DrumBeat: June 7, 2006

Now for some wise words from the readers of The Oil Drum...
Another oil company calls for conservation:

Total sees 2020 oil output peak, urges less demand

AMSTERDAM (Reuters) - France's Total (TOTF.PA: Quote, Profile, Research) estimates global oil production will peak around 2020 if output growth continues at current levels and has advised governments to cool demand to avoid a supply crunch, its chief executive said.

"The capacity of raising (oil) production is a real challenge ... if we stay with this type of production growth our impression is that peak production could be reached around 2020," Thierry Desmarest told the World Gas Conference in Amsterdam on Wednesday.

If demand growth was cut to 1 percent from the nearly 2 percent experienced in recent years, the point of peak output could be postponed by 10 years, the French oil major's CEO added.

"We say to governments, it's urgent to take action plans to reduce oil demand growth," Desmarest said.

Aren't companies supposed to encourage increased use of their product, not discourage it?  

I have learned so much from reading this site. But I do recognize that the preponderance of oil related news comes from here or energybulletin.net. Ocassionally, articles like this throw me, and I start over from scratch. How can all the smart people at TOTAL see output increasing until 2020 when all the analysis here shows 2006-2010 peak?

Is it semantics? (e.g they are including tar sands, ethanol, etc and therefore it is a net vs gross disparity)

Is it they all use the same governmental/private research basis that is inherently flawed?

Is it political, in that they dont want to alarm people?

Or are the near term peakers missing something?

Or a little of everything?

I for one think people are conditioned to believe optimists over pessimists, and that the corporate esprit-du-corps will tend to build in best case, and therefore is unrealistic. I also believe that NO ONE knows, not Matt Simmons, not TOTAL, not westexas, not me, but that is kind of the point - operating on the precautionary principle because the uncertainty is an order of magnitude higher than the things we are certain about. Thoughts welcomed..

I think business types are just naturally optimistic.  If they weren't, they wouldn't be businessmen.  
I think they just don't want to alarm people.  If TOTAL were to say the peak were to happen in 2006-2010, there'd be a huge level of shock out there.
Slowly, gently, we are being softened up.
I think this too.  Preparation is underway to let us know that PO is approaching - soonish.  We are part of that here at TOD.

Don't misunderstand me, I don't mean this to sound conspiratorial, or believe it to be a particularly well organised preparation.

Long term bad news, preconceived, is seldom dished out bluntly.

Hey, Alice, your pet dog has cancer - it will die a slow, painful death.  Treatment is too expensive, and this will only put off death for a short time anyway.

versus

You know, Alice, Rover has to go away for a while.  It will be really good fun for him.

That's how we deal with bad news.  Partly it's for our benefit, but often it's damage limitation.

Hello Mudlogger,

Your Quote: "Slowly, gently, we are being softened up."

Please contrast with Zimbabwe's harsh 'reality beating' as Olduvai Gorge Theory asserts itself:

------------
ZIMBABWE again has been hit by a wave of nationwide power outages in winter as the struggling state-owned electricity utility increasingly fails to ensure reliable supplies.

Reports from Zambia said yesterday that that country's recent countrywide blackout was related to Zimbabwe's supply system.

Zimbabwe's capital, Harare, and other towns have for the past few nights been plunged into darkness as the Zimbabwe Electricity Supply Authority (Zesa) cuts power in the face of continued shortages and distribution problems.

Plush suburbs in Harare such as Borrowdale and Glen Lorne and areas like Hillside and Hatfield, as well as teeming townships on the outskirts of the city, have been without power the past few days.

The Combined Harare Residents' Association said that the power cuts showed government had failed to provide basic social services. Education, health, transport, and water and electricity supply are near collapse as the economy disintegrates.

Zesa said on Monday the worsening power shortages were due to "reduced electricity generation capacity, low tariffs, distribution problems and regional shortages".

Zesa owes foreign creditors a staggering $330m, making it technically insolvent. The crisis is compounded by shortages of foreign currency and spare parts.
-------------

http://www.businessday.co.za/articles/world.aspx?ID=BD4A212040

Zimbabwe is the model of how not to gracefully decline--the US should be entropically planning ahead on how to best shrink and relocalize electrical distribution to maximize uptime.  Recall the posting whereby the US military controls the 'juice'.

I have said it before, but I will say it again: utilities need to be ramping prices much faster than inflation to have adequate funds to prevent blackouts.  The rapid shedding of thieves, delinquent consumers, and poor cash-flow corps is essential so that those that can afford juice will pay for it vs buying gensets for themselves.

Hopefully, US & state utility regulators are examining this COUNTRYWIDE COLLAPSE and realizing that the early forcing of millions off the postPeak grid is the best way to keep the remaining grid blackout free, well financed for parts and maintenance, and well-guarded against attacks [both foreign & domestic].

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

buying gensets for themselves.

Whgat is wrong with having a PV genset you bought with your own money?

Hello Eric Blair,

Absolutely nothing--in fact, that is the optimal solution for nearly everyone, but what tiny % of the US will ever be able to afford this?  Recall that hurricane victims buy gensets instead of PV panels to power their refrigerators, at the minimum.

PostPeak, those economically forced off the grid will resort to woodfires, kerosene space heaters, and ice chests-- expect a lot of house fires, carbon monoxide poisonings, and outbreaks of food poisonings.

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

What a little staement- food poioning.  Nat'l Geo just lately stated that refrideration has saved so many people comapared to all other modern machines.  IMO it is the biggest reason to want some "homepower" set up.  Lights heat, etc. can be had much easier.  
TOTAL has zero obligation to inform the public on this issue. No one has any idea what executives at TOTAL believe re oil depletion (possibly internal memos would help). Look, the head of GM is still talking about success for the company. He is a smart man. Don't confuse intelligence and honesty (or ethics). Company reps say things for reasons, not because the company has a desperate need to inform the public of the truth.
I know it's been pointed out, but don't confuse a shareholder(owner of the company) to the general public.  Companies answer to their owners and if you aren't one, shut up.
Whatever.
This wasn't direct @ you.  Just a general statement that people who don't own the company have no say from the companies perspective.
Look, the guy made the comment at an oil conference covered by the press. I am literally amazed that in 2006 people still put so much blind faith in what company reps say(not just to the public, but also to their own shareholders). You are extremely confident that if TOTAL believed the we are at peak right now, they would say this(at least to their shareholders). Nothing I can say will change this. As an aside, Mark Cuban wrote on another blog site and the jist of his column was that shareholders are delusional if they think that upper management is working for their interests (the interests of the company). Upper management are working for their own interests (often these two interests coincide).I'm just saying you have to take public pronouncements with a huge grain of salt (or if you choose, ignore everything I have said-either way works.    
Im not arguing about Total.  I'm only distinguishing the public from a shareholder.  I don't put blind faith in anything anyone says.  Many people here know to research the so called "facts" and make up their own mind.  I'm in that camp.

I'm only pointing out that companies answer to their shareholders.  I agree that upper management goals are not aligned with shareholder goals and therefore management doesn't tend to care about shareholders.

In the end, a company does answer to it's shareholders and if you don't believe me then there wouldn't be corporate takeovers, hostile or otherwise.  Most times their is a majority shareholder who controls the votes on anything.  Those that are in a position to make changes, can and do.

Just one observation, since the company is French, they are way more progressive about this energy debacle. They drill conservation into their kids at an early age. Their cars are small, they are into Nuke in a big way, they've got the high speed train TGV, they never had the oil to begin with, 5000 people die in a heat wave due, etc. So it's more 'preaching to the choir' to the Frech public who won't panic from it.
BrianT - There are very few people that are still alive who can talk to you about real suffering- rationing during WWII the great depression-  I don't think our society is mentally prepared for what is coming and because so many don't even want to think let alone talk about it(and they have never experienced anything harsh so cannot visualize this happening).  I'm sure that you have had the same response that we have all had it talking to other people about this...they just simply don't want to hear something really terrible is going to happen.  They are correct in there is little if anything that they can do about it( the most common response I get).  I see a slow grinding decline with minor or major problems depending on where you live.  Once everyone is suffering enough then they will listen. Will it be too late...
After thinking about it, the premise of strong form market efficiency, (which includes all private information) would suggest it unlikely that TOTALs and other oil executives  hold an opinion that dramatically differs than their public (shareholder) statements. Privately held opinions and info (of a pending peak) would make it through the ranks of these big oil companies and the 'whisper' numbers would find their way to the futures and equity markets - youd also see all the senior execs at these companies buying farms, etc.

No - a more likely explanation is that these 'corporate' oil people are telling truth for the most part as they see it. (telling lies on such a grand scale is difficult - someone always leaks).  They are seeing slight increases in production and megaproject list. What they are missing is the marriage of their view and the Hubbert view (voiced here of late by westexas and others) that SA is 58% depleted and the world is peaking. The answer that bridges these two viewpoints is a very steep world decline rate and a maximum production peak far to the right of the midpoint of the distribution.

If we are borrowing from the second half of the distribution curve, without knowing it, then the market will extrapolate our continued increase in production as evidence of no near term peak. The problem with this of course, is once the production peak occurs, we'll be well past the 50% Qt level, and have to fight much higher decline rates in addition to the net energy, net export, geopolitical stuff.
I continue to think everything is copasetic until its not with nary a few months in between. Essentially, this implies that few people in the marketplace really use or believe Hubbert on a world scale.

