DrumBeat: June 6, 2006

Now for some wise words from the readers of The Oil Drum...
From Christian Science Monitor:

Can oil companies handle more storms?

HOUSTON - While the US Army Corps of Engineers scrambles to defend the Gulf Coast against hurricanes on land, oil companies are preparing to avoid the havoc that last year's big storms wreaked offshore.

They are fortifying mobile platforms and drilling rigs, putting backup communications systems in place, and working out advance contracts with tug and helicopter services.

But a manpower shortage is hampering these efforts. The shortage is so acute that many companies are still working on last year's equipment failures. Nine months after hurricanes Katrina and Rita moved through, 21 percent of the Gulf's oil production and 13 percent of its natural-gas production remain offline.

Even more disconcerting to consumers is that oil and natural gas prices could rise even higher if another strong storm hits the Gulf.

Another form reply from another Senator:

 Thank you . . .

. . . for contacting me about the high price of gasoline and diesel fuel. I share your concerns and I am fighting in the Senate to give immediate relief to Michigan families, and to find long-term solutions to our energy problems.

In Michigan, the average family will end up paying $500 more this year for gas than they did in 2005. That's a house payment, a car payment, or a month of groceries. And while Michigan families are struggling to make ends meet, the oil companies are making record profits, and giving their CEOs outrageous salaries and lush retirement packages. The CEO of ExxonMobil (which reported profits of $36 billion last year) is bringing home $70 million - $110,000 every day of the week, including weekends. That's more money than the average Michigan family makes in a whole year. That's what is so insulting about these soaring prices.

Currently, we're giving these oil companies about $5 billion a year in special tax breaks. This is money coming out of our pockets, and what have we gotten in return? In the Senate, I've proposed the Oil Company Accountability Act, which would repeal these special tax breaks and return it to Michigan taxpayers with a $500 rebate check to individuals and families earning up to $119,950 per year. Qualifying taxpayers could get this rebate in less than 30 days so they can afford to fill up the tank to go to work, or to school, or so they can get work done on their farm or small business.

In the long term, we need to find ways to reduce our dependence on foreign oil.  As a member of the Agriculture Committee, I am excited about some new technologies that can help do exactly that. Michigan farmers can supply us with soybeans and corn that can be converted into biodiesel and ethanol. In fact, by the end of this year, we'll have five ethanol plants up and running in Michigan. These alternative fuels will introduce some much-needed competition to the oil industry, while helping Michigan farmers and creating much-needed jobs in our state. We can no longer tolerate bad corporate behavior that sacrifices the livelihoods of working families for outrageous profits. Please know that I will keep fighting to bring energy prices down for Michigan businesses and families.

Again, thank you for contacting me. Please do not hesitate to do so again if I can be of assistance to you or your family.


Debbie Stabenow

United States Senator

I have over the past couple of day begun to feel a deep despair about our response to PO.  I'm beginning to move from mild doom / technofreak to off-the-cliff-doomer.  :-(

Nothing like a living in a disaster zone to get your mood up !

Once the worst happens and you and your neighbors rise to the occasion and commit to jointly solving the problems; "the other side" is not so bleak.

I do wonder if much of suburbia will band togetehr though.  Time will tell.

A new statistic in this mornings news.  53% of the people in the Metro New Orleans area are living in "temporary housing".  And that does not count the 200,000 living elsewhere.

Temporary as in a tent inside your gutted home, FEMA trailer, on the floor of a friend's home, renting an apartment with others, living in an RV (4 close to me) etc,

Once the worst happens and you and your neighbors rise to the occasion and commit to jointly solving the problems; "the other side" is not so bleak.

This is the KEY to surviving any disaster and will most assuredly be true if we are indeed close to PO.

There is nothing more important, IMO, than cultivating the future plans for your local situation.  Start small...get to know your neighbors before a dilemma requires it.  If you find some friendly neighbors, so if you can start doing some things jointly in your neighborhood.  

I do wonder if much of suburbia will band togetehr though.  Time will tell.

I'm not sure of ALL of suburbia will band together, but I know that in my area, there has been much more outreach going on with neighbors to other neighbors.  I have hope in my neighborhood that we can work together on surviving intact rather than tearing each other apart for the last twinkie on our cupboards.

p.s. If you find yourself surrounded by UNfriendly neighbors, move soon.

(social capital more important than built or financial capital)

That's an interesting point.  Not to dip too much into the doomer scenario here, but your comment encouraged me to think about each of our neighbours.

1 is a rental household, 3 adult males, all work for some haulage co.  (but all drive their huge pickups to work separately).  Aggressive and selfish.  Definitely a worry.

Next door is a middle aged hippie couple, friendly and definitely a good ally.

The rest are all couples + 2 or 3 kids age 11 or less.  All minivans and SUVs, no vegetables growing in their gardens, lots of water usage etc etc.  All of them bar one have hired gardeners to landscape their front yards, so very little in the way of nature-savvy.

The two houses to our left are empty...

Typical suburbia, in other words.

My wife and I?  lazy liberal slackers, 4 cats, 4 ferrets - soon to be 3 :-(.  No veggies yet, but we bought the seeds!  Our excuse is that we can't afford the drip watering system, and that we haven't yet gotten off our lazy asses to submit our plans to the Almighty Association.

ah let's face it, we're screwed ;-)

Don't dismiss people based on first impressions or stereotypes, i.e. the aggressive males in the rental and the couple with SUV and kids.

People have the ability to change and change quickly when necessary.  Think about what they may have to offer in a crisis.  

SUV - might be handy for making once a month shopping trip for the group many miles away when food supplies grow thin close by (don't drive frequently, but when needed useful).

Strong dudes - Assist in building new structures in your group or tilling soil in "community" garden.

Just like in the John Carpenter's movie Assault on Precinct 13, where cops and criminals band together to fight off gruesome gang members?


I believe love even resulted...

also consider eventually replacing ferrets with guinea fowl.
higher PROI (protein return on investment), more daily dopamine from watching them do funny crap with neighbors shiny SUV tires, eat ticks, lay lots of eggs, etc.

sorry about your ailing ferret though..;(

Guinea fowl are also one of the best alarm systems you could ever have. They will raise a ruckus at anything, a stranger, a snake, deer, almost anything. Of course, they will also sometimes be startled by the occaissional blowing leaf. . .
After a while you learn to interpret their "language" and to know when 'backle backle backle' means "OMFG a rain drop hit my bump!" or "OMFG something's swooping down to eat me!"  However, they make noise all-of-the-time and it's really annoying.  Sometimes so much so that you might be driven to the insanity of chasing them and throwing stuff to get them to stop.  Anyone who hasn't experienced them just doesn't have a clue.  It's also very difficult to find their nests, you generally have to keep an eye on them and know when they're being suspicious, then search the area.  If you go over to the nest while the hen is on it the males will try to lure you away.  The eggs are also really small.  You need about 50 of them to make a decent meal.  They also tend to give up hatching when their nest is disturbed.  Unlike a chicken which you can generally "transplant" to a safer location.  Their males do fight, but it's more of a running around chasing each other thing than a bloody killing thing like chickens do...perhaps the only silver lining.  Despite what anyone might tell you, they too are hell on a garden.

For a new fowl owner I recommend Barred Rock chickens.  Good egg layers and generally a good personality.  Steer WELL CLEAR of rhode island reds and leghorns - they're evil.

Beware of foul fowl! (had to, sorry!)

>No veggies yet, but we bought the seeds!

Organic gardening is not as easy as you would expect, the bugs... and I just had a large number of rows of Blue Lake Bush Beans wiped out by deer.  The only thing I seem to be able to grow huge quantities of year after year is potatoes, I need to find a Russian recipe to turn those tubers into vodka.  You never know when an Oil CEO is going to turn up for dinner post crash.

I'm not sure the kind of territory you're trying to protect, but I saw the funniest thing that might help.  They're motion sensor sprinklers.  Something moves around them, they come on and start hissing and shooting water.  If anything is a good use of water and electricity I'd say that is.
Corresponding with politicians will do that to you.
We can no longer tolerate bad corporate behavior that sacrifices the livelihoods of working families for outrageous profits. Please know that I will keep fighting to bring energy prices down for Michigan businesses and families.

--Debbie Stabenow
  United States Senator

You mean we have been tolerting it all this time?

Being that today is 6/6/06, I propose that the US Senate adopt a new Constitutional amendment regarding the signature with the beast:

Defining "crude" as the marriage between a dinosaur and an oil company.

We need to stop activist bloggers from trying to corrupt our long standing belief in the fundamental right of all Americans to trade freely with any oil company that has married itself to the dinosaur. Let freedom ring.

Outstanding logo. Could you incorporate the Stars and Stripes into it somehow?
That's Sinclair's actual logo.  

There's a reason people think oil is made out of dead dinos.  The oil companies have promoted the idea in their advertising, etc.

You must be young.
There actually was a Sinclair Oil company.
And bronto actually was their signature beast. The photo is a memorobilia from some site I found using Google image search.
There still is a Sinclair Oil company.  Go out west, and you'll still see stations with the dino logo.

We need to work on cloning dinosuars so we can turn them into more oil!
We still have a Sinclair station like this in Lee's Summit, MO as well.  

Always thought it was neat when I was a kid, but now it makes me a bit sick...kinda like Charlie Tuna selling canned tuna.  

You think he really wanted to get eaten?

If only those dinosaurs had stuck around and shat in the weeds a bit longer....
Wow. Sorry guys. I thought you just whipped up a creative logo.
My senior class in high school put one of the dino's on top of the roof as a senior prank.
I used to wear a hardhat with a dino on it as part of TVA's Fossil and Hydro Power.....
Amazing that households with 5 times my monthly income need financial help.
i have friends (who are stockbrokers) who make 500-600k a year and are in the red - their monthly nuts are higher than that - 8000 sf lake houses, private schools, time shares, 3 cars, golf club memeberships, private rooms for eating sushi off of naked women with clients, heli-skiing.

Its insane. But all about keeping up with the joneses. If society told these same friends that they would be cool and have people in awe of them if they grew high EROI root vegetables and they saw examples of men doing this getting political office, womens attention and social status, theyd give up the other path in about 3 months.

*Note. I did not realize this was insane until a) I left this track and b) read books like Overshoot by William Catton, Ishmael by Daniel Quinn, The Moral Animal, by Robert Wright, etc. My friends wouldnt have time to read those books. I guess I was always more motivated by learning than by money. Perhaps my genes will die out....(but not my ideas!!)

If I had such an income I would use some for travel etc and a lot for buing or building nice capital assets such as small hydro powerplants, running them seems to be an exellent hobby combined with a good investment. But I realy do not like having a personal economy that goes backwards, managing that with a large personal money flow would feel devastating. Not as getting food stains on your tie but as dipping it in the soup and realy demonstrate that I am a failed person.
well, I assure you, each time I bring up Peak Oil to these particular friends (who have huge hearts and are great people in general) they laugh in my face and change subjects. They really dont even want to learn about it.
Peak Oil is not important. What is important is why they do not accumulate any wealth or usefull assets and instead pretend to own things that their bank owns. Peak Oil is only one of of manny things that could break down such an existance and leave them with nothing when they could have had a lot for the rest of their lives.
i'll tell them 'god dag' for you Magnus...;)
This kind of grandiose behaviour sounds like my own when I was about 28, rich, and confused good luck with my being intelligent. Three divorces later I found myself broke, praying"God, if you will just give me another oil boom I promise I won't piss it off this time. " After 20 years the Lord came through, there's another oil boom! Just thought I'd witness for you all if you haven't been saved.
Sounds like youve already been through "Peak Wife" and a nasty decline rate.....
"In the long term".  LOL  "In the long term, we're all dead" John Maynard Keynes

Yeh, if we could just get those oil companies, all would be solved.   And as soon as we have converted our entire corn supply to ethanol, then what?  

