And So It Begins...

For the all of you new folks coming in, and those who want to pass around links to their friends, I would suggest two key links:
  1. Why are oil prices going up? Because there's no extra supply. Why is that? Here's our "first time here?" link.
  2. What can we do about it? Here's our brief on changing the political discourse on energy.
Update [2006-7-13 17:40:39 by Prof. Goose]: Also, whoever's been reddit-/digg-ing this post: thank you. We're getting a nice little pop from it.
For those of us who are old hands at Peak Oil issues I am reminded of the lines from the movie Twister (which is back on HBO).  

Dusty: Bill, it's coming! It's headed right for us!
Bill: It's already here!

LOL, more probably the beginning of Act I, Scene ii or Scene iii of a five or more act play, if we take year 2000 as it's approximate start. Perhaps 'King Lear',
which may be an unfortunately appropriate model for what will unfold, whose Act I Scene ii begins:
"Thou, nature, art my goddess; to thy law
My services are bound. Wherefore should I
Stand in the plague of custom, and permit
The curiousity of nations to deprive me,
For that I am some twelve or fourteen moonshines
Lag of a brother? ..."

This tragedy is barely commenced; see,
The audience is yet spare and still crowds
Sweatily through our playhouse' portals.
Far more have seen and heard nought, meander
Abroad in supine ignorance knowing not
This balmy breeze stirring spring leaves forebodes
A tempest to rip the world asunder.
But I get ahead, our play is just begun.

On oil price, it should put on another couple of $ tomorrow, Friday 14th, since little is likely to wind down tension on Israel / Lebanon / Palestine / Iran / North Korea / Nigeria / Iraq soon and it's a G8 meeting in St Petersburg, Russia this weekend. But it shouldn't top $80 before next week unless a further turn for the worse happens. Next week could see $85 if any problems rachet up at all.

My first thought was, seeing this title, "and so it begins", was the middle east problem. Ha'aretz (Israeli newspaper) is saying the kidnapped soldier is this war's Duke Ferdinand, so that tells us how those crazies think about this. Meanwhile our own crazies, the fundamentalists who want to bring on the Rapture, are all for it I'm sure.

My own thinking is, the really radical Jihadists can see that relatively low-level warfare is only gradually sapping their strength and while they're getting better at killing Americans, Americans are getting better at killing them too - not fun. Look at the new weapon the US has, called a SMAW or something like that, vaporizes buildings. Ow.

So, if you're a really radical Jihadist, who doesn't mind losing a bunch of your own people too, you get USrael involved in a real, large-scale war. That's the one thing that can solve your problems. No. 1, Israel gets its money and weapons etc from the US. And the US economy can't stand fighting a real, large-scale war right now. This won't be your grand-dad's war, with the US as huge oil producer and US farms and factories producing tons of the stuff needed to fight a large scale war. Today's US is a debtor nation, which produces very little, and can't afford to lose say 30% of its oil imports - or more. Sure the US can keep chugging along, but fighting a real, serious, war will mean WWII type gas rationing and so on, the conditions of a real war, and what made us stronger in the 1940s will put us in a hospital bed in the 2000s. Dollar collapse, here we come. The US in a "hospital bed" means the US unable to keep the war toys flowing to Israel, unable to keep the war toys flowing to its own troops, and the same kind of isolationism and near-revolution we had in the 1930s. The US won't be able to afford to be in the ME, we won't be under a real  Cuba style powerdown, but it will be close.

If you're a real hardcore Jihadist or just an ordinary Joe Blow in the ME you believe with every justification that it's only a matter of time before USrael wipes you out and your people so why not?

Ha'aretz is a center-left Israeli newspaper, which makes it more peacenik on the Middle East than any major media outlet in the US. They're not "crazies," so if they think Shalit is Duke Ferdinand, you might want to listen up.
SMAW is 20 years old and is a standard weapon for the Marines.  See - <>
I believe Squeekyrat is talking about the novel use of thermobaric munitions in the SMAW.      
sorry, not Squeekyrat, but Fleam
What anyone wanting the Rapture to happen should do is read up on how GOD in the Christian Bible talks about those things.  For Example.  He will make it happen in the fullness of His time, not ours.

Now if you are comparing the Rapture to anything else, then IMHumbleO you are just plain fooling yourselves.  

I dislike when some people or group make a bad name for the rest of us.  I am a Christian.  From all my reading The End does not look like the "left behind" series.  IT IS THE END Period.

But I could debate with some people till it happened and not get anything good out of it.

Just try not to Lump all us Christians in the same boat as others who call themselves Christian.  "You will know them by their love!"  not hate, not back biting, not hoping for the rapture so they get to say i told you so, none of that.  Test the things that Christians say by their actions and by the Bible, and Christ's Teachings in the Bible.

Just so those that read here, know we have all kinds posting.

Charles E. Owens Jr.  AKA Dan Ur (A charactor in a short story, by above author)

I neither want nor expect any Christian or other 'rapture', we humans need to solve our mundane but serious greed problems ourselves. If rapture were to occur the odds are it would be after the bloody human lessons had been learnt and a relatively small 'deserving' number were left. I agree with you that the christian rapture is 'the end' in this reality. For a non-theist version of rapture read "Childhood's End" by Arthur C. Clarke.

I neither judge nor test people by their religion; people are welcome to their beliefs and delusions, a person is how a person be. I am anti-monotheist, pantheist, pagan-ish, and tolerant-ish.

I see what you mean, Memmel, something has suddenly started to eat the arctic ice at a rate of 1 million square kilometres per day 2 days ago (as of 18:00 GMT Thursday 13th July version of the current.365.jpg).

But you exaggerate! There are 6 days of arctic sea ice left, plenty of time to call Superman...

my guess is that he already moved his fortress of solitude to the south pole.

Funny the graphs are fixed now ...
They were broken for days.

I think we know were some readers of theoildrum work.

I can verify they have changed in the last 2 hours. You didn't believe me when I said it was time to call Superman, did you?

I did look at the photo archive, too. Comparing 2005 and 2006 I'd say that 12th July 2006 most closely approximates to 20th July 2005 and that the annual minimum looks to be around 15th september 2005.

Hopefully superman will fix the link on the Candian Archipelago image map thats broken.


Well, looking at the graph, it shows a 365 day record. And if you look back at last July, we were at exactly the same amount of ice then as we are now.

Looks to me like seasonal melt, nothing more than usual, or very slightly increased at most. (I am not a numbers junkie. This is just an observation from the graph.)

The place to look on that site is the archive of daily maps
You can see there that while the whole Arctic is not going to melt in six days, what is happening now is unprecedented.
Hudson Bay will be entirely ice free in a couple of days, that never happens till late August. The White Sea was ice free already in mid May, never happens until mid July. And so on.
Their sums of area melted from the graphs don't add up for some reason.
It would be interesting to have a link to whatever webstats system you use, so we can see visitors come up and down.
The two most interesting pages:

How people find the site:

Moving average of page views (really shows an upswing):

90% of visitors however do NOT find the site via a search engine. I think that should probably be changed.

Sorry, you guys may be right, this may be the BIG IT, but that's reading a lot into a story that could have been copied forward from 1948, 1956, 1973, 1982, etc, etc.  This is "fear factor" stuff.

"Peak oil" is different from the run of the mill Isreali run in with their old enemies, that is as regular as clockwork...

