DrumBeat: July 18, 2006

[Update by Leanan on 07/18/06 at 9:37 AM EDT]

Sweltering heat across the U.S. leads to record-setting energy use from New York to California.

In New York, power outages stalled trains yesterday. They are running on reduced service today. LaGuardia Airport suffered a power outage last night.

Oil spike: a surmountable challenge?

The politics of the Middle East are so incendiary that energy analysts are not sure how high prices will rise.

The Oil Frontier:

Don't expect the scarcity of fossil fuels to drive us toward alternative energy sources anytime soon: we're getting smarter about finding and extracting oil.

Ford first to offer clean-burning hydrogen vehicles

Senator to introduce landmark bill cutting fossil fuel emissions

Repair of post-Katrina wetlands may hinge on oil

U.K.: The new commuter belt

Fed up with over-priced cities and overcrowded trains? The new breed of commuters are going to fly into work from their homes in Spain and eastern Europe, claims a trendspotting report.

The Big Question: Was the break-up of the railways such a disaster that it needs to be reversed?

Plan? What plan? Alberta's energy future:

It's only 16 pages long and hasn't yet been shared with the public, but Alberta's Integrated Energy Strategy, if adopted as currently drafted, could eventually leave a hefty fossil-fuel footprint on every Canadian business.

World Bank Reaches Pact With Chad Over Use of Oil Profits

Anyone see T. Boone Pickens on ABC last night or early this morning on WNN?  Seems he's pretty convinced that the peak is here.
Mr. Pickens was a "Peaker" before I showed him some HL plots last year, but at his request I spent a couple of hours last year briefing his staff on the technique.
Didn't sound to me like he was a "hard sell" on peaking.  It was just a matter of when.  

The thing that was striking, or at least what I remember about it (it was about 4 AM EDT after all), was that he was making the point that ~85 million BPD (and maybe 86 million by the 4th quarter) is the maxiumum amout we will likely ever be able to achieve no matter what the demand is. That it is "sooner" than other experts have predicted didn't seem to be a surprise to him.

( Sidebar: By definition the peak, the summit.  Enjoy the view because it's downhill in every direction from here.)

And demand/supply imbalances will raise the price until the demand pressure subsides.  But it won't change the maximum.  

(Those of us whom have been following this for more than a few years don't find any of this surprising. My own sense of the peak, up to 2004, was that the peak would occur in early to mid 2007.  In the meantime, it looked to me that the Bush Administration was hoping that it would occur in the 2009-2010 timeframe, making it SEP.  Somewhere in late 2003/early 2004, based upon the data I was watching from the GOM and elsewhere, I became convinced that somewhere in the second quarter of 2006, we would "summit."  Have we?  I don't know but it sure is looking like it.)

Pickens also admitted he was wrong in the past about the oil sands in Alberta and is now heavily invested in them (he made the point that he's invested with his own money, and invested a few other things).  

He has no plans to retire.  

Hey, that'd be a good bumper sticker, or T-shirt.  "Peak Oil:  Enjoy the view because it's downhill in every direction from here."
Thanks for the T-shirt idea!
Want to take a peek at what the rest of the decade has in store for the world's automakers?

Here's what it looks like: The winners, maintaining their momentum, are Toyota and Nissan. The Koreans have a hit a dry patch and Honda is unexpectedly barren.

But the big losers - no surprises here - are General Motors and, bringing up the rear, Ford. By the end of the decade, the market share of Ford, currently number two in the U.S., could fall below both Chrysler and Toyota.


Eco-consciousness appears to be hitting the mainstream. For years, it was only the truly committed, the painfully hip and the guiltily ashamed who were willing to stand up in public and say they were willing to do something for the environment.

Now environmentalism has gone way beyond the sandal-ista crowd. We just may be entering a time when everyone from average individuals to giant corporations to politicians of all ideologies agree that the evidence of environmental degradation is so overwhelming that it's finally time to act.


This is a column about poop: cow manure that can be turned into electricity, "green" baby diapers that can be put in the toilet and waterless urinals that don't flush.

Hold your nose if you must, but it turns out that there's money to be made in finding ways to dispose of waste in ways that are cleaner and better for the planet.


Is this CNN or Treehugger?

