DrumBeat: July 12, 2006

[Update by Leanan on 07/12/06 at 12:39 PM EDT]

Citgo to Stop Selling Gas at U.S. Stations

CARACAS, Venezuela — Venezuela-owned Citgo Petroleum Corp. has decided to stop selling gasoline at some 1,800 stations in the United States following calls by President Hugo Chavez to nix contracts that benefit U.S. consumers more than Venezuelans.

Citgo, which is wholly owned by Venezuela's state oil company, currently has to purchase 130,000 barrels a day from other refining companies to meet its service contracts at 13,100 stations across the U.S.

The Houston-based company has decided to sell only the 750,000 barrels a day that it produces at three U.S. refineries in Lake Charles, Louisiana, Corpus Christi, Texas, and Lemont, Illinois, according to a statement late Tuesday.

That will mean that over the next year Citgo will withdraw completely from 10 states and stop supplying some stations in four additional states, Citgo spokesman Fernando Garay said Wednesday.

[Update by Leanan on 07/12/06 at 9:27 AM EDT]

Iran's mullahs promise to cover China's demand for energy

Chinese Ambassador to Tehran Leo Jen Tung conferred here Tuesday with the Head of Majlis Energy Commission Kamal Daneshyar on expansion of mutual cooperation on energy sector between the two countries.

At the meeting, Daneshyar called for continued expansion of good relations between the two countries and voiced Iran's readiness to meet the demands of China in the energy sector.

[Update by Leanan on 07/12/06 at 9:41 AM EDT]

The Mother Of All Battles: For Oil

Blair is going nuclear to avoid blackmail over gas

The BBC gives us a Guide to Russia's key energy clients

Malacañang Palace seeks to cushion new oil price hikes

Pakistan: Loadshedding across country planned

With no let up in energy crisis, the government is expected to start formal loadshedding and spread its duration evenly to different parts of the country to enable consumers to plan their life accordingly.

...He said the government believed that announcements in the past of no-loadshedding had been counter productive because there was nothing the government could have done when there was a clear gap between demand and supply. “It is better to face public and come up with shortest possible means to fill the gap,” said the senior official.

U.K.: TV standby buttons will be outlawed

THE Government is to outlaw standby switches on televisions and video and DVD players to cut the amount of electricity wasted in the home.

Refrigerators, washing machines and dishwashers will have to become energy-efficient, and lightbulbs that burn too much energy will be phased out.

IEA sees oil supply growth exceeding demand in '07

When fuel is the price of champagne

[Update by Leanan on 07/12/06 at 10:48 AM EDT]

The Summary of Weekly Petroleum Data for the Week Ending July 7, 2006 has been released. There was a big draw on crude inventories. Price of oil is heading skyward.

[Update by Leanan on 07/12/06 at 2:21 PM EDT]

Oil sends trade deficit higher in May

WASHINGTON (AP) — America's trade deficit rose in May as the price of imported oil jumped by the largest amount since 1990 in the run-up to the first U.S.-Iraq war.

..."Oil is sucking us dry and even stronger world growth cannot keep the trade deficit from widening," said Joel Naroff, chief economist at Naroff Economic Advisors.

Anyone got any stats on heavy crude vs light sweet.
Ie what is used in the fractional distallation process NG ?
How much of each usable fraction from different types of oil do you get.
The IEA today reported that "Non-OPEC supply will increase next year by 1.7 million bpd, up from growth of 1.1 million bpd in 2006 and no expansion in 2005, the IEA said."
Can anyone confirm whether non-OPEC is up 1.1 mbpd day this year yet?  I was under the impression that it was flat or delining, with the decline being made up by OPEC.
So far, (first four months of 06 against first four of 05) according to EIA figures, OPEC is down 220 kbd, non-OPEC up 600 kbd.
Rumours abound over why there is a sudden let-up in the furore over Iran's nuclear programme.

The best guess is that Russia and China have sided with Iran, and told the US/UK that they will not under any circumstances stand by while Iran is attacked. US expansionism has thus been brought to a rude halt.


Possible, but China and Russia's stance can hardly be a surprise, and represents a problem for a particular strategy, not the overall goal.  I see it as a lull before the storm.  Iran is still a major problem for the US imperialists, as they are a serious threat to US hegemony in the gulf region.  That hasn't changed, and I don't see any development of a different strategy from the Neocons.  If anything has changed, it's just that reality has intruded a little in regard to the difficulty of such an operation, and they need a little time to get the pretext just right (for consumption in the US only).  They'd rather go in under cover of the UNSC, but if need be it can be used to prove that the UNSC is useless, and the sheriff had to ride in alone.

Soon the time will have run out on the latest offer made to the Iranians, and the Iranians will continue to try to drag it out without outright rejecting it.  I doubt they have any intention of giving up the nuclear fuel cycle.   So what will we do then - just say "ok, then, never mind"?  Not likely, and the rhetoric is increasing already.

This is a regular strategy of these people, both domestically and otherwise - you use a tool like the UNSC to enable you to do what you want with some level of legitimacy, and if you cannot you do what you want anyway, and thereby destroy the credibility of the organization that opposed you.  You count on the fact that no one will actually try to enforce the rules.  In the end you have absorbed new powers.

BTW, I find it very interesting that the saber rattling over N Korea is so muted by the administration.  It was the liberals who wanted a preemptive strike, while Cheney played it down.  Why?  Because they have nothing we want, and we must save the military force for those places resources we actually care about.  

So what will we do then - just say "ok, then, never mind"?

Definately not, but US has an experience of presenting defeat as a victory. Most certainly the neocons will impose unilateral measures - diplomatic restrictions, additional trade restrictions etc. Some satellites (UK) will also join for the measures to look more impressive. The practical effects will most likely range from mediocre to none, but the media can fume them enough to save the administration face.

I still consider attacking Iran as highly unlikely - whichever way you look at it, the consequesnces even from a limited air strike will be disastrous, and I can see it only as an act of desperation. I don't really believe that people with so much (money and power) to lose would act so short-sightedly.

diplomatic restrictions, additional trade restrictions

yea, the US will make sure the embacy is closed, stop buying oil, and the important date trade.

Now, if nuclear reactors didn't exist as an option for civian power...what WOULD be the reason for Iran to have such for power?

(the %5 link - because I just find out and wanna share how selling Iran oil mattered....)

With oil at $75/barrel, there is a 0.01% chance of any sort of military action on Iran. I think the only thing that may come out of this are more sanctions, which is laughable because Iran has been under a harsh U.S. trade embargo for 27 yrs. Oil has been used as weapon in the past. Now, it is a very effective shield.
Federal Birth Control for Urban Rail works again

COTA to slam brakes on transit options
Tuesday, June 06, 2006
Tim Doulin

COTA might abandon any attempt to add light rail, streetcars or bus rapid transit.

The Central Ohio Transit Authority has been studying all three, but none qualifies for federal funding right now, officials said.

COTA President William Lhota will share today with the agency's board preliminary findings of a study that looked at how much each option would cost and how each would affect such things as noise, traffic, parking and the environment.

The same findings will be shared in public meetings over the next month. Lhota wants to hear from the public before recommending to the board at its July meeting whether to continue pursuing one of the options.

"At this time, based on everything that we know, it is our plan in July to recommend to the board that we not proceed any further," Lhota said yesterday.

There has been talk of a light-rail system in central Ohio since the 1970s. As recently as 1999, voters rejected a levy request that would have funded light rail.

From 2002 to the end of April of this year, $13 million, including about $367,000 in COTA money, has been spent to study the feasibility for light rail, bus rapid transit and streetcars.

As mandated by the Federal Transit Administration, COTA in the last year weighed the capital costs of each of the three transit options against projected ridership, travel-time savings and other benefits.

COTA found that light-rail and streetcar options each would cost $510 million to $640 million to build and would have a projected average weekday ridership of 9,000 to 18,000.

Bus rapid transit would cost $225 million to $375 million to build and have a projected average weekday ridership of 6,000 to 9,000.

Under the federal guidelines, light-rail and streetcar options would have a cost-effective index of $60 to $100 and bus rapid transit would be $35 to $45.

The FTA requires an index of $23 or less.

"The bottom line is that, when you cut through all of this, light rail, streetcar or bus rapid transit do not meet the current criteria for federal funding," Lhota said.

Federal funding would cover as much as 50 percent of capital costs.

"The FTA approval process is complicated and, from my perspective, has always been a moving target," said Bill Porter COTA board chairman.

"While this is a disappointment to the short-term future of alternative modes of transportation in central Ohio, it does not mean that light rail, streetcars or bus rapid transit will never be a reality in our community."

COTA would need local taxpayer support to fund about 25 percent of a rapid-transit system.

COTA still plans to seek voter approval for a tax-levy increase on the November ballot. If the board drops the thought of alternative transit, money from an approved levy would be used to enhance bus service.

"We still need a levy to pay for expanded bus and paratransit service necessary to alleviate crowding and lack of service in some areas," Lhota said.

COTA's study is separate from the city's streetcar study. Earlier this year, Mayor Michael B. Coleman created a 42-member panel to study streetcar service for Downtown.

Karl Gelfer, a COTA rider for more than 30 years, said that while he supports light rail, COTA shouldn't pursue it at this time.

"The voters don't want it," said Gelfer, a retired state worker who lives in Clintonville.

"The bus service needs to improve before we go with a light-rail option."

URL is:


I have been posting selected news tidbits on Urban Rail in order to give TODers a glimpse and education about real world issues.

In this case, Columbus Ohio is denied a chance at a non-oil transportation alternative because of limited Federal funds and limited local support.

Yesterday, it was about how Manila increased rail capacity by 50% by just buying more rolling stock, a VERY economic scaling effect.  (My guess, +10% costs, +50% capacity)

Rail typically scales up beautifully, unit costs go down (strongly) as volume goes up.  Add miles anywhere on the system and this will add ridership density on every existing mile and every station.  Transit Orientated Development speeds up the larger the system grows.

I rarely get comments with these articles though.  Are they of value ?

Hello AlanfromBigEasy,

Keep 'em coming!  Most of us TODers have very little knowledge of RR and mass-transit.  I try and soak it up just like I try to absorb the info series on Shale oil.

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

Hello, Bob Shaw and other TODers.

I'd like to take up your invitation with a few thoughts on light rail.  As a child, I lived in Oak Park, IL, within easy walking distance of a stop on the Elevated system.  It was very convenient: from there, a dime would get me almost anywhere in Chicago.  At that time also (1930s) there were connections from the downtown "loop," or from convenient stations, with electric interurban routes to points up to 50 miles or so away in northern Indiana and west and southwest of Chicago, as well as north 90 miles to Milwaukee.  All these were heavily used commuter lines.  All this was in addition to the "heavy rail" local and commuting services.

In the early part of the century, electric power use was heavy in the winter months and somewhat slack in the summer.  In order to balance the load, power companies across the country, especially in the north, invested in amusement parks where there was light rail access.  I can't speak for other areas, but around Chicago, the interurban lines were built as part of a utility holding company pyramid scheme headed by Sam Insull, that collapsed in 1929, taking some of my Dad's stock with it.  However, the electric lines continued to operate beyond the depression years.  The need for summer load balance turned around after the war, with the spread of air conditioning.

In my view, the public and political resistance (re: Ohio, in this thread) is simply stupid and short-sighted.  It appears to stem from it being seen as antique or quaint -- nostalgic and just not "progress" -- therefore unwanted.  But, dammit, it WORKED!

-- Mort.  

The South Shore Line into Indiana is still very much alive.
There have been efforts to kill it/grab the real estate from right of way using precisely the quaint & antiquated story. But it still WORKS.
You might get more responses if you did what you just did here...post a summary or brief snippet, and link to the article.  

IME, people tend to just scroll by large chunks of text.

I love the electric rail stuff Alan - keep it coming.
You have changed my thinking greatly.  I just never have anything intelligent to add.

But, rest assured, it is appreciated...along with your tidbits of life in New Orleans.


You have shown us that high mobility is still possible with a lot less energy.

I have to admitt, though, that I very often scroll down, whenever it gets too technical, or too specific to certain US locations.

Absolutely, your posts have great value, especially if you are living in the US, but less so on this side of the Atlantic.

I'm having a great time at TOD. You could wipe me off the floor reading that OPEC does not belief PO "theory". That debat is over; PO is not a theory, it's a physical certainty. OPEC may belief that it is at least decades away, but claiming they do not belief in PO is for sure a lie. Ask Indonesia.

I've always believed rail could serve us better but lacked information. Your posts help fill the gaps in my personal knowledge base about rail. Please do keep them coming.
Please, please keep it coming.  Your comments are always interesting and you bring a unique perspective to the discussions here at TOD.  Bravo for all your efforts supporting urban rail.
I read all your posts and they have done a lot to expand my knowledge about rail and the current mass transit trends in the US, which get very little if any notice in the European media.

So, keep up the good work. It will be appreciated.

You're preaching to the choir with me, but keep it coming.  I do not expect the US to do the obvious, logical steps, but I find it useful to understand exactly why these things cannot get done here.
Yes, most valuable. You have me pushing electric rail.

Casey Jones

Alan, keep 'em coming. The repetition reinforces the message. I don't usually comment on your posts on urban rail, but I always read them.
Its intresting to hear about post peak oil infrastructure investments in USA, please continue you posting.
I rarely get comments with these articles though.

If you want to add "and this is why New Orleans is one of only 3 cites worth saving" and I'll respond telling you to go pound sand.

Rubber VS road - 40 lbs of force to move a ton.   Steel wheels VS steel track - 5 lbs of foce to move a ton.  It is a 'DUH' issue.   So what are you looking for?  A 'thanks' each time you point out how much better tail is?

"A 'thanks' each time you point out how much better tail is?"

Actually I've never heard Alan mention anything about tail. Rail, yes, but no tail. Interesting Freudian slip though.