Geological Peak, the real Texas style, North Sea style, I don't care if no guns are blazin', we can sink all the wells we want and the OIL WILL NOT COME OUT ANY FASTER style peak, is what we should be interested in.

Hubbert really didn't seem to care that there were no wars going on  in the lower 48 states, peak was going to occur anyway.....that's peak, the real thing, that's when it begins.  War is only a distraction if that happens.

Roger Conner  known to you as ThatsItImout


Hezbollah wouldn't make any move without Iran's approval. It could even be at Iran's request. The question we need to ask ourselves now is this:

Why would Iran's leadership do this now?

Are these fundamentalists really this crazed? Is it designed to raise oil prices, a calculated risk?

For the new people visiting TOD, I will mention that there is no spare oil capacity in the world supply right now. This means essentially that any major loss of supply, which I will define arbitrarily as 1.0/mbd (million barrels per day) or more, will cause shortages somewhere and lower the quantity demanded somewhere. The system must come into balance.

Dave, it's important to always keep in mind that we don't really know what is happening.  The level of deception going on with these issues is incredible.  We cannot assume we really know who is manipulating whom, as probably just about everyone is maneuvering as best they can.  A little time will give us more information and a better picture.
I quite agree but the fact that Hezbollah is controlled by Iran is indisputable. Shimon Peres of Israel of was quite explicit about the subject on CNN today. There is not much doubt about this. So, I'm going on what I know. I'm afraid I can't do much else and don't want to engage in conspiracy theories. But I can question motives.

As you say, time will tell. And maybe quickly. We'll see.

Why should anybody believe Shimon Peres? Even assuming that he knows how much control Iran has over Hezbollah--already a dubious assumption--why would you expect a political leader to tell the truth?
I don't need Shimon Peres to tell me this. I just note that he said the words on CNN. I could call on the BBC, who I trust. Who are Hezbollah?. Or any number of other sources. Do a Google search.
IMO, we were at the start of another bidding cycle for available net oil exports, before the Mideast problems started.
Is there any way one could develop a measure of a 'bidding war'?
Khebab has an import versus price chart on Drumbeat.

Israel says they have "concrete evidence" of what Hizbollah is up to. How would they know? Only by having omniscient and omnipresent spies inside Hizbollah. They had this with PLO, why not with Hizbollah?  When you have spies with that presence you also have some level of control.
Do not trust BBC so much. They work for Tony Blair now. Half the old BBC stringers are with alJazeera now, the worlds most trusted news source.(that last not a joke)
My guess (it's a guess) is that we are at maximum game playing right now. Iran has ins with Hizbollah but so does Mossad. What we are about to find out is who wants war. It is impossible to get a clear read on what is happening when there is a reasonable case that multiple actors are suicidal. With everything else going their way for many months it's hard for me to believe that Iran is the most suicidal of the players. Iraq is falling apart completely just now, the elections (US) are coming up, it is the USA and Israel who are ready for desperate action.
And it is desperate action in a hall of mirrors

I agree, I'm very wary of this, and there are many possible scenarios.  It is possible that Iran has determined that they will be attacked anyway, and that they'd rather it be on their terms on their schedule, and by Israel, especially when Israel is already involved in Gaza.  I guess I'm leaning toward this explanation right now, but only just.  

But it's possible that this is orchestrated by the US and/or Israel.  There is no possible way we could tell at this point - we may never be able to.  Perhaps the best indication of who is in control at this early stage will be to watch who appears to be best prepared vs. who seems to have been caught flat-footed.  

We shall see if this involves Iran directly, or Syria, or anyone else.  Just tipped over $78 per barrel.  Sigh - I hope this does not go the way it could - I'm not ready yet.

But it's possible that this is orchestrated by the US and/or Israel.

Hmmm, you think Israel bombing Lebanon might be orchestrated by Israel? Don't you think that's a stretch?

Possibly.  I said which way I was leaning, but it is not out of the question that this was an attempt start something with Iran, though it seems round about for sure.  My point is that Iran, Israel, the US, China, Russia are all capable of elaborate schemes.  We're watching someone's plan unfold here, but whose?  And is it going as expected, or has it already fallen apart?
Well the most optimistic is that Bush administration has told Israel there will be announced troop pullouts out of Iraq before election and Israel is saying, as Israel knows how to say, nothing's changing were still here.

The bad scenarios, well let your mind go, it gets pretty ugly very quickly.

My speculation: Iran is interested in provoking Israel for the purpose of bringing Russian and China more firmly into their camp around the nuclear issue given that some MSM releases suggested that R&C appeared to be inching toward supporting sanctions against Iran. It would also give Iran more reason to re-direct more of their oil production toward C&R and giving the US an economic blow in the process.  
bingo.  iran/syria have much to gain from being able to say "ha, we can start a war--and we have (other than the SA) the oil."
Of course this avoids the fact it's Israel bombing Lebanon, not Syria or Iran. Just as 9/11 changes nothing until the US invades Iraq, this escalation is not brought about by Iran or Syria, but by Israel. The over-reaction of established power is one thing those without can always rely.
The danger here is that Iran may have badly underestimated the US response. Prior to now the Pentagon has opposed the use of the B61 bunker buster "tactical" nuke but it did reportedly draw up plans to hit 400 targets inside Iran. But if Iran enters an open war against Israel, the position in the Pentagon may change and may support the administration's desire to use these weapons. In that case, 400 Iranian targets get nuked and Iran ceases to exist as a modern industrial state.

I have no idea if Bush is going to do this but I would not put it beyond him. We lack the ground forces to fight a major land war in the Middle East so we either concede the fight or we escalate. Iran may believe we are incapable of escalating. Iran should remember that there has already been one (short) nuclear war and that the US was the only one that used such weapons. To presume that the US would not use them again would seem to me to be a foolish position.

A sudden massive nuclear war against Iran would certainly make the nuclear armed neighbours Pakistan and Russia with friends extremely mad and weary while counting the fallout raining down on them. It would also instantly reclassifie USA as a power in line with stalins Sovjet wreacking USA international status that is much better then manny here think.

Breaking the taboo on nuclear weapons would then make the world overall much less safe and that is especially true for small countries such as Israel. This is so since Israel has enemies who state that they would like to eradice the country and surprise attacks to kill the maximum ammounts of civilians would probably weaken their ability to mobilize their army much more then harder precission attacks against their military bases. This do of course only leave Israel with the MAD option and a large part of the region will go up in flames if they return fire.

You realy do not want to let this genie out of its bottle.

Without resorting to nukes, Israel can put Iran back 1,000 years.

That might be a good idea.

The statements litteral meaning were not even a good idea for nazi germany or stalins sovjet, no population deserve annihilation.
I do not advocate genocide. Note that the government in power yearns for a return of the glory days of Islam, about 1,000 years ago.

Perhaps modernism has failed in Iran. Perhaps they are going back 1,000 years no matter what--no democracy, no rights for women, no rule of law, no electricity, etc.

Then the islamic regime would not have built one of the worlds largest condom factories after being overwhelmed by the response to the classic have-manny-children policy. I dont think the iranian people/peoples are lost for modernization.

I really think there will be a convential war between the US and Iran long before Nuclear Weapons are and issue.

Looks like we just gave the Israeli's a green light to secure there independence this will bring Iran in which brings us agianst Iran. We will destroy the nuclear facilaties as a side show. So the game has changed ...