Being that she is from Michigan, I didn't hear much about driving more efficient vehicles or not driving at all.

I guess I need to move to Michigan if $500 is a house payment.

How about a poll?

How many people think that the approximately 1% decline in total world liquids production since December and the approximately 5% decline in Saudi oil production year over year means that we are past the peak of world oil production?

Call me Hamlet, and put me down for "maybe."  :)
Call me Matt Simmons and put me down for, "I'll let you know in a few years, when I can see today in my rear-view mirror."
Probably about 90% of the crowd who reads this site, I would imagine.

Waaay too early to tell IMHO- it would take 5-10 years of decline to convince me, given that the main reason for the plateauing of recent years has been entirely geopolitical rather than geological.

If Nigeria and Iraq became stable, and the US and Iran / Venezuala / Russia made up, then oil production would be 1.5 mbd higher, and the price would probably be in the $50 range, IMHO.

It remains to be seen whether reserves in the ground translates into production in the long run, of course.

Well. yes, it's geopolitical. And yes, more data points are necessary to know, rather than have a hunch.
But remember that as supplies get tight geopolitical tension increases. If we were philosopher kings we would still be looking at an increase in reasons to squabble.
None of the geopolitical events you mention as possibly increasing supplies seem at all likely.
Exactly, geopolitical problems are going to get worse, not improve!  These "what if" scenarios are ridiculous imo.  What if Iraq hadn't been invaded, what if Aliens descended from the heavens and kindly refilled all our peaked oil fields and aquifiers!  Then peak would be real far away huh?  
Hate to beat a dying horse, but the 'numbers' that we are comparing are gross, not net. I think we are past light sweet peak, past net liquids peak, but well before gross liquids peak.

Gross liquids peak (including ethanol, CTL, etc) only matters for marketing and cornucopian purposes.

One of the most frustrating things about following the PO story is the lack of information on different grades of oil.  I'd love to be able to know for sure if we're past peak on light sweet crude--the PO websites generally assume that we are--but as far as I can tell there are no good sources of information to confirm this.
The lastsasquach is correct, the numbers are hard to figure because of the old apples/oranges problem, plus the average newspaper reporter is young and unable to discern B.S.
  The peak does seem to have occured in light, sweet crude, but I believe it will take a couple of years of data to discern truth from wishful thinking and outright smoke
   We are all paying a huge premium for oil having become a speculation commodity under Ronald Reagun under the guise of decontrol, although it is debatable what the majors in collusion with OPEC would be charging. The traditional measure of oil being 6 times the price of Natural Gas would make the price about $40.00 a barrel currently, but gas prices are in the hands of the same speculators. Trying to make money on futures is like guessing the location of the pea in a Monte game. If you think the game is straight and superior skills win you are delusional, and the same is true for any other comodity. You can pay your money and take your chances, but the house will always win.
Your analogy with commodities trading is not accurate.

For every commodity trade there is a counter party taking the opposite position.  Buy a commodities contract on crude for $75 barrel, expiring Dec 2006, and you are hoping that the price of oil will be greater than $75 barrel on Dec 2006.  You have gone "long" on the crude market.  However, someone has to take the opposite position and hope that oil will be lower than $75 barrel on Dec 2006.  The counter party is "short" the crude market.  The house doesn't always win, the counter party wins if the market goes against the position you have taken.

That is the one thing that the MSM does not point out when they discuss the "premium" in the market for all these commodity traders.  For every trading going long on the market hoping that oil goes up in price, there are just as many traders shorting the market, hoping that oil drops in price.

Yep. It doesn't fit the story they are selling. Somehow commodity speculation didn't exist in 1998 when oil was $10. It just materialized yesterday.
The house will always win.

In one sense, you are correct. Playing the commodity market is the same as playing roulette, keno, betting on sports etc in that the 'house' (futures brokerage) charges a commission on top of a floor broker presenting a bid ask spread.

However, as a % of assets, this % is incredibly small advantage to the house. (I pay $10 per round turn at Man Financial on a $72,000 futures contract and the bid ask is 5 cents.

I think what you meant to say is that 20% of the traders make 80% of the money. But this is true in most finanical pursuits. There is nothing inherently crooked in the futures market, espeically if one can reign in their dopamine and treat the contracts as parts of a strategy, whether it be short term or long term.

I also trade with Man and have been successful.  People with a good understanding of fundamental analysis, technical analysis, interventional analysis, and human psychology can consistently beat the other traders (including institutions and commercials) more often than not.  For the average investor, who does not have these skills, it is better to buy silver bullion on a cost averaged basis and store it in a secure location.
agree on all counts...!
I've learned technical analysis & fundamental analysis.  What is interventional analysis?
I'm the guy who read "Fooled By Randomness" and took away that one should be fickle with such beliefs and predictions.  So sure, I say high probability of light/sweet peak now, medium probability of overal "conventional oil" peak now ... and I reserve the right to throw that all the the wind if Robert Rapier scenarios start to look (even) better.
Speaking of which...Geko45 over at PeakOil.com posted some interesting graphs yesterday.

He calls this one "Which of these plots is not like the others?"

Stuart needs to update his "cigar" chart.
I understand the supply projection in the lower graph (discovery + timelag) but that in the upper one seems to be just short-term curve fitting, not helpful.
Geko doesn't actually think we're at peak yet (though he thinks it will be soon).  He just used all the data the EIA released.
The Saudi HL plot could not be more definitive  

Based on the HL method and based on all the other regions that we have seen peak (espeically Texas), it seems like a mathematical impossibiliy for Saudi Arabia to show increasing oil production beyond 58% of Qt.

Question:  What do we know with certainty past the 58% of Qt mark?  

Answer:  The Saudis have to admitted to a 5% decline in production year over year, but they are claiming that it is a voluntary reduction.

If, as I suspect, Saudi Arabia has peaked, then the world has peaked.

Now that's a scary thought.

However, if the Saudis have in fact peaked, I would expect them to do exactly what they are doing now, and claim it's voluntary.

It's what I would do, in their shoes. What other choice would they have?  Out and out honesty on the matter would ignite a global powderkeg, not to mention an internal (Saudi domestic) one.
I said this in an earlier thread but bears repeating here...

The proof will be in the pudding.  

If we see the next two or three months of production below 9.4 million a day from SA when we know the US refiners need more crude this summer to satisfy demand, I think westexas called it and gets the cigar!!

I think that they were compleled to SAY SOMETHING.  How does such a major player "cut" production with prices close to a all time high knowing the turmoil those prices are already causing in (oil importing) economies worldwide?  (Oversupplied????) really what kind of comment is that?...?...?  IMHO that was the most subtle BS answer they could possbly give us. Imagine the meeting that they must have had to discuss what to say..."we cannot panic them what do we say?".... "try a bold faced lie tell them there is too much oil"..(laughter).."hey you got something better?"..."No this will buy us some time to dump our US dollars and get out of thier markets"..."I agree we don't want them to panic until we are ready, it will cost us a futune"..."OK it is decided we give them the BS statement"..."get yourselves out of the markets, this will not hold too much longer"...."we will switch to euro's when it is obvious to the rest of the world that the dollar is tanking and then it will be precieved that we really had no choice- this will make us look good in the world's eyes"..."Abdul you do the talking...and whatever you do don't start laughing"...(more laughter)....
Seriously, "oversupplied" is a warning to us all.
Coping with Peak Oil

How Long Will America Lead the World

The national academies' report points out that China and India combined graduate 950,000 engineers every year, compared with 70,000 in America.

There are some who see the (US) decline of science and technology as part of a larger cultural decay. A country that once adhered to a Puritan ethic of delayed gratification has become one that revels in instant pleasures. We're losing interest in the basics--math, manufacturing, hard work, savings--and becoming a postindustrial society that specializes in consumption and leisure. "More people will graduate in the United States in 2006 with sports-exercise degrees than electrical-engineering degrees," says (GE CEO) Immelt. "So, if we want to be the massage capital of the world, we're well on our way."

Hard for the USA to right the trade deficit when the only things it has to export are personal trainers and wedding planners.
If being the "massage capital of the world" isn't a sign of peak culture, I don't know what is.
At least there will be a few happy endings to this whole peak oil problem.

As a side note, there are no jobs in the US for even the modest number scientists and engineers graduating from universities here annually. A simple read through any given month's BLS jobs numbers will show that most 'new' jobs being created within the US are now low skill, low paying, service sector jobs (such as construction, waiter, and checkout clerk). More on this here:
Getting deep in debt for a sheepskin of waning value is no longer such a great idea.

"Getting deep in debt for a sheepskin of waning value is no longer such a great idea"

Especially for degrees in something that will not lead to producing/providing essential goods and/or services.

As I said before, I anticipate seeing something like student loan riots as we graduate ever larger numbers of young people--burdened with loans that by and large can't be written off--that have poor job prospects.  There was a case history of Sallie Mae seizing part of the Social Security disability payments of some poor guy with AIDS.  

There's more than meets the eye. Working-class whites, the sector of the population that traditionally went into engineering, chemistry, your basic science-y and "making stuff" degrees, basically get kicked in the teeth repeatedly if they try to get into one of those degree programs now. There's been a huge bias against this sector built into the college admissions and funding system over the last 30 years. I think the original idea was to end up with, equivalent to the number of working class whites kept out, an equal number of brilliant and driven and creative, politically-correct scientists and engineers and designers etc who are "of color" and female etc yadda yadda. That has not been the result though, the result has been that the US has to now import huge numbers of such people from overseas, and to export jobs to where the engineers are overseas.

You hear much wailing and gnashing of teeth over the US's lack of engineers, chemists, doctors, nurses, etc., and at the same time, this huge sector of the population that traditionally literally lived to go into one of those fields when they grew up, are now deprived of all but the most basic, and inadequate, financial aid, and in numerous cases actually kept out of programs - yes, there are medical, dental, engineering, etc programs where white students are not admitted because they are white one of the more high-profile being the recent University of Michigan case but that's only one of hundreds.

For those very few whites who can get through this, a simple walk through your local University's grad program, observing the colorful posters, will suffice as an explanation. Read them - you'll find there are gajillions of graduate programs, the kind scientists and engineers and med students go into, but they're only open to "minority" students. Says so right on the posters. Printed on heavy poster stock, with expensive 4-color or 6-color processes, at great expense, along with of course wonderful graphics and the juicy details of this fellowship or that program, is the stipulation: no whites allowed.

Now, as for the "exercise consultant" type programs, anyone can get into those, they're much easier to complete while working fulltime (no heavy calculus and the gym time, what there is, is good for the body) and since white culture, regardless of the fatties you see within it, is one that esteems physical fitness more than many others, you see these same people who in a fair society would be working hard to become doctors and engineers, instead working on their bench press or on memorizing the latest version of The Food Pyramid.