For discussions of tail, may I respectfully refer you to Don Sailorman.
   I too learn from your posts like I do form many of the other TOD posters and when I need to retrieve or refresh some info on rail I link back to your past posts and the wealth of data. I lurk here most of the time and learn from all the reports and opinions that I am able to read each day. This site helps me in dealing with looking ahead and trying to take some positive action for myself and those around me, those that will listen that is. My question I ask myself each day is how fast the squeeze will be (both in volume and time) and how will people and the economy handle the transition.

Does anyone (worldwide) use gondola technology to enhance rail? I would think that this type of technology could be used to move goods and people over and thru areas where even light rail would be expensive to implement.

There is a very nice suspended monorail (single track with passing at stations) in Japan from train depot through mountain to coastal village/resort.  Cab is below with "?" arm on monorail.

There is a ski-lift type gondola system from Manhatten to small island 1/2 way to Queens.  From distant memory, seats about 60.  Used by commuters.

Probably a few more examples.

In the overwhelming # of cases, rail works best for higher volumes of people.

I agree that rail is great for higher volumes. That's the reverse of my question. What about for SMALL volumes of people or goods? Is there a case for a gondola-type technology? Doesn't the cost of the real estate factor in somewhere?

Or...here's a vision...a micro-gondola device that can traverse power lines...even in rural areas. Perhaps the poles would have some widget added to allow the micro-gondola to by-pass them. It could be used as a "package" delivery device . I wonder how much additional weight the average power line can hold?

The established less capital intensive alternative too electrified rail are electrified busses that takes their power from a pair of wires strung over the road.

They are quite common in former east europe.

As far as I know no such system is in use in Sweden. The proposals have so far lost out to biogas or ethanol busses or more ambitious proposals for tramways, most of them not yet built. And there allays someone who somewere tries to sell some track-taxi concept.

Reminds me that I once heard that the reason for the hight of overpasses on the original German autobahns were to provide clearance to electrifie truck traffic. Trucks were smaller in the 1930:s.

I dont think there are any pressing reasons for complete automation of passanger traffic since there probably will be plenty of people competing for the driving jobs.

Gondolas on power poles will need some new kind of power pole system but the electricity distributors would perhaps prefer a cablification. Cables in the ground are much more reliable and are very storm resistant, they also look better, that is not at all. :-) I have seen power poles on manny US programs and it look a little thirld-world cobbled togeather. Perhaps they are popular due to a need for a much larger number of transformers to save on expensive thick 110V wiers?

After the last big ice storm blew thru here, I remember Duke Power (a big power company) saying that power lines on poles was *cheaper* than underground in both installation AND maintenance. Apparently underground gets cut a lot by "back-hoes", and when undergound gets flooded the repair can take much much longer.

Anyhow, I would image that a new power line micro-gondola system would eventually be rather attractive. I think a box about the size of a typical office desk could work (6'x3'x3'). Perhaps the power companies would get rid of that "third world cobbled together" look over time. I can image my "take out Chinese" dinner arriving in minimal time (kept warm by a built-in hot plate device) -- as the delivery gondola slips silently up to my house (while my car stays silently parked in the driveway).

> Apparently underground gets cut a lot by "back-hoes", and when undergound gets flooded the repair can take much much longer.

The standard over here is that if you cut a cable you pay unless you have asked for a free cable marking and then you only pay if you dig at the marking. If the cable is at the wrong location the power distributor pays.

You mean if ground level transformers and switches get flooded? Regular PEX insulated cables are water proof and most of them are also used in water, they even work better in wet ground when loaded since that provides a little cooling.

I have onle seen very short press release versions of cost comparisions. Cables won when comparing the whole multi decade life lenght, they do probably not win if the intrest rate is high. Cheap labour might change the calcualtion but the material cost should be about the same globally if you are a large distributor.

And there might be other reasons, people here dont like overhead wiers, they look ugly, farmers dont like to have poles in their fields and poles alongside roads is an additional traffic risk. Large parts of Denmark looks better then Sweden and one of the reasons is that the have cablified more. But the main reason is reliability during storms and the cost of having service people waiting everywhere. Power line building and maintainance is no longer local busines as it used to be over here and cablifieing is a technological way of providing the same kind of reliability.

Almost the only new power poles installed for voltages less then some 20 kV are where the ground is bedrock or full of stone blocks and there insulated wiers or cables depending on how you define them are regularly used. They can handle a tree leaning on them withouth interrupting service and if a whole forest goes down modern linkage breaks in a controlled way saving the poles, I dont know if the cables are tough enough to survive that. My guess is that damaged insulation is ok as long as the wire/cable are strong enough to be rehung in the poles isolators if you have a real emergency. In the same way as emergency 20 kV ground cables were left on open ground to get repairs done faster, this gave some fireworks when forestry machines rolled over them but I dont think anyone were killed.

Micro gondolas sound like a very fun idea to contemplate and calculate. I have read about simmilar compressed air tube-transportation ideas or micro wehicle in small culvert ideas. They have a problem with the capital cost for building the system. Your micro gondola system is unfortunately not something for where I live since it probably will have a hard time with ice on the powerlines.

My guess for future logistics is much more rail combi traffic with local battery or plug in hybrid distribution wehicles and probably manny packet/post offices to collect packages at the same time as doing other buinesses.

The local trend in Sweden is a now completed closure of most traditional complete service post offices over 15 years. Probably since the dismantling the cash only spare banking infrastructure in case of WW 3 and definately due to the arrival of internet banking overtaking the payment order system we used instead of cheques. This has been replaced with a more fine grained system of small delivery points in shops and larger kiosks for collecting packages and mail to big to fit in your mailbox.

In my home town is a small logistics central being established to recieve heavy trucks and repackage the deliveries to small biogas driven delivery trucks thus getting rid of heavy and awkward delivery traffic in the city center and saving a fair ammount of fuel. It is situated so that a railway spur can be added later. We are not yet ready for the second or third(?) try for getting light rail combo traffic going with small containers. And such a system is technically an easy one.

I forgot, underground cables also give less problems with thunderstrikes.
Micro gondolas are a "very fun idea to contemplate and calculate" -- Yes, I keep thinking about it. For instance, you mention rail and hybrid vehicles, but I keep picturing (1) moving a person from A to B in a vehicle, and then moving the person (with retail purchase or package) from B to A in a vehicle, versus (2) moving the retail purchase or package in a small container (no person, and no vehicle) from B to A -- much more efficient.

It would be not just for postal package delivery, but also for normal retail transactions. Perhaps the micro gondolas would have "line heaters" where necessary.

There has been numerous tries for on-line purchasing of groceries and so on. Over here they usually fail on too high staff costs for putting the delivery togeather and transporting them and the buyer and sellers often wish to meet in a shop to find new things/sell new things.

The first niches that make sense seem to be deliveries to disabled people and high profile luxuries that were fun as internet ghee-whiz.

This part is fairly independant of delivery via optimised car routes, compresse air mail tube or micro gondolas. But the staff and capital cost and delivery times are of course different.

If you want to solve this figure out chilled gondolas, freezer gondolas and why not also heated gondolas.

Line heating has been used to defrost high tension lines but it eats power since it essentially means turning the power line into one long resistiv heater in freely moving cold air. Dont bother with the minus celsius part of the market. If you get people to want any kind of system like this you have done good and if you get something workable that is better then small delivery trucks in any climate you have done even better.

Chicago used to have electrified buses like Eastern Europe until about 1970 - just as the Lower 48 peaked! I remember watching the occasional bus driver having to grab this rope like a clothesline to put the "derailed" trolley back. Of course, it would clog traffic for the couple minutes.

A real problem is that if a truck gets stuck under a bridge, the bus can't divert to go around it, adding to the traffic jam. Plus you can't easally turn a bus around unless it had an onboard emergency genset. (not a bad idea given upcoming chronic rolling blackouts!)

I helped put together a proposal to buy & build electric trolley buses in New Orelns after Katrina.  They would have had a 80 hp diesel generator on-board to make short diversions (also useful for maintenance).  Without a/c, top speed fo about 25 mph for on "off wire" trolley bus.  Larger generator = more speed.
What about for SMALL volumes of people or goods


That stuff looks like it requires a *lot* more real estate and equipment investment than my micro-gondola concept.

A power company could attach micro-gondolas to the tops of existing power poles. They could start (after peak oil makes this look more sensible of course) by delivering the most popular single trip items on the most popular routes. They could have Pizza, Chinese food, diapers, cigarettes, DVDs, and beer & wine delivery to a selection of "destination poles" in big neighborhoods. The pilot project would branch out from the initial network -- just walk down to your neighborhood community center and wait for the gondola to deliver your dinner!

A power company could attach micro-gondolas to the tops of existing power poles

Could.   Most poles that are installed are ment to hold up wires.   Not the forces of a gondola.  

Go talk to the engineers at the power company and ask for the design calcs.  

Then, visit a gondola firm and ask to see the force calcs for their towers.

Also look about - how many power poles have 'gondola obstructions'?

That stuff looks like it requires a lot more real estate and equipment investment than my micro-gondola concept.

In some magical future where electrical energy replaces all oil, the power grid will need to be reworked.  Already, the present grid is overtaxed in parts of the US of A.  The ruf concept could house the expanded power grid, which would be needed for a electrial power grid transport system.

A "redo" with a ruf system makes sense if the power grid needs to undergo a large expansion of capacity, and part of tht new demand will be transportation.   Room temp superconductors stikes me as a reason for such a new buildout.   Or perhaps when nuclear power gets too cheap to meter eh?

More "magical future"...

Those power grid towers that hold up long distance power lines could work also for micro gondolas. They look strong. I wonder if they are hurricane strength? Perhaps UPS or FedEx should look into this.

If it got going almost everywhere (between major cities) the airlines could use them to send our luggage from airport to airport. This would probably pay for itself before too long.

Make it a separate system.

An endless array of new & innovative transportation designs keep appearing.  Monorails are the most enduring (in part because they are the best solution in a very small niche) and RUF is one on the newest ones. A bewildering array of airport people movers have been installed world-wide.

Collectively, these concepts have been lumped together as "gedgetbahn".  Much time, money and effort has been spent on them and none are as generally* useful or economic to build and operate as convential rail systems.  The US actually built a few in the late 1970s and early 1980s when we were looking for solutions to our oil dependence (see below).

However, IMO, we do not have the time or money to waste on more experiments wuth gadgetbahn.  We need to build what works !

RUF is not worth the waste of time to consider.  It has an exposed high voltage rail.  In an accident, a twisted metal structure could short that out with "adverse condequences".  Someone could have a flat tire, get out, jump over the "V" and put their hand in the wrong place.  Not acceptable today.

What happens when the bus stops every few blocks, does a line of cars behind stop as well ?

Unique design cars and buses are required with "limited utility" and market.  How does one induce Toyota to design and build just one RUF model ?

*Monorails have a very small and limited market where they are the "best" solution.  Advocates routinely underestimate their costs to build & operate and discount the value of commonality everywhere with multiple suppliers to chose from.

Some US gadgetbahn:

Miami MetroMover


Morgantown Group Rapid Transit


Irving Texas Peoplemover


Jacksonville Monorail


All of the above are quite uneconomic by any standard transportation metric.

Most transit advocates see "gadgetbahn" proponents as being pro-car and anti-transit, who are using an impractical design to confuse & delay a good solution.

RUF is not worth the waste of time to consider.
What happens when the bus stops every few blocks, does a line of cars behind stop as well ?

Because you don't feel it is worth the time to consider, no one will ever be able to answer your straw man.

Oh wait.   If you think like a linear rail, stopping and staring is a problem.

" At or near each rail crossing is a station and a multi branch rail access/egress point."    Guess THEY have thought of the problem.  

A nice RUF feature is the ability to move about cargo w/o the need for humans.   Like the 'micro gondola' idea.   I have yet to see the 'what works rail' plan for that.

"Trolley Freight" is an old idea.  Shipping freight on streetcar/tram tracks.  Dresden started that up recently AFAIK.

I have talked privately with Westexas that Trolley freight on the Dallas DART lines is doable off-peak one they finished expanding the system.

The electrified Long Island RR also runs freight off a 3rd rail.

We do *NOT* have the time !!

This is NOT six months after President Carter's speech !

If we were fully funding every viable Urban Rail project in the nation, and electrifying 100 miles of freight rail/month and the date was July 13, 1982; then I would be willing to fund some gadgetbahn experiments (RUF would likely not get my vote though).

Consider the time to build prototypes, debug them, build a minimal real world system (with Toyota or Honda building low volume one car & one mini-bus model), gather operational & cost data, re-engineer for any safety or operational problems. expand the initial network a bit, etc.  Most likely a dead end that ends up being scrapped.

At an absolute minimum, if successful, you would take 15 years (20 to 30 years more likely) before RUF displaced 0.1% of US oil consumption.  Meanwhile RUF would consume resources and time, delaying projects that we KNOW work, and work well !

I am generally opposed to gadgetbahn now.  We have a large # of choices that we know work, and work well.

For example, there may be a place for funiculars, which we know all about already.

A fundamental problem with gadgetbahn appears to be its "linearity". As you say, a bus stops and all traffic behind it stops. Also a train can move in only one direction on a rail line.

In my micro gondola design, the gondolas could by-pass each other at any tower (appropriately configured). Think of it as a segmented line rather than a continuous line.

I'd bet there is an air corridor NY-DC (225 miles) or Boston-NY (215 miles) where the airlines could save enough money by "shipping" luggage over the gondolas to pay for itself in a fairly short time. Let's see...those "flights" take about 1 hr 20 min to 1 hr 36 min (gate to gate), add on waiting, loading, and un-loading will get you to at least 2 hours. So the micro-gondola would have to travel about 110 mph to make the same trip in the same time.

Power lines are made of soft aluminum wire with a few steel strands added for strength.  The wear from heavy loads, a la luggage, would be unacceptable.  Any wear would be unacceptable, IMO.
Soft aluminum. That's good to know.