Maybe. Or maybe that permanent "fear premium" of $15-20 that is supposedly built into the oil price is total (pun intended) BS.
Thelastsasquach, I generally agree with your post here but have always been impressed by the extent that "The Big Lie" can be successful despite the presence of leaks and obvious justification of doubt (see Hitler and GWB).  IMO, the critical factor in spectacular mendacity is when people possess a potent motivation to believe the deception.  In this case, people are ready, willing and able to be lulled into an SUV forever "sleepwalk" Kunstler style. Whether the TOTAL people are sincere and believing their own reports or trying to "soften" people up for the bad news or something else I really don't know.  
Good observation about motivation. Everyone blames the fraudster but the sucker is often a willing participant in his own demise.
You think Kenny Boy Lay used to tell the truth for the most part about Enron as he saw it?
I've seen totally evil people at close range a number of times. They are narcisistic-they cannot see other people or the world as anything but extensions of themselves and they try to corrupt others because if the other people are corrupt, then the evil person's behavior is totally justified.
   Kenny Boy is quite intelligent-he has a doctorate in Economics and has been in the upper management of three Gas Companies-but I believe he is responsible for seducing Skillings and Fastow and the partners at Arthur Anderson into the self-destructive paths that lead to their downfall. This wasn't Kenny Boy's first rodeo. He was the archetect of Transco's venture into coal bed methane that sunk the company(it became Williams Brothers), he talked the Republicans into decontrol of Natural Gas (look how much money we can make on futures). He had his first wife commited in order to cheat her of her community interest in Enron so he could marry Linda, he stole fro his employers by having his mistress on the Florida Gas payroll(that's Linda)and has generally behaved like an evil person while telling everyone how honest, how christian and how conservative he was. That's why we follow our King George II and just call him Kenny Boy.  
Very illuminating - the media of course fell for the story painting first Fastow, then Skilling as the mastermind - good to hear, that, as logic always suggested, it was the other way around.
Hello Smekhovo,

Thought-provoking reply, LOL!  We need politicians and businessmen with a more honest backbone like former Pres. Harry Truman:

QUOTE: "I never give them hell. I just tell the truth and they think it's hell."

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

I share the confusion

If TOTAL believed in a near-term peak they probably wouldn't say it - not good for the shareholders and way too controversial.

But equally why use a specific date 2020 unless you have at least some research to back it up. They actually seem to believe that production can grow until 2020. Why lie about something so important when you can just say nothing - after all the statement is meant to be a warning.

My back of the envelope calc - 85mbd at 2% growth per year to 2020 gives 110mbd - an extra 25mbd. Also the smart people at TOTAL must be aware that major fields are in decline - so they must have convinced themselves that there is an extra 30mbd+ to come on stream - 3 Saudi Arabias.

Saudi is promising an extra 3mbd and Canada oil sands an extra 3mbd - allowing for other developments lets call it 2 Saudis they expect to be discovered in the very near term.

How on earth can this happen - what on earth can they see that we can't ?

I think I am a natural pessimist and perhaps susceptible to PO theory. Most of my friends and colleagues think I am bit nuts. If this stuff was true they reason, we would have heard more about it - sometimes I wonder if they are right.

Can the smart people at TOTAL be so incredibly wrong ?

Put me down in the camp that believes Desmarest, like Ali al-Naimi, doesn't actually care whether or not what he says is true. He decides to say what he thinks will make his company look best, and tells a flunky to churn out a macro scenario that can fit that context.
Call it Camp Reality.
But these people have children, nephews, nieces, grandchildren - maybe even a moral conscience. This isn't about trying to fool a few shareholders, its about the future of civilization.

And even if you believe the execs only care about the share price - what about the thousands of oil engineers around the globe who live and breathe this stuff every day - why aren't more of them jumping up and down waving red flags.

I know some of the TOD'ers work for the oil companies - are your colleagues aware of peak oil, is it discussed at lunch or at the water-cooler - does it keep them awake at night ? Why aren't they all buying farms ?

Three of my siblings are petroleum engineers.  When I brought up the PO topic with one of them a couple of years ago, he just laughed and said "there's plenty of oil."  Another said to not worry, since "prices always come down in the spring." Neither really had a clue, and I didn't even try with the other one.  By now, though, the whole family is pretty sure I'm a nut case.  
Show them a copy of this Sunday's Dallas Morning News editorial page and ask for comments :-)
what was in the editorial?  Can you provide a link?
I checked the website for the Dallas Morning News, but couldn't find last Sunday's paper.  The most recent articles I found in the archives are from May.  It is (very) possible that I just don't know how to use the DMN site, but it is also possible that issues are archived by month, making the recent past unavailable until July.  

Is there a particular search term or phrase that might help me find the editorial? Maybe someone else saved it someplace online.

Thanks!

I believe when he said this Sunday he was talking about 6/11/06.  I think Allan helped Westexas write an editorial due out this weekend.
You're right! I can't believe that I totally forgot.  But, I've written myself  a reminder to go to the library on Sunday to look for the Dallas Morning News.  

Thanks!

My experience with oil majors has been that they primarily worry about their own reserves.  Their remit is to make good returns for shareholders, ensuring that the world has enough oil is far beyond remit of any individual corporation.  I worked for oil majors for 3 decades and we never really discussed the world situation.  It's not that they were trying to hide anything, we just had too much to worry about looking after our own patch to spend time on global picture.
But these people have children, nephews, nieces, grandchildren - maybe even a moral conscience.

So did the folks on Easter Island.

This isn't about trying to fool a few shareholders, its about the future of civilization.

Studies show that people are very concerned about relative gains and relative distribution of resources, not absolute gains. What's important is being the big fish, not necessarily the size of the pond.

Putting an exact date on it makes it sound more authoritative.  Make the date far enough ahead that people won't worry about it.

So what is heard is that the experts say everything is OK for a long time.  And yes, since that is what people want to hear, they will choose to beleive it over other information.

If demand growth was cut to 1 percent from the nearly 2 percent experienced in recent years, the point of peak output could be postponed by 10 years, the French oil major's CEO added

That doesnt jive. A 1% decline in demand offsets peak date to 2030? That implies an exteremely long plateau and must be taking into account numerous alternative energy sources...

Soon the 'glow' you get from Champagne might have an added feature.

http://www.commondreams.org/news2006/0530-03.htm

PARIS - May 30 - Greenpeace today revealed that France's iconic sparkling wine, Champagne, is threatened by radioactive contamination leaking from a nuclear waste dumpsite in the region. Low levels of radioactivity have already been found in underground water less than 10 km from the famous Champagne vineyards.

Saudi Arabia as the Canary in the Coal Mine

We currently have the conventional wisdom (CW) folks in one corner asserting that the world peak is years to decades away.   Historically, when CW has been matched up against Hubbert Linearization (HL), HL was won, most recently in the North Sea.   I am not aware of any specific HL predictions involving the North Sea, but I don't think that anyone disputes the plot.  It's basically a perfect linear progression.    The North Sea is a fascinating case history because it tests the "technology will save us" theory.  The North Sea peaked at the same point, relative to depletion, as the Lower 48, 29 years after the Lower 48 peaked.  So much for the technology argument.

(In an interview in Barron's, Matt Simmons said that the major oil companies working the North Sea were predicting, in 1999, that the North Sea would not peak until 2010.  Note that the major oil companies working the North Sea had the best data, best engineers and the best technology available.)

In any case,  given the vast complexities involved in evaluating world oil production, I have pretty much reduced my argument to just Saudi Arabia (SA).  I certainly think it is possible for the world to peak without SA peaking.  However, I can't imagine anyone asserting the opposite--that SA can peak without the world peaking, which brings me back to my point that SA is the canary in the coal mine.

Khebab's HL plot for SA--which showed SA to be 58% depleted in 2005--looks just like the other regions that have gone into terminal declines.

To expect to see flat to rising production in SA from the 58% mark is to expect to see that which has never before happened.

 The HL method and historical models predict a production decline in SA.

The Saudis have admitted to a 5% year over year production decline, but they claim that it is voluntary.  I doubt that it is voluntary.  

As I have relentlessly pointed out, the immediate problem for the world economy is that the top exporters--like SA--are more depleted than the world is overall, while oil demand in the exporting countries is, in most cases, going up very rapidly, resulting in a two way squeeze on available net export capacity.

I strongly advise everyone to practice ELP--Economize; Localize & Produce.  

Economize--Assume that your income just dropped by 50%.

Localize--Assume that gasoline prices are in excess of $6 per gallon.

Produce--Look into becoming or working for a provider of essential goods and services, especially anything related to food and/or energy production/conservation.

great post, and partially responds to question I raised above. Irrespective of when or how severe peak is, ELP is good advice...
I would add an H to ELP - an H for humanize. I suggest this for two reasons. Humanize could refer to assuming that some (many?) tasks currently performed by fossil-fuel powered machinery will in the future be performed by humans. As there is often a learning curve involved, making the necessary mental adjustment and learning practical skills in advance would be adaptive.