Maybe thats why Russia and China are suddenly into sanctions over the nuclear side show.

It looks like WWIII is Oil consumers vs Producers with Russia on the fence.

It certainly looks like a conventional war with Iran could be in the offing but, given the precarious nature of the US economy and the enivitable severe oil shock that will be delivered, this course seems profoundly self destructive--if you give one damn about the American people--or most any people for that matter.  I just don't see how this kind of resource war can go any direction but SOUTH.  
In my opinion, this is Iran's plot at work but other actors have their own plans as well. Iran may have opened the bid on this but I also think Israel was waiting for an excuse to move against the Hamas government and Iran may have given it to them. Iran may be doing any number (or several) things which can include religious jihad, CYA about the nuclear issue right before the G8 meeting, fulfilling obligations to other Muslim nations and organizations, etc.

I'm not sure you have to look at this as a "plot" as much as it is the inevitable outcome of two very rigid worldviews that are in direct collision.

How is this Iran's work??? Israel is bombing Lebanon!!!
Wrong. Hamas and Hezbollah are provoking. Israel is responding. Hezbollah is Iran. While I don't necessarily back GZ's theory, I'll at least say he understands what is going on. You don't. Either that or you are understandibly naive.
Picking who is provoking is like jumping into the middle of a chicken and egg argument.  And I'm sure we don't even get to see many of the provocations.
I can't disagree with you. Good point. Twilight, If I were elected President, you would be my second choice for National Security Advisor, after Jack. And I think you know that. Which would make you Secretary of State. Then the three of us would have to argue about who gets the Defense Department between Jack Greene and Fallout. Leanan for DCI? Oh, wait. That's not DCI anymore. It's Homeland Security. We need somebody totally incompetent for that. How about Kunstler? Oh, c'mon, that was a joke. Gimme a break. Savinar?

If I was President, Leanan would be my Chief of Staff.

I want to be a five-star admiral in your adminsitration.
I know it's hard to face facts, after all this an energy blog.

But lets try one more time, hezbollah has no ability to throw the Mid -East into chaos. Attacking a military base and taking two soldiers hostage isn't destablizing, unless Israel responds as it has and destroys Lebanon's infrastructure, sounds smart to me.

If you are Iran and you want to provoke an Israeli response knowing Israel is already very tense, what do you do? Something exactly like this which lets you further paint Israel as the "bad guy" to the rest of the world. And further, if you can get some agent-provacateur (Hezbollah and Hamas) to do it for you, all the better. Since we know that Iran basically controls both these groups to a high degree, via funding, training, etc., is it so hard to believe that Iran pulled the trigger here?

The next step is to provoke an Israeli attack against Syria, which lets Iran come to the defense of Syria against the "Zionists" whom they constantly decry. Then Iran gets to wear the badge of defender of Palestine, defender of Islam, defender of the Middle East against the Zionist aggressors. This part may be harder than they expect though.

Or Israel refuses to be provoked and refuses to descend further toward disaster. I know, that's such a ridiculous idea.
"Israel was waiting for an excuse to move against the Hamas government"

Actually, Israel has already been moving against the Hamas government, and all of Gaza, for some time.  Lots and lots of shells have been heading into Gaza, long before that soldier was captured.  They just needed a pretext to go in full force.

Robert Fisk thinks this is Syria's attempt to get Israel to punish Lebanon for kicking them out - I'm not sure I buy that.

Anyway, my point about someone's plan unfolding was only in regard to this particular move, and it trying to understand who moved first.  In the end I agree conflict is inevitable, that's why I've been expecting something.  Perhaps we shall get lucky, and this will cool off and end in a prisoner exchange and withdrawal.

Israel will paint reality as they choose and act in their perceived short term interest. My news sources are online and (UK) radio, I think I see what you mean about BBC but I still think (objectively, I hope) that BBC World Service news and analysis is as good as any. Al Jazeera and Ha'aretz are excellent sources.
Israel was always much better at saying they have evidence than showing it to people. I believe this is not so complex as some will say. The palestinians and their allies have discovered a new tool, which has so far not been used much in this conflict: kidnappings. Hizbollah knows a good new tool when they see it, they don't need Iran to tell them what to do. Israel, also, know that kidnappings are effective, which is why the reaction is so extreme. They are trying to choke the idea before it gets widespread use.
Remember, suicide bombs was also a trend that started in a single incident, and then spread like wildfire because it was so effective in the minds of the people who used it. Israel won't risk another "effective" trend, but personally, I doubt that they can stop it.
Hizbollah knows a good new tool when they see it, they don't need Iran to tell them what to do

Wrong. See history of Hezbollah in Lebanon 1980-present. To be clear - A) Kidnapping is a tool they have used for 25 years. B)They have always needed Iran, otherwise they would be Al Qaeda.

No offense to you, but the armchair Middle-East analysts really need to give it a break, here. Go read a book. No, newspapers don't count. You've been outclassed and outgunned for days now. Beat it.

Again, nothing against you Vintermann. More aimed at your friends. You actually frame the points better than they do. Still. I'd be happy to list a bibliography. Unfortunately, most of your friends won't read anything but Mein Kampf.

All I'm saying is that Iran probably does not control every single little thing they do. They could perfectly well have staged this kidnapping on their own, inspired by the previous kidnapping. Saying "Iran was behind this!" is premature, in my opinion.

I didn't mean to say there had never been kidnappings of Israeli soldiers in this conflict, but... there certainly hasn't been many in recent years that I know of.

Fair enough. I didn't mean to get on your case. I hope you will forgive me. I just totally support Israel and am unable to contain that fact. I suspect I am incurable. I am not Jewish, grew up partially in Saudi, and my opinions are based solely on logical arguments I deduced from reading history. I simply can't back the Arabs. Their arguments make no sense to me.
It does seem that the information to opinion ratio on this issue is an all time low.

I don't have the grasp on the issues that you and others have. I do think the discussion benefits hugely from a fact-based discussion.

I am a WASP in remission and live in the only country that didn't even bother to show up for the 1947 partition vote, so I definately don't have a dog in this fight.

One state was absent: Thailand.

Yeah. Most Arabs will avoid the fact that 1947/48 actually happened. I must do a bibliography soon. Gonna need Sailormans'  help, or anybody else that wants to contribute. I was going to start with one book, but I don't want to be accused of blatant partisanship, so I will start with another.

Oil CEO's "Booklist to Understanding the Mid-East" shall start with this - The Koran. More to follow.

The Koran is a fascinating book. And it is actually a short read. Follow it with the Haditha. My understanding of the Koran is that nobody actually understands its order as far as the chapters go. It is usually published in an order that its publishers figured most readers would be able to deal with. From shortest to longest. Or whatever. Comments totally called for here. I think we are breaking new ground on TOD.

If you've never read the Koran, you need to.

I should probably have shut my mouth after the last sentence(If not sooner - Allah will certainly help us with that determination) - but, tell me - Is the Koran all about oil? But it should be, right? I mean if the mid-east and Iraq is about oil, shouldn't there be something in the Koran about oil, or at least how to deal with it?

I mean, there is one God, and his name is Allah. I understand that? but shouldn't he have said something about Light Sweet Crude? Or at least the Heavy Sour shit. Or do I have no right to broach this topic? Am I blaspheming?

Follow the money.

The "Koran" is one of my favorite books; I have three English language editions of it.

