,
I just caught your comment back at the oil shale thread. I left a reply for you. Amazed!
I was just reading that article and ran across the phrase "186 million Brazilians" and thought to myself, "Gee that's an awfully big number."

I assume by now everyone has heard the Bush joke that spawned that thought...

Here is a bit from today's OPIS report:

While ethanol continues to grab the public interest as it is seen in national headlines and mainstream media spot values continue to rise for the blending component. And while West Coast ethanol values are strong they pale in comparison to prices being seen on the East Coast.

Spot ethanol on the East Coast today was seen trading from $5.50-5.75/gal and based on current RBOB values in the New York Harbor the huge price of ethanol is adding some 29cts to the price of finished gasoline, based on a 10% blend.

I guess ethanol does have a useful purpose after all. It is going to force us to conserve even faster due to it being mandated. Of course I don't think this is what the administration had in mind when they mandated it. The good news is that the amount we require in our gasoline will increase over the next few years, which will drive prices ever higher and force us into conservation mode.


Per my understanding, only pollution non-attainment areas (polluted cities) have to add ethanol.  So Baton Rouge & Houston see a price hike due to ethanol, New Orleans and rural areas do not.  California got at exemption from the ethanol requirement.

Correct ?

This is true, but there are a lot of non-attainment areas, especially in the northeast. California did get an exemption, but I read that a lot of producers already had contracts in place to supply or purchase ethanol. Give it some time, and ethanol will probably start to disappear from California markets.


Well, I should add that this WAS the case. Per the new energy bill, a certain percentage of ethanol is mandated into the gasoline pool period. I don't know how this breaks down though (i.e., if it will mostly be in the non-attainment areas).


And Iowa.
And Minnesota. I think they are trying to go to 20%. Perhaps the Minnesotans will meet the mandate for the rest of the country, and we won't be forced to buy the stuff. :) They will be paying $5/gal for ethanol and getting worse gas mileage, while I continue to avoid the stuff like the plague.


An interesting announcement from BP and Dupont I have not heard of biobutanol before so does anyone know what it is and how this relates to the ethanol debate?
I had not heard of it before but there is a good explanation here. The claims for it are that:-

It runs on present gasoline vehicles unmodified at equal or greater mileage.
It is much less prone to absorption of water removing the need for special storage tanks and pipelines.
Can be made from the same feedstocks as ethanol at greater yield.
Produces useful amounts of hydrogen as a by-product.
Is cheaper to produce than ethanol.

All these claims are from a company promoting its patented process to make the stuff and extrapolating from a pilot plant  so due caution is needed in accepting these claims.

This Link References RR's numbers on lines 13 and 22

Pure Energy Systems
"Butanol as a biofuel (http://www.lightparty.com/Energy/Butanol.html) - Butanol solves the safety problems associated with the infrastructure of the hydrogen supply. Reformed butanol has four more hydrogen atoms than ethanol, resulting in a higher energy output and is used as a fuel cell fuel."

I suspect this might be a familiar site to some of you here, is it responsibly run?

Bob Fiske

Butanol is potentially a better motor fuel than ethanol. I did write an essay on bio-butanol a couple of months ago:


Butanol has some significant advantages over ethanol, and probably has a better EROI because it is a less polar molecule than ethanol. Of course, we still won't be able to produce enough to make much of a dent in our oil consumption.


More discussion on BP/Dupont bio-butanol at Green Car Congress.
Not sure if this has already been posted elsewhere, but...

Even the Wall Street Journal has come against the current ethanol hype. In an editorial in the 6/17/2006 Weekend edition of the WSJ they discuss why imitating Brazil won't work for the US, and they also cite research by Cornell's David Pimental and Berkeley's Ted PatzekCornell's that indicates that it takes more than a gallon of fossil fuel to make one gallon of ethanol.

Here is a link:


Even the Wall Street Journal has come against the current ethanol hype. In an editorial in the 6/17/2006 Weekend edition of the WSJ they discuss why imitating Brazil won't work for the US...

Ah, they are just riding on our coat tails:

Lessons from Brazil


and they also cite research by Cornell's David Pimental and Berkeley's Ted Patzek Cornell's that indicates that it takes more than a gallon of fossil fuel to make one gallon of ethanol...

Sadly, any article mentioning Pimentel is immediately discounted by ethanol proponents. They consider him discredited, so when he is cited they don't believe the article is reliable.


Do you think that he has been discredited?  He and Patzek certainly have not changed their views.  Are we supposed to believe that the ethanol lobby and the USDA has more credibility
No, I don't believe he has been discredited. I think he did use some outdated data that left him open to criticism. But I think his methodology was correct.

However, if you want to make any headway with an ethanol pumper, best to avoid Pimentel's name. That is the quickest way to have them dismiss your arguments out of hand. That doesn't mean they are correct in doing so, but my objective is to have them listen to my arguments.


I heard about Unity08 from that recent Tom Friedman article (now up at EnergyBulletin.net.  I guess they are some attempt at a web-based, grassroots, 3rd party.

I just looked in far enough to find an energy post.  It looks fairly real:


Energy Bulletin appears to be having technical difficulties. :-P
Uh Leanan, you might want to get on over to peakoil.com.
They're aware of it.
Keep those servers patched ;-)
I think it's futile with open-source code like phpBB.  

They've bought VBulletin, which should be more secure.  It's still in beta, though.  Not sure when the rollout will be.

What exactly happened over there?
Isn't it obvious?  I don't think it's fixed yet.

The site is still usable.  You just have to scroll past the image (or AdBlock it with Firefox).