Humanize could also refer to the need to cultivate human relationships of interdependency (social capital) between local groups of like-minded individuals, the principle being 'united we stand, divided we fall'. Self-sufficiency is very difficult if it only involves the self and immediate family. In contrast, a loose network of individuals with a variety of skills can all make each other's lives simpler, more secure and less dependent on monetary income.

and HELP is a great acronym.
-pop
Here's an example from today's Seattle Weekly:

Food for the People

...Gardening author Steve Solomon wholeheartedly agrees. "For me, gardening has never been a minor affair. It is life itself. It is independence. It is health for my family. And for people going through hard times, a thriving veggie garden can be the difference between painful poverty and a much more pleasant existence."

In his new book, Gardening When It Counts: Growing Food in Hard Times, the Northwest gardening guru and founder of Territorial Seed Company details a plan to garden with few tools and a small investment. He also posits that peak oil prices and climate change will send more middle-class people to the garden in order to keep up healthful eating. "If you make a decision to eat local, you're going to take a big bite out of this petro-based economy," says Woodard.

The problem is we are also facing rapid and potentially catestrophic climate change as well as economic collapse due to energy shortages.  Here in the northeast we've had a solid month of cool, cloudy weather with record rainfall with no end yet in sight.  Farmers are unable to get their crops planted and the crops that are started are being ruined by all the rain.  And we have a short growing season so if this doesn't let up soon we'll have massive crop failures this year.

This is why I consider myself an extreme pessimist about humanities prospects to survive this crisis.  The one-two punch of oil depletion and climate change may be a knockout blow to our species unless a rapid reduction in our overshot population happens soon.  That's why I am hoping for some sort of pandemic to produce a massive culling.  It may be our only hope at this point.

I'll trade you some of our sun for some of your run.  Here in Colorado, we've had virtually no moisture to speak of since March.  The thing that scares me is that we used to have regular afternoon rain showers in the summer.  No more.  So there is no relief in sight.
it's been the same in Savannah, GA: we used to have regular summer afternoon storms that you could almost set your clock to: from 4:30-5:30pm it was going to be pouring.   no more of that any more, and the elimination of this much needed rainfall has occurred in only the last 4-6 years.  note this is the only area in the southeast that is not in a drout condition.
interesting times ahead...
-pop
WHere in CO is here? It is the same on the Western Slope - no rain in Paonia!
I agree. Most Americans, at least, are completely clueless when it comes to farming and climate.  Many think global warming will be great.  We'll just grow our wheat and corn in Alaska and grow bananas in Kansas.  It really doesn't work that way.  Climate change doesn't just mean everywhere is warmer.  And the crops we have are tweaked to grow in particular areas, under particular conditions, and we can't just going to move them north.  Not without suffering a severe drop in yields, anyway.
Greeeeenland is the place for me!
Not that I disagree with your concerns, but I think you've somewhat missed Leanan's point. You're talking about a different scale. really a whole different world, of production. Leanan brought up something along the lines of a family vegetable garden and I think that there is a lot of merit in that.

I've kept a small garden for the last two seasons, had about 400 square feet to play with, and planted eight or nine different crops. Each season, due to my own ignorance, I had two crops fail. Even so, there was still a great deal of product. For the most part, the food from our garden has been far better than anything we've got from a store. If things were to go bad, I now know what I need to generate the bulk of my family's food and it wouldn't even mean completely giving up television.

All this required was seeds, converting lawn to garden, water, and a lot of labour. The water came from my roof (and only a tiny fraction of that was captured). Seeds to grow a year's supply of food can be had for about $50. There is no shortage of lawn. And, if TSHTF, there will be a surplus of labour too.

With a little preparation and/or warning, even the fat first world can feed itself.

I hope you keep the seeds. In future years it
might not be so easy to replace them.
 This is a major problem,because with global
warming extreme climatic conditions will mean
that some years you will lose certain crops.
Replaceing them the next year might be
difficult.
 Pre 1800 europe tended to have a famine one
year in five,mainly due to the weather, England
one year in ten,due to milder maritime
conditions. I hate to think how often people
would have gone hungry if you added global
warming in to the equation.
People keep on saying how well Cuba coped with
it's peak oil . Very few places in the world
have such a good all year round growing climate.
They would have suffered much more if their
climate had been like the mid west.
This is really a variation on the Voluntary Simplicity movement.  Just think of the lower stress level if you don't have to worry about making a giant mortgage payment, multiple car payments and paying huge energy bills every month.  

Chasing the 5,000 square foot three SUV "dream" is rapidly becoming a nightmare, and the sooner that Americans abandon the dream/nightmare, the better off they--and all of us--will be.  Unfortunately, someone--probably all of us to some extent--will be left holding the bag for the debt driven suburban dream/nightmare.

Westexas-  I read your posts first- you always stay on target - Peak-oil and conservation...I must admit though you scare me..not you of course but what you say...  reciently installed 2,500 gallons of fuel storage- (useful to rebuilding (soils) in nursery green houses into food production greenhouses.  My concern is for people.  When the great depression hit alot more of america was rural and grew there own food-- look at today.  Ive been in horticulture for over 27 years and there is a learning curve to all of this-  I see it over and over- alot of people do not have the foggiest idea how to grow plants?(Q: Do I have to water it?)seriously!! (A: Only if you want it to live????)  This doesn't take into account depending on survival while try to teach/learn how to grow plants while many common fertilizers and insecticides may or may not be available.  Dinner on the table will ad some more later...:/
"I see it over and over- alot of people do not have the foggiest idea how to grow plants"

I gave my PO spiel to the high school age daughter of some family friends.  She asked what college major she should choose.  I told her "agriculture."  She looked at me like I had sprouted two heads.  

Available in College Station but not Austin.  That is the "A" in Texas A & M.

Agriculture is all about factory farming.  I wonder if horticulture might not be a better future fit ?  And where would one learn about orchards ?

I see orchard farming (nuts & fruits both) as becoming "permaculture" quite easily.

I realy hope most of agricultures future is more energy and environment efficient "factory farming".

I have two favorite examples.

Adjustment of fertilizer application optimsed for each "machine width" x "machine lenght" by frequet soil samples togeather with tracking the yield for past years and for instance current crop colour. I think there is a very intresting future in doing a lot of the "hand and eye work" of more advance ways to culture by machine and thus get better nutrient efficiency then an average eye.

Automated dairy farms where cows have transponders "Rfid tags" and walk between computerized feeding stations, milking robots, rubber mats to rest and even a rotating "car wash" brush to scratch any itch. Continues volume and quality measurements on the milk to optimize the feeding for each cow and keep track of their health. Another good idea is sensors on or in the cows to keep track of their ovulation. Lots of capital and electricity in but they give a very good milk yield and happy cows.

The most important electricity uses if your are thinking about backsliding technology is electrical lights and an electrical motor for the milking machine vacuum pump. You do not want to do milking as manual labour by hand, it is very tiering, back breaking and the moisture exposure is not good for your hands. Btw, in a farmer poll in about 1999 in Sweden about the most inportant technical advancement during the 1900:s electricity beat the tractor.

There was a site called "plant facts" by Ohio State had the best unversity search engine I have ever used.  Thye renamed it webgarden
http://webgarden.osu.edu/

I also use Oregon state as well.  
http://oregonstate.edu/Dept/NWREC/

How useful all this will be in post-peak I do not know.  Nitrogen appears to be the hardest element to "make" (perhaps why nat gas is used so much).  I would think a combination of small ag and animal husbandry (for the available manures)is going to be critical.

It is so hard to find young people to take up hort.  There is a learning curve to being a good grower.  I tell every one that it takes 3 yrs per variety to get it down pat and get consistantly repeatable results.  This is with at least a 2 yr degree to get the basics.
Dave

westexas:

Chasing the 5,000 square foot three SUV "dream"

I know you weren't talking about a 5000 sq ft SUV, but I saw this commercial on T.V.yesterday, and had to pass it on.  

An R.v. Dealer in Tucson was offering a deal on one, at $948.00 a month for 240 months.  All I could think of was. MAN that must be some R.V.

I guess if someone would build it, there would probably be a buyer somewhere in Texas.
HL, like all statistical analysis, depends upon the Law of Large Numbers.  When one gets into predictions based upon months, or single years, small numbers can have a large effect.  Thus, HL breaks down when one gets into microscopic view.

From memory, Texas production varied by less than 1% in the years 1972, 1973 & 1974 (0.5% delta between two of those years).  A couple of large (and very short lived) producers later found in the Austin Chalk could have concievably been produced earlier, in late December 1973 and shoved the Texas peak year from 1972 to 1974.  Two or three wells found a couple of decades earlier than they were in fact drilled is all the difference required.

Would shoving the Texas peak from 1972 to 1974 have made any practical difference ?  Would it have invalidated HL as a valid and valuable tool ?

Of course NOT !

Would a "disproved" HL analysis for a 1972 peak superceded by a new 1974 peak have hurt from a PR POV ?

Unfortunately yes :-(

SA has about 90 million barrels in storage.  We have valid SA sales #s, but not production #s.  90 million barrels is enough to manipulate the peak around by a year or two.  Add the potential for overproduction and SA has some potent tools to delay a provable peak.

Just be cautious in your predictions.  HL is a superb but not perfect tool.