Doesn't look to me like honda has hit a dry spell. Their new accord diesel rocks! This is from a couple months ago.Remember, this is a real car, 5 seater.
Honda's new Accord 2.2 i-CTDi Sport has this week set no fewer than 19 world speed records and achieved 3.07 litres / 100 km (92 imperial mpg, ~76.6 US mpg) fuel economy to boot. British racing driver Robin Liddell and freelance journalist Iain Robertson were part of the European record-setting team.

Amongst the speed records set, which were all achieved in Production Car Class B (2000 - 2500 cc), were 133.04 mph (1 mile flying start), 84.25 mph (1 mile standing start) and an average speed of 130.38 mph over a 24-hour endurance period. These records were all set at Papenburg high-speed oval test track in north-west Germany on 1 and 2 May, and are all subject to FIA ratification.

Two production cars, randomly selected by FIA officials, were used to undertake the speed records, and apart from the fitting of roll-cages, racing harnesses and radio equipment for track-to-pits communication, no other modifications were made to the cars.

Following the speed record attempts, the same two cars were then driven 419 miles from Papenburg test track to Wiesbaden, near Frankfurt in order to complete the fuel economy run. The route comprised of a mixture of motorway and non-motorway driving, during which one of the Accords achieved a staggering 92 imperial mpg (US mpg=~76.6) average.

Way to go, Honda!

I've got a 1991 Accord EX wagon with 275K miles and still going strong, and a 1997 Accord EX wagon that hasn't even been broken in yet at 116K miles.


Yeah, I would love to be able to buy the Accord diesel in the US. Rumor has is that Honda is bringing diesels here in about 2 more years for use in their trucks, SUVS and vans. The cars will stick with hybrid drivetrains. Supposedly, Honda has also said that they will meet all 50 states most stringent emissions requirements, and won't need the urea injection that  Mercedes will be using. I hope its true!
Looks like the dieselheads are making a point that diesels are not slow (unfortunately they didn't mention the fuel economy at 140 mph).  And in the 2005 Tour de Sol, a VW Passat on biodiesel averaged 77 mpg, best of the non-Honda Insight production cars (would probably have done a bit better with petrodiesel, but at 77 mpg, why bother)
Energy Secretary Bodman was making the rounds of the cable news shows this morning saying that world oil supply can't meed demand, at least for one to two years.

I sometimes listen to CNBC on XM Radio in the car and at work.   So far this morning, I have heard two summaries of Bodman's remarks by CNBC's energy reporter, Melissa Frances.  

In the first report, she said that Bodman was predicting that Iraqi production would be up to 3 mbpd by the end of the year.

In the second report, she played a clip of Bodman saying that the US economy was very resilient in the face of rising oil prices.  

So far, there was not one single reference to the United States Energy Secretary saying that world oil supply cannot meed demand.

In my opinion, this is a classic case--at least so far--of the Main Stream Media in action, as described in my "Iron Triangle" thesis.  (see link below)



Another talking head last night on Bloomberg said 18 months of constricted supply and at that point more oil and better transportation of it will come on line.

Clearly no consensus on this point.

"Clearly no consensus on this point"

Last year, the Texas State Geologist said that Texas may not be able to match its 1972 peak production, but with the use of improved technology, Texas can significantly increase its oil production.

So, I guess that one could argue that there is no "clear consensus" on the Texas oil production decline.

Texas oil production is now down close to 75% from its 1972 peak, and Texas has never shown a year over year increase in production over the past 33 years--despite a frantic drilling program after its initial decline.

Texas, the Lower 48, Total US, Russia and the North Sea have all peaked in the vicinity of 50% of Qt.  None of these regions--as in zero, nada, null set--have shown production higher than its peak in the vicinity of 50% of Qt.  

The latest EIA data show that world oil production and oil production from the top four net oil exporters are all down since December.

It's a virtual certainty that the world's four largest producing oil fields are all declining.

What part of this is not clear?

To argue in favor of rising oil production, you have to ignore the following:  (1)  It has never happened in the regions cited and (2)  currently world oil production is falling.  

So, you can argue in favor of rising oil production, but it is contradicted by historical models and by recent data.  

To top it all off, the Energy Secretary says we can't meed demand.  Do you think that this is just a coincidence as we cross the 50% of Qt mark, and start showing a decline?

"To argue in favor of rising oil production, you have to ignore the following:  (1)  It has never happened in the regions cited and (2)  currently world oil production is falling."