I think they fixed the minor technical difficulties an hour ago or so.
Well, I'm still seeing it.  Must be a propagation issue.  :-P
I think I see what you mean.  They got it off the front page, but the forum index is still defaced:


Oh, you're right.  I was just looking at the front page.
The only way to have a trulty effective third party is to allow fusion voting like we have here in NY. For instance, a party can endorse a major party candidate and have them run on both lines. Then the count for that party becomes a tool they can use to influence policy. The Working Families Party is doing that, effectively replacing the "Liberal" Party.

Frankly the Green Party is totally inept and unrealistic. I would support a "Sustainable Party" that brought together balancing the budget/trade deficits, energy independence and many other concepts of responsible economic and environmental stewardship...

Yeah, I think it's something more to keep a casual eye on that something to have real hope for.

(wish i'd closed my parenthesis above)

The problem with a lot of 3rd parties is that they focus on running a presidential candidate.  This lets them vote and complain when things don't turn out the way they want, but they never have to deal with the complicated issues of governance.

Maybe they should instead run for city council, school board, or mayor first.   Those races are winnable in some areas.  Once they can establish some credibility, then they can be taken more seriously on a national level.

The way the American political system is set up, third parties are a waste, they cannot win a national or statewide election.  And the effect they have had has, in my opinion, been entirely negative.  Undoubtedly, the presence of Nader on the ballot cost Gore the election, and does anyone remember 1980, when John Anderson got about 10% of the vote, most of which came at the expense of Jimmy Carter, and ended up putting Reagan in the White House.

But the fate of Jimmy Carter is also illustrative of why an elected form of government inherently cannot deal with unpleasant, long-term issues such as Peak Oil.  Carter, of course, however timidly, had started saying that we would have to conserve, and use less.  Politicians do not get elected promising less availability of goods, services, energy, whatever; you have to promise that, if elected, more, not less goodies will be available.  The underlying problem is that elected government is necessarily short-term and political, rather than administrative, and it is impossible to devise any policy without its being distorted by all the well organized and financed special interest lobbies that infest any policy discussions at the governmental level.  Fusion voting, ranked-choice voting like we have here in San Francisco are just gimmicks, tinkering with a dysfunctional system.  And the proponents of such gimmicks aren't generally interested in dealing with such issues, they just see these devices as something that will help get them elected.  Elected governmental systems are all about winning, not seriously dealing with issues that require a response of conservation and facing the fact that less rather than more (of whatever) will be available for general consumption.

Unfortunately, our current system is so well entrenched that it cannot be replaced until it collapses under the weight of its own contradictions and dysfunction.  Peak Oil will probably be the catalyst that sends it crashing down; at this point I expect the USA will break apart into anywhere from half a dozen to 15-20 separate nation states, each of which will then have an opportunity to set up a more long-term thinking and functional form of governance.  Unfortunately, this means that on the national level we will be unable to effectively address such issues as Peak Oil in any proactive manner as any successor governments will be dealing with it after the fact, and be absorbed in reacting to the unravelling of a society and economy based on the impossibility of eternal "growth."

Antoinetta III

Regretably, I think you will find if you do a study of history that in times of economic distress you have a very significant rise of dictators. Take a good look at the 1930's!
If I were to have to give a guess at a scenario, it would be some significant event or series of events (ie nuclear terrorism, wide spread rioting, etc..) followed by declaration of martial law, followed by suspension of constitutional rights, followed by "temporarily" suspending elections due to the "situation". I do not think it makes any difference which/what party is in power at the time. Anyone who remembers FDR's attempts to pack the Supreme Court back in the 1930's will be convinced that the Democrats are just as capable of grasping at "power" as the Republicans.
Most right wing dictators tended to be originally elected to power and most left wing dictators generally gain power through overthrow of the existing government, so I would probably guess that you would have a good likelyhood of a right leaning dictator in the USA & Europe.
With the population problems I fear that there will be a major likelyhood of dramatic events of genocide taking place at some time after the arrival of absolute dictatorships in the USA or Europe.
My guess at a time frame is 2012 to 2016. Elections in one of those two years will never happen if things go down hill as many think.
Hope I am wrong, but with some luck I will die of old age before it gets that bad. Just glad I don't have any kids to leave behind.
Interesting interview of a commodity analyst this morning on CNBC's Squawk Box (sorry I did not find any link). Demand for corn is increasing rapidly due to the strong increase in Ehtanol production. Corn inventories are expected to get really low in the next few years. Problem is that corn is used in many other products and there are concerns that it could be another source of inflation!
Talk about a paradox that is waiting to destroy itself.  The agribusiness cost efficiencies have been wrung out and inflation is taking hold EVERYWHERE.  I know demand for food will not relax, unless the US collectively diets~Yeah right.
Giving an opportunity to get rid of subsidies and letting the market do the prioritizing while using the tax money where they realy do something good.
Note the negative trade balance for U.S agricultural products in April.  The gap has been closing year over year.  Has the U.S. become a net importer of Ag products?


I dug a bit deeper on this one.  We have been a net importer several times in the 20th century.  During the Great Depression we imported food, and I believe we had the dust bowl at that time as well.  During the Korean War, and a few years after, we were a net importers.  There are a couple of outliers, 1958, 1959 and 1962.  During these years there were small deltas in our exports vs. imports.  I can't find a ready answer to explain those years.  I did a quick natural disaster search for those years to see if major floods or droughts occurred in the Midwest to explain the drop.  There were sudden drops in net exports not net imports for those years so it must be some sort of natural disaster situation to explain it.  But since 1962 we have been a net exporter.

If you look at the net export picture we exported more in 2005 than we have ever exported but we imported more than we have ever as well.  In 2005 we were on the positive but just barely :

Export = $62,958 Billion
Import $59,282 Billion
Net = $3,677Billion

So it is hard to draw any conclusions other than we all need to go on a diet!

"So it is hard to draw any conclusions other than we all need to go on a diet!"

Exactly.  This one:


Grow your own food and support your local family farm.