I have been playing around with HL a bit and noticed something that has me puzzled.  In looking at the world production data I can pretty much reproduce graphs you have shown here and elsewhere before.  I can pick off a section of data and do a linear regression, find the x-intercept, etc., and all agrees with your results.  Here is the catch - my result depends systematically on which part of the data set I choose to linearize.  Choosing later chunks of the data always seems  to lead to a smaller slope from the regression, and therefore to a larger ultimate recoverable reserve value.  Four examples: choosing 1982-2005 gives 2250 Gb; 1985-2005 gives 2385 Gb; 1988-2005 gives 2463 Gb; 1991-2005 gives 2935 Gb.

Am I missing something here?

There are of course uncertainties regarding the HL technique.  In regard to regions, IMO the HL technique should be used for regions that have produced about two mbpd or so for about 20 year or so.  

If we look at regions that have these characteristics, we consistently see two data groups, the noisy nonlinear data set and the linear data set.  It's actually pretty easy to pick the point to begin the linear extrapolation.  For the world, I think that most people are using 1983.  You always start the linear extrapolation when the data starts showing linear behavior.  

The following regions have all peaked in the vicinity of 50% of Qt:  Texas; Lower 48; Total US; Russia and the North Sea.  

The really stunning test of the accuracy of the technique was the work that Khebab did with the US and Russia data sets. He took only the Lower 48 production data through 1970 to predict post-1970 cumulative Lower 48 production and he took only the production data through 1984 to predict post-1984 cumulative Russian production.   Actual post-1970 Lower 48 cumulative production through 2004 was 99% of the HL prediction, and actual post-1984 Russian cumulative production was 95% of the HL prediction.

You can see four HL plots at:  http://www.energybulletin.net/16459.html

Jeffrey, I am an HL method believer.  No question it's hard to refute the historical record.  But doesn't it weaken the argument to list out regions that include previously mentioned regions?  By this, I mean: Lower 48 includes Texas.  Entire US includes the Lower 48, which includes Texas.  Texas' peaking at roughly 50% of Qt may be a significant contributor to the Lower 48's peaking at 50% of Qt, and the same for the Lower-48 cvompared to the whole U.S.

Why not do a comparison of Texas vs. the Lower 47 vs. Alaska. If all three regions meet the criteria of producing at least 2 mb/d for 20 years or so, and they are mutually exclusive, I think you will have a more persuasive argument.

I think that there are two reasons to do HL plots:  (1)  to get a reserve estimate and (2)  to develop a model for the world.    If you want a reserve estimate for the total US, I think that you need to look at the total US.   However, I think that the Lower 48 is a much better model for the world.  

Along those lines, I think that Texas and the Lower 48 are the best analogues we have for Saudi Arabia and the world (thus our recent EB article).

When you look at the historical models, the thing that is striking about SA is how far they are down the HL slope they are.  If the HL method is valid, it just defies common sense that they would show increasing production.    Matt Simmons came to the same conclusion based on a field by field analysis, which leaves me back where I started, to-wit, if SA has peaked, who doesn't think that the world has peaked?

Russia is as large a producer as Saudi Arabia.  I could see where increases in pre-Peak Russia offset decreases in very early post-Peak SA (remember the 3 year flat spot near Peak in Texas ?) and world net new** - depletion* keeps us close to a plateau.  Geopolitical issues wotk in favor of increased production so peak is in the future by a year or two.

I see little hope (neither does their Energy Minister BTW) of Russia peaking past 2010.

* Assume the best of 5 Pemex scenarios for Cantarell.

* Assume Libya & Algeria have some upside, more from Central Asia.

The above scenario is certainly possible IMHO.  I am NOT betting $$$ on it coming to pass.  And a world wide peak in world oil production in 2010 should scare the *SH!T !! out of us !

The fact that hard data may point to it happening faster than that should scare us more.  It doesnt though.
HL is really just a model of resource depletion, so wouldn't it conceivably work on, say, other non-renewable resources? Metals like Gold or Silver? Copper? A modelling methodology that fits other resources would be hard to attack. If you could show that HL predicts the Texas, Lower 48, Russia, and the North Sea AND mineral fields around teh world you would be saying quite a lot.
One problem is that there has not yet been a case of global peak production of any mineral resource (unless we are currently at peak copper, silver, etc.) Therefore, even if the model was applied, it would not include the descending production half of the curve, and so it would be less convincing. The model needs to be applied to natural resources that have clearly gone past peak production to verify that the model correctly describes both ascending and descending production. (Perhaps metal production has peaked and declined in certain countries and that data could be used, if available?)
But couldn't it be used for known mines that are exhausted and so on?
Perhaps. For that matter, couldn't the model be applied to individual oil wells? (Perhaps it has been and I'm just not aware...) If it correctly describes the data from individual wells then, by inference, it should describe total production. (The sum of many random processes has a Gaussian distribution, or bell curve, according to the central limit theorem of calculus.)
Exactly. The model would seem to be able to describe the depletion process for a wide variety of resources at many different scales.
Look at flu pandemics- same curve
I've noticed the same phenomenon in US domestic production. If you try to predict the HL URR value based on the 15 years leading up to 1970, you get a much gentler slope than the one that we've historically observed. In order to get a good prediction, you need to include the noisier data that gives you a 30-40 year sample size. At least for US Lower 48, having a bigger sample size is more predictively valuable than getting a highly localized slope in the vicinity of the peak.

I think the reason why small data sets close to the peak tend to overestimate URR is related to the behavior of swing producers. Almost by definition, a swing producer is inclined to underproduce, using its spare capacity to control market prices. As a swing producer approaches peak, more and more of this spare capacity is brought into play. This causes the HL curve for that producer to flatten out, rather than sloping downward. Texas did this from about 1964 to 1972-- it's easy to understand why someone looking at an HL curve for Texas in 1971 would have thought "This is a completely bogus method, over the last eight years it shows URR suddenly rising to infinity!"

This is related, I think, to the reason why swing producers tend to peak well past 50%-- whether intentionally or not, they effectively save an additional portion of their reserves to sell right at the peak, when the prices is high. Since swing producers are so large, the flattening of their own HL curve leads temporarily to a partial flattening of the region/world curve.

Saudi Arabia (with OPEC generally) has been in the process of "walking horizontally" for the last few years, as it starts to draw down on the spare capacity it's been using to control prices. The question is when this process will end. At that point, the HL curve for SA will start to slope down again, instead of running horizontal as it's done for the last seven years.

One other point, oil production in a large region will virtually never go to zero.  The data plot will asymptotically approach the horizontal line (where P = zero), without ever quite getting there.  But P will be so close to zero that it won't matter.   Therfore, as time goes on, the slope has to flatten.  
Production flattening out?  Could that also be from a lack of extraction and refining capacity.  From all the reading it seems that there is a sortage of drill rigs and crew(lack of capacity).  Drilling smaller fields takes more time per unit output(slower- flattening) Is this perhaps overlooked?  
How about ELPI?   Recommend you add I forinvest to your acronum.  

Invest

Invest in solar water heating.
Invest in solar space heating if you have a hydronic system.
Invest in PV if your utility provdies intertie and especially if your state or utility subsidizes PV.
Invest in wind energy.
Invest in insulation.
Invest in an economical car.
Invest in a garden.
Invest in a greenhouse.
Invest in compact floresent light bulbs.
Invest in a bicycle.
Invest in your body by walking.
Invest in your local community.

I would recommend investing in a low-tech activated charcoal water filter system (in case municipal water treatment becomes less effective or one's well becomes contaminated). It's much cheaper than you might think - about $250 for the smallest size (eg Big Berkey), plus $100 for an extra set of filters that will last a couple of years. With good enough filtration you could drink water from puddles and ponds if you had to, without getting sick. Aid agencies use them all the time. I'll look up a link and post it tomorrow.
Here's a water filter link: http://www.countrylivinggrainmills.com/pricing.html

Scroll down until you see The Big Berkey and replacement filters.

You can also google British Berkefeld water filters for other places that sell a variety of models in different sizes.

Yes, I agree.  It is time to move past PO to PPO (Past Peak Oil).  We seem to all now be talking about the numbers past the decimal point concerning PO.
Where would a person find the most reliable stats for them?

I have been using www.mees.com, but that shows April 2006 higher than April 2005.  May is not out yet.

Thanks in advance,
Rick

Starting in 3 weeks, when I move to the bay area, my car miles per year will drop from 20k to under 2k. I'll be taking light rail to work. I'll likely wean myself off the car over the next year and go with a bike and rental car on the occasions when I really need it.

My new job will be in jeopardy within a year, but once I am settled in I will be trying to work my way into the alternative energy industry. Living in the bay area I also won't be nearly as prone to huge natural gas / heating oil bills as I was in Minneapolis and Boston.

More excitement in Nigeria:

Militants attack Nigerian oil facility, kidnap 5

PORT HARCOURT, Nigeria (Reuters) - Militants attacked a Shell-operated oil facility in the Niger Delta on Wednesday, setting a house boat on fire and kidnapping five South Korean contractors, authorities said.

The attack comes on the heels of the abduction of eight foreign oil workers last Friday, who were released on Sunday, and amid rising militancy across Nigeria's southern oil heartland.

A coalition of three militant groups calling itself the Joint Revolutionary Council said in an emailed statement that it had taken five workers hostage, sunk a naval gunboat and destroyed a drilling rig and a naval houseboat.

There were several casualties, it said, without elaborating.