Looks like I'd have to install a lot of pole-top "?" (<-- that's the shape) hooks and run a lot of strong wire. <P> This is not really for gondola companies though, it may be more of a robot thing. What's the closest existing vehicle that traverses a "wire" with its own motor? Electric rail? Roller coaster?

"Bus rapid transit would cost $225 million to $375 million to build and have a projected average weekday ridership of 6,000 to 9,000."

Hummm, 225 million devided by 6000 is $37,500 per rider. Be a lot cheaper to buy each rider a new fuel efficient car and supply them with free gas for the rest of their lives?

Do you know what the analysis assumed about the future price of gasoline? Ridership might be a lot higher at $7/gallon than at $3/gallon.
Hello TODers,

The G8 Conference is heating up already.  Garry Kasparov, former world chess champion and an strong critic of Putin says his group is being arrested and beaten up by police and operatives of the FSB:


President Vladimir Putin's fiercest domestic critics and political challengers have defied the Kremlin and held an alternative G8 summit in Moscow, four days before the real thing.

The "anti-summit" was an attempt to persuade the West to get tough with the Russian leader. Speaker after speaker complained about the state of democracy and urged G8 leaders to stop treating Mr Putin as a democrat.

Igor Shuvalov, Mr Putin's G8 point man, had made it clear before the anti-summit that the Kremlin did not want "high officials" from foreign countries to attend, warning their participation would be viewed as "an unfriendly act". Two senior officials from the US State Department also ignored the warning to stay away.

Another protester tried to punch the former Russian prime minister Mikhail Kasyanov, who is a potential presidential contender for the opposition.

From Yahoo news:


One of the cleverest recent comments about the New Russia came from Ivan Krastev, a prominent Bulgarian strategic thinker. "The transition," he said, "has been from one-party state to a one-pipeline state."

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

Putin takes swipe at Cheney over criticisms
Russian president tells NBC that VP was on `an unsuccessful hunting shot'


Putin translator, "Move Rook to position f3."

Impeach Bush and we get this moron.  My god they are delusional.
Hello TODers,


President of Georgia Mikhail Saakashvili believes that the upcoming G8 summit in St. Petersburg will have determining significance for the world politics.

As the Georgian president stresses, his last visit was not limited to negotiations with George Bush. "There was a separate meeting with the US vice president, where US chairman of the Joint Chiefs of Staff, defense secretary and energy secretary, other officials, we had talks with practically all top officials of the US administration," Mikhail Saakashvili notes.

According to the Georgian leader, his visit to the US was a historical one "because of the moment, at which we are all now." He stressed that "the G8 summit would be a decisive one in terms of where the world will go in the near future" and that "everything is being decided right up at the moment": "What is this world? Is it where everything is determined by weapons, money, oil, big strategic or global interests, and small countries even do not have their own place? Where bargains are stricken behind them, and their fate is determined by others? Or is it the world, where moral, principles, freedom of various nations are equally important as it has been declared by the free world for decades? Will small countries have their say in this world?"

Mikhail Saakashvili finds it very symbolic that before the G8 summit he had a meeting first with Russian President Vladimir Putin and then with George Bush, which was the last meeting of the US president with a foreign visitor before the summit, which coincided with the US Independence Day and Bush's 60th anniversary. "I think it is a clear indicator for everyone of the role of our small country in the big world politics. We are actors not only in protecting and forming our fate, but because our people are special, and because of special events in our new history, we participate in forming the biggest world interests and policies, in determining, and what the main thing is, what our place in this all is," the Georgian president stresses.

"I do not have claims to be a world actor, or for our country to become a world actor. It goes here about the fact that we have our own interests, our small interests that are very big for us. Our country has turned out to be in the center of global interests. We have very powerful friends now, and it has its price: we have very strong enemies too. And I want all of us to comprehend it properly," Saakashvili notes.

Will Bush push Georgia to join NATO?  Will Putin cutoff Georgian FF supplies if they try to join NATO?

Speed Chess allows very little time to prevent miscalculation in the Great Game! Yikes!

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

Tiny island of Vanuatu ranked as world's happiest place

"The Happy Planet Index strips the view of the economy back to its absolute basics: what we put in (resources), and what comes out (human lives of different length and happiness)," the NEF said.

...NEF said Central America was the region with the highest average score, combining good life expectancy of 70 years with an ecological footprint below its globally fair share, while island nations scored above average and Switzerland came top in Europe.

The weakest point of this index is its reliance on polls to determine how happy the citizens of different countries are. That element reflects mainly cultural differences in the extent to which it is acceptable to express enthusiasm for one's situation.
Interesting link and relevant to the problems discussed at TOD daily.  There is one nation who's motto is actually "The Gross Domestic Product of Happiness", and that is Bhutan.  They started allowing TV, on Sunday afternoons only, a number of years ago.
"Life, liberty and the pursuit of happiness" - who said that?
Re:  My "Export Land" Model--Ladies & Gentlemen, this ain't rocket science

The latest EIA data show a big drop in crude oil inventories, because of big drop in crude oil imports.  

As I predicted, total US petroleum imports, on a four week running average, have started falling again--and oil prices have started rising again.

IMO, the pattern that we will see for years and probably decades to come is the following:  (1)  a drop in oil exports; (2) followed by an increase in oil prices, as remaining exports go to the highest bidder, followed by (3)  a period of relative stability, and then the cycle starts all over again.

We had one complete cycle this spring, and IMO we at the start of another cycle right now.  What amazed me this past spring was the number of people that kept trying to explain how falling petroleum imports and rising oil prices meant that we had plenty of oil.

Look at the consumption numbers--up in the US and China and way up in many oil exporting countries--while world crude + condensate production, as predicted by the HL method, is down 1% since December.  Someone has to be cutting back.

As I said, this ain't rocket science.  What baffles me is that anyone is contesting the hard cold facts.  How in the world can you predict rising oil production when the four largest producing oil fields are all past their peak production?  I suspect that Ghawar and Cantarell are both on the verge of catastrophic declines.

trying to explain how falling petroleum imports...

What falling imports? Total Net Imports are UP 2.9% year-on-year (YTD = 187 days).

How many times do we have to go over this?  

We measure declines from the peak.  Oil production peaked in Texas in 1972, but 1973 produduction was 6.3% higher than 1971.  Based on your reasoning, this means that Texas didn't peak.

In 2006 so far, we have 27 weeks of US import data.   On a four week running average, 21 of the 27 weeks show lower petroluem imports that what we showed at the end of 2005.   The most recent four week running average number, for 7/7/06, is once again below the 12/30/05 running average number.  Oil prices are up 25% since December.

But fundamentally world crude + condensate production is down since December and the four largest producing fields in the world are all past their peaks.    I'm not building my Export Land model based on a few weeks of export/import data, I'm building it based on an analysis of the HL data and the fact that the world's top exporters are more depleted than the world is overall.  This is why I predicted--in January--that we would face a net oil export crisis this year.  

If 21/27 avg weeks are lowere than end 05, are the remaining 6 higher? WOuld not one of these constitute a new peak avg? So, what 4-week period is the highest avg?
It probably makes more sense to look at a longer period than 4 weeks anyway, either months or quarters. How does 1q06 compare with 4q05? BUt, even this may be misleading. SPring is when refiners shut down for maintenance, and some opec countries have, at least in the past, reduced output in this season to support price, and this could in theory explain SA reduced output. So, it is reasonable to compare yoy quarters, eg 1q06 vs 1q05, or years, but can't yet compare 06 vs. 05. (in your example, you compared texas 73 vs 72).  
The future may be dark, but premature to declare Deffeyes won the pool, and this is true even if mex/sa continuously reduce output going forward; Chris (and, apparently, aspo too) is expecting substantial non-opec increases in 07, plus the ng/ethanol conversion is surging.  So, 07 could easily be peak year even if he has underpredicted field declines.

Of course, we may well see higher prices even as total production edges up or maintains stuart's bumpy plateau. The world wants at least 2% more/year, might not get it.

We measure declines from the peak. Oil production peaked in Texas in 1972, but 1973 produduction was 6.3% higher than 1971. Based on your reasoning, this means that Texas didn't peak.

Depends. Not if the imports graph looks like this:

Except that is not what total petroleum imports look like for 2006.  As I pointed out above, 21 of 27 weekly import numbers (on a four week running average) were below the December, 2005 number.
As I pointed out above, 21 of 27 weekly import numbers (on a four week running average) were below the December, 2005 number.

Please look at my graph again. Isn't that what it shows? All 2006 numbers are less than December 2005! (The horizontal axis being conventionally time).

I've asked Khebab to do some graphing of the 12/7/05 and forward total imports versus price.  

Robert and I traded about 20 postings on this subject.  He kept getting hung up on weekly import numbers.  My point was that I could not reconcile rising oil prices and falling imports this spring--unless the falling imports were due to a bidding war.   If the refiners did not need the oil, why were they paying more for it?

But the primary point is that I am not building my Export Land model based on the weekly export/import data.  I made the prediction, in January, that we would see falling export capacity this year based on the observation that the leading exporters are more depleted than the world is overall.

Since I made the January prediction, oil prices are up by 15% to 25%, world oil production is down, Saudi production is down and on balance US imports are down (21 out of 27 weeks), relative to late December.

US imports  in 2006, relative to the first half of 2005, are not the issue, no more than Texas oil production in 1973, relative to 1971, was the issue as Texas started its long term decline.

"Please look at my graph again. Isn't that what it shows?"

To answer your question directly.  Yes.  But your plot suggests continuously rising imports in 2006, which is not the case.  21 out of 27 weeks were down relative to late December, with only 6 up (all four week running averages).

The two downward trends on the import graph in 2006 correspond to price increases.  IMO, this is simply evidence of declining net export capacity--as I predicted in January--being allocated to the high bidders.


I suggest to you to try to find real import graph to take a good look at.  Graphoilogy is loaded with real graphical data from real production, import and export numbers.  The simple assumption you made are too much simple and far from reality.

Oil is a real material, not a mathematical concept you can work to fit your desired curve or equations.

Before arguing on something you have just a bit of knowledge of, try to learn more about it.  Your arguments will then be very much more interresting.

Wolfric, I agree real numbers would be better :) But what I was trying to show was how it is possible for this year's import numbers to be all less than December 2005 but at the same time be 3% UP relative to last year. I will not buy into the "import depletion scenario" until the EIA's YTD figures show a decline in imports, not an increase.
"But what I was trying to show was how it is possible for this year's import numbers to be all less than December 2005 but at the same time be 3% UP relative to last year."

I never denied this fact, but as I said it is no more relevant to Peak Oil considerations than is the fact that Texas oil production in 1973 was down relative to 1972, but up 6.3% relative to 1971.  Does that mean that Texas did not peak?  No.

Not just US imports. Think globally.
"Not just US imports. Think globally."

That was the point that I made when US imports started rising, following the spring price increase,  Just because US imports were rising--following a bidding war--didn't mean that imports everywhere were rising.

Just because US imports were rising--following a bidding war--didn't mean that imports everywhere were rising.

This is sort of what I mean when I say you have set yourself up an unfalsifiable position. I could take the opposite position: When imports in the U.S. were falling, that doesn't mean imports elsewhere were falling.

Your argument is highly dependent upon the specific time period under consideration. There are times that we see rising imports and falling prices. That does not fit your model, but you always say something like "well, maybe imports elsewhere were falling". There are two problems with that argument. First, prices fell slightly during the period of rising imports. Second, there is no direct evidence that imports for other countries were falling; it's all anecdotal evidence.

I really think what you have here is just too little data upon which to base a conclusion. I don't intend to get into another huge back and forth, but I thought I would weigh in since my name was invoked. :)



In defense of my thesis, we are seeing another drop in imports and another rise in oil prices.   My point is that we have never been in this situation before worldwide.
While one could say that an almost historical high level of crude stocks make huge imports useless, this is not true for gasoline stocks.

I look more at finished gasoline stocks than total gasoline stocks which are blending components+finished. At the end of last week the finished gasoline stock should be somewhere around 120.6 million barrels which is below the lower half of the average range for the same period of the year (mean 155 mb, lower limit at 129 mb). The historic low since 1990 was on 2006/04/26 at 113.922 mb.

In the same manner, finished gasoline imports are below the lower limit of the average range of the same period of the year (computed over the last 5 years, mean 533mb/d, lower limit 423 mb/d, last 4-week average 408 mb/d, last week ending at 380 mb/d).

At actual rate of consumption, the stocks represent err ... 12 days in reserve.

"While one could say that an almost historical high level of crude stocks make huge imports useless, this is not true for gasoline stocks."

We do not know what percentage of crude oil stocks consists of heavy, sour crude versus light, sweet crude.  IMO, flat to declining invnetories of  light, sweet are being obscured by rising inventories of heavy, sour.  As Cantarell crashes, this will probably result in more of a total crude oil shortage.

absolutely. It would make absolutely sense to differentiate the grades of crude in terms of imports, stocks and inputs to refineries.

BTW, I've been thinking of your definition of Yergin's day. IMHO it should be the first day when the nearest future of WTI (or Brent ?) closes above 76$. Waiting for a second crossing day implies that the futures drop below that level. But what if a sudden event drives futures well above that price ? In such an unlikely but not impossible case, we would have to wait too long before a new crossing occurs.

I tend to agree with your analysis, but I do wonder why we would be stockpiling heavy sour?
All I know is that the price spread between light, sweet and heavy, sour definitely suggests that light, sweet inventories are low relative to heavy, sour.
From http://money.cnn.com/2006/07/12/markets/oil_eia/index.htm

Gasoline supplies fell by 400,000 barrels, while distillates, used to make heating and diesel fuel, rose by 2.6 million barrels. Analysts were looking for a 100,000 barrel drop in gasoline stocks and a 1.6 million barrel build in distillates.

If there is a shift toward Heavy Sour does that push the products from gasoline to distillates?