Should read:  

"To argue in favor of rising oil production (beyond the peak level in the vicinity of 50% of Qt), you have to ignore the following:  (1)  It has never happened in the regions cited and (2)  currently world oil production is falling."

Russian Oil Production, courtesy of Khebab

1977      9.95
1978      10.49
1979      10.88
1980      11.17
1981      11.37
1982      11.48
1983      11.42
1984      11.17
1985      11.00
1986      11.18
1987       11.48
1988      11.56
1989      11.23
1990      10.44
1991          9.32
1993           6.73

If you round up to 11 mbpd, the above data table shows 11 years with production of about 11 mbpd--five years on both sides of 1984.  

Khebab's HL plot shows 1984 to be the 50% of Qt mark.

Khebab took only the production data through 1984 to generate a predicted production profile throuth 2004.  The actual Russian post-1984 cumulative production was 95% of what the HL model predicted--again based only on production data through 1984.  

The same exercise for the Lower 48 showed that post-1970 production was 99% of what the HL model predicted.

(I'm practicing for the Peak Oil debate tonight--interesting timing given Bodman's remarks.)


You make some good points. I am certainly no expert in this field, but I do my homework and have taken the Danish outlook on this that named 2020, granted a few years back, as the true peak point.

We certainly do not argue that it will occur, and relatively soon.

This off Charles Schwab site (and yes, I note the doublespeak in this statement):

Kuwait To Clarify Its Oil Reserves Within Days -Min -2-

1:42 PM EDT July 18, 2006

Sheikh Ali also threw his weight behind the long-delayed $8.5 billion development of its northern-most oilfields, Project Kuwait, which has attracted consortia led by BP PLC (BP), Chevron Corp. (CVX), and ExxonMobil Corp. (XOM).
Kuwait wants to double oil production to about 900,000 barrels a day from four northern fields. This target is a key plank in Kuwait's quest to boost its total production capacity from 2.7 million barrels a day currently to 4 million barrels a day by 2020.
But lawmakers are concerned how increased tax revenues - which currently make-up about two-fifths of the overall economy - from future production will be used.
Sheikh Ali said in the statement: "I'm confident that this strategy was only approved for the interest of Kuwait, and there is nothing" proposed in the plan that undermines Kuwait.
He said upgrading capacity in the north "does not mean an exhaustion of these fields, but develops the efficiency of the fields."
Separately, the minister said oil producers weren't influencing current oil prices.
The Organization of Petroleum Exporting Countries, he added "will not save any effort to use its available mechanisms to achieve" a balance in the oil market.

-By Adam Smallman, Dow Jones Newswires; +44 (0) 20 7842 9343; adam.smallman@dowjones.com

how is it that the MAX amount extracted in year 88 is not the earmark for the start of a decline, since no other years can produce as much?
1988 would be the precise peak, but the differences between the years is so small that I think a valid way to look at Russia is to pick the peak as the midpoint of the 11 mbpd years.
Hey, it worked for smoking and the tobacco companies, it worked for energy companies and global warming.  Why not here in peak oil country?

Remember the old adage about how something can't become clear whenever a persons livelihood depends upon it not ever becoming clear.  

WestTexas -- not a day goes by that I don't think of the "Iron Triangle."

Is there a way you -- or TOD -- could get an article published about this?

I guess in Adbusters such an article would be preaching to the choir, but in Harpers it might reach a few ears for whom it would cause creative disequilibrium, at the very least.  Where else might such an article be published?

Sooner or later, even the MSM will crack as a groundswell of awakening people make changes in spite of the Iron Triangle....I think....I hope....

By my count, CNBC just mentioned Bodman for the third time, without mentioning the supply/demand imbalance comment.  This time, it was that Bodman was blaming oil traders for the run up in oil prices.  This is almost Orwellian.
This is rich.  CNBC just announced that they are bringing in--drumroll please--Daniel Yergin to tell them what is really going on.  
He's "just a guy," we should give him a break ;-)
I missed Yergin, but so far CNBC is pretending that Bodman didn't say we had a supply/demand imbalance, but I thinik that the oil traders were listening.
So, it would seem that TPTB are being careful not to tell "Joe Six" that we are having an oil supply problem. That could set off a chain of events beyond their control.  Instead, we "clue in" those that set the price of oil, they raise the price of oil, and -- tahdah!!! -- "The Magic Market" takes it from there.