This is also why so many front-line troops in Iraq and elsewhere are white - out of proportions to their percentage of the population. It's often the only way a white person can have a hope at college, so many of the other routes being closed to them. And enough of the old culture of duty, service to country, hard work, etc. remains that unlike most other cultures, there's no shame attached to military service. This esteem for duty and hard physical work is seen also in the Hispanic culture and to some extent in the black culture I should mention.

These words are brutal but true. As Peak OIl unfolds there's going to be a lot more plain speaking in this country.

If you are white and working-class (don't have enough to simply pay full pop all the way through college) your best shot in life is probably to, if you are science and engineering inclined, start your own business. You'll waste years in college fighting with racist financial aid types and racist school policies, when you can be learning what you need to know and applying it to your company's products and learning much faster, on your own. If you're very young, under 22 say, the military can be a good, a very good, first step. Try to get into something techie and that means learn techie stuff NOW because they'll test you for knowledge and if you're outstanding at something like that, they'll move you into that. Working in high-tech, the security clearance you'll get in the military will be very useful when you're done. Sure, you can get shot, but you can get shot just walking down the street in many places in the US these days.

The system is increasingly Not For Us. Between the exporting of jobs, the exclusion of us from education and mainstream opportunities as detailed above, and the destruction of the middle class in the US that's ongoing, it's time to lose the illusion that the system is your friend. The one thing on our side is, Peal Oil says the US won't be able to be a service-oriented postmodern economy for much longer. We'll need people who can make things here. So the way to think is like the "yeoman farmer" so esteemed by the Founding Fathers - independent and productive. The bulk of people in the Revolution were craftsmen, Paul Revere was a silversmith for instance. Franklin an author/publisher. The rifles used to fight the English were made and designed here, by independent craftsmen here who didn't work for some big company, and so were free to innovate and design on their own. The best designs won the "turkey shoots" and were continued, and later proved to work quite well against the invaders.

Work hard. Create. The system is not necessarily your friend.

It be a shame how dem wicked po folks always be goin on oppressin de rich.
From what I have heard, the going rate for a top-notch computer programmer is $6000/yr if you farm the work out to India. I am not sure if this is an accurate number, but if it is, it explains why outsourcing is so attractive.
Hmmm...I'll have to ask the Infosys programmers that make up 3/4 of the IT staff in my company.  Oh and by they way...they have 24/7 support.  The programmers over here work during the day and then the "offshore" folks pick up the work when it's night.

Now, this would sound like such a sweet deal for my company, but there have been so many IT Solutions projects released to IT Service that were not properly Beta-tested.  They would then blow up and IT Service would be left holding the bag to clean it all up.

You see...these guys don't really know how the business runs...they are crackshot programmers, but don't understand the big picture of how it all fits together.  My company is saving alot of money using these guys, but in the long term we are wasting money because we have to fix everything they release.

Some companies, like Sprint, have tried outsourcing and have now gone back to hiring Sprint IT employees after going through similar pain.

I've had the same experience, in a way. I've known several Chinese and Indian programmers who were technically very good (actually, the Indian guy wasn't that good), but didn't grasp the 'big picture' ideas of how the system fit together. After going to work for one outfit, following one outsource programmer, I told my supervisor that I'd owe the company money if I was paid by the line of programming produced because I had ended up writing very few lines to do the same thing as many more that I had tossed.
Generalizations are dangerous, however...
I wasn't making generalizations, I was being specific about my company and Sprint.  Things might work great and flawlessly for other companies that have laid off their vetern programmers for the discounted 22 year olds.
This is a problem that is hard to solve for the primary reason that for most individuals the return on investment for an engineering degree simply isn't that high. Law, medicine, sales, management, and so on all promise a better return on a cheaper investment. Corporations want cheaper engineering labor so they import labor from abroad or send the jobs overseas. If Americans want more American engineers and scientists , then they need to pay them more and subsidize their education. It really is a simple matter of incentives.  
The national academies' report points out that China and India combined graduate 950,000 engineers every year, compared with 70,000 in America.

For a moment I thought that might not be as bad as it seemed because China's population is slightly larger than the US.  But...

950,000/1,000,000,000 = .00095

70,000/350,000,000 = .00023

Turns out it's pretty bad.  I wonder how many of those graduating in the US are US citizens?

Since the peaking of SA oil would be a geopolitical disaster, wouldn't they do everything in their power to keep this from happening.  I ask this question:

Is there any way to determine if Saudi Arabia has increased drilling for oil this year compared to the last year or two?  For example, have they bought more drill bits or leased more rigs in a desparate attempt to make up for the shortfall near peak oil?  

They are definitely leasing more rigs.  They want to more than double their number of active rigs.

People are also griping about Aramco bidding up the price of rigs.

Major Saudi Aramco Contract; 4 Jackup Rigs to Exit U.S. Gulf of Mexico for 4-Year Terms in Middle East

They did the same thing last year, luring four or five rigs from the GOM to Saudi.

Warning:  recycled post ahead

As Jim Kunstler says, history doesn't repeat, but it may rhyme (don't know if this is original to Jim or not).  

In any case, regarding post-peak drilling booms, been there done that.  We had the biggest drilling boom in state history in Texas in the Seventies, as a result of a 1,000% increase in oil prices.  We increased the number of producing wells by 14% from 1972 to 1982.  Result?  Production fell by 30%.  

Once the big fields in a region or the world peak and decline, the smaller fields that are found post-peak can't make up for the declines in the big fields.   This is what puzzles me about people that express optimism about conventional world oil production, when there is so much evicence that the big fields--Ghawar; Cantarell; Burgan, Daqing, etc.--are declining.

When it feels like a rat, and smells like a rat...more than likely...it's a rat!!
Not necessarily.


Sorry W-Rat...didn't mean to discriminate against rats.

What was that joke about 4 blind men feeling different parts of an elephant and all thinking it was something different?

I'm used to it :>)

Far from the first time, and won't be the last.


It's an old tale, oft retold, writ here as a poem:

The Blind Men and the Elephant

It was six men of Indostan
To learning much inclined,
Who went to see the Elephant
(Though all of them were blind),
That each by observation
Might satisfy his mind

The First approached the Elephant,
And happening to fall
Against his broad and sturdy side,
At once began to bawl:
God bless me! but the Elephant
Is very like a wall!

The Second, feeling of the tusk,
Cried, Ho! what have we here
So very round and smooth and sharp?
To me tis mighty clear
This wonder of an Elephant
Is very like a spear!

The Third approached the animal,
And happening to take
The squirming trunk within his hands,
Thus boldly up and spake:
I see, quoth he, the Elephant
Is very like a snake!

The Fourth reached out an eager hand,
And felt about the knee.
What most this wondrous beast is like
Is mighty plain, quoth he;
'Tis clear enough the Elephant
Is very like a tree!

The Fifth, who chanced to touch the ear,
Said: Even the blindest man
Can tell what this resembles most;
Deny the fact who can
This marvel of an Elephant
Is very like a fan!?

The Sixth no sooner had begun
About the beast to grope,
Than, seizing on the swinging tail
That fell within his scope,
I see, quoth he, the Elephant
Is very like a rope!

And so these men of Indostan
Disputed loud and long,
Each in his own opinion
Exceeding stiff and strong,
Though each was partly in the right,
And all were in the wrong!


So oft in theologic wars,
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean,
And prate about an Elephant
Not one of them has seen!

     -- John Godfrey Saxe


It was six of The Oil Drum
To learning much inclined,
Who wrote about the Hubbert Curve
(How much oil we will find),
That each by speculation
Might satisfy his mind

And so we read The Oil Drum
Dispute it loud and long,
Each in our own opinion
Exceeding stiff and strong,
Though each are partly in the right,
We all may well be wrong!


So oft in geologic wars,
The disputants, I ween,
Rail on in utter ignorance
Of what each other mean,
And prate about a future world
Not one of us has seen!

If I had more time, I'd write verses for each editor.

I bet I know what part the doomsters are focussing on.
Great men talk about ideas;
Mediocre men talk about things;
Small men talk about people.
                - Admiral Hyman Rickover
Ah...excellent!!!  Thanks for some culture.  I knew the tale/poem/joke (I've heard it many different ways) was somehow pertinent to the situation of Peak Oil.

Peak Oil is that elusive jumbo-sized elephant offering us only various parts of itself from which to deduce it's true nature.

A question I just thought of...how many parts of the elephant must be explored before we discover the elephant is really a donkey?


According to its worshippers, only the elephant possesses "gray matter".

The donkey is all Hee and no Haw.

The thing is that such a huge number of free market people are so willing to buy into the idea that they have an unlimited supply without being able to quantitatively back it up.  Normally these people would never invest in a company or industry without having all the facts, but when it comes to the Saudi Arabia, no problem we trust you. A complete lack of transparency, no it doesn't bother us.  We are left to guessing from their actions what is really going on, not a safe way forward.
I think the thing about history not repeating but it often rhymes was one of those old German general types, you know, the ones who used to look at the whole world situation in the pre WWI era and come up with all this stuff that turns out to be ever so true. Things like, You can have guns or butter but not both, and, Tracers work both ways.
Mark Twain is, I believe, the original source for that saying.

For starters, rigs are not normally bought, they are rented. The going rate for deepwater rigs is currently about half a million dollars a day. Shallow water rigs are of course cheaper and land rigs even cheaper yet. But that is another story.

Yes, the number of oil rigs is increasing dramatically in Saudi Arabia as well as in the rest of the Middle East.

In May 2005, a Saudi Aramco VP announced Aramco's plans to build projects worth about 487.5 billion Saudi Riyals (US $130 billion) in the next 5 years. Due to the unprecedented global demand for oil, Aramco announced that the number of its oil rigs will double by the end of 2006 [2]. The company expects expansion in all supporting fields as well for years to come as the demand increases.


And this from Forbes Magazine

[Rig contractor] GlobalSantaFe's announcement that it was sending four of its jackup rigs to Saudi Arabia... is part of an ongoing exodus to the Middle East that could cut shelf production in the Gulf of Mexico by as much as 20% over the next 18 months.


Saudi Arabia and everyone else in that area are doing everything in their power to increase production. It is hypocritical of them to claim that they are voluntarily reducing production. Saudi Arabia, as well as most other OPEC producers are definitely post peak.

This is a fantastic point, Darwinian.
In most any kind of business, one does not 'voluntarily reduce output' at the same they are adding more production lines.
Unless you are schizophrenic.  Or running in circles, chasing your tail.
Strickly speaking, the Saudis might actually be telling the truth.  The problem may be that the water cuts are rising so fast that the engineers are demanding that the production rate be lowered in order to reduce the ongoing damage to the reservoirs.
Ya, well...wouldn't all that water rust out the rigs somewhat??? Gotta cut back or all the machinery will seize up.  Not enough oil flowing to keep it lubricated.
Mekrob at PeakOil.com reports:

From the Oil and Gas Journal (May 8th), SA had an average of 52 rigs active in '04, 83 rigs in '05 and will have about 120 by the end of '06.

But they're voluntarily reducing production...

No to mention from 2004 to 2006 they have increased the rig count by 130%, but their oil output from 2004 is 3.75B barrels.  2006 we don't know, but I bet it's not a 130% increase.
I think you are right.   We are passed peak.  As an opinion.