Airline association predicts $3bn loss for global industry






THE International Air Transport Association (IATA) yesterday increased its forecast for global airline losses this year to $3 billion (£1.6 billion) from $2.2 billion, as one of the industry's leading investors predicted that 2006 would be "as good as it gets".



He said: "Today is as good as it gets in the airline industry. It's going to get worse. In two years' time we will see everyone cancelling those 1,000 airplanes."


Didn't someone say the airlines are similar to the canary in the coal mine?


-C.

The 787 will use 20+% less fuel than the 767s it replaces. Boeing is considering increasing production rates above 11/month past 2010 (the 787 will enter service in 2008 and production will ramp up from EIS). I sincerely doubt that many 787 orders will be canceled. In almost every case the new a/c replaces a less fuel efficient a/c, but often a 5%, 8% or 10% delta. 20+% improvement is extraordinary.
Alan I've been following this Boeing deal for some time since my step father is employed there(defense side, very good to be there right now).  There are a few hiccups with the dreamliner though.  For one it's going to be more fuel efficient due to the extensive use of high tech plastic and carbon fiber.  Last I checked these are oil dependent and ripe for unforseen cost increases that Boeing hopefully is planning for.

Second the fuselage will be entirely plastic/carbon fiber.  On commercial planes they have to pass rigerous FAA testing and one test is to withstand a lighting strike.  The metal fuselage handles this without problems (most times), but plastic doesn't conduct electrifcity very well, so what happens?  They don't know yet.  Also what happens when this thing crashes?  Metal absorbs the impact much better than plastic that will break into MANY pieces.

Lastly after talking to some guys on the inside, the attitude is kind of laissez.  Boeing's plan is to become the DELL of plane making.  They don't want to make all the parts, only assemble them.  So they have created a highly complex supply chain and Boeing ability to coordinate these massive movements will determine how successful this plane is.

In the end I will agree that the demand will be there.  Airbus screwed up big time and they know it.  Boeing is sitting on a cash cow and they know it.  Let's just see if they can put the whole puzzle together.

Before Qantas would order about 100 787s they wanted to resolve the lightning strike issue. Boeing showed them test samples of aluminum and carbon fuselage hit with laboratory lightning. Carbon conducts electricity (some auto ignition wires us ethem to reduce RFI interference). carbon came out much better. Each generation of Boeing a/c has had more outsourcing, but the 787 is a step up no doubt. Speciality 747 frieghters will be used. (better than the Rude Goldberg arrangement to get A380 wings from Wales to France. High tide at Cardiff, low water under some French bridges and late night crawls of convoys through French country roads after removing buildings too close to the road). Pricing on the 787 has recently "improved" as has demand with higher oil prices. Boeing will make $$$ no doubt. Boeing has committed to four models now, the medium range 787-3 and (by size) 787-8, 787-9 and 787-10 (-10 just recently, the -10 competes with the 777-200). The next step is a 787-like replacement for the 737, EIS 2012 (my prediction). The development team will be told "Once more, but smaller".
In a couple of years I think most parts will be made in China (now few or none are) and then the whole industry will move there, one of the last.
The only reason I don't see this is the quality control has to be fierce and the Chinese are hardly known for their quality parts.  

Not to mention when you get into the specifics there is little wonder how the Japanese managed to get first in line with nearly 50 on order, nearly 35% of it will be made in Japan (wings, mostly).

I had a real nice picture that showed EVERYWHERE parts were going to come from.  I mean it was immense, but I can't find it when I need to.

The Japanese have a patented/secret process that creates soft fibers within the harder mass of composite that is supposed to stop cracks from spreading.  It also allows more "bend" in the engineering analysis (airplanes bend and twist quite a bit in flight).

Machines do the carbon fiber layup and need Japanese QA & QC supervision & inspection.

Quite frankly, the savinsg on wages is a minor % of toal costs.

BTW, there is some question if Airbus will be able to duplicate the Japanese process with German technology.

I've been reading about airlines and profitability.  This article here states that oil @ $100 barrel will break them.

http://www.breitbart.com/news/2006/06/06/060606180328.5jqhfzft.html

It has calculated that the fuel bill for the air transport sector will amount to 112.0 billion dollars (87.0 billion euros) this year, or triple the figure in 2002.

Fuel accounts for 26.0 percent of operating costs, the IATA says.

I've read in other places that fuel has surpassed labor as the highest cost input.

Now you've got Northwest Airlines attendants refusing to take a pay cut, so I guess many would rather not have jobs all together.  I don't understand the rationale for this when the data says, NW can not afford to pay you an outrageous salary for smiling at people and instructing them how to escape.  It's not like they are serving food these days.  

Northwest Airlines said late Tuesday it will ask the bankruptcy judge overseeing its turnaround to void the contract covering the carrier's flight attendants after the union's membership sharply rejected a tentative deal to save the airline $195 million a year.

http://www.marketwatch.com/News/Story/Story.aspx?dist=newsfinder&siteid=google&guid=%7B7123A CC6-0E49-4D56-8D67-F2C51B4FF661%7D&keyword=

Actually, NW's offer is to start the attendants at $18000.
And their current salary?
Try reading the article, Einstein.
SAN FRANCISCO (MarketWatch) -- Northwest Airlines said late Tuesday it will ask the bankruptcy judge overseeing its turnaround to void the contract covering the carrier's flight attendants after the union's membership sharply rejected a tentative deal to save the airline $195 million a year.
Some 5,195 members of the Professional Flight Attendant Association, or 80%, voted against the contract, with 1,274 voting for it, according to a telephone hotline update.
A tentative deal was reached in March.
Northwest said it asked the bankruptcy court on Tuesday to rule on the rejection of the current contract and the imposition of new terms.
The union said it reserves the right to walk off the job, but Northwest said it will also seek a preliminary injunction to stop any strike.
"We continue to urge the judge to deny NWA's application to reject our contract. The carrier's proposals are harsh and overreaching," said Guy Meeks, president of the Professional Flight Attendant Association, in a statement.
Quantifying the impact of the rejected terms, the company said the move will have a financial impact on its bottom line.
"While temporary labor cost savings approved by the court last November are helping Northwest, today's PFAA vote further delays implementing permanent labor cost reductions, which will result in ongoing losses of $30 million per month," said Northwest human resources and labor relations executive Mike Becker in a statement.
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As part of the airline's push to cut $1.4 billion a year in labor expenses, Northwest's pilots have already signed off on a new labor deal structured to help the airline emerge from Chapter 11 protection, as have other labor groups.
The machinists union representing service and stock clerk employees has tentatively agreed to a new contract and is voting on the new terms. See full story.
For salaried workers, cost cutting has also been put in place since the airline filed for bankruptcy on Sept. 14, 2005.  
August Cole is an editor for MarketWatch in San Francisco.

Where in this article does it provide annual salary info.

It is a 40% cut (you posted the wrong article). You're the one who said they made outrageous salaries.
What are yout alking about?  You're making up articles now?  The article I posted is the article I copied into that post.  You're telling me I posted the wrong article, so where is the right one?

You're right I did say they made too much money. It's a low skill service position.  They should be paid accordingly.

I had read a similar article this morning on yahoo finance which mentioned the pay scale.
The job, however, requires high quality people working hard with good attitudes with difficult working conditions. That does NOT come cheap.
Suggesting that these qualities are not common is unduly pessimistic - this is neither france nor russia. Successful retailers manage to recruit helpful, friendly people at much lower wages than that received by these union workers, who got to their current wage level with the threat to stop production. Note that the lower cost carriers do indeed recruit helpful, friendly flight attendants at wages less than what was rejected by the union workers. Breaking the union contracts might put the first carrier to do so under, but probably not the rest... and, in any case, the low cost carriers are increasing market share every day, exactly in line with the reduction in legacy carrier flights.

As an aside, competition from lower cost carriers is causing bigger problems for 'legacy' carriers than high oil prices - without the competition, prices would simply escalate. Further OT - the competition would not exist if the CAB did.

Yes it does.  Let's sit back and watch the bankruptcy court throw out the contract. Then what?  You think everyone is going to quit?  I don't.  Where do they go then?  Another carrier, yeh right they aren't doing well either.  

Even if the bankruptcy court doesn't get rid of the contract, then what?  The company bleeds itself to death and everyone at the company is out of a job.  It's a sad situation.  

High quality people?  You mean they have to smile a lot?  What high qualities do these people HAVE to have?  Good attitude - yeh they need that, but so does any other CUSTOMER SERVICE job.  

The difficult working conditions I can agree on.  However there are plenty of coal miners that will go into coal mines with little regard to their safety over in the east.

Check out this article on how dangerous coal mining is, yet they aren't being adequetly paid.  

The Sago miners didn't even have the minimal protections afforded by membership in a union. In the economics of coal country these days, people are so desperate for a job that will sign up for the most dangerous kind of work with few questions asked about the risks or the precautions taken by the companies. And that's exactly the way Big Coal wants it.

http://www.counterpunch.org/stclair06032006.html

Again labor comes down to scarcity.  Airline attendants are a dime a dozen, especially after the last 5 years and massive layoffs.  TWA used to be home here, but it is now AA and following the merger it wasn't too long after that most of TWA lost their jobs.  There are plenty of attendants willing to take their places.