In the US over half the crude is of a grade that is imported or pruduced is not light. I do not know the split between medium and heavy. As world production of light sweet has declined over the last four years when we had "peak light sweet crude oil", we can expect a continuation of an ever declining percentage of this grade. I understand that Cantarell is more of the medium sour grade. In Canada, we have the same situation- declining crude but even more so, declining light sweet crude. What the world has is a shortage of refineries that can process the heavier sour grades.
Westexas, I seem to recall your pointing out that poorer countries would tend to loose the bidding wars for oil.  It seems that a potential impact of this might be the staving off or reduction at least of some of the inflationary impacts of increasing fuel prices in the US.  If poorer countries loose the oil bidding wars, their internal economies cannot grow, making them potentially even more dependent on globalizing industries for jobs/income, making them more willing to continue to accept low (or even lower) wages and as a result maintaining lower retail prices, at least for a while, despite the increases in shipping costs.  
Oil stockpiles post a 6 million barrel drop this week.  Wow.  In other news, we're going broke as a country trying to pay for all of it.


Looks like we have already hit an Intraday Record at 74.85.  Anyone doubt we will cross $75 today?
Yergin Day approaches.

We have a winner!!!

Energy           Price Change High Low Settle Last Update†
Light Crude
(NYM)           74.85 +0.69 75.00 73.75 74.16 7/12 1:45pm

But wait...where is the headline news?  Where is the coverage of this incredible event?

Only on TOD!!

Why is this special?  The intraday record for the front month contract is $75.78.  The record close is $75.19.  Set just last week.
God...brain fart...I should not rely on my memory.  Sorry, as you were.  Nothing to get excited about.
OK, so I was just a day late:

Oil prices hit new records amid escalating crisis in the Middle East

http://futures.fxstreet.com/Futures/news/afx/singleNew.asp?menu=economicnews&pv_noticia=11527846 11-a0a30f08-17860

LONDON AFX - Oil prices hit new records as Israel clamped an air, sea and land blockade on Lebanon and bombed Beirut airport in what is seen as a dangerous new escalation to the Middle East conflict

At 10.25 am, August-dated Brent contracts were up 1.11 usd at 75.50 usd, after striking an all time record of 75.60 usd that broke the previous 75.09 usd record set last Friday amid rising tensions over Iran and North Korea

Meanwhile, August-dated US light crude futures were up 85 cents at 75.83 usd, after striking a new all time record of 75.89 usd earlier to break Friday's all time high of 75.78 usd

US inventories down.
Oil price up.
Cool summer breezes blowing in the GOM.
No real media catastrophies this month.
World's 4 largest oil fields in decline?
The end - whatever that is - is in sight.

The end (stage 1) must be oil prices rising to the point where this lowers global demand - $100-$150?  And at that point interest rates must rise, property values crash, consumer driven growth dives, governments go bust and "recession stage 1" sets in.

At that stage do oil prices fall back?  Or does falling production go faster than falling consumption?

And all this by the end of July.

We are all cursed to be living in exciting times.
There's a wolf at the door!
A famous quote taken from the movie Airplane (1980)

As the plane prepares to take off.]
Old lady: Nervous?
Ted Striker: Yes.
Old lady: First time?
Ted Striker: No, I've been nervous lots of times.

This pretty much sums up our feelings, we too have been nervous about world events lots of times......

But this time it's different!

Ted Striker: Surely you can't be serious.
Rumack: I am serious... and don't call me Shirley.

Love that movie.

It does feel different this time, but if we can maintain a sense of humor, perhaps we will survive.

I have followed peak oil from a disatnce for several years but only more closely for 3 months - the reason....

In May, world markets had a severe shake down - stocks, gold, copper etc.  The one striking omission amongst the carnage was oil which barely fell at all.  It seemed to me that oil was the cause of the shake down - high prices - higher interest rates etc.

So yes, I do think this time could be different - but there will be no well defined peak in production or price.  The whole process probably started back in 2003 with shrinkage of spare production capacity.

Many will correlate the current upward movement with trouble in Lebanon.  My feeling is that this upward movement would have happened anyway (don't like using spike as it has transient conotations).

Airplane is a great movie but a future remake will perhaps have to be called Blimp.

It's kinda interesting how much weight the EIA Weekly Petroleum Status Report have become.

The stock market seems to hang in midair on Wednesday mornings trading in a very narrow band.

Any guesses on stock levels before the report comes out since we are all waiting?

Oops...too late.
Hello TODers,

More on the Mexican election [I have no idea on how truthful these websites are]:

Death by Video: Mexico's Election Fraud Is Coming Undone
Video and Audio Evidence, an Outraged Citizenry, and Panic from the White House Are Converging to Make López Obrador the Next Mexican President.

Harvest of Discord From a Rural Tally

The apparent winner of Mexico's presidential vote got nearly one-fifth of his victory margin from a single district. A complaint is filed.

In Guanajuato's District No. 13, one of 300 electoral districts across Mexico, Calderon piled up a 44,000-vote margin, equivalent to almost one-fifth of his nationwide edge over Lopez Obrador, candidate of the Democratic Revolution Party, or PRD.

Lopez Obrador's supporters express disbelief over that margin.

"Valle de Santiago is the strongest bastion of the PRD in Guanajuato," said Miguel Luna Hernandez, a PRD congressional deputy who won election here three years ago. "It doesn't make any sense that they would give us such a terrible beating here."

Among the inconsistencies that PRD supporters cite: Two precinct reports show polling stations at street addresses that do not exist in the city listed. In another precinct, two different vote totals were listed for Calderon. In others, the sum of leftover blank ballots, discarded ballots and votes cast did not equal the number of ballots issued to a precinct, though the difference was often just one or two ballots.

"I've been in politics for 25 years, and my gut feeling tells me that the will of the people here was not expressed in the tally of the votes," Luna said. "Double voting and a double reporting of precincts took place."

"Just because we're poor doesn't mean we're ignorant," said Alma Delia Rico, who said she declined an offer of roofing materials. "If they don't count our votes, we might even start a war."
http://www.latimes.com/news/nationworld/world/la-fg-heartland12jul12,1,878741.story?coll=la-headline s-world

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

In Chicago we call that kind of thing "vote early, vote often!". Given the election fraud in Y2K and Y2K4 in this country, surely some hanky-panky by the Bush regime to sway Mexico's election occured. Bush wanted a Mexican right winger as a friend. Electorate (in either country) be damned!
Hello Mad Maxout,

Yes, and as I recall from the campaigns of the first Mayor Daly, even the dead voted twice for him too.  Now that is a 'popular' politician.

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

Just when I was beginning to think that people were starting to become aware of peak oil and our energy problems in general ........

I read in the business section of today's paper that the largest multi-brand car dealership in Delaware is going to open up the area's first stand-alone Hummer dealership. The owner said that in spite of rising gas prices, he's seen no drop off in demand for Hummers, which have been selling briskly.  

The building for the new Hummer dealership is designed to look like a cross between a Quonset hut and an airplane hanger, consistent with the military image of the Hummer. One satisfied customer has had four Hummers so far, absolutely loves them, and for his next one is planning on buying their largest model, which weighs 7,500 lbs and gets an average of 11.5 mpg.

Opening up a Hummer dealership in times like this strikes me about as smart as sinking your life savings into opening up a Pierce Arrow or Dusenberg dealership in September, 1929.

So, while the message is getting out, a little tidbit like this tells me that we have a hell of a long way to go.

I've seen a few new Hummer ads on the tube. Appears you can't  be macho,or feminine macho, without one. Not even subtile about it any more. Don't let your kid get aced by another on the playground slide; buy yer elf a Hummer; "Get yer girl on."
The newest "American Idol" (EU has even worse Eurosong competition by nation) winner, Taylor Hicks (?) sings on Ford Truck commercial.  Understandable parts "I do what I want to do, When I want to do it" and "Expand the possibilities" with visuals of trucks splashing everyehere.  Emotions, not logic are appealed to.

Earlier local auto commericals showed our streetcars (Toyota, Ford, Buick & Chevy).  Logic ? No.  Just an emotional appeal (like a pretty girl, but to both genders).

Local advertisers show streetcars in their commericals as a signal that they are New Orleans based (and add interest/appeal). No irony for furniture, health care, dry cleaner, clothing, food, daiquari ads to show streetcars.  One can take the streetcars to get to their businesses.  But automobile ??

We moved heaven & earth to get minimal, pieced together streetcar service back somewhere in town after Katrina (1923/24 built St. Charles streetcars on Canal with used Boston DC rectifier).


The wife and I watched an interview with a car industry market analyst last year on 60 Minutes. The guy basically said SUV popularity was pure emotion. His exact words were, 'These things make you think it's Mad Max out there! You could put a machine gun on top and people would buy more.'

I had an idea that Saturday Night Live should do an advertisement for a Ford "Extradition" -- a couple of guys driving thru the jungle in a Ford "Extradition" complete with machine gun on top.
It's hard to produce satire when reality has the lead on you. Have you seen the latest Hummer commercials? The slogan is "Recover your manhood." I am not making this up!
They just need to step it up a notch:
I used to think this Onion piece was satirical


but now I'm not so sure...

I agree, it's disappointing, but I wouldn't be too discouraged by reports like this.  There is, and will always be, a portion of the population that doesn't concern themselves with the "big picture."  They are consumed with feeding their vanity and with lording it over others.  They won't change.  

Actually, I'd be willing to bet that Hummers will sell well for some time into the future.  Seriously; can you picture your professional athletes, your real-estate tycoons, your former B-actors turned politicians, and your big-time-sling-your-bling drug-dealers driving Toyota Corollas?  As Leona Helmsley famously said "that's for the little people!"

They have a Hummer dealership with a building like that near me.  I always wonder what use it will be put to after.....

There will always be people who just don't get it.  But in this case, while I don't know the demographics of the typical Hummer buyer, I'd bet they're reasonably affluent - enough that they don't care much about the present cost of fuel.  But I'd bet they're mostly not so wealthy that they won't soon begin to care!

No need to be rich.  Just take out a home equity loan for the down payment (quick, while the "equity" is still there!), then qualify for the low monthly payments on a 72 month auto loan.  Never mind the 4-year warranty, this car's reliability record speaks for itself!
The building for the new Hummer dealership is designed to look like a cross between a Quonset hut and an airplane hanger

That is an entirely accurate and quite entertaining description of our local Hummer dealership built last year. (South Portland, Maine)

 The supply and demand components of the world oil market are enough of a worry. Now I am trying to get my arms around how much the oil price will rise if the declining value of the US$ has an increasing impact.
I don't know if Lawrence Kutlikoff and the St Louis Federal Reserve Review are actually part of the US Federal Reserve system or not. In any event, Is America Bankrupt?
I live here in STL and have applied at some positions at my local FED branch.  I haven't quite finished my degree so I suspect that are in no hurry to contact me.  Lawrence is one of the more outspoken members of the FED from what I was told in my banking class last semester.  He is well known around here in STL, or at least I am led to believe so.  I haven't read the entire paper yet, but this strikes me the same as similiar to this conversation...