I've long suspected that perhaps the single most traumatic event to occur in modern industrial society will be the dawning upon the great masses of people that the world oil supply is starting to contract.  I have absolutely no doubt that TPTB want to push that day as far into the future as they possibly can.

Oh, they like Yergin, though the last time I saw him he wasn't his usual "more oil is just around the corner" self.  He'll be okay as long as nobody brings up his record of predictions and how well they've played out.  

As for the futures comment that Bodman made, its and easy argument to make because it makes an easy target.  But futures traders don't by futures contracts to lose money and many (looking at the futures chain out 6-12 months) obviously think the only direction that the price of oil is going is up.  

has us
Orwell just didn't make up the stuff he wrote about.  It was more an extrapolation.  TPTB, who make scads of money with things the way they are, are going to resist any changes at all until they see the peasants coming over the hill with pitchforks and torches.
TPTB will hire other peasants to kill the peasants coming over the hill with pitchforks. This post-peak career path will be one of the best, with generous benefits.
Be All You Can Be.
The Few, The Proud, The Rednecks with a job.
That's a funny joke.
You should tell it in the Intensive Care Unit of your nearest  VA hospital.
I'm sure it would cheer up all of the amputees recently back from Iraq.
Yes, it'll go down well there, especially if he adds what a big Israel fan he is.
Some of my multiple-amputee veteran friends work as recruiting sergeants--and work with great success.
I know one doctor who works at the VA, his speciality is vets who have lost use of their arms/legs, and guess what? he is a bigger Israel fan than me. He is also very sympathetic to the plight of all patients who have lost mobility in one form or another. (There are a lot of complications that come into play when you don't move around much --bed sores to begin with).
P.S. I'm proud to be an Israel fan.
Come out of your Nzi-word bunker and tell us all how you are proud to be a fan of Hell's Ebola.

p.p.s. Was watching Chris Matthews Hardball show on MSNBC tonight (7/18/06). He asked  the Syrian emassador: "How small does Israel have to get before you people leave her in peace?"

The Syrian never answered the question-- a fact that should not escape anyone but the dumbest and most virulently anti-semetic of viewers.

Instead he went into the typical staccato sleeze response: Buh buh buh but why don't you ask me how Israel is bombing our women and children? Buh buh buh but why don't you ask me how Israel smells like my mother's behind? ....

Then Chris Matthews asked the Syrian emassador: "Well what about the Golan Heights? Syrians used that to shoot at innocent Israeli farmers. I've been up there. I've seen the Syrian pillboxes." Answer: "Buh buh buh but this is a typical American delusion. You did not see what you saw. It is only beautiful valleys and pastures and indents in the ground where Syrian farmers feed their sheep. There are no "Heights"."

The 7/18 transcripts should be up soon at this location for 24 hours.

Answer: "Buh buh buh but this is a typical American delusion. You did not see what you saw."


"The Syrian never answered the question." Maybe that's because  he was smekhovo.

Myth: "For nearly 20 years, Syrian troops sat up here and fired down at Ein Gev, at farmers in the fields, at children at play, at people leading peaceful lives. They might call it war against the 'Zionist entity,' but I'd call it murder, the murder of people who only want to live in peace."

--Golan Heights Jewish settler Joel Sheinfeld, quoted in the Los Angeles Times, Jan. 4, 1993

Fact: "This oft-repeated claim about Syrian shelling ignores the repeated attacks by Israeli kibbutzniks and border police against Palestinian and Syrian villagers who were indigenous to the Syrian-Israeli demilitarized zone, which led to the shelling in question. The demilitarized zone, set up after the 1947-48 war, consists of three small patches of land along the then Syrian-Israeli border--a total of 66.5 square kilometers--populated by both Arab and Israeli villagers. According to the General Armistice Agreement of 1949, sovereignty over this area was to be determined at a later date, in the context of an overall peace agreement.

"Israel had failed to conquer these areas during the war and was determined to do so gradually in the years that followed, starting as early as 1951. As a result, the U.N. Truce Supervision Organization, assigned to monitor the armistice, recorded thousands of incidents of major and minor clashes across the Syrian-Israeli border, most of which stemmed from Israeli encroachments onto Arab-owned village lands.

"The typical incident involved small groups of Israeli kibbutzniks--armed with weapons illegally brought into the demilitarized zone--moving their tractors or other equipment onto Arab-owned farmlands to use these lands for their own agricultural projects. Arab farmers . . . resisted by firing at whoever or whatever was trespassing on their property, followed by return fire from the kibbutzniks, joined by Israeli border police, on an even larger scale.