I must confess, I found it hard to read the article... there were a couple of blondes with biguns on the right (advertisement) LOL
Never come to Russia in the summer then ... you won't get much work done.
I'm married to a Russian woman, and actually have been to Russia several times =)  And no, I didn't order her... we met while I was on a 9 month project in Anchorage, AK... she was going to Univ. of Anch, you know the deal... met, fell in love, married, had a kid still in love (imagine that).
I guess I was preaching to the converted :-)
Provda, Moy Drook!
Greenspan: Oil prices starting to hurt economy

WASHINGTON - Former Federal Reserve Chairman Alan Greenspan said Wednesday that while the country has been able to absorb sharp increases in oil prices, the high energy costs are beginning to stunt economic growth.

But he also said that sharply higher oil prices have not produced any "serious erosion" of world economic activity.

"The United States, especially, has been able to absorb the huge implicit tax of rising oil prices so far," Greenspan told a Senate hearing in his first appearance before Congress since leaving the Federal Reserve.

However, he added "recent data indicate we may finally be experiencing some impact."

Greenspan said the high oil prices, exceeding $70 a barrel resulting in gasoline costs to sore beyond $3 a gallon, are due to a sharp decline in spare global oil production capacity, refinery shortages and to some extent market speculation.

He said that American business "to date has largely succeeded in finding productivity improvements that have contained energy costs." But he said consumers "are struggling with rising gasoline prices."

But he doesn't see supply increasing or demand decreasing any time soon.

Anyone know latest numbers for production(either crude+condensate or all liquids[except that stupid ethanol crap] globally so far this year? Month by month? Opec vs. Non-Opec?

Also, why do the airlines seem to plan to simply go out of business instead of just raise the ticket prices? There will always be enough wealthier travelers to go around if they do that. IS this disinformation? It doesn't seem to make any sense for air travel to cease to exist instead of just become more expensive when the airlines could continue to make plenty of benjamins if they do the latter.

Relax. Air travel will never cease to exist.
In the US, Southwest has been increasing prices gradually, and they are the "price leader" (and quality leader in areas like customer complaints).  Enough to continue their 30+ years of profits but not enough for the others to do much more than break even (if that).  

Their overall costs are quite low (highest wages and almost lowest labor costs due to productivity) and their famous fuel hedges (from memory, 55% of 2006 fuel at $36/barrel).

They keep growing at a steady rate of about 8%.

Given their VERY strong financials and operations, I cannot see any scenario where they stop flying.

I am on record predicting that they will order 400 787-like 737 replacements (25+% better fuel economy) in 2008 for first delivery in 2012.  When they are flying hundreds of these and their competitors cannot afford more than a handful, their strategic advantage will grow.

Here's an article from Monday's Wall Street Journal which you can read for free:

http://www.post-gazette.com/pg/06157/696124-28.stm

Despite the burden of record fuel prices, major U.S. airlines are staging a recovery from five years of brutal losses, something many analysts and airlines didn't think possible as recently as six months ago.

The improving financial results posted by seven of the nation's 10 big airlines in recent months reflect a fundamental shift in strategy that goes beyond the efforts of older network carriers to wrest billions in concessions from their unions. The big carriers, which for decades have doggedly pursued market share at any cost, now are focusing just as aggressively on the profitability of each route and flight.

The recovery of the U.S. airline industry is counterintuitive given rapidly escalating fuel costs, but they are managing their business quite well right now.  They have reduced the number of planes flying by 21% from the end of 2000 to 2005, reduced available seats, are increasing their load factors, and, of course, are raising prices:

With the cuts in capacity and strong demand, big airlines are enjoying their strongest pricing power in five years, and for the first time the ability to pass on a substantial share of lofty fuel costs to their customers.

The airline industry will not disappear, but it will become increasingly expensive and unpleasant to fly commercial in the coming years.

It seems obvious that there are only so many things the airlines can do to 'cut fat' from their operating expenses and they are doing these things now. That there is a 'comeback' indicates that the fat cutting is currently outpacing the rise in costs. At some point, as business people say, they will no longer be cutting fat but sinew, then the thinning out will increase. Big question is how innovative the airlines can become in cutting expenses, and whether a critical mass of travelers can sustain necessary increases in price.
On the subject of what a post-peak oil world would be like:

A recent article in Asia Times <http://atimes.com/atimes/Middle_East/HF07Ak01.html> gave a glowing review of Dubai, calling it the 'post-oil Arab dream.'

From this article and others I have read about Dubai, it sure appears to be a truly incredible place - sort of a combination of Hong Kong, Las Vegas, a mega Disneyworld, and Tatuoine, all rolled into one.

However, I don't see how this totally artificial little fantasy world could survive a post-peak situation, being completely dependent on air conditioning, desalination, and global commerce and finance. Not to mention other countries coveting what little oil it might have left. Yet, reporters, such as the author (and the likes of David Brooks) see places like Dubai and Pheonix/Tempe, AZ, as what the future will be like. It sort of reminds me of those articles in Popular Science magazines of the early 1950s predicting that by 2000 we'd all be commuting to work in our own personal atomic-powered aircraft.

Perhaps a more chilling side to Dubai (about the only thing this reporter got right) is its almost total dependence of imported near-slave labor from Pakistan, the Philipines, and SE Asia. These people work in dreadful conditions, have zero rights, and are kept out of sight and out of mind. Having extreme wealth and privilege so close to extreme poverty and wretchedness is an inherently explosive situation. Perhpas a little Dylan (Bob, that is) might be apropos:

"You never saw the frowns

On the faces of the juggles and the clowns

When they did their tricks for you...."

It seems almost axiomatic that the greatest extremes of ostentatious wealth and conspicuous consumption always occur right before the shit hits the fan, e.g., Roaring Twenties, pre-October 1929. I kind of getting same feeling now.

Another view...
We all assume that a) post peak, prices will rise, and b) a higher proportion of the world's oil will come from the me. This implies far higher regional income even as they pump less oil, probably throughout this century. So, how is this bad for dubai?
Not necessarily. Prices would have to rise faster than output declines for higher income. For the next 30 years, you are probably correct. For the next 100, very unlikely. By that time oil will probably be a very expensive niche product (not a major industry as it is now).
It seems almost axiomatic that the greatest extremes of ostentatious wealth and conspicuous consumption always occur right before the shit hits the fan, e.g., Roaring Twenties, pre-October 1929.

I think this comparison is very apt. Last time I looked, the Dubai market had recently crashed by over 60%. I would say the party is over and the morning after is about to begin.

I dont know who started the Iron Triangle idea, but it is fracturing!  I really didn't think our domestic's would make it to bankruptcy, but man it doesn't look good even when you take into account the massive cash accounts that both automakers have.

http://www.signonsandiego.com/news/business/20060606-1305-ford-creditrating.html

Moody's said it is reviewing Ford's Ba3 rating and the Ba2 rating of Ford Motor Credit Co. because of concern that high fuel prices will shift consumer preferences away from medium and large sport utility vehicles. Those ratings are three and two steps below investment grade, respectively.
My MSM article:  http://www.energybulletin.net/15126.html

In regard to the "fracturing" of the triangle, there are several examples.  For one, there is the article about Total above.   For another, the Dallas Morning News, one of the targets of one my Peak Oil articles, is supposed to be running a Peak Oil op-ed piece this Sunday that Alanfrombigeasy and Bart (from the Energy Bulletin) helped me put together.  

In my MSM article I maintained that we were in the early stages of a bidding war for declining net oil export capacity, and I think that is still the case.  I think that we are (temporarily) "winning" the bidding war, given persistent reports of fuel shortages and energy riots in poorer countries.  However, Senegal/Pakistan/Thailand, etc. today may be giving us a glimpse of our own future.
Derivatives, petrodollars and how leveraged "the system" is.

I pulled this:

More complicated derivative structures are also becoming popular. Mr Grimeh said that billions of dollars, including petro-dollars, were "being deployed" into synthetic structures such as collateralised debt obligations, which are repackaged portfolios of other credit derivatives.

Part of the draw of complex, synthetic products is that they can be designed to meet specific needs of investors. A derivative product can comprise a pool of different credit risks that can subsequently be divided into slices or tranches. These tranches offer a sliding scale of risk and return, with the riskiest first-loss or equity tranches, paying the highest.

http://news.ft.com/cms/s/a6d89bcc-f582-11da-bcae-0000779e2340.html

Heres what I see.  These PD are being "deployed" into man made exotic financial instruments that build their value based on even more derivatives.  So we've got derivates ontop of derivatives and this in a mostly unregulated industry.  This is truly a house of cards, ready to be blown away.  

I posted a link to an article yesterday that an Economists doesn't understand why oil prices are being bid up higher, but energy companies are taking a minor hit on their stock price.  What gives?  He proposed a hedge fund is in trouble somewhere.  I can't seem to find the link again.

I heard on CNBC this evening on Cramer's dog and pony show that because metal profits were plummeting and most of these contracts are bought on margin that some people were unable to liqudate their contracts fast enough to pay their calls and were therefore selling stocks to meet margin calls. Hope that made sense, but it srikes me as correct that if a person speculates with borrowed money they are asking for this kind of trouble.
I wonder if the same could be said of oil though.  The article was suggesting that oil companies stock was retreating while oil prices were increasing.  It was defying logic(when doesn't that happen on the street?) and he was surmising that a stock sell off was going on and now that you pointed to the relation to the futures market, maybe these two are also tied.