 The following is a conversation with Mr. Ron Supinski of the Public Information Department of the San Francisco Federal Reserve Bank. This is an account of that conversation.  
CALLER - Mr. Supinski, does my country own the Federal Reserve System?  
MR. SUPINSKI - We are an agency of the government.  
CALLER - That's not my question. Is it owned by my country?  
MR. SUPINSKI - It is an agency of the government created by congress.  
CALLER - Is the Federal Reserve a Corporation?  
CALLER - Does my government own any of the stock in the Federal Reserve?  
MR. SUPINSKI - No, it is owned by the member banks.  
CALLER - Are the member banks private corporations?  
CALLER - Are Federal Reserve Notes backed by anything?  
MR. SUPINSKI-Yes, by the assets of the Federal Reserve but, primarily by the power of congress to lay tax on the people.  
CALLER - Did you say, by the power to collect taxes is what backs Federal Reserve Notes?  
CALLER - What are the total assets of the Federal Reserve?  
MR. SUPINSKI - The San Francisco Bank has $36 Billion in assets.  
CALLER - What are these assets composed of?  
MR. SUPINSKI - Gold, the Federal Reserve Bank itself and government securities.  
CALLER - What value does the Federal Reserve Bank carry gold per oz. on their books?  
MR. SUPINSKI - I don't have that information but the San Francisco Bank has $1.6 billion in gold.  
CALLER - Are you saying the Federal Reserve Bank of San Francisco has $1.6 billion in gold, the bank itself and the balance of the assets is government securities?  
CALLER - Where does the Federal Reserve get Federal Reserve Notes from?  
MR. SUPINSKI - They are authorized by the Treasury.  
CALLER - How much does the Federal Reserve pay for a $10 Federal Reserve Note?  
MR. SUPINSKI - Fifty to seventy cents.  
CALLER - How much do they pay for a $100.00 Federal Reserve Note?  
MR. SUPINSKI - The same fifty to seventy cents.  
CALLER - To pay only fifty cents for a $100.00 is a tremendous gain, isn't it?  
CALLER - According to the US Treasury, the Federal Reserve pays $20.60 per 1,000 denomination or a little over two cents for a $100.00 bill, is that correct?  
MR. SUPINSKI - That is probably close.  
CALLER - Doesn't the Federal Reserve use the Federal Reserve Notes that cost about two cents each to purchase US Bonds from the government?  
MR. SUPINSKI - Yes, but there is more to it than that.  
CALLER - Basically, that is what happens?  
MR. SUPINSKI - Yes, basically you are correct.  
CALLER - How many Federal Reserve Notes are in circulation?  
MR. SUPINSKI - $263 billion and we can only account for a small percentage.  
CALLER - Where did they go?  
MR. SUPINSKI - Peoples mattress, buried in their back yards and illegal drug money.  
CALLER - Since the debt is payable in Federal Reserve Notes, how can the $4 trillion national debt be paid-off with the total Federal Reserve Notes in circulation?  
MR. SUPINSKI - I don't know.  
CALLER - If the Federal Government would collect every Federal Reserve Note in circulation would it be mathematically possible to pay the $4 trillion national debt?  
CALLER - Am I correct when I say, $1 deposited in a member bank $8 can be lent out through Fractional Reserve Policy?  
MR. SUPINSKI - About $7.  
CALLER - Correct me if I am wrong but, $7 of additional Federal Reserve Notes were never put in circulation. But, for lack of better words were "created out of thin air " in the form of credits and the two cents per denomination were not paid either. In other words, the Federal Reserve Notes were not physically printed but, in reality were created by a journal entry and lent at interest. Is that correct?  
CALLER - Is that the reason there are only $263 billion Federal Reserve Notes in circulation?  
MR. SUPINSKI - That is part of the reason.  
CALLER - Am I mistaking that when the Federal Reserve Act was passed (on Christmas Eve) in 1913, it transferred the power to coin and issue our nation's money and to regulate the value thereof from Congress to a Private corporation. And my country now borrows what should be our own money from the Federal Reserve (a private corporation) plus interest. Is that correct and the debt can never be paid off under the current money system of country?  
MR. SUPINSKI - Basically, yes.  
CALLER - I smell a rat, do you?  
MR. SUPINSKI - I am sorry, I can't answer that, I work here.  
CALLER - Has the Federal Reserve ever been independently audited?  
MR. SUPINSKI - We are audited.  
CALLER - Why is there a current House Resolution 1486 calling for a complete audit of the Federal Reserve by the GAO and why is the Federal Reserve resisting?  
MR. SUPINSKI - I don't know.  
CALLER - Does the Federal Reserve regulate the value of Federal Reserve Notes and interest rates?  
CALLER - Explain how the Federal Reserve System can be Constitutional if, only the Congress of the US, which comprises of the Senate and the House of representatives has the power to coin and issue our money supply and regulate the value thereof? [Article 1 Section 1 and Section 8] Nowhere, in the Constitution does it give Congress the power or authority to transfer any powers granted under the Constitution to a private corporation or, does it?  
MR. SUPINSKI - I am not an expert on constitutional law. I can refer you to our legal department.  
CALLER - I can tell you I have read the Constitution.  It does NOT provide that any power granted can be transferred to a private corporation. Doesn't it specifically state, all other powers not granted are reserved to the States and to the citizens? Does that mean to a private corporation?  
MR. SUPINSKI - I don't think so, but we were created by Congress.  
CALLER - Would you agree it is our country and it should be our money as provided by our Constitution?  
MR. SUPINSKI - I understand what you are saying.  
CALLER - Why should we borrow our own money from a private consortium of bankers? Isn't this why we had a revolution, created a separate sovereign nation and a Bill of Rights?  
MR. SUPINSKI - (Declined to answer).  
CALLER - Has the Federal Reserve ever been declared constitutional by the Supreme Court?  
MR. SUPINSKI - I believe there has been court cases on the matter.  
CALLER - Have there been Supreme Court Cases?  
MR. SUPINSKI - I think so, but I am not sure.  
CALLER - Didn't the Supreme Court declare unanimously in A.L.A. Schechter Poultry Corp. vs. US and Carter vs. Carter Coal Co. the corporative-state arrangement an unconstitutional delegation of legislative power?  ["The power conferred is the power to regulate. This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons." Carter vs. Carter Coal Co...]  
MR. SUPINSKI - I don't know, I can refer you to our legal department.  
CALLER - Isn't the current money system a house of cards that must fall because, the debt can mathematically never be paid-off?  
MR. SUPINSKI - It appears that way. I can tell you have been looking into this matter and are very knowledgeable. However, we do have a solution.  
CALLER - What is the solution?  
MR. SUPINSKI - The Debit Card.  
CALLER - Do you mean under the EFT Act (Electronic Funds Transfer)? Isn't that very frightening, when one considers the capabilities of computers? It would provide the government and all it's agencies, including the Federal Reserve such information as: You went to the gas station @ 2:30 and bought $10.00 of unleaded gas @ $1.41 per gallon and then you went to the grocery store @ 2:58 and bought bread, lunch meat and milk for $12.32 and then went to the drug store @ 3:30 and bought cold medicine for $5.62.  In other words, they would know where we go, when we went, how much we paid, how much the merchant paid and how much profit he made. Under the EFT they will literally know everything about us. Isn't that kind of scary?  
MR. SUPINSKI - Yes, it makes you wonder.  
CALLER - I smell a GIANT RAT that has overthrown my constitution. Aren't we paying tribute in the form of income taxes to a consortium of private bankers?  
MR. SUPINSKI - I can't call it tribute, it is interest.  
CALLER - Haven't all elected officials taken an oath of office to preserve and defend the Constitution from enemies both foreign and domestic? Isn't the Federal Reserve a domestic enemy?  
MR. SUPINSKI - I can't say that.  
CALLER - Our elected officials and members of the Federal Reserve are guilty of aiding and abetting the overthrowing of my Constitution and that is treason.  Isn't the punishment of treason death?  
MR. SUPINSKI - I believe so.  
CALLER - Thank you for your time and information and if I may say so, I think you should take the necessary steps to protect you and your family and withdraw your money from the banks before the collapse, I am.  
MR. SUPINSKI - It doesn't look good.  
CALLER - May God have mercy on the souls who are behind this unconstitutional and criminal act called the Federal Reserve. When the ALMIGHTY MASS awakens to this giant hoax, they will not take it with a grain of salt. It has been a pleasure talking to you and I thank you for your time. I hope you will take my advice before it does collapse.  
MR. SUPINSKI - Unfortunately, it does not look good.  
CALLER - Have a good day and thanks for your time.  
MR. SUPINSKI - Thanks for calling.
Enjoyable post, Tate. Thanks!
Wow. Did Mr. Supinski really say that? It's hard to invent stuff like that.

Has he been fired yet?

Spooky stuff....

oooohhh! The evil Fed! Maybe Freemasons and Templars control the Pentagon too.

The Fed is the lesser of two evils. Would folks really like to go back to the world where the legislature controls the money supply (time to get elected so fire up the printing press!)or when there was no lender of last resort?

Central Banks have become increasingly independent because legislatures, quite rightly, have absolutely no credibility when it comes to regulating the money supply.

Is the Fed imperfect? Yes. Does it have biases? Yes. Should we junk it and go back to the old way? Probably not.

Would folks really like to go back to the world where the legislature controls the money supply (time to get elected so fire up the printing press!)or when there was no lender of last resort?

Please show how the 'legislature' crated more gold/silver

Please show where the reality you are claiming was the case.

Gold or silver?

Come on. So when we had a 'hard' money policy during the 19th century and unregulated banks and no lender of last resort things were hunky dory right? All those bank panics never happened and the deflationary policy of gold-backed dollars didn't hurt borrowers at the expense of investors?

As for the link between Central Bank Independence and inflation....

From "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," by Alberto Alesina and Lawrence H. Summers, Journal of Money, Credit and Banking, Vol. 25, No. 2. (May, 1993), pp. 151-162

Given, economists are not quite sure why we see this relationship and there are papers out there that cast doubt on the empirical relationship, but I believe the consensus is that independence gives CBs the maneuvering room needed to make tough decisions independent of political manipulation.

As for 'legislatures' creating more gold or silver -- they don't have to. All they have to do is debase the currency, a tactic as old as the Caesars.

Please show where the reality you are claiming was the case.

I believe I just did.

Oh, and you might want to count up and compare bank runs and depressions during the 'gold' era of the 19th and early 20th century to the number of bank runs and depressions today.

One would need to examine how the authors determined the degree of central banks' independence before deciding how strong the correlation was.
Sure, of course. Go read the paper yourself. CB independence is debate that never ends.
Gold or silver?
Come on.

You claim the 'printing press' is turned on when the money is in control of the state.

Yet, a money system that prevents that condition is rejected by you.  

So you condem a 'running of the press' AND you condem when a press can't be run.   Huh.

Let me guess, a money supply controlled by a private corporation is a better plan?

Now, care to explain why the M3 money supply is no longer being published in the US of A?   Please feel free to explain how it is not in any way influnenced by the body politic.

So you condem a 'running of the press' AND you condem when a press can't be run.

Yes, because the world is a complicated place. Too little inflation and the money supply can't keep up with economic growth and the result is unemployment. Too much and you get all the usual problems associated with high inflation. An independent central bank that can print money in a responsible manner is a fair compromise, though one often difficult to achieve in practice because its effectivess rest solely on how credible an institution it is.

Plus, you grossly, either out of ignorance or in order score points among the clueless, misrepresent the nature of this 'private corporation'. The Fed is independent, yes, but it's head is appointed by the President and confirmed by the Senate. The Congress could change the laws and bring the Fed under more direct supervision if it so wished. It's a creature of the government that has been insulated from day-to-day politics because of the special role it places in regulating the money supply.

The Fed is independent, yes,

I see.  

So, care to explain why the M3 is no longer being published?   Some kind of fair transparancy?

Plus, you grossly, either out of ignorance or in order score points among the clueless, misrepresent the nature of this 'private corporation'.

Ok, please explain HOW saying "Let me guess, a money supply controlled by a private corporation is a better plan?" is a 'gross misrepresentation'?  

Sure, stopping publication is troubling, but less troubling than, say, the Bush administration filling the EPA up with industry reps. It remains to be seen what impact this will really have.

Ok, please explain HOW saying "Let me guess, a money supply controlled by a private corporation is a better plan?" is a 'gross misrepresentation'?

Because it's not 'really' private in the way, say, Exxon-Mobil is. You're making it sound like the Fed is the creaion of a cabal of bankers when in fact it's a creature of the federal government. A past Congress  decided to tie the hands of future (present) Congress' because it was perceived to be in its long-term self-interest to do so. But, just becuase it would be extremely difficult to regain complete Congressional/Executive control over the Fed doesn't mean it can't be done or that this tacit threat to do so isn't in the back of the mind of very Fed Chairman.    

Congress has in effect delegated the regulation of the money supply to a dedicated, independent agency. There is nothing 'conspiratorial' in this. It happens all the time. A good thing too, else we would have ignorant, vote-seeking politicians in charge of raising interest rates or printing money, not economics and financial professionals.  

Actually, the Fed is a private bank in every way. Any USA guv threat against it would only exist in the sense that Citibank is potentially threatened.
'private bank'?

The Fed is a creature of the government. It's chairman is appointed by the president and confirmed by the Senate. congress can 'destroy' it whenever it wishes to. Do you dispute this?

No disputing that the Fed chief is appointed by the Prez. Somebody has to tell the Prez who to appoint- supposedly he doesn't read at all.
Sure, stopping publication is troubling

That is your response?!?!   I've asked you to explain and you say 'its a problem'?  

Next up, you've got this:

but less troubling than, say, the Bush administration filling the EPA up with industry reps.

Oh, well because there are OTHER problems, the transparancy of the M3 is not to be considered.

Well then.   Glad that is all sorted out.  

Why then, sonny boy, are you bothering to post about money when the global temp is rising, people are starving, and there is a shooting war!  Well?

If you are going to post, can you actually BOTHER to answer the question:

Now, care to explain why the M3 money supply is no longer being published in the US of A?

Because an answer "Sure, stopping publication is troubling," is simply craptastic.

Why? Because it the Fed has been captured by special interests? Is that the answer you're look for? It's certainly plausible, but you need to cite more evidence to support it. Citing non-existent power that 'member banks' have over the Fed does not count as evidence.  

Anyway, if special-interest capture is the answer, then it was captured in the same way other government agencies are captured, not because of some nefarious conspiracy between 'old banking families' and multinational banks.

Or, does your 'explanation' also include 'old banking' families? Maybe the Bavarian Illuminati? UFOs? I know, Elvis and the Jews have consorted with the Devil to control the Fed, right?

Either way, please cite real evidence, ok? Talk show transcripts and 'books' that allegedly talk abou thow the Fed is 'owned' by European banking families won't cut it.

Now, care to explain why the M3 money supply is no longer being published in the US of A?

Ok, then you are admitting you've got nothing.

Other than the rest of your text where you argue with yourself and pretend it is me.  Because that is what the rest of your text is.

Either way, please cite real evidence, ok?

Why don't YOU follow your own advice and show where I've actually made the argument in this tread about the running of the money press  you've claimed?  Come on Sonny boy.....step up or step off.

You're an idiot. I gave you a possible explanation. I don't see you making an argument. I see half-baked conspiracy theories, but that's about it.
I don't see you making an argument.

I pointed out how using physical items in limited supply like silver/gold prevent the government from running the press.

I see half-baked conspiracy theories

That you claim I've made.
Still waiting for you to provide the links to where I have claimed a theory of a conspiracy.

Oh, and Sonny Boy, I'll point how a member of Congress, Ron Paul has claimed that under The Fed system, the money printing press will be cranked up per the desire of the elected officials.

So either Ron Paul is right, being a memebrr of Congress and all, or your data you offer up as proof from a 20th century book is wrong for the 21st century.

Ok, please explain HOW saying "Let me guess, a money supply controlled by a private corporation is a better plan?" is a 'gross misrepresentation'?

Now lets look at your answer.

"You're making it sound like the Fed is the creaion of a cabal of bankers when in fact it's a creature of the federal government"

No, I believe I said "Let me guess, a money supply controlled by a private corporation is a better plan?"

It looks like you are having a dialoge in your head, and somehow you THINK I've said stuff I have not.

Ok, please explain HOW saying "Let me guess, a money supply controlled by a private corporation is a better plan?" is a 'gross misrepresentation'?
Now lets look at your answer.

"You're making it sound like the Fed is the creaion of a cabal of bankers when in fact it's a creature of the federal government"

No, I believe I said "Let me guess, a money supply controlled by a private corporation is a better plan?"