In my opinion, my Egyptian friend was correct: Namely and to wit:

Of Judaism, Christianity, and Islam, Islam is the best.


Because it incorporates all the good things from the earlier religions and adds much more, such as the Divine duty to be kind to animals (not found explicityly in either Old or New Testaments).

The greater the wisdom, the greater are the possibilities of perversions by fanatics.




With all due repsect, may I present a different perspective? Demanding allegiance from unquestioning masses is definitely not the hallmark of a "great" system - religious, economic, political, philosophical or whatever.

By that same token, the aforementioned three religions have been the stumbling blocks to critical thinking for a huge section of humanity. People like me, who were born and brought up in systems where, at least at a philosophic level, one's beliefs were not decided by a set of rules written down in ancient times, tend to see these three rigid religions as systems designed to control the "faithful".

Sorry to bring religion into TOD, but I hope it adds to the variety of perspectives :-)

Some time ago I posted Sailorman's Conjecture. It went something like this.

The greatest ideas of the best thinkers will be perverted 180 degrees from the intent of these people (Moses, Jesus, Mahomet, St. Thomas Aquinas, Marx, etc.) by fanatics.

Each great man spins in his grave.

Things are heating up!
FORTY-SIX Lebanese civilians were killed yesterday in a wave of Israeli retaliatory strikes over the capture and killing of soldiers by Hezbollah, igniting fears of a wider Arab-Israeli conflict.

BTW, Saudis have been known to finance Hizbollah too. Of course, it's not good to publicly blame an oil friendly nation!


I'll second Twilight here for starters. But more to the point. There is plenty of spare capacity. And I'm sure you are aware of this(if only subconciously). Please read Jim Jubak's piece on MSN Money today. I'll find link later. Trust me, you will like it.

Let's all stick together. This is a smaller community than we would all like to imagine. When Goose ran that poll last week there were only 244 responses when I ckecked in. This pales in comparison to the 10,000 hits per day some like to quote.

I only count the guys, and 3 gals I talk to. This is what Lenin would call a Vanguard - not a majority.


A good time to repost a link to my paper

A 10% Reduction in America's Oil Use in Ten to Twelve Years
An Overlooked, Practical, and Affordable Approach Using Mature Existing Technology

and a related paper with a few more details

OK, we've all been practicing this for awhile now...does everyone remember their Peak Oil "Duck and Cover" procedures?
Dragonfly41 -

Yep, I know the drill well:  bend over, put your head between your legs, and kiss your sweet arse goodbye.

Actually, I am old enough to remember practicing duck and cover in grammar school during the early 1950s, a time when the spectre of nuclear annhiliation was a very real thing in the mind of the average American. I kinda thought it was a lot of fun.

Civil Defense was a big deal at the time. In retrospect, it was next to useless and was mainly intended to make people believe that the government was capable of protecting them.  How the US and the Rooskies managed to get through almost 50 years of cold war without nuking each other is, in my opinion, a minor miracle.  

Yeah, I remember duck and cover too. And there were weeks that I didn't see my dad in the late 50s early 60s because he was officer in charge of a Nike missile site outside of DC.

I remember a lot of friends whose parents built really elaborate bomb shelters back then. Anybody ever buy a house with one of those? Looks like they could be fashionable once again really soon . . .

I haven't posted in awhile due to work, vacation and lurking.

My first thought is that those of us here who have been predicting steady increases in price with no change in demand appear to be correct over any multi-week time frame.  We base this on dwindling supply coupled with an inability of the US consumer to reduce consumption.  

It has been at least 9 months now that the promised (by some posters) reduction in crude price should correct the oil market.  There are lots of noise in the run up in price over the last year but I see no change in the trend of higher prices going forward.  

So why are higher prices not activitaing the twin economic forces of increased supply and reduced consumption to moderate oil prices?  

And no waffling about our ability to absorb higher costs in any answers. Prices are much higher than a 3 years ago so by textbook definition supply should increase dramatically or demand must decrease drastically or both should occur.  Either the economic model is wrong for unique finite resources or it is going to take a long, long time to kick in.

Maybe it's Javon's Paradox, NC ...

Price of crude now at $77.42 (after hours.)

"Either the economic model is wrong for unique finite resources or it is going to take a long, long time to kick in."

Andrew McKillop predicted increasing economic activity until oil prices are over $100 per barrel or so.     He thinks that prior recessions, that coincided with rising oil prices, were actually caused by interest rate increases.

Again, let's not parse quotes.  Andrew roamed with the nihilists and fatalists known as Yahoo EnergyResources forum.  His hypothesis was that there is a herd effect in times of scarcity and consumers will keep on buying with increased zeal in hoarding mode until exhaustion occurs.  This activity was to culminate in the implosion of all the world's major stock markets in November 2003.  The higher the price ... the more people will buy.  Enuf said?
Enclosed is an excerpt from one of McKillop's relevant articles.  Also shown is a link to all of McKillop's work on the EB. I think that the TOD readers will agree that he has been remarkably accurate regarding oil prices and the overall economy.
Energy Transition and Final Energy Crisis
Published on 31 Oct 2004

 by Andrew McKillop


The strengthening likelihood is that oil prices will easily exceed 75 US dollars/barrel, in the absence of any war, sabotage or hostile action, solely because of `structural undersupply' and almost certainly by 2008. This itself will powerfully draw attention to study and action for firstly slowing the growth of oil and gas demand, then reducing demand for these fossil fuels.

Only at genuinely `extreme' oil prices, well above USD 100-per-barrel, will there be a rapid and uncontrolled fall in fossil energy demand, firstly in the OECD countries, triggered by economic crisis.

This will come too late to offer any chances of organized and efficient economic and energy restructuring, especially in the OECD economies and societies, which are the most oil-dependent due to their high or extreme average per capita rates of oil demand.

Laisser-faire scenarios will necessarily include a new `Great Depression' to a backdrop of already serious tension and low-level but increasing international conflict and warfare focused on the Middle East (`war against terror' and `war for oil'). De-globalization, or increased self-reliance will necessarily feature in longer-term restructuring of the world's energy and economic systems. The sooner that internationally agreed targets, frameworks and structures for managing energy transition can be set, the greater is the chance of avoiding endgame energy resource conflicts, and achieving long-term sustainability.

The likely, near-term oil shocks due in final analysis to emerging supply deficits will be `salutary crises' if they bring coherent action to head off irremediable crisis.

All articles by McKillop on Energy Bulletin: rch

A missive today at FSO from Andrew McKillop:

I've given it a decent glance but not read thoroughly, looks resonable and is specific. eg. "There will have to be large cuts in the fossil energy intensity of the richworld countries : this can come through crisis or it can be planned or programmed, we still have the choice but soon wont."

Here is a quote from an article by Andrew McKillop on April 30,2006.

"At present, we do not have major signs or `signals' of high oil and high energy prices adversely affecting the world economy. In fact we find many signs of rising energy prices faster driving the world economy, and we badly need to explain and understand these signals to find the areas and sectors for best, most productive investment and development."

It can be found at

A complete listing of his articles at.