I would think if you are long on the future, then shorting the stock would balance this out.  I'll find more info.

Surface temps change daily, up and down, but the gom is hotting up again. Compare with one year earlier...
http://marine.rutgers.edu/mrs/sat_data/?product=sst_comp&region=gulfmexico&nothumbs=0
I posted on SSTs a day or so ago... you actually want to be looking at the actual Sea Temps...

National Data Buoy Center

Remember the movie "Day After Tomorrow"?  

"We have a Buoy that registered a 13 degree temperature drop.." LOL

This is what you want to look at anyway.

Enjoy.

-C.

Hello Bradshaw,

The continuing drought in AZ gave us Phx locals an obvious climate change reminder last night [CNN.com video]: "Miles long duststorm turns sky black"-- sorry, don't know how to link to it-- please go to CNN and watch please.

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

A new article today about how the distribution of oil field sizes can be used to infer the URR:

What Can We Learn From The Oil Field Size Distribution?

I'm a little confused by these results. HL estimates always seem to show URR = 2.2-2.5 TB, but the PF estimate looks to be converging somewhere around 1.7-1.8 TB (after adding back ~200 GB for US and ~50 GB for Canada). Am I misunderstanding the prediction? Or do micro-fields in even more heavily populated bins make a bigger difference than expected?
I should have discussed that result a little bit more in the conclusion. I used Jean Laherrère parameters which are based on the top first 2,092 oilfield size estimates taken from the Petroconsultants database (IHS?). I believe that it does not include NGL and synfuels from tar sands. Therefore the resulting world URR should be lower than 2.0 Tb.
Summary of Weekly Petroleum Data for the Week Ending June 2, 2006

U.S. crude oil refinery inputs averaged over 15.6 million barrels per day during the week ending June 2, up 115,000 barrels per day from the previous week's average.  Refineries operated at 91.0 percent of their operable capacity last week.  Gasoline production declined slightly last week compared to the previous week, averaging over 9.1 million barrels per day, while distillate fuel production increased slightly compared to the previous week, averaging 4.1 million barrels per day.

U.S. crude oil imports averaged nearly 10.9 million barrels per day last week, up 39,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged over 10.4 million barrels per day, an increase of 231,000 barrels per day from the comparable four weeks last year.  Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.4 million barrels per day.  Distillate fuel imports averaged 296,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.1 million barrels from the previous week.  At 346.6 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year. Total motor gasoline inventories increased by 1.0 million barrels last week, but remain in the lower half of the average range.  Distillate fuel inventories rose by 1.8 million barrels and are slightly above the upper end of the average range for this time of year.  A large increase in ultra-low sulfur diesel fuel more than compensated for a decline in regular diesel fuel (15 ppm to 500 ppm sulfur), while high sulfur distillate fuel (heating oil) inventories inched higher by 0.1 million barrels. Total commercial petroleum inventories jumped by 6.3 million barrels last week, and are just above the upper end of the average range for this time of year.

Total products supplied over the last four-week period has averaged nearly 21.0 million barrels per day, or 3.8 percent more than averaged over the same period last year.  Over the last four weeks, motor gasoline demand has averaged over 9.3 million barrels per day, or 0.7 percent above the same period last year.  Distillate fuel demand has averaged nearly 4.1 million barrels per day over the last four weeks, nearly unchanged from the same period last year. Jet fuel demand is up 4.2 percent over the last four weeks compared to the same four-week period last year.

Price of oil is dropping...

Total products supplied over the last four-week period has averaged nearly 21.0 million barrels per day, or 3.8 percent more than averaged over the same period last year.  Over the last four weeks, motor gasoline demand has averaged over 9.3 million barrels per day, or 0.7 percent above the same period last year.  Distillate fuel demand has averaged nearly 4.1 million barrels per day over the last four weeks, nearly unchanged from the same period last year. Jet fuel demand is up 4.2 percent over the last four weeks compared to the same four-week period last year.

OH  SH!T !!

US Demand is UP!

Higher prices are NOT creating ANY "price elasticity of demand"

Even with two years to digest and adjust to the the first round of higher prices.  Buy smaller cars, move closer to work,strat bicycling to the store, etc.

Unsustainable.  The "Other Way" is demand destruction.  Unemployed people drive less, closed offices and factories do as well.

OH  SH!T !!

Yeah, but look at those healthy imports.  The demand destruction is going on elsewhere, not here.  The happy motoring lifestyle continues.  As long as our Chinese overlords support it, anyway...
The demand destruction is going on elsewhere, not here

Indians are not happy!

Indian Communist Party activists shout anti-government slogans as they stand on a police barricade during a demonstration against hike in gasoline prices, in New Delhi, India, Tuesday, June 6, 2006. India's Cabinet on Monday allowed state-run oil companies to raise gasoline prices, which have remained unchanged for the past nine months despite increases in global crude rates, a government minister said. Gasoline prices have been increased by 4 rupees (US$ .08; euro .06) a liter and diesel by 2 rupees (US$ 0.04; euro .03) a liter. (AP Photo/ Manish Swarup)
Yes, I don't get it.  China's consumption is up 5% yoy, our consumption is up as well, Europe is flat.  Yet world production is stuck just under 85 mbpd for 2 years now.  If consumption is up, and production is flat, someone must be going without.  Who is it?
I think that is why we are seeing recurring news items about fuel shortages and/or energy riots in places like Pakistan, India, Senegal, Thailand, etc.
There have been no fuel shortages or energy riots in Thailand. Last year, when the government belatedly removed gasoline subsidies, there was a little noise, but overall it went quite smoothly. Removing these incentives to consume is an essential part of a transition to a future with less supply.

Most of the energy riots reports I see linked to relate to the removal of subsidies or infrastructure breakdowns. I don't think you can make a case that supply constraints indicative of peak oil - beyond current high prices - are behind them.

Although my point should not be interpretted to mean that poor countries won't suffer.

Can Struggling African Economies Survive Escalating Oil Prices ?
http://www.afdb.org/portal/page?_pageid=473,1036251&_dad=portal&_schema=PORTAL

This from Dan Drezner, oddly in an anti-Chavez post:
http://www.danieldrezner.com/archives/002738.html

There have been protests over power outages and fuel prices in Zimbabwe, Panama, Lebanon, Bangladesh, India, South Africa, Pakistan, etc.  Farmers don't have fertilizer for their crops or fuel for their irrigation pumps.  People are going for most of the day, or several days in a row, without electricity.

Here's an example from today's news:

South Africa's bright future will have to be candle-lit

WHEN the Chief Executive Officer of Eskom is reputed to earn a salary of R73 million per annum is it unreasonable for each of us to presume this man is the cat's whiskers, the triple cream floating at the top of the milk bottle with the qualifications, experience and intellectual abilities of a giant among men?

So, how it is that Eskom has plunged us into an energy crisis that no amount of whitewashing by Alex Erwin and Eskom's spin-doctors will satisfactorily answer. Rolling power cuts, huge economic losses and not a solution in sight!

Government proudly cites our current and projected growth rate as indicative of a "bright" future, bright being the operative word. Eskom is unable to supply our current power demands and given that they failed to make crucial decisions to build other power stations 10 years ago, means that bright future may actually have to be a "candle-lit" one.

In some countries, TPTB are having to choose who gets power.  Residential users?  Farmers?  Industrial users?  Hard to tell just from news reports, but it seems like it's often the industrial users - mining companies, factories, etc. - that are the last to get the power cut.  Of course, they are often the ones producing raw materials and goods for export.  

The incompetence of Eskom is proverbial, but a good point is made here which applies to many power companies around the world. Almost everyone failed to predict the big growth surge of the early 2000s, and since then it's been swimming upstream.
Price elasticity of demand can be there.  Who's to say that we wouldn't have increased our usage by 5%.  It's only 1.2%, but among the millions of barrels, it adds up.  

In the short term we could say that the price of oil is highly inelastic, but it's there.  In the long term we know oil is price elastic.  I did a paper on the price elasticity of drugs on the black market.  In the end the demand for drugs is price inelastic.

Price elasticity will also vary by society. An already energy-poor society like, say, subsaharan Africa will find moving to a 'no-oil' future not too far removed from where they are now. In a society like ours that shift will be much, much harder to achieve psychologically.
And why would we have to shift to a no-oil society?
Sorry, didn't mean literally 'no oil' of course. :-)
Great point. The old cliche the "law of diminishing returns" is more than just a cliche. A little free energy input from a low baseline can do an amazing amount of objective good. The low consumers get a lot of benefit from the use of a relatively small amount of resource consumption.

Part of the reason I am a bit of an optomist is that in the U.S. a lot of the energy usage [in particular motor fuels] is totally optional and adds very little from my perspective to the quatlity of life. Commuting alone. Four trips to the mall with one passenger in a week. The list goes on.

Cutting back on this sort of nonsense is quite forseeable.