It looks like you are having a dialoge in your head, and somehow you THINK I've said stuff I have not.

Christ, how fucking dense are you? The Fed has a large degree of independence, but it is NOT independent in the sense a real private bank is. Why is that so hard to understand? It's as if you and the other tin-foil-hatters are willfully trying to misunderstand something very simple.

Anyway, I believe I have demonstrated that an INDEPENDENT central bank is good for monetary stability. Let me (sigh), once again, post this:

See the line? It means more independence means less inflation. Less....inflation....good. Go read the citation above and the larger literature on CB independence, pro and con, before spouting off nonsense.  

Have you, by the way, counted up the number of bank panics and recessions/depressions under the 'gold standard' and compared the number when we were not under the gold standard?

Is the Fed perfect? No. Does it have policy biases? Yes. Is it better than having Congress control the money supply? Yes. Is it better than relying on the straightjacket of the gold standard? Yes. Is it better than having no official lender of last resort? Yes.

Christ, how fucking dense are you?

Does it matter?   You make up the argument you want to have.  When you feel like having an actual discussion VS an argument with yourself, I'll be waiting.

I've always said follow the money....so let's do so.  The Fed is owned by "member banks."  Each bank has a stake in the FED as a private bank.  Who are these stock owners?  I don't think it's published anywhere as certifiable fact, but most books say it's owned by the oldest banking families in Europe as well as the new banking families from America.  

It sounds crazy, but it's true.  If you say this is the best solution, then why has no audit been done on the FED in it's ENTIRE HISTORY?  

From federalreserve.com...

However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

Now this is specific to the branch banks.  We can set up ten shell companies that all lead back to a few people.  It's not that hard, drug lords have many of them to launder their money.  

The Board of Governors, the Federal Reserve Banks, and the Federal Reserve System as a whole are all subject to several levels of audit and review. Under the Federal Banking Agency Audit Act (enacted in 1978 as Public Law 95-320), which authorizes the Comptroller General of the United States to audit the Federal Reserve System, the General Accounting Office (GAO) has conducted numerous reviews of Federal Reserve activities.

Yet everyone who actually looks for the info knows there are NO GAO audits because the FED will not allow it.  So is this a credible institution?  I think NOT!  So the FED is clearly lying above, so do you really believe that they are a not for profit company?

Check out this primer for a better FED...


1. Regular open press conferences by the Chairman. Alan Greenspan and his predecessors never held press conferences.

  1. Adhere to the Budget Act which requires the submission of a formal annual budget subject to review by OMB and the Congress. (Currently the Federal Reserve prepares a limited in house budget and gives it self approval).

  2. Require congressional appropriations for all Federal Reserve activities. Currently the Federal Reserve finances whatever it pleases with public funds derived from the buying and selling of government bonds in the market as part of its control of the money supply. Surplus funds are returned to the U. S. Treasury annually.

  3. Allow the early release of Minutes of Federal Open Market Committee meetings with exceptions for national security issues.

  4. Hold open meetings on all issues not involving monetary policy.

  5. Require full audits by the Government Accountability Office (GAO). Currently the Fed refuses to allow GAO to audit anything involving monetary policy as defined by the Fed itself.

  6. Support legislation to prohibit commercial bank officials from serving on the boards of the 12 Federal Reserve District Banks.

I think this would be a good first start...even though it's never going to happen.

The Fed is owned by "member banks."  Each bank has a stake in the FED as a private bank.  Who are these stock owners?  I don't think it's published anywhere as certifiable fact, but most books say it's owned by the oldest banking families in Europe as well as the new banking families from America.  

It sounds crazy, but it's true.  If you say this is the best solution, then why has no audit been done on the FED in it's ENTIRE HISTORY?

Come on. This is tin-foil hat stuff. Member banks are REQUIRED to buy into the Federal Reserve system, and no more gives them control over it than you have 'control' whether it will rain today. The Fed's policy biases, such as they are, are caused more by the way in which the Fed is staffed (finanical experts  and professional economists) than by the power 'members' have over it.

Yet everyone who actually looks for the info knows there are NO GAO audits because the FED will not allow it.  So is this a credible institution?  I think NOT!  So the FED is clearly lying above, so do you really believe that they are a not for profit company?

The Fed's credibility is seen in how investors keep track of every word uttered by its chairman.

Come on. This is Tin-foil hat nonsense. The Bavarian Illuminati, the Templars, and Freemasons are no doubt at work.

The Fed's 'profits', such as they are, are meaningless. It's role is to 'create' or destroy 'money' through reserve requirements, interest rate policy on its overnight loans, and through its purchase of US treasuries through its open market operations in New York. Villifying the Fed because it makes 'profits' (horrors!) is akin to villifying God because he is omnipotent. It's a nonsensical argument.

I would be concerned if the Fed DIDN'T somehow make profits. In fact, profits are simply a side effect of its principal goal of regulating the money supply. How can the Fed set interest rates, for instance, if it can't charge an interest rate on its loans?  

Anyway, those suggestions aren't bad. But, let's not make the Fed out to be a cabal of evil bankers.  

But, let's not make the Fed out to be a cabal of evil bankers.

Yes it is.  

Not good fro your job application >:{0
Two words...six total....Trojan Horse.
One more thing...
Yet everyone who actually looks for the info knows there are NO GAO audits because the FED will not allow it.  So is this a credible institution?  I think NOT!  So the FED is clearly lying above, so do you really believe that they are a not for profit company?

The Fed's credibility is seen in how investors keep track of every word uttered by its chairman.

Come on. This is Tin-foil hat nonsense. The Bavarian Illuminati, the Templars, and Freemasons are no doubt at work.

You did not answer this.  If things are so rosey then why is the FED so evasive of a general all inclusive audit?  You're as much a tool as I am a tin foil hat wearer.


You did not answer this.  If things are so rosey then why is the FED so evasive of a general all inclusive audit?  You're as much a tool as I am a tin foil hat wearer.

It's a dumb question.

No bureaucracy likes to have another agency look around the place and then shit on the rug -- which is what the GAO, god bless them, does on a regular basis. This is normal bureaucratic politics -- not a sign that the Elders of Zion and the Illuminati control the place. Perhaps if you read something other than conspiracy books on how Freemasons control the Fed or primers on Austrian Economics you would know this.

Note, I'm not saying the Fed is great of prefect. It definitately has its own policy biases. But you need to stop with the conspiracy nonsense.


You missed the point.  I'm not saying they won't open the books b/c of XXX.  I'm saying that the fact that the books haven't been audited by anyone is enough cause for concern period.  If I wanted to push the conspiracy angle I would have named names and I didn't.  I didn't say I bought into any conspiracy theory, I offered a general statement that many books say it's is owned by banking families from the USA and old Europe.

Fannie Mae is audited and so are private banks.  Yet this one quasi government body who is privately owned does not answer to anyone. So power doesn't corrupt absolutely, I forgot. Yeh the GAO does nothing, great point.  So all the reports available on their site with audited balance sheets, are for nothing.  The data that they provide isn't real...ok.

Ok, Fair enough. Transparency is good regardless of which agency it is, but I think it is going overboard to go from there to a 'conspiracy of bankers'.

And you misunderstood my point abou the GAO. The GAO is a great agency. When I said it 'looks around and shits on the rug' I meant its investigations causes political problems that bureaucrats don't want to deal with. That alone is reason enough for any agency, including the Fed, to resist opening up to it. All the problems with the Fed can be chalked up to the usual symptoms of bureaucratic politics and the bureaucratic mentality.

You don't need conspiracy nonsense or ridiculous comments about how vested interests conspired to take the US off the mythically perfect Gold standard and use the Fed to control the economy. Stuff like this:

I didn't say I bought into any conspiracy theory, I offered a general statement that many books say it's is owned by banking families from the USA and old Europe.

What books? Who says this? Which 'old banking families'? What publishing houses did these books come out of? The Fed is 'owned' by no one. It's 'membership' owns it in the same way depositors at a credit union 'own' the credit union or an individual stockholder 'owns' a company -- i.e. they don't. The family of Jewy Von Moneyhoffen from Europe doesn't control the Fed. Chase doesn't control the Fed. The Fed is a quasi-independent agency of the federal government set up to serve as the lender of last resort and to regulate the money supply. It's made up of professional economists and financial experts. Most of what it produces is academic research on financial markets.

The president just appointed a new Fed Chariman for fuck's sake. Do 'privately owned' entities have thier chief executive appointed by the President and confirmed by the Senate?

Could the Fed use more transparency? Sure. But the fact threre isn't a lot of transparency doesn't mean you can jump from here to tin-foil-hat-land in one go.

Tate: Don't you love when someone misrepresents your argument rather than addressing the issue? Now you are a crazy conspiracy bigot (for stating a few, readily available facts).
It's enough to make me just nod and say OK.
>You did not answer this.  If things are so rosey then why is the FED so evasive of a general all inclusive audit?

The Fed has been singing the same tune as the GAO. That is "Cut spending, cut entitlements, Don't burden taxpayers to support gov't spending increases". While the Fed has made many bad calls in my opinion, they aren't part of some conspiracy. If you read Greenspans testimony to Congress, virtually every discussion Greenspan tells congress that spending is out of control and is completely unstainable. The Fed has also been on the front lines about discussing energy security, trying to convince congress to take action. In Mid June, Greenspan gave testimony to Congress telling them that they need to act on Energy Security to avert a crisis. The bad guys aren't working for the Fed, they are the houses of Congress and the Senate.


The Fed's policy biases, such as they are, are caused more by the way in which the Fed is staffed (finanical experts  and professional economists)

Sonny boy, you don't quite get it.  In these here parts,  "professional economists" just shows your source of data is no good.

If you are gonna try an make a defendable argument, "professional economists", is gonna get you mocked.   Got it Sonny boy?

What pablum.

The Fed's policy biases, such as they are, are caused more by the way in which the Fed is staffed (finanical experts  and professional economists)

Sonny boy, you don't quite get it.  In these here parts,  "professional economists" just shows your source of data is no good.

If you are gonna try an make a defendable argument, "professional economists", is gonna get you mocked.   Got it Sonny boy?

Do you even understand what I wrote? I am not citing professional economists, I am saying because the Fed is made up of professional economists that is the ultimate source of their policy biases.

As for source data, I believe my citation of the paper establishing the link between infaltion and CB independence is evidence of that. Perhaps you have a problem with the methods used therein?

At least I don't reference 'books' that say the Fed is 'owned' by 'old European banking families.'

I am saying because the Fed is made up of professional economists that is the ultimate source of their policy biases.

Which, again, using 'professional economists' as a source of authorty will get ya mocked about these parts.

But not as bad as making up stuff outta whole cloth.

At least I don't reference 'books' that say the Fed is 'owned' by 'old European banking families.'

What gets you mocked MORE is when you make up stuff.   Because no where in this thread where I challenge you on governments printing money being bad have I said what you claim I have.

But go ahead.   Show where I have ya liar.

oooohhh. You are 'mocking me!'

I wilt in the face of your contempt.

Which, again, using 'professional economists' as a source of authorty will get ya mocked about these parts.

(Yawn) You really are an idiot.

An independent central bank that can print money in a responsible manner

Ron Paul says different:
"Faced with uncomfortable financial realities, Congress will seek to avoid the day of reckoning by the most expedient means available-- and the Federal Reserve undoubtedly will accommodate Washington by printing more dollars to pay the bills.  The Fed is the enabler for the spending addicts in Congress, who would rather spend new fiat money than face the political consequences of raising taxes or borrowing more abroad."

Now, why should I believe YOUR claims Sonny Boy VS the claims of someone who would be pulling the strings of the Fed?

(Come on, refute Ron Paul's position)

The great debate in the US in 1890s on whether to monetize silver.  See Bryan's "Cross of Gold" speech.  So much new silver was being found that monetizing it would have been inflationary.  A compromise was reached.
Exactly. The Fed is an imperfect institution.
Some of the most heated debates to occur among our nation's founding fathers were over the role (if any) of a central bank. TThe central bank supporters lost.
Thomas Jefferson's comments opposing such an institution are worth re-reading.

    The paper offers three policies to eliminate the nation's enormous fiscal gap and avert bankruptcy: a retail sales tax, personalized Social Security, and a globally budgeted universal healthcare system."

Yeah, there are regional Fed economists who do research reports from time to time.  They do excellent work for the most part.  Thanks for sharing the link.
I did not intend to Fed bash or start a gold/ paper money arguement when I posted the link to the St Louis Federal Reserve Research Report above.
I was really astonished at how bluntly a member of the US Federal Reserve system would say that America is fiscally screwed.
I fear that the supply demand fundamentals will cause the price to increase and that the fundamentals underlying the US$ as described by Mr Kotikoff will make a bad problem much worse.
I think even if their were plenty of oil to meet demand (I feel there is not)the price of oil would increase due to declines in the value of the US$.
I did not intend to Fed bash or start a gold/ paper money arguement
But this is what always happens! Perhaps you should take an "Economic Vow Of Silence" like me. This discussion is part #1 and part #3 on my list.

I'd like to add this concept to the "EVOS":

Economists, having hoped to turn economics into a science with the precision and predictability of Newton's physics, once pictured economies as deterministic, equilibrial and machine-like. Even today much in economics, including the legecies of Adam Smith, David Ricardo and later Karl Marx, John M Keynes and Milton Friedman is still based, at least partly, on Newtonian mechanics and Cartesian logic.

Almost a century ago, however, quantum theory, relativity and the uncertainty principle produced a crisis in physics that led first physicists, and then non-physicists as well, to a clearer understanding of the limitations of the machine model. It turns out that not everything in the universe behaves, at all times, with the regularity, predictability and lawfulness of a machine. The message is a disconcerting one for those who believe that economics is or should be an exact science.

In other words, physics is rather mechanistic on a macro scale and rather chaotic on a micro scale. Inversely, economics is chaotic on a macro scale and perhaps mechanistic on a micro scale.