Didn't SA say they had a gross decline of 8% but mitigated to 2%(previously discussed on TOD).   I would say that is past peak.

Plus the FSU/Russians are sounding more and more like they are close to a major drop in production/collapse.

Mexico's Cantrell peaked out,  and Kuwait revising reserves.

But, all this is subjective.   We can only be objective in the rear view mirror.

Probably.  It looks like the worst case too, a plateau for a while instead of a sharp peak.
From last October to March OPEC output drop almost 1 MBD. I don't think natural depletion occurs so fast, so we might probably see figures above 84,5 MBD again. The major drops will be when Mexico and Iran step into their terminal declines.
>From last October to March OPEC output drop almost 1 MBD. I don't think natural depletion occurs so fast

We are well past natural depletion. Adv Oil recovery Technics have been used on all the large fields. What is likely occuring is that the water cut is rising fast. Some producers make lack the equipment necessary to cope with the rising water cuts, resulting in the fast production declines.  Nearly half of global production is produced from the top dozen or so largest fields. All of which have been in production for many decades. All these fields peaked more a decade ago.

Close, so close we are going to measure this race by a nose.
According to EIA year-on-year production has dropped - 84,105 in March 2005 versus 84,047 March 2006. According to the Saudis production has dropped because demand has dropped.

Given we still have global economic growth we might expect to see demand at least 1 or 2% higher than 2005 i.e. 85mbd. The 1mbd shortfall in demand must be due to demand destruction due to high prices.

So if priced dropped, demand would increase and the Saudis could sell their oil i.e. if they kept pumping the price would drop and they would find buyers.

The Saudi excuse doesn't stack up, either they are manipulating the price higher or they have peaked.

I vote the latter so YES we are witnessing the peak.

Okay I'll bite with these thoughts.

If the price of oil stays high than yes we are past peak because demand destruction will limit use even if we could pull out all the stops to produce more.

On the other hand if the price drops $10-15 per barrel over the next year than people will ramp up consumption and maybe production could be ramped up to meet that new demand.

In summary what I think has happened is that the Cost of Goods for oil has gotten so high that there is a permanent demand destruction built into the system.  The world can't afford to use more oil.  This is an economic/political peak, different than a geological peak but they are inter related ultimately.  At some point oil will be so hard to extract that even if we wanted to increase production we wouldn't physically be able to.  In either case I think we may have seen peak production but it will be impossible to sort out what the limiting factor was until long after decline occurs.

The peak will necessarily be what some at TOD have called a "logistical peak".  There will always be at least a few million barrels a day tied up in one geopolitical issue or another and there will certainly be some demand destruction as prices go up even before we attain the actual peak.  There are also the issues of lack of experienced manpower, experienced engineers, shortfalls in rigs, pipe, etc. and shortfalls in basic raw materials such as steel.  We will always be able to produce more in theory than we actually are at any given moment from here on out.  Previously these issues were irrelevant due to the cushion provided by spare capacity, but now that spare capacity has eroded, the impact of these issues grows exponentially.
Exactly my thoughts.
My entirely subjective impression leans toward it meaning we are past the peak, but I'd be a lousy engineer if I placed too much stock in the perceived short term trend of a noisy graph.  It's also possible we'll see a slight up tick in production again - but on one hand I don't really care.  It is enough to say that right about now we're maxing out production, and demand continues to rise at a constant rate of growth.  Which has to equal big problems.

On the other hand, I want to know much better what the timeline is, and it's very frustrating not being able to pin things down more accurately so one can have more confidence in what actions to take.

Having said that, I really don't think the things that are going to have the biggest impacts on our lives will be based on the geologic realities of oil extraction, rather it will be how people and societies react to them.  This makes it even more unpredictable, and also means the exact time of the peak is less important.  If I can no longer get fuel because some crazy bastard starts a war with a major oil producer causing short supplies and high prices, I suppose it might be nice to know that more oil could someday be available, but practically it won't help much.  

As I've said before, when you push any system to the maximum of its capacity, the effect of losses becomes much more important.  If we are near the peak, then all of this non-geologic crap that limits our ability to produce the crude and refine and deliver the end products is here to stay.  One of the questions I keep thinking about is if the Hubbert method takes any of this into account - it's based on results isn't it?  I guess when previous regions hit peak there were other places to go to, so while there was a temporary increase in political and other losses, it might be different this time.  Now the non-geologic losses may be far more significant.

OK, enough stream-of-consciousness rambling!

I don't think we are at the theoretical or geological peak yet - but very close. If by magic Iraq got peaceful and international investment poured in, ditto Nigeria, we would obviously see (IMO) a jump in world production if demand supported it. However, this will not happen. Political factors create the "undulating plateau" with unpredictable patterns. Same with hurricanes.

However, If Ghawar, Burgan, Cantarell, etc get into their decline in a serious way, and political issues continue as I expect, I cannot see any way the world could get up to the 90 million barrel mark RR is speculating about. I would be very surprised to see production exceed 86 million. While I deeply respect RR's contributions, especially in the ethanol debate and economics issues, I remain puzzled that he hasn't addressed the issue of supergiant decline or just general depletion with anywhere near the throughness of other issues. "Trust me on this" doesn't do it for me. This is not meant as an attack, but I don't know how to evaluate comments like "mark my words" without more solid information. On the other hand, I certainly can't say I know better.

I don't think the new numbers say anything definitively, but they are quite suggestive in my book. If you define peak as a process rather than as a point, I think we are there to within 1 million barrels per day.

I too am a big fan of RR, but he himself has acknowledged that he is not on the drilling side, and not a depletion expert:


Stuart's working hypothesis of the slow squeeze makes as much sense to me as anything else I've seen about depletion.

That is correct. I am not on the drilling side, and I am not basing my comments on any of the depletion models. My position is based on current production rates, projects that are scheduled to come online, crude that I happen to know is shut in, and crude that I happen to know is available in certain areas even now, as production appears to be flat. For me, the wild card is on the demand side. If demand stays strong this summer, we will set additional production records.

Due to the nature of my position, there are some things I can say, and some things I can't say. I firmly believed for a long time that peak would be 2005 or 2006, until I started talking to some people within my company, and they pointed out certain things to me. Since I can't be a whole lot more forthright than this, you all certainly are expected to be skeptical. But I will say that we try to plan years in advance, and we do look at these sorts of issues. I do ask tough questions about where we are going to secure oil supplies.

I know my position is a tiny minority on this board. But I want to stake out my position, because I firmly believe I am right based on things I have seen. If production records continue to fall, as I believe they will, then you may start to believe that there are some very competent people inside the oil industry looking at all aspects of this, and I have spent quite a bit of time picking their brains.

For the most part, I am not really going to spend too much time arguing this issue. I can't lay all my cards out on the table, and that's no way to conduct a debate. But when the production records fall, remember where you heard it. And if I am completely wrong, and we are at a peak today, then God help us all.


and for those that dont believe in God, there is silver bullion and venison....

points taken RR. This is a complex system we live in, and no one really knows how part A will affect part X.  Your peers at your company are undoubtedly oil experts, but might not be human nature, political, economic, or weather experts. We could see records fall and we could be at peak now. The precautionary principle says we will be at peak sooner or later and we should take steps now just in case.

Fair enough. No question you have access to more information than I do. I wish we could all have more access to reliable, more complete information. It is the unknowables that makes this so compelling/confusing. It feels like knowing a Tsunami is coming but not sure when, but knowing that enough people have information that if it was put together we could have some certainty. However, some of the most important factors are state or trade secrets. As such, each can only see their part of the elephant and no one can put it completely together.
It feels like knowing a Tsunami is coming but not sure when, but knowing that enough people have information that if it was put together we could have some certainty.

I used a very similar analogy in the Peak Oil Primer that I wrote for Omninerd:


Perhaps the best way to prepare for Peak Oil is to consider it in the context of preparing for a natural disaster. For example, if one lives on the Gulf Coast, they need to be prepared for an eventual hurricane. The consequences of failure to prepare played out on television following the devastating hurricanes of 2005. Failure to prepare took place on both individual and governmental levels. In the case of Peak Oil, there are actions that individuals can take to reduce their dependence on petroleum. Purchasing vehicles with higher fuel efficiency, ride-sharing, biking, and utilizing public transportation are just a few of the ways that individuals can reduce their petroleum usage. Governments can encourage conservation by individuals, and they can also adopt policies to reduce petroleum consumption nationwide (e.g. encouraging a move toward higher efficiency diesel engines).


"I know my position is a tiny minority on this board."

There is a fairly large middle path consituency here, it just a bit quieter. In fact, when you look at longer term posters with analysis-based postings, the balance narrows. If you read what Stuart Staniford writes, it is far from doom.

There is plenty of room for open minded people who want to learn and exchange views. Please keep yours coming.

One question you can perhaps address is this:

Where is the new oil production going to come from? Are the players using better techniques to suck more out now or are new fields slated to come on board? From what I've read on this board the big fields all seem to be either in or on the cusp of decline and there isn't a lot of spare production capacity. Is there spare capacity we're not seeing?  

I don't think there is going to be a whole lot of new supply coming on, but neither I do think there will be a huge, rapid drop off. This is why I call my view the middle, between cornocopeans and doomers.

I do think the world can make do, and even grow, at current supply levels. First, current resource use is incredibly inefficient. I think demand elasticity for oil is strong, but acts over the longer term. I would guess that we could live pretty much the way we do now with 20% less oil. It would mean a bit less flying, more efficient vehicles that are driven less, and a bunch of other things that we can't see now.

It will also mean substitution of other fuels.  As Engineer Poet noted yesterday, this is fairly realistic, based on current technologies. I think that ethanol and biodiesel could offset say 15-20% of oil use and electricity could do the same in vehicles. I would hope the inputs to these are renewable rather than coal. However, if it has to be coal, that is what will be done. This is a prediction, not a value statement. I am aware and concerned about climate impacts, but don't think that will stop it from happening.

I don't think any of this will be easy or guaranteed. I also wonder how developing countries will be able to continue to access the growth that has pulled millions out of poverty in China, India and other countries.

I do think it is possible. I write from a highly import dependent developing country that will suffer if changes aren't made. They have been incredibly slow to adapt, but are starting to.

I see price as the only mechanism for creating this change and think sustained high oil prices are probably among the greatest assets mankind has in adapting to a future of reduced supply.

I don't think there is going to be a whole lot of new supply coming on, but neither I do think there will be a huge, rapid drop off

This is where sociology/psychology comes in. Say that the true 'numbers' are that we peak at 90mbpd and have a 4% decline rate from there. Conventional analysis will say we have to tighten our belts, ramp up alternatives and build the wedges outlined in the Hirsch report. My concerns are increasingly, that 1-3 years past peak, when everyone realizes that peak oil is for real and here now, that the system no longer works smoothly - will Russia want to sell her oil to other countries? will Iran? will montana and texas sell their oil to other states that are desperately in need of it, to their own depletion.  

The whole system is predicated on growth - if there exists the possibility in peoples minds that this paradigm is ending, I dont think we can rely on normal incentives to right the ship. I continue to believe that AT peak there will be economic contraction leading to demand destruction and selloff in oil prices - then the world reloads and next time demand outstrips supply it has caught up with depletion rate - here is where we see the nature/nurture intersection.

I am hopeful but afraid.