Anecdotal evidence suggests to me that the prices of illegal drugs may actually have experienced deflation over the long term, certainly has grown much slower than those of legal drugs. Is that your take too? Why do you think it is?
Prices have been stagnant or dropping for heroine, marijuana, and cocaine for about 20 years........I know this from experience with 2 of them, marijuana prices now are the same as they were 15 years or more ago, the really good stuff has gone up in price and leveled off and stayed steady. Market is flooded with the stuff, supply has been quite good for a long long time, had a brief hiccup in the early 90's one summer but that was about it. Cocaine is dirt cheap, its price has been slowly dropping for years, crack caused a increase in sales which brought more suppies in but then supplies never backed off to match demand and bring the prices back up. Funny thing is, crack is often cheaper than powder yet powder costs less(no extra step to process it again).Drug market is funny, demand and supply rules dont seem to cause big price increases, just shortages. I have no explanation, just what I see. It is a really really big black market with lots of folks in the ruling class doing the wash with the money so to speak. When the Taliban shut down the heroine it caused a massive price spike in europe but not in the US, and took on the order of 700 million or more out of the market, notice how quickly that turned around LOL !!! Its is arguably one of the few markets untampered with by investments or other artificial market forces like bidding on commodities contracts(speculation), maybe that has something to do with it, dunno.
My, what broad readership we have...!

For the record, in addition to tomato, cucumber and pepper seeds, a peak oil seed saver might want to get some poppy seeds. Opium was a major medicine before fossil fuels. (as was cannabis)

You might be interested to know that http://www.groworganic.com ran out of poppy seed this year... none until fall.
I typed in poppy in the catalog search and two of the 60 were sold out.  Would these be heroin poppy, and it's legal?  Funny when you click on them it says USDA organic and it's for medicinal use.
I don't mean to go off course here, but I would definatly agree with all of this.  I have experience in several of those as well and pot can had for dirt cheap if you know the right people.  Quality pot is everywhere now due to the internet teaching SO many people how to grow it.  The seeds are easy to get through customs I hear as they don't open first class letter mail.

Coke prices are down due to the massive supply.  Remember it used to pretty much be one man, Escobar.  Now it's a constant fight to establish to dominant cartel and each cartel is operating independently in their own best interests.  So it's a consumer's market.

Keep in mind that even though the prices have fluctuated it's mostly due to the increase in supply.  I said the elasticity of demand was inelastic for drugs.  The demand doesn't really change.  On net over the last 20 years, little has changed.  We all know the drug war is a failure.  The introduction of cheap crack via coke made it even cheaper.

The heroin comes from Afghanistan, mostly.  Almost all of it today anyway.  The southern asian countries also push it, but the scale doesn't even come close.  I've read countless articles about how the poppy drug lords control many of the northern territories.  Their are raids all the time, but again the scale that they operate on is immense.  

Well you wont see or hear of any of the really huge raids because they get shut down before they get far.May be conspiracy talk but lets face it, big people in high places enable this sort of thing because they make huge sums of money off it, and they also have the connections to make it happen quite easily. For example, "rendition air", the govt sponsored "enemy combatant" air passeneger service and other diplomatic services can and have many times in the past done lots of smuggling. This sort of thing goes right to the top, follow Dick Cheney for example, you will find drug money and drug people all around him and his past. President Bush and the Presidents before him have had many meetings with known drug dealers and guys running the cartels, its a business, and its a business involving huge sums of money. The drug business is multinational and multi-tiered when it comes to heroine and cocaine. Marijuana is local for the most part, mostly north america, but it doesnt bring the $$ like the others do either. Cant have a "war on drugs" if the people fighting the war are dealing the drugs or enabling it to happen !! Sorry to get off topic, take all the above for what its worth, you may return to your regularly scheduled PO discussion which I find fascinating myself :)
My favourite quote about the "War on Terror"  was, "War on Terror?  Great!, Remember when we had a War on Drugs, and now you can't buy drugs anymore..."
You are forgetting Meth and X. These have had a huge effect on the coke market for the last 20 years. Just as Prozac, all its equals, Ambien, Lunestra, etc. have had an effect on the weed market. The big(legal) pushers have totally gotten into the market by buying the doctors and politicians. Whether you call them substitutes, competition, or greater supply - these other drugs cannot be overlooked or underestimated.

How many alcoholics have joined AA only to be "cured" by Eli Lilly? How many speed-freaks are getting what they need from some start-up, soon to be bought by Merck? What is the spread between Ukranian jet-fuel and a $5 bottle of "decent" Chardonnay.

Truly horrible.  There is no hope for the American people. None. I thought I saw some signs of change, a hybrid here, a smaller car there.  But it makes no difference. People are probably just driving those more efficient cars farther and more often.  I don't want to hear any more whining about gas prices. They mean nothing.  I still stick by my prescription that gas should be at least $10 per gallon or we should have some kind of rationing/tradeable energy credit system.  But that would require goals.  

We shall just slump towards Armageddon.  

Westexas....

I found this article about instituting an energy tax, but based on the CO2 emissions.  Some interesting snippets...

Chuck out all energy legislation, replacing it with a one-sentence statute that levies a tax on carbon emissions. Let's do it big--30 cents a pound. So that people can adjust, start it at 1 cent and increment the tax by a penny a year from now to 2036.

It would add $1.65 to the price of a gallon of gasoline. It would triple your electric bill if your utility were entirely coal fired.

Couldn't resist this one...

Forget George Bush's plan to spend $1.2 billion on hydrogen and $150 million on grass clippings.

We could find other employment for the lobbyists who tell us that ethanol is a winner; now, for the very first time, the chemical would succeed or fail on its own carbon merits.

I would love to see some real details and meat to this idea.

Full details: http://www.forbes.com/home/columnists/forbes/2006/0619/020.html?_requestid=4274

You might have to sign up for a free account.

Great idea. Will never happen. Too many vested interests and lobbyists to ever get a simple law like that passed. Politics is about mutual back scratching. Not much to trade in a law like this.
I didn't want to sign up, but the idea sounds pretty good - get rid of all the lobbyist-hobbled energy plans and go with a straight carbon tax.  Was Forbes being facetious?
Actually this was written by William Baldwin.  We can always talk about making things simpler, but really when TSHTF we will have to do something.

The best part of this plan is that it taxes the black market at the same rate as a guy working at Exxon.  Think about it, they have to buy gas for their cars and home.  They got to buy electricity.  We wouldn't be dependant on someone working to get some money.  They can hustle and the gov't would still get your money.

Makes perfect sense but the price per pound should be higher.  We need to let the carbon market pick the winners and losers, not debating societies and the government.  My guess is that ethanol would disappear within about six months.
Current US corn-based ethanol might. Ethanol from sugar as currently produced in Brazil and elsewhere should benefit.
Bank of America offers hybrid credit

Charlotte-based bank will give its employees $3,000 if they buy a hybrid and live within 90 miles of Charlotte, Boston or Los Angeles.

NEW YORK (CNNMoney.com) - Bank of America announced it will reimburse $3,000 to many of its employees who buy a new hybrid vehicle.

The nation's No. 2 bank will make the rebates available to more than 21,000 employees who live within 90 miles of Boston, Charlotte, and Los Angeles. The bank's main headquarters is in Charlotte.

"Given the size of our commuting associate base, the hybrid program expands our commitment to the environment and helps our associates to participate in making a difference while cutting down on their commuting costs," said a statement from Anne Finucane, head of the company's environmental council. "We are pleased to be one of the first corporations offering this benefit and strengthening our long-standing leadership on environmental issues."

Mrs. Fitts is not positive about BoA.

http://www.google.com/search?hl=en&lr=&q=fitts+%22bank+of+america%22+solari&btnG=Search

In fact they are at #1 on the 'top 20' list.

Following is Solari's list of the 20 Best Banks to flush from our lives in the US. In 2004 alone these 20 banks reaped $89 billion in net income, while in the same year US households ran a deficit of $342 billion [1]. Think what could happen if we turned the tables?

    1. Bank of America    

Nice to see the energy-saving effort.  

If "Conspiracy Planet" say it, it must be true. BoA is shaking in their pants now.
Perhaps this is why US / Iran relations appear to be improving, and the price of oil is easing:

http://biz.yahoo.com/ap/060607/azerbaijan_iran_caspian_pipeline.html

Bodes well for US access to Iranian oil.

The last ASPO newsletter is out:

ASPO Newsletter 66 (June 06)

Articles in this newsletter:

  1. Venezuela buys oil
  2. Saudi Arabia struggles to maintain production
  3. Bolivia takes a lead
  4. The Power of Community: How Cuba Survived its Peak Oil
  5. Oil Trade Currency
  6. Saudi Arabia Revisited
  7. Britain moves nuclear
  8. Water, Energy and Food Prices
  9. US wakes up to Capacity limits
  10. Excellent New Film
  11. Registration of national ASPO members
  12. Russia
  13. Mexican Deepwater Discovery Discredited
  14. Saudi Arabia - Can It Deliver?
Interesting.  Haven't read it in detail yet, but from a brief skim, it sounds like they think Saudi Arabia is now past peak.
are they discontinuing it??
I think he meant "last" as in "most recent."  Not last as in there will never be another one.
Correct. Sorry, English is not my first language :)
no problem. my arrogance to assume it was. but i was curious - 'last' ASPO letter would have assured we're at peak (as a contrarian thats the way I think, in any case)
Quite likely, now that we are AT Peak Oil, there is no longer a need for the organization, and it's publication.

A bit like the "Bugle Call Bulletin" for the Spanish-American Veterans Association.

:-P

Perhaps we should found an American Society for Post-Peak Oil ?  ASPPO  !