Economists are constantly trying to foist in futility simple linear models to understand macro events.

OPEC May 2006 production is down roughly 100,000 bpd .(WARNING! PDF!)

Note in the same report that OPEC now expects global production to be 84.6 mbpd in 2006. OPEC also expects non-OPEC production to be up but not as much as previous predictions.

There are also consumption and demand figures in this report that westexas may find interesting.

Gas Wars in New Brunswick:

Premier Bernard Law announced a dramatic energy plan last spring, promising to cut fuel taxes, regulate prices, and cap utility rate increases.

It's not working so well....

New Brunswick gas stations turn off pumps to protest price regulation

Station owner bumps prices over regulation to survive  

Hmmm, that gives a new meaning to the phrase "gas war."

When I was growing up, they had gas wars too, with one gas station trying to undersell the other. I had this naive image of gas station attendants pulling their nozzles and spraying each other with gas.

If I recall correctly, gas was around 30 cents/gal. back then. Those were the days, eh?

And they gave you free glassware with a fill up...
The latest Fortune 500, the listing of the largest companies in the world, measured by revenue:

  1. Exxon Mobil          339,938.0
  2. Wal-Mart Stores   315,654.0
  3. Royal Dutch Shell  306,731.0
  4. BP                            267,600.0
  5. General Motors     192,604.0
  6. Chevron                  189,481.0
  7. DaimlerChrysler   186,106.3
  8. Toyota Motor        185,805.0
  9. Ford Motor            177,210.0
  10. ConocoPhillips       166,683.0

5 oil companies, 4 car companies, and Wal-Mart.  

= 10 companies built on the happy motoring lifestyle...
Here's fodder for Westexas' Iron Triangle Theory if ever there was some.
Much more itneresting to list companies by market cap than sales.  Airlines are another group that would look very different depending on the scale selected.
Here is by market cap (in $billions):

Exxon Mobil        380.08
General Electric     346.27
Citigroup               243.99
Microsoft Corp.      237.69
Bank of America      222.7
Wal-Mart Stores      191.72
Procter & Gamble     185.4
Johnson & Johnson    179.5
Pfizer Inc.          173.51
Altria               162.46

Here is by profits (in $millions):

Exxon Mobil       36,130.0
Royal Dutch Shell 25,311.0
Citigroup          24,589.0
BP2           22,341.0
Bank of America Corp.    16,465.0
General Electric    16,353.0
HSBC Holdings        15,873.0
Total                  15,250.0
Gazprom         14,865.2
Chevron            14,099.0

And finally here are the airlines that are still in the Fortune 500, with revenues and profits, (in $millions):

228 Air France-KLM Group 26,099  1,111  
282 Lufthansa Group 22,447  563  
312 AMR 20,712  -861  
333 Japan Airlines 19,426  -417  
369 UAL 17,379  -21,176  
414 Delta Air Lines 16,191  -3,818  
442 British Airways 15,189  804

UAL 17,379  -21,176  

IS THAT A TYPO??!?  If that's true that means United will cease to exist a year from now.

Not a typo. I suspect it was the one time accounting adjustment made related to dumping their pension program while in Chapter 11 bankrupcy, not so much losses from daily operation (though I suspect they are bleeding money there as well). Gigantic one time costs and balance sheet adjustments like this are pretty common and can lead to some crazy looking numbers.

United may still cease to exist a year from now. Most airlines are really hurting and many are at risk of folding in the next few years (United and Delta in particular).

hard to believe bankrupt companies are in teh fortune 500 - I'd rather have profits than sales. Better to show southwest, with market cap higher than the total of our so-called major carriers (major losers.)
This sales concept is ruinous.  In Japan, nothing is based on Sales, it's based on profit.  If the company loses money, there are no bonuses.  If they make lots of money, they spread it around.  Its takes serious leadership to change a corp at the top.  There are no executives getting fat while the company bleeds.  It doesn't make sense basing value of sales as the indicator of financial performance.
Energy Program on CNBC Thursday 8:00 P.M. Eastern time:  

Survival Guide:  Addicted to Oil

I don't think anyone posted a link to this yet - I just skimmed it quickly but it looks to be a pretty straightforward assessment of the bottom line regarding our energy troubles...



The article you reference is "What We Need Is Policy" by Jane Bryant Quinn.

Regarding oil production, she says:

"Production is declining in most of the countries outside the OPEC cartel, even with new sources such as Canadian tar sands. At some point - perhaps in the next few years - OPEC will also be pumping at diminishing rates."

This sounds a lot like peak oil to me.

Regarding bio-fuel, she says:

"Depending on which expert you consult, bio-fuels either (1) take much more petroleum to produce and transport than they save or (2) save a little energy but not a lot. They're not a way out of the oil hole. In fact, they may dig us in deeper."

This is not news to most TOD readers, but it is a nice one-page article in the MSM that has some ideas we would like to get across to a general audience. We should be sure to "Digg" and "Redditt" the article, and highlight it to our friends.

Gail -

Yep I was hoping that it would get noticed some because it seemed to have a bit more of a cautionary tone to it - rather than all the happy talk and the "technology will save us" party line...

Thanks for the response.

Interesting (frustrating) that the latest IEA oil market report summary does not give revised numbers for May production or preliminary for June. This is the first time I've seen this left out. Instead it focuses on the projections for the next year. Us non-subscribers will have to wait 2 weeks for the full report I guess.
Won't the info leak before then?
I'm sure it's already being discussed in business circles by people who subscribe, but I don't know anyone who would have the info personally, and I don't know if any might be TOD commenters.
If you (or anyone) can send me those numbers from the IEA report...I have a post waiting for them...it would be much appreciated...
The full OMR is here (pdf)

It says that April has been revised down by 580kb.  Was this figure used by Stuart in his last plateau graph?

To save you looking it up, here's the relevant section from the report:

"World oil supply in May is estimated up by 445 kb/d from a downward-adjusted April base. Total supply reached 85.0 mb/d. Increases derived 275 kb/d from OPEC, and 210 kb/d from the OECD, where a pause in North Sea maintenance played a part. Among other non-OPEC producers, increases from Asia and Latin America were offset by declines from Africa and the Middle East. An upward revision of 215 kb/d for first quarter supply came mainly from OPEC crude and NGLs. However, a sizeable 580 kb/d downward revision to April supply was due to lower OPEC and OECD supplies."

Why to Hell should companies operating in the North Sea pause their maintenance programs in May?

I've heard that this winter the UK Department of Trade was phoning round operators on a daily baisis begging for more gas.  As the UK sldes into importing are they now doing the same for oil?

A very serious point here is that world wide infrastrucure may be getting tested to the limit.  Normally HS&E is one of the first activities to get sidelined when prices are down - it looks like the same might apply when prices are up.

Rig explosions might just get more common - a symptom of dissintegrating society.

How comforting can the 445m increase be since it is over numbers that were revised downward by 580m?  Isn't it likely the numbers for May will also ultimately be revised downward?
Based on past history it is extremely likely, hence why I expect Freddy Hutter to come crowing (again) about the 85mbpd mark but to slink off and vanish (again) when it gets revised downward (again). I think it's rather funny how many times we get to apparently celebrate hitting the incredible 85mbpd mark, then having to put the cork back in the old champagne bottle. And we're supposed to hit 86mbpd this year? Really? And 90mbpd in the next 3-4 years? That's going to be interesting to see the industry pull that rabbit out of some deep dark hole. Maybe it's possible and maybe not but they've sure been stuck running in place for the last 24+ months, haven't they?
Bravo, and well said Greyzone.
I expect to see our friendly neighborhood "drive by poster" show up any day now.
Data from the EIA on inventories came out today. This Week in Petroluem:


Crude oil Down 6.0 million barrels
Gasoline Down 0.4 million barrels
Distillates UP 2.6 million barrels.

Also, the IEA just came out with their monthly Oil Market Report summary.


For the first time in memory, the IEA did not give their estimate of world oil production for last month. WHY? I haven't a clue. But they had OPEC June production up by 200,000 barrels which is in line with the EIA's Short Term Energy Report which had OPEC June production up by 300,000 barrels over revised May production. They revised May production down by 30,000 barrels which leaves the total OPEC increase for June up by 270,000 barrels.

The EIA's Short Term Energy Report for OPEC can be found at:

From the IEA report:

Chinese apparent demand (refinery production plus net product imports) grew by an
unexpectedly robust 9.6% year-on-year in April. Gasoline demand was very strong, surging by
19.7%, which is in line with strong vehicle sales. On 24 May the government raised the
administered retail price of gasoline and diesel by a reported 9.6% and 11.1% respectively. This
should help reduce the pressure on domestic refiners, who have suffered substantial losses under
artificially low prices. The retail price increase may add strength to apparent demand in the near
term, as refiners are more willing to supply the domestic market at the margin. In the longer term,
however, the increase is likely to dampen demand growth to some extent. China's second quarter
demand is projected to grow by 8.6% before slowing to a still robust 5.9% over the second half of
the year. Transport fuels will lead the way, growing by 7-9% over the remainder of 2006.
No one wants to talk about this Citgo stuff? Seems kind of important! No that it changes much about the supply side but the statement is bold!!
Sounds to me like Venezuela is having production problems.  Earlier this year, they were forced to buy oil from Russia to meet their contracts.  Now this.
Well, on the plus side now they won't have to buy Russian oil to meet their contracts anymore.
I live in MO, which is a state affected.  I'm curious as to how this will affect supply.  These stations still want to sell gas, so they will have to get it from somewhere or close.  In a round a bout way, does little change on net except for a few pennies higher gas due to more transportation costs as the pie gets shifted?  I am surprised that people aren't saying WTF really loud.  Or maybe most people just haven't heard yet.
I don't think it's clear what the effects will be yet.  It is likely related to Venezuela's falling production, but the widely accepted explanation for that is Chavez's anti-business stance.  Not enough investment, and all that.

Venezuela will presumably have to buy less petroleum from Russia, now that it doesn't have to supply all those Citgo stations.  The question is whether that Russian oil finds it way to the U.S. market via other routes.  At least some will.  All?  Maybe not.

Thats what I'm saying.  In a round about way, does the same volume of gas get sold just at marginally higher costs due to increased transportation costs?  Since this is mostly confined to 9 states for sure and I think 4 others are possible, I don't think there is a significant change as a whole.  
Citgo, which is wholly owned by Venezuela's state oil company, currently has to purchase 130,000 barrels a day from other refining companies to meet its service contracts at 13,100 stations across the U.S.

I read this to mean that they have to buy gasoline (130,000 barrels a day) from other refiners to suply their gas stations.  I don't think they will be brining less oil into the US, although I don't know who's getting the Russian oil; maybe one of their other neighbors or China.

It's not clear from that article, but some of the others out there drew a connection between Venezuela's Russian oil purchases and today's announcement.  Citgo is a separate company, and Venezuela had been buying oil from Russia to fullfil its contracts with Citgo.  This will relieve them of that obligation.
As far as I can remember, Venezuela was buying from Russia to fulfill her european obligations. VEBA, in Germany is now supplied by russian instead of venezuelan oil. At that time they gave optimised transport costs as a reason.
But the article doesn't say that the Citgo refinery will be producing less?  Just that they won't be buying gasoline from other refiners.  I think they are still going to need that Russian oil no mater what contracts its being used to fulfill.  

I can't find the original Russian oil contracts article, but I'm not sure that the oil was specifically going to Citgo.  Doesn't Venezuela have contracts with other countries that they also need to fulfill?

I'll see if I can find a link.  Basically, it doesn't matter where the oil comes from, or where it ends up.  Venezuela was buying Russian oil to make up for its lost production.  Now they don't have to buy as much, because the production they had planned to sell to Citgo can go elsewhere.
But the article doesn't say that the Citgo refinery will be producing less?  Thus Citgo will need as much oil as before.  Their (to be closed) gas stations will just not be buying gasoline from other refineries.
Like I said...there are other articles out there, with different takes on this.  

Citgo is selling one of their refineries, and that is apparently one of the reasons they decided to cut back on gas stations.  They are also selling some asphalt plants.  FT quoted an anonymous Republican as saying Citgo may be having problems with their refining capabilities.  

Syria Will End Dollar Peg, Moves Reserves to Euros

"July 11 (Bloomberg) -- Syria, under fire from the U.S. for the alleged support of terrorism, plans to end its currency peg to the dollar by year-end to reflect closer trade ties with Europe, central bank Governor Adib Mayaleh said."

Rather than simply selling oil at high prices through intermediary countries while continuing to recycle dollars back into the US banking system, as Saul Eslake, Chief Economist of the Australia & New Zealand Banking Group, Ltd warned June 22 in his report to the International Conference of Commercial Bank Economists "The Emergence of Oil Producers as Net International Creditors: Possible Implications for the Global Financial System", oil producing countries that are enemies of the US have developed strong trade ties with Asia and Europe and are no longer reliant on the US for export revenue. They can cut off the oil AND stop lending the US the money needed to buy it without suffering much from the revenue loss. This could make the 1970s energy crisis look like a cocktail party.
$200 oil with high inflation and interest rates?

Syria switching reserves to euros is a first step in the process. Not coincidentally, gold, silver and platinum all rallied on the news.

Automotive pioneer ZAP announced today amid new record oil prices that it has delivered the first of its new XEBRA(TM) electric vehicles to five ZAP car dealerships in California, Arizona, Florida and two in Oregon.


Good for hiding in the tall grass, too.

Some are already making the choice to start driving electric. So far this summer, ZAP has seen interest surge for the XEBRA, with concerns over rising gas prices generating over half a million dollar backlog in XEBRA orders from dealers and fleet buyers. ZAP calls the XEBRA a 'City-Car,' designed to travel at a top speed of 40 MPH and pricing under $10,000. ZAP's idea with the XEBRA is to create an economical alternative to gas cars, useful for around town fleet driving or multi-car families.