AM: "In fact we find many signs of rising energy prices faster driving the world economy"

Oh yah, that reminds me of this mckillopism from July 31 2003:

AM: "In other words, when gold is cheap nobody wants it, when its $600 or
$1000-per-ounce everybody wants it!  Thats just like oil you know
Keeping oil cheap really did limit demand growth through about two-thirds
of the 1986-99 Cheap Oil interval. After 1999 with oil prices tripled,
world oil demand growth has strengthened"

AM: "Another apparent illogical thing, that I have figures to prove, is that low
oil prices tend to reduce oil demand growth, while high oil prices tend to
increase oil demand growth (up to certain extreme price levels)."

AM: "No way do I say "go out and buy gold, physical or paper". FiendBear and
UrbanSurvival both published my bit on how a 1929-style is likely or
possible this Sept/Oct 2003. To me its primarily a Kondratiev cycle thing
with oil price trimmings"

AM: "My contention is that really this fall ( artfully crafted by European
business media, TV, press, radio as uniquely and solely due to OPEC's
despicable cut, right on the verge of Winter - when it gets cold despite
Global Warming) is nothing more or less than an outrider to a classic
bourse crash.  For people who want definitions/ A big crash = 60% fall in DJIA over a period able to be under 10 trading days (meaning 500 + points per day some days)."

AM: "Take either (or both) the 1929 and 1987 bourse crashes and try to find one
main or critical cause or trigger: you wont find it. Logically speaking
both these crashes were illogical, but also the fruit of long-term,
underlying real economy events, pressures and factors. So nothing at all prevents an October 03 crash from happening, while the hamfisted "management" by the economics team around G W Bush is so laughable its like they are doing their durndest to make a crash ever more plausible"

AM: "High oil and gas prices will therefore maintain what are essentially
'inflationary growth trends in the world economy'. This doesnt at all prevent a stock market crash in the USA or Europe just anytime. However, a stock market crash would in the current international context probably now act like an oil shock - on balance increasing world economic growth rates, because of an outfall of capital from Norethern markets, to so-called regional stock exchanges."

A McKillop  (energyresources)

FH - i don't have to say a word...

Freddy--following is a link to an Energy Bulletin story, along with editorial comments. Just curious, have you had anything published on the EB or comparable websites?

Published on 11 Jul 2006 by Thesis & Antithesis. Archived on 14 Jul 2006.

Coping with high oil prices
by Nikos Tsafos

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Andrew McKillop deserves some recognition for predicting early on that high oil prices will drive economic growth - up to a point. Here's some excerpts from some of McKillop's articles published on Energy Bulletin:

Increasing oil and gas prices, up to levels around $75/bbl or barrel-equivalent ($10-13/million BTU) will certainly be called `extreme', but will not in fact choke off world energy demand.

The likely net impact of price rises to $75/bbl, if interest rates in the OECD countries are not `vigorously' increased to double-digit base rates, will be increased world oil demand due to continued and strong economic growth. This `perverse' impact of higher prices will therefore tend to reduce the time available for negotiating and planning energy and economic transition.

Only at genuinely `extreme' oil prices, well above US$100-per-barrel, will the pro-growth impact of increasing real resource prices be aborted by inflationary and recessionary impacts on the world economy.

This will come too late to offer any chances of organized and efficient economic and energy restructuring, especially in the OECD economies and societies, which are the most oil-dependent due to their high or extreme average per capita rates of oil demand.

( 22 September 2004) and
Higher oil prices increase world economic growth by raising `real resource' prices, through what we can call `the revenue effect.' The pro-growth impact of oil does not stop there, because fast increasing values of world merchandise trade due to higher `real resource' prices directly leads to fast growth of world liquidity ... the quantity of money in circulation. The trend for world liquidity is close-linked to oil price changes (both up and down), but in the current context there is also growing world liquidity due to fast industrialization of, and growth of exports from China, India and other countries. This directly translates to additional growth of the value and volume of world trade. World trade is now growing at its fastest rate for over 15 years, which again is concrete, cast iron proof of fast economic growth.
(21 September 2004)

thanx for asking.  we don't do the submission ciruit.  ours was set up as a passive site available to academia, analysts and pundits on a variety of topics.  our server shows we were visited last season by viewers from 87 nations and there are literally hundreds of links to our site's graphs or commentary pages or inserts of our material in other's studies.  andrew resides in a realm of archie bunker economics and i will allow his own words be my ammo.  
And you come from the Louis Farrakhan school of statistics.

There now. See? We can all do the ad hominem thing, right?

I've been told that the Aryan Nation website has visitors from over 100 nations and links all over the internet too. Does that make them more credible than you?

In other words, your prior post contributed little. Care to try again? Maybe with a bit more substance instead of vituperative bile?

P.S. Your keyboard should have a shift key. Learn to use it.

P.P.S. The P.S. was expressly for you, since you seem to have a hangup about nitpicking.


He stopped posting to that group long before you stopped posting to it,  I left there about Oct of last year, Bob Shaw and several others that post here I am sure can back up my memory of things.

I have read several of his Posts found through Google news searches he still talks the quotes that WesTexas is talking about even up until the last one I read long after I had left EnergyResources  ( which can a bit heavy in genetics and other over the top thinking man's drinking games type of debates ).

Dan Ur aka ceojr1963 aka Charles E. Owens Jr.  Author at large.

Washington Post -- Oil Prices Settle Near $77 a Barrel.

Not noted in today's threads: Nigeria rebels are taking advantage of the situation.

In Nigeria, government officials said twin explosions hit oil installations belonging to an Italian oil company in the volatile southeastern delta region. Elsewhere, militants attacked a group of 11 boats carrying supplies to Chevron's offshore oil fields Wednesday, killing four navy sailors who were escorting the convoy, Brig. Gen. Alfred Ilogho said Thursday.
Silence from Iran. Silence from Hugo in Venezuela. Silence from the Saudis.

Also, Beijing joins Moscow in moving Iran issue to UN. Support for Iran is weakening. Their presumed gambit may not pay off.

Oh, so the oil prices have settled already, have they? WaPo is priceless...
I'll be the first one to criticize the media for inappropriate spin, but "settle" in this context simply refers to the day's closing price.  The price of oil settles every day.
Talk about inappropriate headlines as oil passes $77 - "Plane sales may take off" - here:

Maybe the sales will, but the planes won't!