My gut feeling is that the world won't recognize that peak is here in a flash. I also don't worry much that exporters won't export. Sitting on the oil while the world develops alternatives won't help them much.

My baseline scenario is that the peak comes on us gradually. Exporters make huge sums of money exporting for a while until the balance shifts and their portion of the energy pie shrinks. Gradually other energy sources will displace oil.

This could be completely wrong, but so could every other scenario tossed around here. No one really knows and how we view post peak says more about our insides than the world outside.

Then really the BIG wild card is how fast the 'biggies' decline. It seems that nobody, even the most knowledgeable engineers associated with these fields can say (look at North Sea predictions) so this is an unknown that we all have to live with until we get to 'rearview mirror' territory. Oh well... but the wait is killing me!!!!
Why should public corporations operating under public charter have the legal right to keep information (beneficial to the public) out of the public domain? Just curious...
you probably already understand this.  

but just for the record, because they are not "public" at all.  they are private corporations, some of them "publicly listed", which are bestowed with the right to incorporation, and thus Personhood,  by the states and the federal govt.  this is supposedly in the public interest, but when did the elites ever do anything to help the public?  instead corporations are legally bound to maximize their profits to shareholders, one way or another, regardless of civil issues, environmental effects, human rights or even national security.  they only consider such "social" issues when it impacts their bottom line (thus "corporate responsibility").  

Publically held oil companies muct disclose their reserves to investors. Shell, ExxonMobil, ChevronTexaco, ConocoPhillips, etc. But they control a small fraction of world oil reserves. Not enough data for useful global analysis.
We are past peak, be it demand destruction or unable to pump more.  We are now just talking about the numbers after the decimal point.  It is time to move from PO to PPO (Post Peak Oil).  
How many people think that the approximately 1% decline in total world liquids production since December and the approximately 5% decline in Saudi oil production year over year means that we are past the peak of world oil production?

Are you tallying votes? My vote is "No". I believe we have more production records ahead. However, I want to make it clear that I think we need to be preparing for Peak Oil with everything we've got. If Peak Oil happens 10 years from now, however, my feeling is that we won't be any better prepared than we are today.


How much is SA of the total production?  A big decline in a major area can drag down all the rest.  Are they 20% and is thier decline responsible for all the decline?  
You know the more I read from poeple such as youself westexas, (kebab, RR, etc.) the more concerned I get.  I think it is totally rational to expect a decline in production soon.  What I strugle with the most is how will the chips fall?  Depression/recession/inflation/starvation. It just looks so big time bad.  How do others see this unfolding and most importantly why?
No. If you are counting.

It could be but I'd bet against it. The emphasis people here sometimes put on specific data elements is troubling. Oh well. One could argue that the inability of people to deal appropriately with statistics is intimately related to society's failure to anticipate peak oil (along the same lines as Al Bartlett and his arguments about exponential growth).

In particular and of late, the over-emphasised data point of choice has been west-texas' "58%". The uncertainty here is large. The comparison with texas is said to be meaningful. And then most people seem to agree? Sheesh. Frustrating.

On the front page of the McPaper:

High cost of oil could put many jobs at risk

DARLINGTON, S.C. -- Gazing out at the thousands of bales of fluffy, white polyester filling Wellman's factory, it's hard to imagine that the man-made fiber has the same origins as a gallon of gasoline.

But it does.

Of the 2.3 billion pounds of materials Wellman produces at its several factories around the world each year, 2 billion are derived from oil or natural gas. The company's polyester is used to make numerous products, including sports apparel, diapers and pillows.

The rising cost of oil has put a squeeze on the companies that use oil as an ingredient for their products. Although they are down from the records seen recently, oil prices are up more than 20% from a year ago and are more than 150% higher than they were five years ago. Natural gas prices have also risen.

Chemicals made from oil are used by companies to manufacture many products consumers rely on every day, such as plastic bottles, aspirin, lipstick and deodorant.

"It's used in pretty much everything," Wachovia economist Jason Schenker says. "I cannot look at my desk and see things that are not petroleum-based."

DuPonte says the cost of raw materials has gone up 85% in the last four years, and have hit a record for the first quarter of this year.

However, companies are finding it very difficult to pass on the increases to their customers.  Instead, they are recycling, using software to increase efficiency...and laying off employees.

On a related note...CNN had a story this morning on metal thieves.  Aluminum has become so valuable that people are stealing highway guiderail, light poles...even banks of stadium bleachers.

Here's a story from MSNBC about it:

Aluminum is the new copper for metal thieves

DENVER - Thieves have been stealing copper for years as prices have risen, mostly an expensive nuisance. Now they are targeting aluminum products, with experts saying safety is at risk as everything from light poles to highway guard rails are disappearing.

"Aluminum prices are at an 18-year high," said Chuck Carr, vice president of member services for the Institute for Scrap Recycling Industries.

Thieves in April made off with $4,000 worth of aluminum bleachers -- enough seating for 100 people -- from P.C. Campana Park in Lorain, Ohio.

Copper is still popular, too:

In the past year, copper water spouts have been taken off churches. Coils of communication wires. Power cables for trolleys. Raw copper from the Navy at Pearl Harbor. Authorities attribute at least five deaths to thieves being electrocuted. Railroads have sent out warnings about thefts of spikes, communication equipment and track.
Some more such stories, and my faith in the ingenuity of the American people will be restored.
This is what happens when the government does not try to  reassure the country and ignores the issue.  People take matters into their own hands.  
The WSJ had an article today about plastic milk cartons, and all types of plastic containers,  being stolen for recycling.  
Not sure I understand. Here in Toronto, we have to separate the garbage and plastics goes into one container (blue box). Nobody has to steal it-they could just do the rounds in the morning before the garbageman shows up.I might be missing something on this one.
I suppose it might have something to do with the quality or type of the plastic resin used in the milk cartons and similar containers.  In any case, the WSJ said that there are organized groups stealing the things because of the value of the plastic.  A sign of things to come?
just wait until we are fighting over food.
An electrician told me recently that the same is happening with copper wire.
And here's another interesting, tangentially related article:

I'm afraid Chavez has struck a nerve

One thought keeps nagging me... It is an observation once made by the historian Niall Ferguson. He pointed out that markets are not that good at taking account of the really big shifts in world affairs. I think he might be on to something.

(No kidding....)

He goes on:

Chavez might be a villain in the West, but he has touched a nerve. One of the darker aspects of globalisation is that many of the world's weaker countries are having their physical assets plundered for a song by Western corporates. The worm, it seems is turning. Each week comes fresh news that a growing number of the world's politically weak but resource rich countries are prepared to play their joker card - a windfall tax, or even nationalisation, in order to exploit their natural resources.

Let me give you a few recent examples that were not widely reported in the press. On May 12 Mongolian lawmakers approved a windfall tax on minerals mined in the country. The tax, starting at 68pc, will be triggered when copper reaches a price of $2,600 a metric ton, or when gold reaches $500 an ounce. There was next to no warning that this tax was coming and some Western miners have complained that it was passed with "inexplicable haste".

Tanzania is considering changing its mining laws because it is thought that the government is getting too little revenue from the mining of the gemstone Tanzanite.

He warns Nigeria may be next:

During the past 25 years Nigeria has earned $300bn (£160bn) in oil revenues, but per capita income has dropped from $1,000 to $390 and more than two thirds of the population live below the poverty line. As a result, some have described Nigeria as the largest failed state on Earth and the reports of kidnappings and terrorism often aimed at global oil companies, such as Shell, is a clear warning that Nigeria could soon become front page news for all the wrong reasons.

And it gets worse.  He thinks even food will be affected:

Recently, Stewart Wells, president of Canada's National Farmers Union, wrote an open letter to Kofi Annan, the UN secretary-general, detailing his worries about global food supply. He points out that in 1999-2000 the world had 116 days' worth of food in storage. This has fallen to 69 days but he quotes an estimate made by the US Department of Agriculture that it will fall to 57 days this year.

Mr Wells said that the last time we saw numbers this low was in the 1970s. The problem this time is that there is less land to farm and crop yields are considerably higher due to the more intensive use of fertilisers combined with the improvements that have been made with the breeding of crops. He shares the worry I expressed here on April 20 that the world might be heading towards a food crisis.

Mr Wells makes the point that we probably need to get back to more localised production of food. In other words, he feels that globalisation and the impact it is having on the climate have added significant risk to the food chain.

I fear that, when we look back on 2006, we will see that it marked a watershed at which the world was revealed to be a riskier and dangerous place than most hedge fund managers realised. While stockbrokers and fund managers worry about corporate profits and inflation the very fabric of modern life is being unpicked.

I'm telling you...it's all laid out very simplistically in the movie "A Bug's Life".  

The big, scary grasshoppers had control until the ants realized they actually had greater power in numbers if they all acted together.

LOL.  Maybe I should watch that movie.  Some video store gave it to me for free with another purchase, but I never got around to watching it.  I meant to, because I'm interested in computer animation (yeah, that's likely to be a growth career in the post-carbon age), but never got around to it.
In real life, the grassgobblers have money, lot's of it. They spend on think tankers and outwit the ants every step of the way.

Let's define "marriage" as a sacred union between an elephant and a faith-crazed monkey. The sanctity of our society depends on it.

Of course. There must continue to be circuses for the masses, to distract and divide.
"Hey, look over there!"
< Let's define "marriage" as a sacred union between an elephant and a faith-crazed monkey. The sanctity of our society depends on it.>

Gota love that quote.


Ya...the distractions never end.  

Also, helps the GOP scare and disenfranchise the Mexicans and Gays who typically vote Democrat.  How convenient right before next round of elections.

It is a good example..  all about resource management and empowered leadership.. and circus-folk, all the essentials!

I have a foot in the CG world, and I do think it's got a great advantage in the storytelling of the (near, at least) future.  It is allowing filmmakers to build sets, create weather, creatures, etc.. without having to take crews all over the world and set up massive lighting and scenic displays.  They still DO, but they don't HAVE to in many cases.

I don't think we're going to lose computing, but I do think that resource shortages will start to bend a lot of manufacturing, and particularly electronics, back towards valuing 'Durable Goods' instead of 'throwaway upgradables'..  maybe that's a pipe dream, but I think we'll start to see that we can't just buy new furniture every five years when the color is wrong, or there's a little rip in the armrest.

Oil price hike sparks uproar in India

NEW DELHI, June 6, 2006 (AFP) - A sharp hike in Indian fuel prices sparked uproar against the government Tuesday as both its communist allies and the main opposition Hindu nationalist party vowed nationwide protests.

Even senior members of the ruling Congress party demanded the rollback of the rise aimed at bringing fuel prices closer in line with surging world oil prices and curbing losses at state-owned oil companies.

"The Congress opposes the hike in petroleum prices and wants the excessive increase to be reduced in the interest of the common man," party spokesman Rajiv Shukla said. He did not say whether the party would stage demonstrations.

The protests began after the cabinet gave oil firms approval to raise fuel prices from midnight Monday.

China just did the same thing, and they don't have these problems. But then, the measure causes more objective pain in India, where income is much lower and agriculture much weaker.
They are addressing this issue by subsidizing the cost of petrol in India.  
Good article (with a great flow chart) of the corn ethanol process:


I've been wrong, thinking that corn would be mashed and grains separated before fermentation (like beermaking), and was surprised to see that (yes, as others here have said) they ferment on the grain slurry.