I do like that under 10K price tag, but I'd want a test drive to see how that delta wheel layout handles in a turn.

They've made a huge fundamental blunder with the delta 3-wheel design. An inverted delta (two front, one rear) arrangement would have been self-stabilizing in a turn.

Such delta-configured three wheeled ATV's are already outlawed in the US.

I had heard that the tadpole configuration was better, but when I test rode recumbents, I found both configurations to be  tippy.  If anything the tadpoles were worse.


Now granted, I was a 250 lb fellow testing $800 Chinese trikes that were intended for 150 lb people. The $4,000 German Hase was much more stable, and a $4,000 tadpole may well be more stable, too.  But I see no inherent advantage either way.

EVs have really heavy batteries that can help with stability, as in the super narrow Tango, so I'd give the Xebra a chance of being a decent ride.

It mostly has to do with weight transfer under braking and turning.  When entering a turn, you generally slow down (causing a weight transfer to the front) and then turn (moving the weight to the outside of the corner) and in a Delta style configuration, the weight gets shifted to...thin air...and it flips.  In the tadpole configuration, the weight is shifted to the eagerly awaiting outside front wheel.  Stable.
I think COG trumps wheel configuration in this case.
"I know what you're thinking, punk," hissed Wordy Harry to his new editor, "you're thinking, 'Did he use six superfluous adjectives or only five?' -- and to tell the truth, I forgot myself in all this excitement; but being as this is English, the most powerful language in the world, whose subtle nuances will blow your head clean off, you've got to ask yourself one question: 'Do I feel loquacious?' -- well do you, punk?"


Donal -

Good one!


The blogspot


had recently a post with some interesting diagrams (in English and click able for larger views) about developments in energy consumption and energy mix for the United Kingdom.

The first diagram, in MBOE; million barrels of oil equivalents a day, illustrates net exports from and net imports to UK of fossil fuels for the years 1981 to 2005.

UK re-entered the role as net importer of energy in 2004. Surprisingly coal imports saw to this, and most recently, 2004, imports of natural gas surpassed exports.

The UK will in the near future have to increase natural gas imports, and this is to happen, as the European natural gas market is growing tighter. A few more years into the future UK will again become a net importer of oil.

As of 2005 UK imported net approximately 14 % of its total energy needs.

The second diagram shows the development in energy consumption by energy sources for the years 1965 to 2005 for UK.

The interesting about UK is that natural gas as of 1999 became the most important primary energy source. There are few other OECD nations where natural gas is as dominant in the energy mix as in the UK.

American Petrocracy

Few lies have wound up injuring Americans more--in everything from automobile gas tanks and winter heating bills to diminished U.S. global standing--than a rarely revisited three-year-old fib-fest involving George W. Bush, Donald Rumsfeld, and Tony Blair. Since World War I, history is clear: the British and Americans have been pre-occupied with only one thing in Iraq--oil. Yet in 2003, as their troops again disembarked, the pretense was all about good and evil, democracy and freedom. The disastrous outcome of the unacknowledged Middle Eastern mission, the struggle for petroleum, has rarely been discussed.

In part, that's because a credulous press has swallowed an extraordinary fraud. Speaking on behalf of George W. Bush, then White House Press Secretary Ari Fleischer insisted in February 2003, "If this had anything to do with oil, the position of the United States would be to lift the sanctions so the oil could flow. This is not about that. This is about saving lives by protecting the American people." In November 2002, Defense Secretary Donald Rumsfeld had likewise declared, "it has nothing to do with oil, literally nothing to do with oil." On the other side of the Atlantic, British Prime Minister Tony Blair told Parliament in early 2003, "Let me deal with the conspiracy theory that this has something to do with oil. There is no way whatever that if oil were the issue, it wouldn't be simpler to cut a deal with Saddam Hussein."

Horse manure. In the run-up to war, from Alberta to Texas, oilmen gossiped about the centrality of oil. Meetings of petroleum geologists buzzed about the so-called "peak oil" forecast that a dangerous top in global production was only a decade or two away. Specialized publications guesstimated how much taking over Iraqi oil could mean for profits and Exxon and Chevron. Polls of ordinary citizens from Europe to Latin America and the Mideast produced similar findings: people thought the invasion was about oil.

From The American Conservative, no less.

That is an extraordinary article. None of it a real surprise to me,  but its thoroughness and especially the source amazes me.

The drama continues to unfold in unpredictable ways.

Yeah, I thought Kevin Phillips would be on their don't-call-us list.
I've been a peaknik for a while, and I knew what was up. We had two choices as to pre-blunder Iraq:

  1. get buddy-buddy with Saddam all over again. (he WAS a client dictator after all)

  2. Invade and occupy the place

Obviously we made the wrong move. The infamous doomer peaknik Jay Hanson predicted that as we close in on the peak we would invade Iraq - as shown. His "fossilgate" essay has his theory of the first time to hold the oil patch largely untapped to later unsequester it as the last swing producer.

Had we got buddy buddy again, Iraq would still serve as a check and balance on Iran, a much better position than we have now. That would have been my move, not invade.

Why we don't hassle North Korea is obvious - for one reason out of two:

  1. North Korea has no oil, the obvious reason

  2. Even without a nuke, Seoul is within range of permanently mounted artillery pieces (zillions of them) always at the ready on an instant's notice

If we got stupid, the zillion artillery pieces suddenly get turned on. The pieces alone are normal artillery, but in the aggregate form a conventional-powered WMD. And some of the shells could contain chem weapons. Even without a nuke, if we attack North Korea, Seoul is toast just from the zillion artillery pieces alone - even without a single chem weapons shell.

Result? Kim Jong Il got to shoot off some of his own fireworks to celebrate the 4'th of July!

Did you mean Pyongyang, rather than Seoul?
No Seoul is within range of Pyongyang's weapons.
North Korea has oil, they even have some small scale onshore production. They have been telling everybody for years that there are more offshore. These fields would be in the same formation that the Daqing fields in China and located in the Yellow Sea. For political and economic reasons there has not been any exploration in that area, but the North Koreans have been interested in getting some independent foreign companies to do that. There are claims that North Korea might have as much oil as Iraq. But this is of course impossible to know.

In any case North Korea is one one of the last really unexplored potential conventional oil provinces in the World - located excellently for China, Japan, South Korea and the US.

wow, kickass!  thanks for the link
And now it starts.... From Bloomberg.

Hezbollah Fires Missiles Into Northern Israel, Several Wounded

It's escalating fast. Iran backs Hezbollah. Hang onto your hats, the manure has hit the air conditioner.

As I said before, we are replaying the Seventies. . . but they won't end this time.  We even have a president that makes Nixon look good by comparison.
holly shiite, your choice of words shows me you are a clear concice thinker
OK, I'll bite.

wtmhta/c ????

I think it means when the manuer hits the air conditioner.
Clearly so.

Israel Accuses Lebanon Of "Act Of War" Over Kidnapping

Act of War.

Israel accuses Lebanon of an "act of war" over the kidnapping of two Israeli soldiers as the conflict in the Middle East escalates further.

The soldiers were seized by Hezbollah fighters in a cross border raid into Israel yesterday.

Israel has responded with a major assault using artillery, planes and gunboats in its first incurson into Lebanon since the year 2000.

Look at the oil price spike since about 4:00 pm today.

It was an interesting choice of words by Israel to call it an "Act of War." Some mobilizing of forces is taking place but not a full mobilization. But the fact that Hezballah crossed the border into Israel to undertake this operation is pregnant with significance.

This is from an Israeli source:

DEBKAfile reports: Iran's national security adviser Ali Larijani flies to Damascus aboard special military plane Wednesday night as war tension builds up around Hizballah kidnap of 2 Israeli soldiers

July 12, 2006, 10:14 PM (GMT+02:00)

Larijani is also Iran's senior nuclear negotiator. He will remain in Damascus for the duration of the crisis in line with the recently Iranian-Syrian mutual defense pact. His presence affirms that an Israeli attack on Syria will be deemed an assault on Iran. It also links the Israeli hostage crisis to Iran's nuclear standoff with the West.

The White House released a statement holding Syria and Iran responsible for Hizballah abduction and demanding their immediate and unconditional release.

The Syrian army has been put on a state of preparedness.

DEBKAfile's military sources add that the Iranian air force, missile units and navy are also on high alert.

DEBKAfile's counter-terror sources report Hizballah acted on orders from Tehran to open a second front against Israel, partly to ease IDF military pressure on the Hamas in the Gaza Strip. This was in response to an appeal Hamas leader Khaled Meshaal made to the Iranian ambassador to Damascus Mohammad Hassan Akhtari Sunday, July 9.

DEBKAfile's Iranian sources report Tehran's rationale as composed of three parts:

  1. Iran shows the flag as a champion and defender of its ally, Hamas.

  2. Sending Hizballah to open a warfront against Israel is the logical tactical complement to its latest order to go into action against American and British forces in southern Iraq.

  3. Tehran hopes to hijack the agenda before the G-8 summit opening in St. Petersberg, Russia on July 15. Instead of discussing Iran's nuclear case and the situation in Iraq along the lines set by President George W. Bush, the leaders of the industrial nations will be forced to address the Middle East flare-up

Any Israeli decision taken at prime minister Ehud Olmert's high level consultation in Jerusalem Wednesday night must take this turn of events into account before deciding on limited air strikes against Hizballah and Lebanese civil targets without delay.

Our sources also report that immediately after Nasrallah's statement to the media, Hizballah's leaders went into hiding, their bases were evacuated and their fighting strength transferred to pre-planned places of concealment. Ahead of the abduction, Hizballah ordnance and missile stocks were transferred to the Palestinian Ahmed Jibril's tunnel system at Naama, 30 km south of Beirut, which was built in the 1980s by East German engineers.

The Israel navy has long tried to smash this coastal underground fortress from the sea without success.

Israel began calling up an armored division, air crews and technicians from the reserves Wednesday night. DEBKAfile's military experts: If Israel's leaders opt for an anti-Hizballah operation on the lines of Operation Summer Rain against Hamas in the Gaza Strip, the IDF can expect the same measure of success as it has had in recovering Gilead Shalit and ending the Qassam missiles barrage

Thanks, Jack. The more you learn about this situation, the worse it gets.
I predict (this prediction was made some time ago by me, but not in TOD so I cannot prove it) that the Palestinian/Israeli conflict will not be resolved until the average age of Palestinians reaches approximately 30 years old. At the time of the initial prediction, I vaguely recall that the timeframe would be about 2010 or so, but I haven't looked at a demographic update.
The way the Israeli army is behaving, one would be amazed were there any Palestinians left within 100 years.

Guys what the hell is this? We are producing 81 million barrels. Westexs your input will be appreciated. Anyone else too, feel free to help me understand this.
Damn should have bought more dec 2010 futures.

I  question his numbers. It seems to be virtually impossible for anyone to get exact numbers, so how can a private individual know better, and how could such a discreapancy be hidden? I'm not sure how he justifies his numbers vs IEA's.
"I'm not sure how he justifies his numbers vs IEA's."

Unless he has some inside info on production collapses in the Middle East.

Yeah - I'd really like to know. He shouldn't tease us with such statements left so unanswered.
"How could such a discrepancy be hidden?" Matt Simmons believes the Saudis have 60-85 million barrels in storage, enough for a short-term disguise:

MRS: [The Saudis have] Somewhere between 50 and 70 million barrels of domestic tank farms and they have about 10-15 million barrels of Atlantic basin tank farms ... The only times there is clear evidence of a Saudi surge was during the Iraq war where it jumped by about 800,000 barrels a day for about 45 days. I bet you they were just emptying the tank farms."


1+1=2  (I'm afraid that's the extent of my maths)

Interesting article.  Nymex crude >$75 this evening.  The production and consumption figures are at best guestimates.  The key point for me is the increasing number of comments comming from ME OPEC suggesting that production might be in decline.

Or do I only percieve there to be an increasing number of ME OPEC comments since I started reading TOD - all of about 9 days ago?

Well no.  The UK Energy review published yesterday was full of references to Energy Security which is their euphemism for Peak Oil.

So when do we celebrate Yergin Day?  When oil gets to $76?  We shall see tomorrow....
I believe this is Crude Oil production only.

According to the BP statistical report (I downloaded the spreadsheet the other day), the world produced 81,088 thousand barrels of crude oil last year, which was 1% higher than 2004's total of 80,198 thousand barrels.

The EIA and IEA figures (around 85mbd) are "all liquids".

Is he excluding any particular kind of oil? The only way possible is if Saudi Arabia and the rest of middle east are exaggerating their own consumption levels to the world.
When PR Goes Horribly Wrong

"MILWAUKEE (AP) -- Two vehicles crashed, four people were arrested for fighting and three officers got sent to the hospital -- all over some free gasoline Wednesday.

For the most part, hundreds of drivers waited patiently for hours for about $30 worth of free gasoline from Allstate Insurance as a reward to Milwaukee for ranking high on its safe drivers list.

Some cars started lining up before midnight for the gas, and the line stretched far from the service station into a residential area, trapping some residents in their driveways Wednesday morning, said Anne E. Schwartz, Milwaukee Police Department spokeswoman." ...


Not a good portent for our future behavior.

And if the gas frenzy was funny, did you see that in New York with the ex-husband's bid to become a suicide bomber to keep the ex-wife from getting the house? The townhome looked like a car bomb was wrecked into it but the ex-husband purposely made a natural gas leak to use it in an improvised fuel-air bomb.

The New York doctor who gave Divorce a "7/10/06" is in critical condition with 2nd and 3rd degree burns over 3/4 of his body.

I guess future ex-wives can take solace that when the NG runs out a "7/10/06" will not work!

Best to stick with offering a chance to win a holiday for two ...
I just saw this interesting piece on Shell exiting the Pacific Islands.


It seems Shell thinks the poorer pacific islands will be among the first to be unable to afford gas.