It sounds like the Lenten penance of giving up meat during Lent and eating only fish in New Orleans ! :-)

Our two unique unique local cuisines are both based on what is grown & caught locally.  Cajun has little dairy since that was hard to get in rural areas.  Creole had access to the dairies acrross the lake.

LOL!  Oh, would that we all could have the food (and chef!) resources available to us that y'all have in New Orleans!
I recently took two German volunteers (10 weeks unpaid labor) out to dinner at Brigtsen's (one of a 12+ James Beard award winning chefs in town & my favorite).

We shared a GIANT soft shelled crab with mienure sauce & pecans as an appetizer.

They shared a 6 piece seafood platter (portions jumped when waitress found they were volunteers).  I had a rare tripletail fish (local).

They had pecan pie for desert, I had lime-mint & strawberry sorbets then dark roast local coffee.

They were beyond impressed with the avalanche of flavors but stuffed.  Later they asked to talk to Frank Brigtsen and he came by after the last dish was cooked.

We may not have a working health care system, fire department, postal service, etc. BUT we are not yet past "Peak Food Quality" !

Except for the coffee, flour and perhaps some spices (very limited lime production down river) all was local.  And we have ALWAYS traded for flour & coffee.

$62 trillion in exports from an economy that only produced $12 trillion.  I guess I don't understand economics. $59 trillion in imports. OH boy. We could replace all taxes with a 5% tarriff.  
If you pretend you're reading it in Europe (or much of the rest of the world), the numbers make more sense. :)
My Bad those figures are not trillions but billions. The original spreadsheet has them listed in millions.  Sorry for the confusion.
>If you look at the net export picture we exported more in 2005 than we have ever exported but we imported more than we have ever as well.  In 2005 we were on the positive but just barely

One issue that probably hasn't been considered is the cost differential been US grown food verses imported food. For instance the US produces a lot of inexpensive grains (rice, corn, wheat) because of our climate. I suspect the majority of imported food is for fresh fruits and vegetables during winter months and premium foods that are grown outside of the US because of climate (coffee, brazillian nuts, tropical fruit, etc).

Perhaps simply looking at dollar figures is an inappropriate measure of actual demand/verus consumption. For instance, measuring imports and exports by weight might be a more accurate gauge.

However, it is important to remember how important fossil inputs (pesticides, Fertializer, irrigation) are to US crop yields. If we examine crop yield declines in Cuba, which declined by nearly two-thirds (10 years after the loss of soviet supplied oil) we can clear see, we will have a problem in the future.

I think your numbers might be erroneous.  Each month total imports into the U.S. have been running about $170-$180 billion.  Twelve months in a year right?   Roughly $2 trillion in imports annually, and by the way roughly $1.3 trillion in total annual exports.  My source is http://www.census.gov/foreign-trade/www/press.html
I think he's talking just about food.
We're talking agricultural imports & exports.  See the link I posted above originally:


The cost of candy and junk food in particular will rise...
Ah, another benefit of Peak Oil :)
Yes, obesity is one of our society's problems that will likely get better after peak oil.
Adhesives, Cardboard, Construction Materials, Detergents, Paper, Textiles, Plasterboard   
Adhesives, Animal Feed, Bookbinding, Laminated Building Products, Enzymes, Leather Tanning, Lubricating Agents, Metal Plating
Antibiotics, Enzymes, Coatings, Insecticides, Organic Solvents, Plasticizers, Shampoo

Antibiotics, Aspirin, Baked Goods, Candies, Condiments, Mixes & Instant Preparations, Processed Meats, Puddings

Baby Food, Bologna and Hot Dogs, Chewing Gum, Cookies & Crackers, Dessert Mixes, Fruit Drinks, Canned Foods, Cereals, Medicinal Syrups, Pickles, Salad Dressings, Seasoning Mixes

Brownies & Baked Goods, Canned Fruits, Cheese Spreads, Cured Meats (such as bacon), Dessert Mixes, Intravenous Solutions, Jams & Jellies, Soda Fountain Preparations, Marshmallows, Soups

Carbonated Beverages, Fruit Fillings, Cereals, Frostings, Ice Cream & Frozen Desserts, Pancakes, Pastries, Relishes & Sauces, Syrups & Dessert Toppings

Ethanol, Citric Acid, Lactic Acid, Essential Amino Acids, Sugar Alcohols


That's outrageous!  Puddings!?
I think you need to back that one up, pal..
Ethanol, Citric Acid, Lactic Acid, Essential Amino Acids, Sugar Alcohols

Wait ... Ethanol? Thought we were supposed to be making so much of that, we can run our cars on it.

Nevermind ... I thought it was about oil, it's an article about corn.
An interesting article on the subject:
Ethanol Reshapes the Corn Market

It's an interesting graph.  

Over 9 years,  I can only see growth in ethanol production, none for food.    

In the same time period, the planets population will have increased by approx. 700 million.   Is anyone increasing food production?

Peak oil is an aggravating factor.

Its all about population!

It occurs to me that corn-ethanol is a very bad way to import natural gas. As North American NG wanes off, we already see fertilizer companies moving to countries with big NG reserves. We import the NG-manufactured ammonium nitrate to grow the corn etc. in effect, importing NG via ammonium nitrate. I'm sure LNG would be more efficient.
Imported fertilizer is probably on a growing list of 'stealth' energy imports. That is, products that once were home manufactured but are now made where energy is cheaper, rather than importing the energy stock itself and manufacturing here.
lng is not more efficient. Very expensive vessels, plus up to 30% lost to compress/chill/heat/decompress.
The proof is that fertilizers and plastic precursors like ethylene/propylene are running offshore as fast as they can. And, this is a good thing, freeing up ng for residential and other heating plus electrical generation. It might have been a big mistake to build ng electric generators rather than coal/nukes, but now that they're here the only alternative to using them is shutting down the grid.
Or building LOTS of wind turbines.  The short cycle of WTs (~30 months from financial OK to on-line) works in their favor.
Oddly enough, in some quarers, there seems as much resistance to wt's as there is to nukes, not least some liberal leaders eg kennedy.
My point is that
NG -> LNG -> NG -> burn in your car or whatever

is more efficient than

NG->ammonium nitrate->corn->ethanol->burn in your car or whatever

Especially given that the fertilizer must also be transported from Qatar or wherever the NG is cheap.