The chart does indeed also show them drying the "stillage" to create DDG (dried distiller's grain)

(found via The Energy Blog)

odograph -

That was a very good general description of the corn-to-ethanol process, and the flow chart was also helpful.  I will bookmark that one for future reference.

As I understand it, the largest single energy input of the actual conversion process (as opposed to growing the corn) is the heat needed for the distillation step.  Cooking the mash is probably a not-too-distant second.  

I wonder it there is much potential for internal energy recovery in order to decrease the energy input and improve the EROEI. During the distillation step the overhead ethanol vapors must be condensed, probably via some sort of heat exchanger employing cooling water. Perhaps some of this heat of condensation could be recovered and then used to help heat the mash in the cooking step and thereby reduce the energy input?

I suspect that the process, as presently configured, is designed to get the maximum amount of  ethanol production from the smallest amount of process equipment (and hence capital investment), rather than to minimize energy use.

Maybe there really isn't much potential for energy savings, but I ask the question. Anybody?

It depends on the design of the plant.  Most plants would use the column bottoms and overheads to preheat the feed.  This requires that you buy a heat exchanger though; if the plant was designed for very cheap energy they might have omitted it.
From an article in todays 'The Telegraph':

Russia: 'Era of cheap fuel is over'
"Russia has served a double warning over the price of oil and intervention to block attempts by its energy firms to move into EU markets."

"Viktor Khristenko, Russian's energy minister and guardian of 5per cent of the world's oil reserves, declared that motorists and business would have to learn to live with expensive fuel...."

"Russia with its huge oil and gas reserves has been one of the main beneficiaries of soaring oil price and shares the industry consensus that there is little prospect of relief. Mr Khristenko said: "Forecasting is a thankless task in hydrocarbons, but one can say with certainty that the era of cheap hydrocarbons is over."

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/06/06/cnfuel06.xml&menuId=242&sS heet=/money/2006/06/06/ixcity.html

This was the part I found interesting:

He also made it clear that any intervention by EU states if Russian firms sought to buy their European rivals would be regarded as unfriendly.

..."The less political issues there are in this area, the easier and calmer it will be for suppliers and consumers and businesses." In today's global market, a firm's nationality was increasingly irrelevant, he said.

"We have global companies - it can be hard to pinpoint where a company comes from. BP is considered a British company and in America it is an American company. There is nothing contradictory in that because its assets are spread all over the world." Russia was intent on "the expansion of our own participation in others' assets".

Darn Commie is using free market capitalism/globalization against us...  ;-)

Why not? We used it (successfully) against them previously.
'Those who do not learn from history.....'
We destabalized the ruble (rubel?) in the late 80's/early 90's and it brought them down. Payback is a bitch huh?
UN Report on Global Warming and Deserts - Did anyone else notice the distinct dichotomy between reporting on this paper on various news outlets? I watched BBC coverage of this report last night which was similar to this rather optomistic tone but most world-wide coverage seems more in line with the Guardians negtaive one. I was not able to find original text on internet.
The BBC has become shamefully subservient to the British government under Tono.

Debate Over Wind Power Creates Environmental Rift

OAKLAND, Md. -- Dan Boone has no doubt that his crusade against wind energy is the right way to protect the Allegheny highlands he loves. Let other environmentalists call him deluded at best, traitorous at worst. He remains undeterred.

For four years or more, Mr. Boone has traveled across the mid-Atlantic to make every argument he can muster against local wind-power projects: they kill birds and bats; they are too noisy; they are inefficient, making no more than a symbolic contribution to energy needs.

Don Quixote rides again, on another fool's errand.
Don Quixote was neither a fool nor engaged in act as banal as an "errand."

Don Quixote was a visionary embarked upon a quest. Seeking to uphold principles far greater than his mortal flesh could ever hope to play host to, yet as compelled to offer his life for these as the greatest knight in pursuit of chivalric perfection.

One might find both the humility of Don Quixote's limitations and the power his convictions drew forth nearly divine. Perhaps they might be seen as the ravings of a madman. I hope, for the sake of the world which gives you sustenance, Don Quixote's divinity is seen and admired long before his lunacy can be diagnosed and treated.

Bully for you, Boone and goritsas!
It is better for the spirit/soul to live poorly in beauty than live wealthy in squalor.  The fool's errand is risking the grand oil flameout in the futile exercise of staying the economic course.  Adapt, but wisely.
The world has been paved over with roads, electric poles and cell phone towers, and he worries about a few windmills!  
In the image above, I see a vista of timeless and immeasurable beauty.  I imagine the change of light as the seasons pass. I must use my imagination, else how to wipe away the intrusion of the "windmills."

You must see something else altogether.

To deride his efforts simply because you and your progenitors have chosen to sully the landscape with "roads, electric poles and cell phone towers" shows the depths the problem Peak Oil reveals.

If you cannot embrace his activism to save his beloved landscape, then how can you lament the coming of Peak Oil? For if we've already squandered much of this amazing resource, much as this vista may be squandered by the coming of "windmills," why stop now? Why not really put our backs into it and make the tar sands melt and the Orinoco flow?

His activism is an important part of our salvation. Should we recognize the power of the landscape we inhabit, if through nothing more than its awe inspiring beauty, we will discover the resolve to save not only it but ourselves.

Mr Boone is a typical NIMBY hypocrit, one who takes for granted the very infrastructure and civilization that makes his 'holy crusade' possible. One who derides adding windmills to his vista while buying a spacious and comfortably appointed home on land cleared on the same said vista. One who drives from protest to protest in a fossil fuel vehicle, and thoughlessly uses the same electricity the windmills would provide in his personal life without so much as a care.

"Those who live in glass houses should not throw stones."

The description of Dan Boone, "typical NIMBY hypocrit," further exposes the nature of the conflict. For Dan Boone, you are the "typical NIMBY hypocrit." Another caricature. Dan Boone cannot embrace your position just as you cannot embrace his. You both feel the absolute conviction that springs forth from absolute rightness. Thus, the points are moot, for they shall never be discussed. Perhaps for you the outcome satisfies. For myself, I grieve, for I know you and Dan Boone make progress impossible as you find each other impossible.
He doesn't have better arguments than that? Hopefully people won't fall for that..

As for killing birds and bats, very little (large wind turbines spin very slowly).. In fact, orders of magnitude less than moving cars, pet cats and windows.

Spinning slowly, they bring forth the electricity we all yearn for. What, pray, would be the meaning of nights without the lamp electric?  What, pray, would be the meaning of the horizon lest filled with the ever circling ever present towers? What would life be without these monuments to a life redeemed by the intervention of technology? From whence would the dishwasher churn and the tumble dryer roar and the food processor whir?

While the pressing need for changes in both our consumptive excess and our means of generating such excess are absolutely compelling, is not reflection on the value life not our own worthy of notice? Need we deride the motives of another when they fail to recognize our far superior understanding?

It is surely without doubt these "windmills" will cut short a winged creature. This is most probably an unavoidable and reasonable outcome. To forgo the electricity these monoliths provide smacks of childish indulgence or witless nonsense. But to fail to engage with the effects these towers inflict suggests we have limited our scope of inquiry to that of Dan Boone.

Roger that.

Sounds like these "monoliths" will be a good forage site.  Windkill--yum!

I understand, it's truly appropriate to tear asunder your natural heritage. Sadly, you've been doing that for several generations. Thus, for as long as possible, electrical devices of all kinds may continue transducing, and a new class of consumer, the poor-beyond-poor, can inhabit the space beneath these "monoliths" hoping for just one good meal, just one. Will their wait be rewarded?

May you one day wake and see what might have been. Only then shall you know what you have wrought..

Globally, I'm not sure how many people cars kill each year, but it's more than a few. Once we stop killing people with cars we can start worrying about not killing birds with windmills.  
Overall, 42,636 people died in car crashes in the U.S. last year.  Over half -- 55 percent -- of those killed in vehicle crashes were not wearing safety belts.

So that would be 820 people killed every week.  

bird deaths............

number of U.S. annual bird deaths and the cause.

Deaths due to collision:

300,000,000 - buildings
200,000,000 - free roaming cats
150,000,000 - transmission and distribution lines
70,000,000 - trucks and autos
60,000,000 - pesticides
50,000,000 - communication towers - doubling by 2010

As compared to wind turbines the bird mortality rate is about 2.0 birds per year per tower. Also, it is becoming more common practice to site new wind farm developments out of the way of migratory paths and the increased size of the turbine blades also minimize the chance of bird death on collision.


Good comparison (and numbers), Wharf Rat. Thank you.
Iraq oil production rises 15 percent in southern fields

BASRA, Iraq (AFP) - Crude oil production in southern
Iraq has reached 1.95 million barrels a day (bpd), a 15-percent rise over the average output of the past 10 months, the Southern Oil Company director has said.

"Since yesterday (Monday) production levels reached 1.95 million bpd," Jabbar al-Luwaibi told reporters on Tuesday. "Average production over the last 10 months has been 1.7 million bpd," he added.

On May 23, then interim oil minister Hashem al-Hashemi said Iraq's total oil production for the northern and southern fields reached 2.1 mpd in April, the highest level since the 2003 fall of the old regime.

An average of 1.62 mpd was exported in April, or the equivalent of the average daily exports in 2002, according to Hashemi.

And twice (1.15, actually) nothing is still nothing.
A genuinely massive effort is presently being made in Iraq to get production numbers up, and yet they still have not reached pre-war output levels.
Iran is backing the troublemakers in Iraq, helping to keep Iraqi oil production down and prices up. Maybe this is too obvious to state, but Condasleeza forgot to mention that in this instance, Iran can eat their cake (export a lot) and have it too (keep prices up).
To make things worse check out this article...


To give you an idea...

Military commanders in the field in Iraq admit in private reports to the Pentagon the war "is lost" and that the U.S. military is unable to stem the mounting violence killing 1,000 Iraqi civilians a month.

Even worse, they report the massacre of Iraqi civilians at Haditha is "just the tip of the iceberg" with overstressed, out-of-control Americans soldiers pushed beyond the breaking point both physically and mentally.

There were problems in Kilo company with drugs, alcohol, hazing [violent initiation games], you name it," she said. "I think it's more than possible that these guys were totally tweaked out on speed or something when they shot those civilians in Haditha."

Now take a deep breath and repeat after me....VIETNAM.

I knew crystal meth was big in Kansas, I didn't know it was big in Iraq (oh yeah, those guys are from Kansas).
My uncle told me stories about the speed and he would know he came back hooked to it.  Before cocaine became as popular as it is, the CIA field manual recommended cocaine when you may need a boost in the field due to injury or in a tight situation.

I forgot that LA cop who wrote the book detailing this about his fiance breaking her ankle(s?) and she snorted some coke (before it was mainstream) and she sat on the phone (finishing some CIA junk I suppose) for like an hour before she had him take her to the hospital.  

I just read a book, "The Last True Story I'll Tell" about a guy in Iraq, he was in the National Guard to pay for college and when he had 2 credits to go, they sent his Guard company there. Very good read. The Iraqis have quite a culture of drinking booze, which is sold by street vendors, along the banks of the Tigris, and anything else you might want is available too. The book really gives the impression Iraq is an out of control place, which it apparently is.