"The Syrians, atop the Golan Heights, would then come to the aid of the beleaguered Arab villagers by shelling in the direction of the kibbutz from which the original attack came. This would be followed by Israeli artillery fire and air bombardments, often inside Syria proper. Specific, major incidents include, but are by no means limited to, the 1951 expulsion by Israeli forces of some 2,000 Arab civilians from three villages in the demilitarized zone, never to return, and the 1960 Israeli occupation of the entire village of Tawafiq inside the zone, which soldiers could only enter after cutting through the many layers of barbed wire the villagers had erected to protect their homes and farmland. In this case, it was only Syrian shelling from the Golan Heights that saved Tawafiq; and it was that shelling that finally forced Israeli troops to withdraw from the community.

"These events, and many more like them, have been extensively documented by four consecutive UNTSO chiefs of staff who were responsible for keeping peace and reporting armistice violations on both sides . . . To put this period (1949-1967) in its proper historical perspective, then, what is now termed by Israel's advocates as 'Syrian shelling from the Golan Heights' represents only a portion of what was recorded by U.N. observers at the time as 'mutual exchanges of fire on both sides,' caused mainly by Israel's campaign to gradually annex Arab-owned land inside the demilitarized zone. . .

"It is clear from the historical record that the phrase 'Syrian shelling from the Golan Heights' did not even exist at the time and does not appear in U.N. records. That is because the point of origin--the Golan-- was in itself not relevant, and because the real problem of the time was Israeli land encroachment, of which the Syrian responses were but a result. The phrase, in fact, came into use only after the 1967 war, by people seeking to justify Israel's retention of that particular territory."

--Washington Report on Middle East Affairs

What would you have us to tell them?  That they gave up their legs so that Joe and Josephine Sixpack could take their long-awaited RV tour of the Desert Southwest this summer?  So that Tony Testosterone could afford to spend Saturday night burning rubber and gasoline for the babes down at the Burger Queen?  So that the ESPN/Pennzoil Peckerhead 500 would go on as scheduled this Sunday?

You tell them.

They shouldn't have to hire too many though. Modern weaponry are great labor-saving devices. :-)
Preaching to the choir is what Adbusters does best!
I asked a question about PO/GW-aware investment & finances on yesterday's thread (or how to best safeguard a recent small inheritance).  There was an interesting (to me) discussion on gold. Also advice to stockpile pre-1982 pennies, buy long-term oil contracts, and invest in hydroelectric utilities worldwide, among other solid bites of posters' personal wisdom.  I do appreciate it, really.  Unfortunately, it leaves me at about the same place I started, since my lack of knowledge about markets and investing is what prompted my question in the first place.  While I certainly can't expect to be helped with that by you dear readers, I am wondering if anyone might be able to guide me in the general direction of investment strategy, or, ahem, how to formulate such a strategy.  I find that financial planners by profession are usually irrationally optimistic and hence present a glazed-over stare when told about peak resources and the deficiencies of growth-driven economics.  Someone recommended The Complete Investor and Stephen Leeb's books.  Do others confer?  Any more advice?  Thanks in advance!
I have an MBA in Finance. My return on investment in 1962 (a year of stock market decline) was 29%, as described in a witty post of some months ago. I have been financially comfortable for a long time.

My advice:
1. Read Benjamin Graham's, "The Intelligent Investor."
Then read it again. I have read it six times, as well as the much more formidable Graham and Dodd book twice.

  1. Put your money mostly in Vanguard Inflation Protected Securities, a zero risk mutual fund. Just for fun, plot this zero risk fund against the Standard and Poors 500 for perfomance. Very enlightening.
  2. Follow your bliss.
I agree about the Ben Graham books. But the two most important concepts to come from the Ben Graham school are "margin of safety" from Graham, and the competitive "moat" of Warren Buffett. North American oil and gas companies seem to have quite a bit of both-- there is a significant margin of safety, since most companies are priced as if oil were at $60/bbl or less (see Kurt Wulff and his mcdep ratio), and since the moat of oil and natural gas is perhaps the largest of any in the business world (see the Hirsch report). Right now, the gas companies and royalty trusts seemed to be priced the best. I don't trust TIPS, because the government's inflation statistics are outside of market control. Anyone who believes in peak oil, and doesn't have sixty percent or more of his assets in oil and gas, isn't putting his money where his mouth is.