It is much easier to transport fetilizer in a random bulk cargo ship then very cool Liquid Natural Gas in special ships with insulated tanks.
Perhaps of interest - One of my right-wing friends sent me this link of an interview of Woolsey on Energy Security.


Al Gore mentioned Peak Oil again in his interview on the Charlie Rose show: [Google Video]

The segment starts at 31:08

Cheney -- made speeches -- in which he said the coming of Peak Oil -- he may not have used the phrase -- but the coming strategic competition for oil reserves means that the United States of America has to find a way to secure a strategically dominant position in influencing the future of the Persian gulf reserves. And he made speeches on that long before he became vice president. And I do think, Charlie, that that is the connection between the global warming crisis, the climate crisis and the strategic error that has us bogged down in Iraq.
Look at the overall pattern. We are borrowing huge amounts of money from China to buy huge amounts of oil from the most unstable region on the planet to bring it here and burn it in ways that destroy the habitability of the planet.
This is a dysfunctional pattern. Every component of which has to be changed. And can be change only when we look at the overall pattern.

This is an important interview, Gore's exploration of the origins of the Iraq war (tying it to Peak Oil) it really the first time I've heard an explination that makes sense, and fits all of the facts.

This is the most important connecting of the dots I haveve heard of in the MSM . Good for you Al Gore!
Imagine if the election wasn't stolen and he became president...
He'd be too tied down Vetoing Abortion, Gay Marriage, and Immigration bills from Congress to worry about saving the species..

Which reminds me of a joke I wrote in 2001:

Please to be reading joke in fake Russian accent!

What is being difference between Russia and the U. S. of A.?
In Russia, last election, man who got most votes -- is now president.
Excellent interview with Gore, especially his take on the causes of the Iraq war. He goes pretty easy on Bush, everything considering.

One of the problems with his "mission" is that he is jetting around the country to tell people about the dangers of jetting around the country. Just the act of trying to get the message out on global warming contributes to global warming.

Being a politician requires that he endorse a "solution," which he does with cellulosic ethanol, from something other than corn. Unfortunately, it seems that Peak Oil is about the only real solution to global warming. If it doesn't exist, you can't burn it! (as I'm sure you are aware from previous posts, the IPCC projections for global warming assume that fossil fuel burning continues to increase at the same rate for the rest for the century, an increasingly unlikely proposition.)  

He "offsets" all his CO2 release. His speaking fee to Universities at least is $80K, so paying a self-imposed carbon tax for his travel is a trivial expense.
the offsetting is key here.
he is not carbon neutral because he does not take out any of the carbon he puts in he just offsets it by focusing on activity's that do not produce c02.

it's way essayer to offset c02 emissions then to actually become carbon neutral, unfortunately nature only cares for the harder of the two.
to be carbon neutral you must take out every ton of c02 you Emmit.

Agreed, but at least the entity he pays the tax to pools these funds to provide a lower carbon impact powerplant (PV panels) than might otherwise get built.
I'm not totally sure I follow.  As an ex-chemist I tend to think of CO2 in the atmosphere as CO2 in the atmoshpere.

If you buy a proper remediation, then you are indeed carbon neutral.

Think I even heard him advocate a revenue neutral CO2 tax offset by a reduction in the income tax. Some way to unburden lower incomes who are just trying to get to work.

Not that depressing, kinda sounds refreshing.

Also said whoever gets the Presidency (in 2009) 10 minuets after they're in the GW policy will change.

In addition to the Cheney/peak oil stuff pretty revealing conversation.

I'm pretty amazed that an ex-Vice President and Presidential candidate systematically connected the dots between peak oil, war on terror (Iraq), and the federal trade deficit.

This relationship has been written about by many in significant detail, including Michael Ruppert of the website From The Wilderness.  Many of these theories have been dismissed as "conspiracy theories", but hearing a confirmation from Gore helps cement the basic theory in my mind.

My god! Has Al Gore been reading "Crossing the Rubicon" or something? What's next, a call for relocalization?

In any case, this is far and away the best Al Gore interview I've seen since he started this movie promotion junket. Charlie Rich asks decent questions, but mostly just lets Gore say his piece, with more detail that the soundbyty stuff he's been putting out there up to now.

What progressive politicians need to do is take Gore's points and merge that into a larger narrative that makes sense to voters. Democrats need offer policies that all touch upon an overarching theme in a way that Gore talked about.

During the final moments of the Vietnam debacle Conservative politicians were able to weave together growing disenchantment with cultural modernity, the welfare state, and over regulation of the economy into a single phrase made famous by Reagan: 'I'm from the government and I'm here to help.'

Globalization, Peak Oil, Climate Change -- these issues are connected. The party that can successfully talk about these  issues in a way that makes sense to voters will dominate US politics for the next 30-40 years. Gore has begun to learn how to do that. Unfortunately no one else in the Democratic party seems capable of it.  

The dems clearly remember how much good it did gore. and, they remember their reward for raising taxes and turning the earlier gop deficit into a surplus. Politicians with short memories turn to other occupations.  Only unemployed politiicians not expecting to return to work advocate policies that make sense because the public is not interested in any idea that reduces their standard of living now, regardless of their (or their children's) future. Politicians cannot look further into the future than the voters, so we must wait for the hidden foot to kick us into doing the right things with (much) higher prices.