(For those new to TOD) Well the low-cost, hop on a flight to Disneyworld may start to suffer. But international service is still the only practical travel option (beats the slow boat to China). Note the article states the new orders are all for higher efficiency planes. :-)
Minor point re Israel/Lebanon: Hezbollah didn't exist until Israel invaded Lebanon in 1982. Since the Versailles peace conference of 1917 the Zionists have been planning to take Lebanon up to the Litani River and split the country with the Chritian Maronites. Ben-Gurion put forth a plan to do this in 1950 (seconded by Dayan): There would be a "revolt" by some Lebanese army officers and Israel would rush in and "save" Lebanon. Sharett shot the idea down. The 1982 invasion was allegedly to get the PLO and Arafat who had been launching terror raids into Israel. However, Philip Habeb had brokered a peace with Arafat and for the 13 months prior to the invasion there were no PLO raids. The event that kicked off the invasion was the attempted assassination of Israel's ambassador to the UK (Argov)that Sharon & company blamed on the PLO - even though they knew the Palestinians had nothing to do with it. Good old Saddam was behind it: The Iraqis were getting their ass kicked in the war with Iran - the human wave assaults were highly effective, and Saddam thought he was going to lose the war, and his job. He hoped the attack on Argov would ignite a general war against Israel and take the Iranian pressure off him (Saddam). He hired Abu Nidal (a sworn enemy of the PLO - he had killed about a dozen of Arafat's men and was sentenced to death in absentia) for the hit on Argov. As one Israeli general  noted, "Abu Nidal, Abu Shmidal - they are all the same." After the IDF-IAF had killed about 30K civilians, including using cluster bombs on Beirut (supplied by you-know-who), some Shia leaders asked Israel to pack up and go home. When the request was denied, Hezbollah was born and, after 18 years of nicking away at the IDF, Israel pulled out of Lebanon in 2000, pressured by the "Four Mothers Movement" in Israel that was fed up seeing their sons killed in Lebanon. (In 1996, Israel laid on "Operation Grapes of Wrath" on southern Lebanon, flattening the civilian infrastructure and blowing up the Qana UN-sponsored refugee camp with its inhabitants.)While we won't get into Hamas here, Israel purposefully encouraged the organization's growth in Gaza beginning in the late 1970s, not to promote the growth of Islam, but to act as a counterforce to Arafat and the PLO's growig legitimacy. Hezbollah and Hamas didn't just appear out of thin air - aka as being hoist on ones petard. For a little background on 9/11, suggested reading is OBL's "Letter to America" of November 2002 - available on the Internet - see para starting "Why are we fighting and opposing you?"
Im sure there are grains of truth in this but I assure you anyone that reads something that shows its all Israels fault or its all the Palestinians etc will immediately consider the whole work propaganda.

I've seen intolerance on both sides of this war. And to be honest the heart of the problem is the refusal of the militants to live with Israel.

Look at what Ghandi and MLK accomplished and look at what the years of bloodshed in the ME has done. The ME culture including Isreal can't accept taking the approach that Ghadi took and thus the endless bloodbath caused at the end of the day by simple pride and racism.

Apartheid South Africa and French Algeria are better models for Israel/Palestine (than Gandhi's British India or MLK's Jim Crowe U.S.).  

If it wasn't for ANC's armed struggle (or Algeria's brutally savage war of liberation), the white colonists would have never eased their perverted idological grip over the native population.  

Palestinians are struggling for a similar outcome.  Israel/Palsetine should become a secular state where Jewish colonists do not have "first class citizen rights" over the native Arabs.

  1. Jews are native to the area as well. Jesus was a Jew after all. Jews lived all across the Middle East until fairly recently, when they were persecuted in virtually every regional country. In fact Jews were there before Christians or Muslims, because it is the older of the religions.

  2. Not all Palestinians are Arabs

  3. A portion of the Palestinian lands are held by other Middle Eastern countries, especially Jordan. The Palestinians there are treated worse than those in Israel. So why isn't that an issue for you?

I am not a strong advocate of either side of this issue and think there have been numerous wrongs on all sides. I do, however, have a lot of sympathy of Israel. I also have a lot of sympathy for the Palestinian people, who are victims in the whole affair. Neither am I an expert on this issue. However, it does seem to me that a number of stark inaccuracies fuel this debate, so I wanted to provide some factual clarification.
  1. No evidence whatsoever that the Jews of ancient times were native to Palestine. No evidence that those who invaded Palestine in the 20th century had anything to do with the Jews of ancient times. No reason why the invasion would be justified anyway. Would Crimean Tartars have a right to invade the south of Sweden because they were partly descended from the Goths?
  2. By no means all Palestinians are Muslims. However, all are Arabs.
  3. Palestine is usually defined as the land between the Mediterranean and the Jordan river. What portion of lands do you mean, and which Palestinians claim they are treated worse in Jordan than on the West Bank and in Gaza?
Actually, DNA is solidifying the case that modern Jews are indeed mostly descended of the pre-66AD Jewish population. And half of Israel's Jews are from Arab countries. refugee flows went both ways.
Not at all. They show that many modern Jews have some genetic markers associated with the eastern Mediterranean, which is very different. Incidentally, the studies claiming a so-called Cohen gene have been exploded as fraudulent or incompetent.
What about your claim that the Serbs didn't commit genocide against the Bosnian Muslims. I'd be interested in hearing that explanation again. Just because we have a wider audience. Maybe this time more people listening will give you the chance to convince somebody. Damn I'm tough. I'm a motherfucker, ain't I?

Gonna call me a troll again? I'm not "adding anything to the debate"?

Let's see whatcha got.

Another 7 on trial today. Pity Milosevic couldn't stick around.

1. No evidence whatsoever that the Jews of ancient times were native to Palestine.

Duh Smekhovo --Dead Sea Scrolls ? remember? written in ancient Hebrew, the language of "the Jews"? Hello? Anyone home?

Click on the image to the right to read more. Better yet, since you probably refuse to believe in anything that the evil Z-word pro-Israel posters put up here, Google it for yourself

Yeah, we're wasting our time, dude. He rarely fights. Then he comes back tomorrow. Maybe we're doing a good thing. Who knows. I'm serious. Look at his statements. They are extraordinarily vague. I wouldn't be surprised if he's Putin's intelligence chief. He's going to be busy tomorrow, so give him a break. His statements on Russian oil production are odd in comparison to his other statements on oil. He might be the next James Jesus Angleton. (Don't say I never said anything good about you, Smekhovo). And I always talk about him like this in the hopes that he will respond. But he never does. It's tough to bait him. But somebody's got to try.
As you may have heard, even according to their own legends they did not originate in Palestine, but invaded and committed genocide against the native inhabitants.
That is a half-truth of course because Abraham and his progeny were among the first to dwell in the holy land. A drought forced them to migrate to Egypt where Joseph of Techni-color Robe fame was awaiting them with silos full of grain. Then the Egyptians enslaved them (using online gambling as an enticement). When they finally got out of bondage, they discovered some new people; Cannanites had moved in on their original turf without even so much as a green card or a may I card. It was God who commanded them to wipe away the Cannanites ... so it really wasn't their fault. But all during this while in the Hebrew Bible, which the Muslims accept BTW, there is no mention of a single "Palestinian". The concenpt of a Palestinian people was made up many thousands of years later.
  1. I said I am not an expert. I do think discussion on this point has already brought some clarity that the original post did not. But you don't deny that the Jews were indigenous people of the Middle East persecuted by Muslims and to a large degree chased out of the countries where they had lived.  

  2. I got the "not all Palestinians are Arabs" data from Wikipedia. I can't vouch for it beyond that.

3. The 1947 UN plan partitioned Palestinian lands into two almost equal halves. Israel is one of them. Where is the other?

Again, I am not an expert and am learning as I go here. There are a range of different opinions that I can respect. I do think that the situation is far more complex than the original post, which appeared to be ignorant propaganda, made it out to be.


Really TOD is not the place to debate this.
You are probably better off going here (Wiki on Palestine).
  1. Utter nonsense. Neither ancient nor modern Jews were every chased out of any Middle Eastern country.
  2. You can't defend this claim.
  3. The WestBank and Gaza, illegally occupied by Israel.
ever chased out
1. Utter nonsense. Neither ancient nor modern Jews were every chased out of any Middle Eastern country.

Funny, the sailor-teacher just made me do my homework on this very question elsewhere. Read it and pretend to weep: Expulsion of Jewish populations from ME countries

A ludicrous grab-bag  of lies and fantasies.
How can  you argue that piece supports your claims, when it gives not a single instance where a substantial number of the Jews in any country were expelled from it? When it admits that Mossad provocations were necessary even to get any to leave at all?
I present facts.
I present authorative support.
And you respond with another one of your
Islamo-crazed circus performances
Some of your arguments may be reasonable, Smekhovo, but your intemperate comments above weaken your whole case.