I'm sure that there will be lots of people telling me that my oil and gas stocks are going to expropriated soon, but I think that there will be plenty of warning about that-- PO is not even in the MSM yet, for crying out loud. In the meantime, my annual returns are running 65% plus, for four years running.

Buffett acknowledges that he got the "moat" idea from Ben Graham.

BTW, back in 1961, I bought a few hundred shares of See's Candy shops because I liked their product and loved their stores and seduced women with their chocolate. Some years later Buffett bought up See's for his Berkshire Hathaway Co.

Always invest in what you know.

Hm, wonder what a Class A share of Berkshire Hathaway that came out at $12 is going for today?

Do you believe the next 30 years will provide the same investment opportunities as the last 30 has provided you?

I expect Don's American Cafe, Tavern and Trading post to become the start of the first post-Collapse business empire.

For more, see my series of novels:

"The Adventures of C.C. Eggum"
and the sequel,
"Caesar and Kari"

soon to be coming to a website near you.

I have an MBA in Finance. My return on investment in 1962 (a year of stock market decline) was 29%, as described in a witty post of some months ago.

1962? Man, that was 4 years before I was even born.

I will add a bit to the advice that has been given. I have been investing in health care and biotech for many years. You can make a lot of money off of the Baby Boomer demographic, and they are going to be spending a lot of money on health care. Those investments have done very well.

I also think energy companies are a good place to put your money, but the market perpetually undervalues oil company stocks. But with the supply/demand imbalance, as well as the possibility of an oil peak looming, oil companies are still poised to make a lot of money going forward. That is until the government succumbs to the public outcry and nationalizes the oil companies. ;)

In my opinion oil companies are still being valued as cyclical industries, but it is not clear to me that this paradigm still exists. The cyclical nature is because during good times, refiners overbuild refining capacity and producers overbuild production capacity. I don't think this scenario is even plausible any more, which would mean oil companies won't be cyclical going forward.



Pretty good advice, coming from a guy with no grey hair;-)
A few things to think about when investing in oil stocks:

  1. What is the decline of projected production like for that oil company? You want something with LONG LIFE reserves of oil and/or gas.

  2. How big are they into refining? presumably if oil supplies decline there will be excess refining capacity - so this will be a bad place to invest your money.

  3. Where is the oil that they produce coming from, if it Nigeria, Iraq, Venezuela and the Gulf of Mexico you might think twice.

  4. How vulnerable is the company to cost increases?

  5. Has the company hedged against the oil price - i.e. do you get the benefit of higher prices?

Also be aware that when TSHTF the whole market might go down. If inflation pushes rates materially higher there likely won't be anywhere to hide in the share markets.


I hope I am not breaking any rules by asking about a specific stock. (FNG here)
What do you guys think about BPT? Prudhoe Bay Trust
I do not have any experience with oil trusts and would like to know more about them in general and BPT specifically.
I appreciate any info you can share.
Vanguard Inflation-Protected Securities are down 1.6% over the last year.  Does inflation hurt the performance of these?  If so, wouldn't they be a bad place to put your money with PO on the way?
Yearly fluctuations are meaningless noise.

Check back for the five-year overall rate of return.

Also, have your accountant do some tax numbers for you.

You forgot number 4...

4.  Engage in great gobs of prodigious whoopie.

You forgot number 4...

4. Engage in great gobs of prodigious whoopie.

Don, I may take up your offer of a sailing lesson some time.  How do I get from Aberdeen to Minnesota?
Go to Mapquest.

My e-mail is sunfishsailor@hotmail.com

I have a green canoe and a Viking spirit.
I prefer a "heads I win (if not hugely), tails I don't lose"  approach.

Hydroelectric utilities pay decent returns today, and likely will tomorrow.  Each has it's own risks (drought being one).  Each will not deplete in your lifetime.  Each indivisual company has it's own risks as well + currency & interest rate risk.

More stock buyers > higher stock price > more investment capital available today > more hydroschemes built

Some specific companies to look at:

Brazil: CIG & CPL on NYSE (Buy Brazil on dramatic downticks.  Good buy was when Finance Minister was visiting bordellos and someone else was picking up the tab, another recently when 3rd World equities were abandoned in "flight to quality")

Canada: (ranked by quality IMHO) Innergex, Great Lakes Hydro, Canadian Hydro Development (no dividend), Algonquin (one other that I do not own, B???)