Many here advocate a gas tax. Any politician that advocates this will lose in a landslide. So, just wait - prices will be higher by and by, just as we want.

Gore is an "intellectual".

The sheeple do not tune in on intellectual noises.

They like feeling noises.

It's who we are. We are emotional creatures.
Stay the course. Raise the flag. Don't cut and run from the the herd!

Being right does not equate to being heard.

Gore is finally scoring some points by including his family life, his childhood rememberances in his movie, Inc. Truth.

If you've seen the movie, what do you remember most?
What made the biggest impact?
Was it scientific fact slide number 132?
Or the pictures of young Gore with his Ma and Pa on the Black Angus ranch next to the clean river?

Bet you it was the movie producer's idea to include those emotional snapshots in the movie, not Gore's idea. He still doesn't understand media anywhere near as good as Slick Willy does.

It was the graphs...they scared the shit outta me. I'll never forget them, ever.
Actually the graph with the disease-filled mosquitos climbing higher up towards Nairobi was pretty scary.

My significant other was fast asleep in the adjoining theater seat. Oh well.

Hidden foot is good. I'll remember that one.
Have we posted this already?

Russia to Increase Number of Strategic Deposits from 6 to 70 -- Resources Minister


A new Russian law could classify 70 oil, gas and minerals deposits as "strategic", putting them out of reach of foreign ownership, the country's Natural Resources Minister Yuri Trutnev said on Monday, June 19. Under a much-delayed law on subsoil use, Russia plans to make it illegal for enterprises that are not majority Russian controlled to take ownership of large fields.

Originally the law was expected to name six vast assets, including world-class gold and copper deposits as well as huge oil and gas fields.

But Russia has moved to strengthen state control over its energy sector and President Vladimir Putin has said he wanted the law to be beefed up, with more fields deemed "strategic".

World Oil demand will never get above world oil supply.
I cant see how people are predictiing Oil shortage without defining what a "shortage" means. If you were to define a shortage then it would mean we are already in a time of shortage.

Supply will always match demand. If demand is higher than supply the price will increase until demand matches supply.

So with Oil at $70 a barrel means there are people that can't afford some oil products, you can consider that a shortage.
If the price increases to $200 a barrel then more people won't be able to afford oil products.

Excellent comment, IceAge.  ExxonMobil stated last Autumn that at $60 contract oil, they presently see a $20 fear premium component in the Price.  This is pure profit and explained the obscene quarterlies we saw disclosed recently.  It was not just fortunate that speculators were in the marketplace taking up demand destruction ... they were driving the pricing by their presence.

We now know that there were 2.5-mbd supply surpluses in that episode 2005Q2.  But they have for the most part covered their positions and we still have high prices and very little surplus capacity (0.9-mbd).  The fear component is still there due fear of an Iran air raid, but someone is still buying the oil albeit at contract prices ... not at spot prices.

It is clear that demand destruction is at play in 2006.  There is a queue of buyer s that are ready when others back off.  One of the largest buyers in the price and demand back offs will of course be China as they fill their SPR.

The global supply system needs surplus capacity of 2.5-mbd.  Pricing will be the determinant that gets us there 'cuz demand is growing at the same rate of extraction.  And as we are returning to long term real price norms, recessionary fears are unwarranted at this juncture.    

An oil shortage is when I have trouble getting my usual oil-based products....
And if you where the richest man in the world, there would never be any shortages.

Already a large percentage of the world population is having difficulties getting the oil based products they need. So shortages are already here (and they have always been).

  If this were simply an exercise in economic jargon, I might be willing to agree with you.

  As preventable and pathetic as it all might seem to be (given a few decades of proper preparation), the 'shortage' is that we have come to require a certain amount of energy to supply our basic needs, and it seems that those lines on the graph (needs and energy) are crossing.

  Beyond the energy required just to eat, shower and get to work, is the energy required to restructure this party so we can do it from other sources, or eliminate many of the wastes we now see as normal.

Supply will always match demand. If demand is higher than supply the price will increase until demand matches supply.

Your second sentence is in direct conflict with the first one.  Read that again.  You said S&D are always equal.  You're talking a little too much theory, and not enough reality.  S&D are not always equal.  Equilibrum is a theory used to talk about what happens when not in equilbirum.  The most advanced economic studies being researched are non equilibrium conditions.  Any econ member of academia will admit that equilbrium MAY happen for a BRIEF period of time, but variables are always changing and so S&D move around a bit and are not always the same.

S&D do not always match demand.  There is demand at 60 there is more demand at 50 and there is even more at 40.  So when supply is priced at $60 a barrel you're telling me that there is no more demand?  To say that supply always equals demand discounts that there is extra demand at lower prices.  Demand isn't EQUAL to supply.  The quantity demanded at $60 oil EQUALS XXX barrels of oil and at $70 there will be XXX barrels of oil available.

It there is 5M barrels available thats what the demand will be. The price will make sure that demand is 5M barrels because its an open market. If Bill Gates needs a barrel of Oil and there is only 1 barrel left you can be sure he wont see a shortage.
He (Bill Gates) will see a marked shortage of toadies and lackeys. He will even see a shortage of supply-demand monomania, He will not be able to continue his existence in a fashion even remotewly comparable to what he now enjoys.
If there is 5M barrels of oil available then the supply is 5M barrels. Demand is seperate from supply, but I guess you missed that somewhere. There is increasing marginal demand at a lower price and a decreasing marginal demand as the price increases.  Demand is greater than supply thus we are stuck with $70 barrels of oil.  If demand and supply were completely equal then producers would break even, not enjoy the retarded profits they are enjoying.
"If demand and supply were completely equal then producers would break even, not enjoy the retarded profits they are enjoying."