Of all racial cultures Jews have probably been the most persecuted and wronged. Sadly the state of Israel seems intent on behaving much as Jews' persecutors have in the past.

The reason the palestinians have trouble elsewhere is that they refuse citizenship, for obvious reasons. The palestinians in Israel proper are certainly better off than them (though they are second-class citizens, subject to both legal and informal discrimination). Whether the palestinians in the occupied territories are better off... that depends on what week we are in.

According to Ottoman statistics from around the turn of  century, about 10% of the inhabitants of Palestine were Jewish.  Of these, a significant number had just come there escaping Russian pogroms.  Zionism, the movement for establishing little Jewish colonies or communes was clearly not by (or for) the native Jews.

If you want to make a Biblical argument, fine.  Palestinians are the people the Bible refers to as Cananites.  So according to the Bible, it was their land before the Jews captured it (after Exodus)!  

But the Biblical arguments are really very silly anyway, and rational people like us should not go there.  For most people in the world, the Bible is nothing but the Judeo-Christian mythology, no better or worse than so many other myths from various other cultures--mostly based on actual history--often claiming some distant land as their sacred ancestoral homeland.

Anyway, what makes Zionism and Apartheid similar is that (1) they were developed by persecuted European minorities, (2) colonizing land when colonialism was romanticized, and (3) holding on to it brutally and via an irrational ideology.  Who in their right mind thinks that an American Jew from Brooklyn has more rights to living in Palestine than the Palestinian who has lived there for hundreds of generations?  Probably the same ones who thought Whites had the right to own land in South Africa while Blacks didn't.

European-descended Jews are now at home in Palenstine/Israel.  It is as much theirs now as it is the Palestinians'.  But the regime there should be changed so that Jews and Arabs have equal rights.  It's really quite logical and it will solve lots of problems.

Thanks for reading!

Your history is accurate and, unfortunately, little known by Americans whose perceptions are formed by the MSM.
Chainsaw4wood is correct whe s/he says that Hezbollah was created as a result of the Israeli invasion of Lebanon in 1982. That invasion was apparently to eliminate the PLO, many tens of thousands of mostly innocent Lebanese were killed.

I've sadly concluded that there will be no true peace in the mid east while Israel exists there. I don't mean that as a criticism of Israel or the arab nations, although I would strongly criticise both, just a statement of bald fact.

Israel is currently systematically destroying the infrastructure of Lebanon. That is just morally wrong, inappropriate and ultimately counterproductive.

I strongly support a jewish state and the jewish cause generally. It would be better for the world if that jewish state were in the USA.

anyone know why Brent was up over 3%, but straight crude was up only 1.7% today?
At the risk of being redundant, I think that we are at the start of another cycle of demand destruction, with declining net oil export capacity going to the high bidders.  Chinese oil imports up by 15%.  US consumption up.  World oil production down.  
that makes sense, but why the disparity between the two types of crude?
It looks like Brent was just catching up to US light, sweet prices.
Oil hits new record US$78.35 a barrel in after hours electronic trading

Oil traders are going to be very nervous about the weekend.  The weekend effect, combined with short covering, could easily send us over $80 tomorrow.

I expect lots of interesting comments and judgements today.

Nominal oil price has reached as high as ever before.

That will lead a lot of "Oil drum" readers and contributors to get very excitable.  This is an internet forum.  Pronouncements will be made - some may suggest civilisation is over.

The Middle east has been politically and violently volatile - relative to oil prices for decades.  Low.  High.  Middling.

Machinations and subterfuge.

What is different now?

World oil supply may have little (or no real) room for current expansion, or even substitution if any disruption occurs.  That's why 'The Oil Drum' is here.  

So as oil prices rise, so may petroleum.

If we lack something we want and are willing and able to pay - we pay more.  We can pay in much more than currency.

Is it a good idea to do so?  who knows?

Anybody mention yet that the "overnight" price just topped $78, then cooled some.  At last check it was still up $1.20 over yesterday's MYNEX close.  Never seen anything like that at this time of the evening, me no likee...
CNN's blurb for their late news was something like, "Paying the price for Israel's aggression" - about the record high oil prices.

I was quite astonished that they put it that way.

Oops, meant NYMEX of course...
While I'm at it, it is more than curious that Israel got all the "settlements" out of Gaza, and got the Syrians out of Lebanon, all within the past couple of years.  And then today happened.  Hmmm...
Meanwhile, the sheeple continue to drive SUVs to the grocery store talking on their cell phones totally oblivious to the coming energy crisis and social chaos.

Farewell, American way of life.

Yes, I watched them on the way home today, as I listened to the NPR "news" chattering away about trivialities.  Of course I really don't know what they were thinking about, but if I were a betting man......
My brother, an architect, just got a proposal from FEMA to build 25,000 styrofoam houses outside of Dallas. (He's been designing styrofoam houses for some time now -- VERY energy-efficient.)

They've just finished raising capital for a large factory. There appear to be more of these giant projects in the future.

I can't help but see the former American middle class living in FEMA camps or plantations if and when they lose their jobs and homes.

How else to explain something like this?

For those who haven't read it yet, here's Pepe Escobar's piece on Russia and the financing of the Iran-Pakistan-India gas pipeline.  (a.k.a. the "pipeline of peace" because of its role in reducing the Pakistan/India tensions 8-9 years ago, but got nowhere because of U.S. opposition.)

It is a good analysis of Putin's energy strategy as a whole: divert the Iran gas to the east so that Russia can hold on to its supply monopoly to the West.  (The Iran energy watchers will recall the Khatami administration's plans to exports gas to Europe by extending the Iran-Turkey pipeline.)

We have now entered the most interesting 60 day period in this calendar year.  $80 a barrel?  All but guaranteed.  And perhaps much higher, depending on weather and political events.  It certainly is an interesting time to be alive.

Hang on tight!

Curiously said, care to elaborate on your 60 day feeling?

$80 is a 40% probability for Friday and 75% within a week. $85 is 60% probability within 60 days, $95 a 30% probability, $100 close to 25% before mid December.

As it unfolds it will be interesting but once it has the mundane reality will probably be less so.

Hi Agric, thanks for your question.

Although anything could happen, I base my remark on the fact that we are close to entering the peak season for hurricanes, and am using the 2005 model for an oil price runup.  I suspect something similar is in the works here.  

What we are witnessing abroad is bad enough.  Throw in a brewing tropical storm in the gulf, and watch out!

$80 is just $2 away, or roughly 2.5% higher than the price of WTI today.  While many might posit a sticker shock that comes with certain levels, the reality is that $80 and $75 oil are not interestingly different, economically speaking.  Oil prices have been very well behaved, considering the lousy geopolitical outlook, and it isn't very productive to worry too much about every new piddling record.  When the real fireworks come, you will know.  With the recent increase, the water under the frog is just getting warm.....
but psychologically, I would argue $80 is a pretty big deal, isn't it?
The 1980 record oil price of $35 (in "nominal" dollars) can be reframed as about $81 in 2005 dollars. For a long time, we've had to listen to the ongoing refrain that "yeah, but oil in real terms was more expensive in 1980."