I was reading about this Kilo Company business, and there's another opinion out there, that a reporter spent a bit over a half a year with Kilo co. and thought they were fine.

Tate: If you haven't heard it, listen to the 2nd hour of the financialsense broadcast from Sat. I think you will like it.
Where do I get it?  financialsense.com, but where once I'm there?
Also, Contraryinvestor has free monthly summaries that are excellent.
Read the full Newsweek article here:
Yes, 250 kb more than the last ten months' average is no higher than a level already reached during that period (last September). Nothing new to see here.
I am compiling existing plans for Urban Rail and any supporting analysis, to see what can be taken off of the shelf and built in a decade or so.

Just went through a pdf file on Los Angeles and hand transcribed #s for each project.

$23.8 billion in 2015 $

24.8 miles of subway, 109.3 miles of light rail and 11.5 miles of freight railroad running passenger service.  101.6 million boardings/year.

Just looking at a map, a good majority of Angelenos will be within a half dozen miles of a station.  Many within bicycling range.

Boardings were calculated in 2003, add higher energy costs to the mix and those #s will rise.  Give some time for TOD (the other one Transit Orientated Development) and ridership will climb even more!

IMHO, building out these plans (plus more) in Los Angeles makes more sense than building and operating a coal to liquids plant !

BTW, any good #s on capital and operating costs for a coal to liquids plant with and without carbon capture ?

My list of projects (my shorthand for offical titles):

Burbank LRT
Gold East - Air
Gold to Montclair
Green Harbor
Green North
Green South
Harbor DMU
Red Subway CC to Sea
Red Subway North
Red Subway to CC
Silver LRT
Vermont Subway
Yellow LRT

Living here in Japan, and enjoying the cost savings of trains, I keep wondering if there will ever be a city in the US which could ever rival the major metropolitan areas here, wrt rail transit.

I guess I believe that in a city like Los Angeles the #1 issue is not so much right of way (thought ROW is always an issue to some extent), but the social-outcast nature that is attached to transit options.

Never, not once, in my travels around Japan, including on some of the most desolate and darkest streets after midnight, even in seedier areas, have I feared of being mugged or having my pockets picked.   Something tells me (namely, my own driving experience around LA) that riding on the LA green or blue line would be a different experience.

I can be packed like a sardine in train car in Japan and not be at all concerned I might lose something.

It is acceptable to women I date that I don't own a car.

I've never been at a loss to find help at a station, for directions or anything else.

Etc., etc.,...

You get the picture... there is much more to the challenge of reinstituting rail in the US than tax dollars.   Indeed, taxes and plans are not really the issue IMO.

Speaking of tax dollars, have you been considering the future of private rail?

There is, no doubt, a class difference between rail and bus.  One extreme example is that New Orleans only billionaire often took the streetcar to work (he died a year before Katrina).  I doubt that he EVER took the city bus.

The Red Line was a fairly upscale crowd in LA, as is the Gold Line.  The Blue Line goes through the heart of the barrio, but I was not uncomfortable taking it.  The Green Line was in between.

I think that you are wrong, there is a social negative about taking the bus, but not Urban Rail.

a class difference between rail and bus

That's my observation in the San Francisco Bay Area of California, too, especially the South Bay and Mid Peninsula. People riding Caltrain are mostly white-collar types or in the technology industry (or both); bus riders seem to be moms with small children, laborers, and other 'non-professionals.' I think cost might be part of it: the buses are painfully slow but cheap, while the trains can be fast but are more expensive.

My employer gives me a regional bus pass for free, but I pay the $99 each month for a Caltrain pass. I've sat on the buses plenty, I don't mind mixing with bus riders, and I'm familiar with the VTA system, but it's just too slow for me.


Solar power plant for North China

Solar Millennium AG, a Germany-based solar energy technology company, is working with its Chinese counterpart to build a multi-billion-dollar solar power plant in North China.

The firm, with the Inner Mongolia Ruyi Industry Co Ltd, is conducting a feasibility study for the project in Ordos of the northern Inner Mongolia Autonomous Region.

Preparatory work will be completed for construction to begin by the end of the year, said Christian Beltle, chairman of Solar Millennium.

When completed, the plant will be China's first large-scale commercial plant converting sunlight into electricity, industry experts said.

The project, using solar-thermal technology provided by Solar Millennium AG, would have a capacity of 1,000 MW (megawatts) by 2020.


That's the future right there. Sad it's in China.
A few thoughts:

On my way to New York last weekend, I was stuck in a New Jersey Transit train for about half an hour because the overhead catenary lines were lacking sufficient power.  Recall that a week earlier the entire northeast corridor was affected, and several dozen trains - both Amtrak and NJ Transit - coasted to a stop, some under the Hudson River, due to a cascading power outage.  Which leads to this question:  Why must our rail transit systems continue to lurch from one financial crisis to another, always begging for the table scraps of transportation spending?  Why is there no dedicated funding source?  (no doubt, this issue has been addressed here in this forum before).  

Common sense tells me that as the age of cheap oil comes to a permanent close, we ought to be doing whatever it takes to fund the necessary capital improvements for our rail transit systems to help prevent these system failures.  But of course, rail transit never had the lobbyists to throw money at politicians the way auto, oil and airlines companies did for so long; perhaps this answers my question to a great degree.

On another matter, do you sense a general lull in the energy markets?  After the very impressive runup in crude prices in March and April, things have settled down.... for now.  But I get the uneasy feeling it will not last for very long.  Here's a question I want to pose for you:  what will we see next - $80 a barrel or $60 a barrel?  My money rides on the former.  After witnessing a few of these smug pundits on cable television blow their "$50 a barrel before $70 a barrel" prediction with such absolute self assurance, I realized my own instincts are more reliable.  

Have a nice day!

I think we'll see $80 before we see $60.  And it will probably be due to a hurricane in the Gulf.
Might be nice to have a GOM temperature tracker, year over year perhaps... located somewhere useful (like below the NYMEX graph).  
The only thing I know of are the SSTs

I don't think you can draw much from SSTs as they can change quite a bit from day to day.  It's the deeper water temps we need to get at.

Enter your own date range here

Here's 06.05.2006

Here's 06.05.2005

Here's 06.05.2004

Does anyone know of where they post the Sea Temperatures?

Ahh, here we go.  This is what I was looking for.


This site has mountains of data.

Here's one little chart on Galveston, TX area (sea temp).


Suggest that an answer to your question "Why must our rail transit systems continue to lurch from one financial crisis to another, always begging for the table scraps of transportation spending?" could be:
because you are unwilling to pay a ticket price for a high quality, 99.8% assured service.

The reason I believe this is because of your next statement: "Why is there no dedicated funding source?" as if you expect someone else to pay for your transportation.

Yes, I realize automobile travel is subsidized - vehicle and gasoline taxes don't pay the full cost for private automobile and truck usage.  Perhaps that should change, and the general revenue taxes be refunded to the taxpayers... but I wouldn't hold my breath.


While riding through Memphis Yesterday, I noticed an Oil Refinery, that was burning off something from 2 smokestack towers.  

What was it?


Why were they wasting something that was burnable by just burning it off?

Dan Ur -

From what you described, it sounds to me like some pressure relief valves popped and sent some gaseous hydrocarbons to the refinery's flare system. Typically, the discharge side of the pressure relief valves are tied together via a piping system that flows to a small flare which is kept lit at all times (sort of like the pilot light in a kitchen stove).  When the hydrocarbons hit the flare, they burn off, and hence the flame you are seeing. If there were no flare system,  the hydrocarbons would be discharge directly to the atmosphere and contribute to VOC air emissions.  So, the flare is both a safety feature and a pollution control device. Obviously, one wants to avoid having pressure relief valves going off too frequently, but sometimes things happen that can't be avoided.

Some Econ data for the day...

http://www.dallasnews.com/sharedcontent/dws/bus/columnists/all/stories/DN-dimartino_05bus.ART.State. Edition1.e274a31.html

Year-over-year foreclosures through the end of the first quarter were up 72 percent nationwide. And home equity delinquencies are fast closing in on 7 percent; they're up 9 percent over last year.

Aaaahhhh....the calm BEFORE the storm...enjoy it.

Good stuff, Tate. Thanks!

U.S. to give Iran nuclear technology

VIENNA, Austria - A package of incentives presented Tuesday to
Iran includes a provision for the United States to supply Tehran with some nuclear technology if it stops enriching uranium -- a major concession by Washington, diplomats said.
On the surface it looks like Bushco may actually be trying to do a very positive thing here.  It will be interesting to see Iran's reaction to this.
Consume More -

I just read the same thing. Until I see more details, I will remain highly skeptical of the Bush regime's true motives in its actions toward Iran. It could be genuine, or it could just be a ploy to show the world that,  'Lord knows we've tried to be nice' ..... before we take military action.

 Nor should one underestimate Israel's influence on what the US does or doesn't do with regard to Iran. They want Iran taken care of, one way or the other,  and have enormous clout in the US Congress. Woe be it to any congressman up for reelection who doesn't take a tough line on Iran. (Notice that there is no open debate on Iran in Congress. Why IS that?)

 Let's keep our fingers crossed that things will eventually get resolved peacefully, but let us also keep in mind that there are strong forces at work pulling in the other direction.  

I think this is the first time I have seen BushCo give up and change its strategy on anything in 6 years.  Either Iran has one heck of a blackmailing scheme going or we (read the world) really can't afford to lose any oil production from Iran.   What a minute...I guess that could be the blackmailing scheme right there.
"I think this is the first time I have seen BushCo give up and change its strategy on anything in 6 years."

I'm a long way from believing that's what's happening here.  I still think it's just pre-positioning - so we can say "well we really tried".  If they actually negotiate with the Iranians without the preconditions, then I will be willing to consider it real.

I think BCR needs a bogeyman to scare, I mean, "rally" the electorate just before the midterm elections.
We made the same type of offer to North Korea in the 90s....
Hmm, first we go back on our word and agree to negotiate face-to-face with Iran, now we agree to give them nuclear technology.  If I was Iran I'd hold out for Manhattan, Yellowstone National Park, and the Washington monument.  
More importantly, the article points out that we have a strict policy of not noegotiating with terrorists.  Last I recalled Bush labeled Iran one of the the biggest terrorist sponsored countries.  So now we ARE negotiating.  What a joke.  
Yes, what happened to the post 9/11 "we will not distinguish between terrorists and the countries that harbor them."
They sent out a memo; you mean you didn't get it?
Over PeakOil.com, someone just pointed out that Javier Solana is believed to be the Antichrist in some circles. (Seriously - Google it.)  And now this deal, on 06/06/06?  I suspect the Rapture index is headed up...
That stuff is priceless, thank you!
He shall not regard the desire of women (Daniel 11:37)
Some scholars see the desire of women meaning the desire to "give birth to the Messiah". In any case, Javier Solana has a wife and two children, but lives on his own in Brussels since taking the post of NATO Secretary General in 1995.
Take a look at this:

EIA: May OPEC Oil Output 29.335 Million B/D, April Revised Down

There is a 4 MBD lag from EIA's numbers to IEA's, any guesses why?