Based on that demand will always be higher than supply. If the price falls due to increased supply some suppliers will reduce output, reducing supply. So its not a matter of demand being higher that supply its a matter of how much people are willing to pay.
At some point people (countries like Iran and venezuela) will realize that the total amount of Oil they can produce is fixed and already determined. They will also realize that they can pump it out now for $70 a barrel or next year at $80 a barrel, or 5 years from now at $300 a barrel. As the price increases they need to produce less and less to maintain their revenue stream, and as that happens the price increases. Until someone gets bombed.

"World oil demand should soar from this year's almost 86 million barrels per day to 118 million bpd by 2030, even though higher fuel prices will cut back some petroleum usage, the U.S. government's top energy forecasting agency predicted Tuesday."

What kind of Crack-Cocaine have these people been smoking?  Oil production has hit an 84-85 million BPD plateau for about two years now.  I expect it will hit peak at around 87-88 million BPD; I will be astounded if it ever hits 90.  As for 118 million BPD?  Sheer, unadulterated lunacy.

Antoinetta III

I think they are all crystal meth addicts.  This is the typical "don't worry, be happy" line we are fed by the media on a daily basis.  They actually expect OPEC to crank up production by around 50%.  The only way this could happen is if a few new Ghawar like fields were discovered.  No way this is going to happen and small fields here and there can't fill in the gap.  The vaunted tar sands are going to be slightly delaying global production decline and not providing substantial new oil supply to contribute to meeting this 50% demand increase.

But who's interests this sugar coating of reality serves is not quite clear to me.   Waiting another ten years to do something isn't going to help.

IMO, the thinking is that an understanding of oil depletion and related challenges by the general public would lead to a major drop in consumer confidence, spending and investor confidence. Under the current system, the important people are making money (global millionaires now number 8.7 million, up 6.5% YOY)-TPTB see no reason to alarm the sheeple.  
I like that
And interesting commentary about public reaction to Public Health efforts.

One day before going behind paywall.


Energy Department Report: Oil's role in world energy supply to fall

In 2003, oil accounted for 38 percent of total world energy consumption, but by 2030 that figure will drop to 33 percent, Caruso said.
The oil supply coming from countries outside of the Organization of Petroleum Exporting Countries is expected to rise by almost 24 million barrels per day by 2030. That is 62 percent more growth than is anticipated from OPEC.

A dry spring helped start up residential construction early, so May was first month-to-month increase in 4 months.  Note that most of the growth was in multi-family housing and in the West.  And builders are NOT optimistic.
... For May, construction of new single-family homes was up 2.1 percent to an annual rate of 1.586 million units while construction of multifamily units was up an even stronger 19.7 percent to an annual rate of 371,000 units.

The strength in May was led by a 15.8 percent jump in construction activity in the West. Construction rose by 8.5 percent in the South and was up by 1.7 percent in the Northeast. However, construction fell by 15.8 percent in the Midwest.

The National Association of Home Builders reported Monday that its builder confidence index fell in June to a reading of 42, the lowest point in 11 years....

Just to add...50 is considered the midpoint for optimism, so 42 is pretty low.
Anyone with knowledge please help me understand this....

Using this map, we have 5 geographic regions for oil allocation set up in WWII.  Based on the next table...

Ok I read this as follows: The gulf states produce the most, but they don't keep ANY?  Based on this it appear they ship ALL of their oil to the midwest and the east coast with some trickling to the west coast.  Then they import oil from the rockies and midwest.  The midwest gets additional oil from the east coast which again, keeps nothing!  I dont know if this includes imports or if this is PURE domestic, but the graph is titled movements of petroleum products US regions.  So it may be TOTAL, and in that case I guess it all gets sent to the Gulf states for refining and then distributed to the country?  Just curious if anyone can help.

Is this making sense to anyone?  Granted this is 2004, but I'm sure not much has changed in this giant network.  Can anyone confirm or better explain this?

I got it from the EIA site.  Does anyone know WHERE to get S&D graphs for crude oil or at least be able to point me in the right direction.  Google has little to help so far.

This is reporting just oil movements not oil consumption . PADD3 produces most of what it consumes.
No. What this says is that the Gulf Coast is self-sufficient in refining capacity. They refine what they need, and have plenty left for export. That makes sense if you have ever seen a map of U.S. refineries: The Gulf Coast is covered with them. The East Coast and Midwest don't have enough refineries to cover demand, so they import finished products from the Gulf Coast.

The imports into the Gulf are typically around the edges of the market. For instance, it may make more sense to put some product into the Texas panhandle from a Colorado refinery, instead of transporting it from Houston. That would be an import from PADD 4 into PADD 3, even though PADD 3 technically has enough product that they don't require importants.


Please note that the total is far less than 20+ million b/day.

As stated this is PRODUCT (not Crude) movements BETWEEN PADDs (imports not counted unless transshipped through another PADD).

So shipments of gasoline to New Mexico from Colorado refineries would be counted as movements to PADD 3 only.  Nothing noted about just which PADD they came from.

Big story from above is that the East Coast and MidWest are HEAVILY dependent upon the Gulf Coast for refined products.  The Rockies & West Coast are not (new gasoline pipeline to Tuscon & Phoenix from Texas since 2004 will change that though).

Big story from above is that the East Coast and MidWest are HEAVILY dependent upon the Gulf Coast for refined products.  The Rockies & West Coast are not (new gasoline pipeline to Tuscon & Phoenix from Texas since 2004 will change that though).

This would make sense since I'm in STL and I can literally see refiners across the river in Illinois (east St Louis...internationally known).  However we do not get our gas from them it comes from Texas.  I've always wondered about this.