Not for much longer. Soon, just north of $80, a nominal dollar price record will be a real dollar price record. Then we officially have the most expensive oil ever. Maybe someone will notice.

This is incorrect.

From my understanding, adjusted for inflation in 1980 dollars we need to get to $95 because records are truly broken.

my bad, before*
Mmmmmmm. Just for the helluvit I'm gonna say No. I struggled long and hard to interpret that "Yes" of yours. And in the end I determined that I could be nothing but wrong. Therefore you must be right.

I'm actually going to present a piece on PRICE soon in which I will amazingly prove everyone right. Everyone. Stay tuned. There will be a very pretty graph included as well. But no quotes from Mr. Yergin. Several from Shake Your Booty.

"Therefore you must be right."

Wow. I was only aiming for decisive.

Shit. And I'm being totally serious here. I can't tell if you are being serious, messing with me(that's easy to do), or something else. You win. This episode proves to me that Southeast Asian English speakers have a slightly better grasp on subtle linguistic differences than mainlanders...

...nah...I did, I meant it, you're right. Unless I'm wrong. And I have established here that you are aiming for something. That comes as positive news for many of us. Cheers.

On a separate issue. Are we just going to let Cherenkov get away with his ethanol fraud of yesterday?
Please moderate your language. May I suggest:
  1. Feces
  2. Mierda
  3. Merde
  4. Horse Maneuvers!
If $80+ holds for a week or more and any pullback afterward stays above $72, the parabolic nature of these kind of things puts $120 by Feb '07 on the radar screen.
The roller coaster is starting to make me sick. :-)

But at $78, unleaded gas is now $2.34, up 0.04  ( The pot full of frogs is very accurate. Only a major gas tax will shock consumer behavior.

What about several kilotons of Iranian Uranium? What would you calculate their discernible effect in dollars per de-populated square mile? Just curious.
Want to feel all warm and fuzzy, don't read this.

Wonderfull reporting. Any thoughts on stopping the Bush war machine? How do I stop paying taxes to fund this? No, it is not off topic, it is all about oil. We know that.

Light rail, and switch grass may be interesting, but how do we stop the carnage?

A JHK nightmare come true.

I'm going to go pop a sedative and go to my "happy place."
I hope there's lot of Prozac available in the post-peak world.
Shame on you!

Oral sex works better and is cheaper.

A few comments on comments about the I-P situation: Jack said "Jews lived all across the Middle East until fairly recently." True, for about 2,000 years, until 1948 - then things changed.(Before the Ottoman Empire fell in WWI, a quarter of the elected municipal council of Baghdad were Jewish; Jews certainly faired better under Muslim domination than Christian - a reading of James Carroll's "Constantine's Sword" recommended.)

One of the forgotten side notes of history was UN 181 of November 1947 that created the state of Israel after the UK abandoned the Mandate of Palestine - after years of terrorist attacks against the British there, viz. the Irgun, Stern Gang etc. (Begin, after Deir Yassin, proudly proclaimed himself "the world's number one terrorist.") Immediately after the passage of 181, both Ben-Gurion and Begin flatly rejected the UN borders and said Israel would fight for Eretz Israel - "all of it." While "Greater Israel" is now loosely spoken of as the territory "from the Nile to the Euphrates," Herzl in Diaries had a map of Eretz Israel with the following boundaries: Start at Alexandria and go down the Nile about 400 miles. The boundary then goes north east through Saudi Arabia ending at the Persian Gulf at Kuwait, then up the Euphrates, then another line to the Med at the southern Turkish border, then down to Alexandria. Hence we have: Eastern Egypt (indluding half of Cairo), the northern half of SA, Kuwait, about a third of Iraq, most of Syria, all of Jordan, all of Lebanon. The Arabs didn't buy into this vision in 1947, hence the 1948 War. Memmel sees the problem as "the refusal of the militants to live with Israel." Perhaps the other way around: Gaza is the world's largest outdoor prison camp, and immediately after Sharon's settler withdrawal (done for purely economic motives as it was costing about $3 billion a year to maintain the military in the area for the benefit of 7,000 settlers)an economic seige was launched - crossing points closed (Karni)and the winter crop harvest left to rot in situ. Israel was putting the economic screws on Gaza before Hamas was elected. As for the Palestinians in the West Bank, like living a Kafkaesque nightmare. Read Jeff Halper's (Ben Gurion University) "Matrix of Control." The "Palestinians in Jordan are treated worse then in Israel" [?] For sure.

You don't really want one of us to bite on this, do you? Maybe tomorrow.
I personally think TOD is not the place for this history debate. People who want to explore can go here

There is no crude oil in Israel. (Just olive oil.)
There is no crude oil in Gaza.   (Just let-not-live oil.)
There is no crude oil in Lebanon.

The I-P conflict is a red herring just as is the Israeli-Hezbollah conflict. It has nothing to do with supplying the global population with sufficient quantities of crude to satiate market "demands". It has everything to do with making up irrational excuses about above-ground externalities.

The Arab-Israel conflict seems quite relevant to oil concerns.  As I recall, it was US support for Israel in an Arab-Israel war that triggered the Arab oil embargo back in '73.

Antoinetta III

it was US support for Israel ... that triggered the Arab oil embargo
Yeah right.
And the members of the OPEC cartel went crying boo hoo all the way to the bank because that horrid friendship between USA and the democratic z-word people had forced the peace-loving, free-market loving members of OPEC into the dreadful position of constraining supply and forcing prices higher even though their belief in free markets is almost religous like. Yes, I think I too can almost remember it that way.
I'm sure the Gaza strip is a miserable place to live. A news show last night said it was the most densely populated place on earth. Which makes me wonder why more Palestinians don't emigrate to other Arab countries.

When I was in Israel years ago I saw a guy wearing a tshirt that said," Don't ask a Jew why we don't trade land for peace,,ask an American indian."

And of course a Palestinian is wearing a comparable shirt ...
Hence the current dilemna,,
And of course, a Mexican can be wearing the same kind of T-Shirt if residing in Texas or California.

The issue of one people having a right to exclude another from being in a certain territory is going to get more poigniant as our oceans continue to rise, our costal lands recede and our resources run out. Millions of refuges from environmental and resource reduction will be looking for new places to call home. What would Jesus do? What would Mohammed do? Interesting questions to ponder over.

Hundreds of thousands of Arab Muslims live in Israel with full citizenship rights under the rule of law.

How many Jews live in neighboring countries as full citizens under the rule of law?

Far, far more Jews were expelled from Arab countries during the past fifty years than vice versa.

Please check the facts.

I am insulted.
It is a well known fact that Syrians openly let Jews hang around in their midst. Please Check your history.
About 350 Jews still live in Syria.

Do you know why?

Do you have the faintest idea how many Jews lived in Syria in 1900.

Please do your homework.

BTW, do you know why no Jews now live in Hebron?

I should have put a "smiley" on my reply. Sorry.
That 350 number seems a bit high. No. Tell me how you come to that large of a number.
Most Syrian Jews have nominally converted to Islam to stay alive and keep property. Behind closed curtains, their children still spin the dreidel.
Wouldn't the shreds of latka between their teeth and the apple sauce breath given them away? :-0

Also, they might be a bit too chubby and cheery during Ramadam.

As usual, your statements are the opposite of what would be accurate.
I always get goosepimps when I watch Kosh say that.