In particular there is also a misunderstanding as to what is being measured and covered. For instance, American Petroleum Institute and EIA regularly publish weekly data on the US stock position (with sometimes conflicting with each other). Note that the weekly bulletin of API is based on voluntary reporting with coverage of about 90-95% on most major series. Best data come from EIA petroleum supply monthly but it comes out 2 months after the fact. (see here for more on that). The EIA uses the same definitions as API. Their reports are released the day after API's. The problem is sometimes is not with stocks but with logistics like frozen waterways and ports being closed due to bad weather.

Maybe this is why?  I'm not familiar with all this type of data, but I ran across this article and it may at least be tangential to your questions and somewhere within this lengthy article, may be your real answer.


They're counting different things, you have to look at the figures for all liquids.
But there is indeed a substantial gap, not 4 mb but 600 kb in March, and growing all the time. Surely IEA will have to revise down now.
I have to show you this even though it has nothing to do with oil...well someone can make something up.

http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=389357&in_page_id=17 70

I don't know how to post pictures, but PLEASE look at the pic there.

Coolest.  Thing.  Ever.  Deploy Batman to Iraq!  Yes!
Here you go:

Elite special forces troops being dropped behind enemy lines on covert missions are to ditch their traditional parachutes in favour of strap-on stealth wings.

The lightweight carbon fibre mono-wings will allow them to jump from high altitudes and then glide 120 miles or more before landing - making them almost impossible to spot, as their aircraft can avoid flying anywhere near the target.

Dunno how practical they'll be in the post-carbon age, though.  Carbon fiber = high-tech plastic.  So it's another petroleum-based technology.  ;-)

Want a laugh?
Here's what I get when attempting to view it (from work, natch'):

"Air Force Materiel Command - Proxy Server Policy Denied"
"The website you have attempted to reach has been blocked by AFMC or Air Force policy."
Certainly would want us looking at it, eh?

I thought a while about Sen. Debby's idea on providing relief from gas prices. The effect would be trivial. I've thought about CAFE standards. Too many loopholes, too little effect, and too slow in making serious changes.  What America needs is petroleum rationing in a big way. If we limited petroleum use to what we can domestically produce it would drop worldwide demand by 10-15%, providing price relief to poorer countries, while effectively increasing prices domestically thereby stimulating investment into CTL, BTL, and plug-ins. Arab monarchies and their financing of terrorists would collapse. We could bring the troops home from everywhere since foreign oil would no longer be a "vital security issue". The US trade deficit would dramatically shrink with its concurrent economic benefits. Given 90 days notice the American people could figure out how to get by with less gas. An Internet based ration trading system could be set up for those willing to sell part of their ration to those who insist on still driving guzzlers.  One way or another it will happen and the sooner we do it the better it will be in the long run.
A little off topic here, in a way, but.....

What if....there was another plan?  
Already in the works?
A grand 'Strategic Vision'?

Peruse the following two links, in order:
http://www.amazon.com/gp/product/0745322069/qid=1129652725/sr=1-1/ref=sr_1_1/102-3515470-9410501?s=b ooks&v=glance&n=283155

Left hand column here is excerpted from the book above:

The only thing about this rationing stuff is what happens when you voluntarilly ration gas.  A black market will be created to sell more gas at prices slightly above the market rationed price.  People would spend their money and it wouldn't even be counted as GDP, wow would that take a MASSIVE hit or what?
Well, here's what I'm curious about...is this Sen. Debby really that clueless or is she well aware of how ridiculously ineffective this is and just playing to the crowds?  Actually stupid or wilfully obtuse?
Energy appetite remains hearty

Government ups its estimate for U.S. and world demand growth despite high prices.

NEW YORK (Reuters) - Soaring energy prices may not undercut world oil demand growth as much as some experts had feared, as consumers become accustomed to the higher costs, the U.S. Energy Information Administration said Tuesday.

The EIA, the statistical wing of the Department of Energy, reported small upward revisions to its world and U.S. demand growth forecasts in its monthly oil outlook.

"High prices are having an impact but they are not yet leading to a demand decline, just a slowing," said EIA analyst Doug MacIntyre. "Demand growth could be stronger this year than last year despite higher costs. It may be that people are sort of adjusting."

Once again, more evidence to support my pet assertion (supported by Khebab previously) that petroleum demand is largely (x10-to-x1) inelastic.
An order of magnitude increase in the pump price will be necessary before significant meaningful demand suppression takes place.  
The term 'demand destruction' is something of a misnomer, for demand is not permanently destroyed by higher price signals, only temporarily suppressed.
Just to be clear, with pump prices around 2.75 x 10^0 USD per US Gallon, you think the price will have to go to 2.75 x 10 ^1 USD per US Gallon, correct? When prices are approaching ~ 30 USD per US Gallon, you then expect not "demand destruction" but temporary "supression?"

Wow. The Yanks must be absolutely stark raving bonkers. I'd get out and walk long before petrol hit 10 bucks.

Yes, gas at $27.50/gal (+900%)would effectively suppress demand by 90%. Most would hoof it at that point, yet 10% would still buy it. Likewise, double the price (+100%), and you cut demand by 10%.
The numbers are based on YOY demand/price data and a previous WSJ article.
This is an area that I am interested in, both short term and longer term elasticity of demand.  Can you give more details ? (I know WSJ is behind a paywall)
It easier to copy wiki then explain...

Further, elasticity will normally be different in the short term and the long term. For example, for many goods the supply can be increased over time by locating alternative sources, investing in an expansion of production capacity, or developing competitive products which can substitute. One might therefore expect that the price elasticity of supply will be greater in the long term than the short term for such a good, that is, that supply can adjust to price changes to a greater degree over a longer time.

This isn't demand and demand and supply are different, but yes the short and long term price elasticity of demand may be different.  Not necessarily so, but most long models a culmination of lots of short term models.

Yes, I understand that.  the supply demand curve has a third dimension of time was the way my EXCELLENT high school economics teacher explained it.

What I am looking for is values for both US and world price elasticity of demand over time with constant economic activity.  Just HOW elastic are we over some time interval ?

So far, a 50% increase in price seems to restrain US oil demand about 1% over what it "would have been" without reducing overall US economic activity.

This 50:1 ratio should shrink with time, but by how much ?

I know this thread is mostly dead, but Alan here you go:

From behind WSJ's paywall (5/1/06):
"Research suggests it takes years for higher gas prices to meaningfully damp consumption. Opinions differ, but many experts say that, in the short term, the "price elasticity" of U.S. gasoline use is as low as 0.1. That means gas prices have to rise 10% to produce an initial 1% drop in demand."


There is also the obvious: Crude prices are up over 300% since 1999 (under sub-$15 crude vs. $70+), yet both US national annual and worldwide annual demand has continued to rise throughtout that same 7 year period, in total opposition to these price signals (from IEA numbers).

Others on the subject:
http://are.berkeley.edu/courses/ECON100A/2006/student%20applications%20to%20post/Application%20writi ng%20-%20Jay%20Jo.pdf

In searching for more information on the web, use the term "price elasticity" rather than "demand destruction".

Note that this refers to US demand elasticity.
Demand suppression is more resposive to price increases elsewhere, as the article below indicates.

Excellent articles!  Alan, the marginal increases are cumulative and you're right even though prices have rises 50% our demand has curtailed around 1%.  However the next 50% includes the last 50% increase so it would have a greater impact, at least you would think.

To provide for the common defense by requiring all persons in the United States, including women, between the ages of 18 and 42 to perform a period of military service or a period of civilian service in furtherance of the national defense and homeland security, and for other purposes.

If you don't believe me see the links below. I think that this explains the cameras and security fences along the north & south boarders not to keep people out but to keep people in.


Don't read too much into this.  Charlie Rangel has been pushing this notion for a while, as a way of drawing attention to the racial inequality of the current system, i.e. African Americans in the US make up a larger percentage of the military than they do the general populace, thanks to reduced economic alternatives for that group.

I would bet anything that Rangel knows there's zero chance of that bill going anywhere.

Rep. Rangel has been "pushing this notion" since HR 163 was submitted in the House in January 2003. Once again the bill stands before the house. Even if defeated, will that be the end? As an American, are you prepared to risk the lives of those you hold dear without any effort to ensure this legislation never again comes before the house?
Here is the thing,,,
I understand what you are saying. However they are debating this as of today. The idea is to do what the Israelis' do and make service mandatory. As the $ crashes the choices will be going to a camp or service. All of this is frankly possible. Who would have thought we would have a dictator in the US? Who would have thought both Dems and Repubs after giving war powers to the Exec branch still want to stay in Iraq even though they did not do 9-11?

My point is that these days anything is possible and Rangel is part of the same body that brought us utopia on a stick with a side of death.

Exactamundo.  See the last two paragraphs from his web site:


It's devised to draw attention to the crappy job Bushco has done with their war planning.

Doug Noland's latest Credit Bubble Bulletin over at the Prudent Bear site presents an interesting take on the increasing weight of oil exporters' investment decisions on capital and currency markets. An excerpt:

"As much as I despise the "Bretton Woods II" hypothesis, there was some truth to the notion of the symbiotic relationship between the U.S. as borrower and consumer and Asia as producer and saver.  The significant Financial and Economic Power now shifting to the oil producers entails quite different dynamics and should be cause for concern.  We do not enjoy such a symbiotic relation with the oil producing community, while the rising prominence of energy on the world stage will diminish the Asian infatuation with our securities markets.  We could always count on the Japanese to do what we wanted, and the Chinese and other Asian countries have to this point basically followed a similar path.  But many oil exporting countries clearly hold us in contempt."

His piece begins more than halfway down the linked page. Just scroll down or search for "What Difference Does a Year Make" -- that's where his remarks begin.

I'm having a devil of a time trying to find something that I'm sure is out there: A table of the oil producing countries listing the date of their peak production (past or projected).

The best one I could find was on page 103 of The Party's Over, but that's about 6 years old, and I was hoping for something more current.

I've Googled until my mouse button finger was raw, but I can't seem to locate this information.  

Suggestions, anyone?


This gives you crude + condensate by country and region for several decades.

Thanks.  That helps a lot for the historical data.  Hopefully I can come up with a good source for predictions on the countries yet to peak.
You'll find it interesting how those dates cluster (70s, 1995-2000).
Drivers getting used to higher costs

The San Jose Murky News has a story today that people aren't fed up with $3 gasoline anymore.

``I have not been told by any of the cashiers that people are griping anymore,'' said Jan Root, who manages a Shell station in West San Jose where prices have fallen from $3.32 a gallon on Memorial Day to $3.19 on Monday, 11 cents below the state average of $3.30.

The new reality: Drivers seem to be getting used to gas at $3-plus a gallon. Just like they did a decade ago when gas first soared past $2 in California, drawing outage and promises of probes into the behavior of Big Oil.

Oh, and we have no control over gas prices:

"I learned a long time ago that you can't be angry with something you have no control over. Gasoline prices is one of those things."

All contradictions of the population overshoot debates are explored with the usual pathologist's thoroughness over at The Onion. Enjoy...

Emergency-management personnel [...] fear the mounting life toll will only grow as tiny bodies are discovered among the human wreckage.
I thought The Onion was supposed to be funny. And fictional. There was too much reality in that and it was just sad.
It's been a long time since I last thought of The Onion as a humor site. What it really excels at is its own brand of social commentary (of which the present piece is a prime example). Sometimes it seems they can pack 1.2 bytes of truth into each byte of text. If Jonathan Swift were alive these days he'd be at The Onion, no doubt.