Earth to EIA - Come in EIA

Interesting quote from the EIA IEO2006 report just released:

"In the IEO2006 reference case, the decline in North Sea production is slowed slightly relative to past outlooks, based on the implemetation strategies for redeveloping mature fields.  Production from Norway is expected to peak at about 3.6 million barrels per day in 2006 and then decline gradually to 2.3 million barrels per day in 2030 with the maturing of some of its larger and older fields.  The United Kingdom sector is expected to produce about 2.2 million barrels per day in 2010, followed by a decline to 1.4 million barrels per day in 2030."

Note:  Norway has produced 2.87 million barrels per day to date in 2006 and the UK produced 1.8 million barrels/day in 2005.  Evidently the editing aspect of the IEO2006 was not highly emphasized...

From last November, via Energy Bulletin:

EIA /IEA / Eee Aye Addyo (its all the same...)

''When Parliaments decide on energy policy, they normally start with proposals from the government. Governments like to swim in the mainstream - and they get information and advice from so called experts of organizations such as the International Energy Agency (IEA) or the International Atomic Energy Agency (IAEA).

But up to now you barely find an international body who is in favour of renewables. Why is this so?

The International Energy Agency IEA is a world champion in wrong predictions, and their scenarios do not fit reality. Let's take a closer look at the World Energy Outlook (WEO), a bi-annual publication of IEA...''

Full story here:


Here and here are a couple of pages of photos taken recently in North Korea.  After looking at them for a while and getting more and more uncomfortable, I realized why.

They make me think of North America 25 years after Peak Oil.  Human power everywhere, streets but no cars, money and energy only for those at the top of the heap. If you want to see what a post-Peak Oil world looks like in the mind of a doomer like me, this is pretty much it.  Right down to the political structure.  Christ I hope I'm wrong.


This website gives you the night time view from space.  Look at all the pretty lights....that dark spot above S. Korea is ALL of N. Korea.  THAT is what things could look like more and more around the world.

GliderGuider -

Sadly, I'm afraid that I have to agree with you. North Korea circa 2006 is probably a fairly realistic model of what US circa 2050 might look like if we fail to get a grip on the energy problem.

As far as 'doomer' scenarios go, I think a lot of people secretly get some excitement out of fantasizing about a Mad Max world of total anarchy and social breakdown. The danger, freedom, and lawlessness does have a certain perverse excitement to it.

Unfortunately, I think a far more realistic scenario is one of a drab brutally repressive police state in which there are apparatchiks and oligarchs who live fairly well, an impoverished downtrodden proletariat, and practically nobody in between. While North Korea might be at the far end of the scale, I have no trouble picturing the US circa 2050 as looking a lot like the Soviet Union during the worst of the Brezhnev years. If it does come to pass, it probably won't happen catastrophically, but rather as a gradual but relentless downward spiral.

Fifty years post peak, and at least fifty years from now, is far enough away that we are writing fiction.

That's not a bad thing.  Fiction has served a great purpose in allowing societies to "try on" futures and see how they like them.  1984 was not like 1984, etc.

I'm a bit more of an optimist, that there are a lot of lazy good people out there, just focusing on other short-term issuse right now.

But go ahead, write some dark futures and publish them widely.  They might be why 2056 is not like 2056.

My bet for 2056 USA would be 33% New Delhi, 33% Bejing, 33% Mexico City. Approx 5% of the population will be extremely wealthy. Privatization of police and military will have advanced so that these openly function as security guards for the wealthy elite. Maybe 20% of the population voting. Widespread cynicism and discussion of revolt, along with increased fear of authority.
Except for the widespread discussion of revolt part you are talking about America circa 2006. Which is of course your point of reference.
Expect TPTB to continue working as hard or harder on thought control as on physically coercive control.
I wonder if the US government's tacit approval of widespread anti-depressant usage is possibly linked to suppression of citizen unrest.
Hmm, two recent posts don't match.  You posted this:

They make me think of North America 25 years after Peak Oil.  Human power everywhere, streets but no cars, money and energy only for those at the top of the heap [...]

shortly after someone else posted this:

Production from Norway is expected to peak at about 3.6 million barrels per day in 2006 and then decline gradually to 2.3 million barrels per day in 2030 with the maturing of some of its larger and older fields.  The United Kingdom sector is expected to produce about 2.2 million barrels per day in 2010, followed by a decline to 1.4 million barrels per day in 2030."

You know, if declines are that shallow it still will be "peak oil" while it won't be "human power everywhere."

If you had looked closer, you might have realized that this post showed the EIA projection was already enormously wrong.
I think I'm interested in the huge gulf between those numbers (however many million barrels per day) and the classic doomer stance, that we'll be down to essentially zero barrels per day within our livetimes.

Does ANY reputable prediction put us at zero in 2030?

I have never seen a "doomer" here say we will ever be at zero. I think you are setting up a straw man.
They make me think of North America 25 years after Peak Oil.  Human power everywhere, streets but no cars, money and energy only for those at the top of the heap [...]

How does "human power everywere" and "energy only for those at the top" mean anything else?

I would recommend a movie called "Since Ottar left."  It's a movie based on the post collapse of Russia.  Pay attention to health care and the local market.  I believe this to be an accurate depiction of the future of North Americans.
I believe that anyone who says a decades hence prediction is "accurate" is either using some literary flourish, or just kidding themselves.

We can all see wide range of possible futures from this point forward.  I hope we'll have the sense not to bind ourselves any one of them.  It's much more reasonable to catalog them, inspect them, match them to current events ... and maybe dust off an old one when conditions change.  We might have our current favorite scenario.  That's reasonable, if we don't hold on too tight.

Certainly we won't know which random prediction is "accurate" until we get there.

Sorry for the flourish.  It might end up to be a depiction of a best case scenerio.
From reports, North Korea has been able to keep their hydroelectric plants going and that is the major source of electricity.

I noted that the subway (world's deepest with arches in the station to survive a nuclear attack) and electric trolley buses were still working.

The have three surface tram lines as well (from memory).  One is meter gauge where they made an offer to a Swiss city for their old trams as they were getting ready to change out for new ones.

One lesson to learn (among many) is that hydroelectric power plants and Urban rail & electric trolley buses are very robust.  We may wish we had more when TSHTF.

Hi All, with some trepidation I am venturing to post a comment.

While there is plenty of bad news, there will be some good out of all this as well. This is all about transition both economic and cultural. The good that I see is that during and especially after the transition we will hopefully have replaced the current culture of me me, with one that is more about communities and small towns and people depending on and helping each other.

This weekend I took my first train ride from Portland to Seattle and it was an eye opener. Because of recently doing a lot of reading about PO, the first thing I noticed was how many small towns were along the railroad tracks and the many businesses, loading docks and houses facing the railroad that were unused or boarded up. Just this one train ride told quite a story about how we used to live and how we might live again. The second thing I noticed was how pleasant it was, to ride along and visit with the other passengers and not be hunched over the wheel trying to push the guy along in front of me. I am now a fan of railroads.

Those little communities might thrive again when we utilize the rails for more freight and especially for more human transport. Agriculture for fruits and vegetables can and should thrive again and maybe the lost generation will have to put down their video games and pick berries or work in some local industry?

People will probably work closer to home and cities will become denser with less suburban sprawl.

A lot of changes will occur good and bad and yes it will be painful at times. We often talk about "the good old days" and it looks like they are just around the corner.

Anyway those are just some observations, I am leaving the technical talk to those more qualified. Who knew that I'd be wishing I'd voted for Al Gore! sheesh!

Peakearl has commented yesterday that Saudi oil production for May averaged only 9.1 Mbpd. The OPEC June 2006 MOMR has Saudi oil production at 9.16 Mbpd. This is a fair drop on April's figures and the lowest since January 2005. Anyone have any ideas about why the big drop? Cutting back on production or suffering a drop in production at Ghawar?

By the way, Mexico's oil production fell slightly in May to 3,770 Mbpd. Could this be the start of Canterell's long predicted decline as May's figures tend to increase?

The Saudis state the reduction is due to drop in demand. This makes sense, in light of the world stocks being so high. There are some things that don't make sense about this, however:

  1. Sustained high oil prices suggesting demand remains high

  2. Why isn't anyone else taking the hit on production and sales? a drop of 400,000 is a lot for one country, even SA. Why aren't other nations in and out of OPEC showing a drop?

  3. Based upon past behavior, NO country in or out of OPEC has been willing to substantially drop their production unilaterally to support world prices for other producers. In this situation, the Saudis, who are the most powerful OPEC member, would absolutely insist on the burden of cutbacks being shared. This reduction amounts to hundreds of millions of dollars per month lost revenue, right when they need the money not only for internal economics, but for the incredibly massive program they have going to expand drilling. I have heard nothing about Saudi Arabia asking other nations to change or adhere to quotas - very fishy.

  4. Westexas has discussed his analysis relentlessly, and it does fit with recent production trends and Simmons' analysis.

  5. OPECs most recent analysis claims over a million bpd more demand this year over last, when April 2006 production came in below April 2005. How does that fit with not selling oil?

Based on this, I am inclined to believe that at least a significant portion of the reduction is not voluntarily. Time will tell.

I have watched Mexican numbers for a long time and they keep surprising me with their production recoveries after low months. I'll want to see at least a 5-6 mo pattern before I'm ready to say we're seeing the start of the serious decline (the slide in output began mid 2003 but has been very gradual).

I understand that if you pump oil out of a field too aggressively for too long, you can seriously damage it, and ultimately, your field will yield considerably less oil.  The fields need to be rested occasionally, and this could be what is going on with Saudi production.  I don't insist that this is true, but it seems likely; the other alternatives are that they realize that the oil will always be worth more later and it is advisable to leave as much in the ground for as long as possible, or, that they have already peaked and are pumping flat out, and not yet 'fessing up that they have indeed peaked.

Antoinetta III

Simmons defines the peak as the maximum that can be sustainably produced without damaging the fields. If they have reduced production from the current maximium possible in order to get to this rate, good for them.
Having read "Twilight in the Desert," by Matthew Simmons, it seemed just a matter of time before Saudi Arabian production started to decline.

SA has a history of overpumping to discipline other producers, but this seems different; as was said above, there seems no effort to "jawbone" other producers into cutting production, and little compulsion for ANYone to do so.

Got this a couple of days ago from ASPO. Anyone signing up? Costs 50 Euros. This is an update of Zagar's presentation in Lisbon last year. (Zagar is Dr Campbell's son-in-law.)

ASPO Ireland would like to invite you to attend an Audio Conference Chaired by Dr Colin Campbell

Presenting Jack Zagar, Consulting Petroleum Engineer
Saudi Arabia --- Can It Deliver?
Thursday June 29th 2006 17.00 GMT *Duration 1 hour inclusive of Q&A

Jack Zagar, co-Director of ASPO Ireland and a consulting petroleum engineer who worked in the Kingdom managing some of the super giant oil fields, will provide a perspective that throws into question Saudi Arabia's long term ability to sustain or increase their current oil production capacity of 10 million barrels per day.
Increasingly, the world is looking to OPEC and specifically to Saudi Arabia to increase oil exports to cool soaring oil prices and to foster continued growth in global economies.
With perhaps as much as a quarter of the World's remaining conventional oil reserves, will or can Saudi Arabia provide the additional oil production?

Please book your place now on our secure site

Did everyone see this:


Land of really, really cheap gas
Venezuelans pay 12 cents a gallon -- and not a penny more

Venezuala actually IMPORTS oil to cover contracts.  You know this 12 cents is HEAVILY subsidized.