New Zealand: Trustpower

Austria: Verbund

Switzerland: MotoColumbus and many others

Here is a simple solution:

Go to http://www.apmex.com

I would buy both gold and silver. If you are a doomer, buy more silver coins (not rounds) otherwise, buy larger bars.

Get yourself a safety deposit box at the bank.

Dig a whole out in the woods somewhere.

Keep a bit in your mattress in case the banks get weird.

Why not rounds?
I recommend "bricks" of 500 rounds of .22 ammo plus other popular calibers such as
.45 Colt automatic
.223 (also known as 5.56 mm)

and all shotgun shells.

I like single-shot weapons. To date, I've never needed more than a single shot.

"Gun Control" means using two hands.

Rounds usually have a higher premium [higher cost per .999 ounce.] In addition, they are not always recognized as being of stated purity. Bars from Englehard or another well recognized supplier will usually be accepted without assay.

90 percent U.S. junk silver in bag lots usually sells at very near spot. The 40 percent clad Kennedy halves often trade at a discount to metal content. There is no conterfeiting that I am aware of ... and whatever else Uncle Sam is guilty of he delivered the stated purity.

Are you not worried that deep ocean mining in volcanic seabed ridges will not greatly increase the supply of gold and sink prices?
The Four Pillars of Investing by William Bernstein is the best book on investing money that I've come across. Your Money or Your Life by Joe Dominguez is the best book on spending money that I've come across (with some wackiness thrown in).

In order, I've chosen to invest in 1) getting a cache of supplies together in case something does go seriously wrong (not necessarily PO related), 2) personally becoming more energy-independant, 3) getting rid of debt, and 4) spreading our investments as widely as possible.

I thought that 1 was silly, but since it's cheap if you don't buy a bunch of guns and ammo, I swallowed my pride and did it anyway. 2 is slowly ongoing (started with dusting off my bike for commuting and recently saw us selling our suburban city property, moving to a small town, and buying a large rural property within cycling distance of town). 3 is straight-forward. 4 boils down to: Buy the market, some bonds, some commodities too, and rebalance when necessary.

Presumably, you have the resources for 1, 2, and 3. With those covered you could accomplish 4 by buying half-a-dozen ETFs and checking up on them whenever there are big moves in the markets.

That's good advice from Don about reading The Intelligent Investor, by Benjamin Graham. This teaches a style of investing known as "value investing," which involves "moats" and "margins of safety," as noted.  Value investors often invest in boring-sounding companies and avoid glamorous tech issues (there are exceptions, as always).

Along these lines you might consider buying a few shares of Berkshire Hathaway class B stock (BRK-B on http://finance.yahoo.com - about $3000 per share today), as well as reading anything you can find written by Warren Buffet (see http://www.berkshirehathaway.com).

In general I would encourage you to read as much as you can and try not to make hasty investment decisions.  If you are going to hire an advisor, make sure to do thorough due diligence, including understanding excactly how he or she gets paid.  A 1% to 1.5% fee on assets under management is a typical structure, but make sure you are not also paying mutual fund overheads.

Back in the day when Buffett bought See's Candy Shops, one share of See's was worth, if memory serves, about the same as one share of Berkshire-Hathaway Class A.

I like the voting rights that go with Class A stock, but Class B is fine too.

Also, at the annual meeting, you will encounter thousands of the nicest millionaires on the planet. Many are former janitors, secretaries, neighbors of Buffett from fifty years ago, furniture store clerks, etc.

I do believe Buffett has created more millionaires than has Bill Gates. More than ten thousand, anyway.

A week or so ago Buffet was on the Charlie Rose show for several nights running, including some reruns of previous interviews. Charlie Rose's people had tracked down one of Buffet's neighbors whom Buffet had tried to solicit as a client for his investment partnership, even before the days of Berkshire Hathaway. The guy said no, figuring Buffet was just a dreamer who stayed at home and didn't seem to be doing much of anything.  I forget the exact numbers, but if he had put in something like $10,000, he would have about $400 million today.

Class A shares are nice if you can afford them: they are changing hands for over $90,000 per share today.  Buffet doesn't believe in stock splits.

If I had a windfall of $20k I'd bury a 5000 gallon tank in my backyard with a hand crank pump hidden in my garage. Fill the tank with diesel. Stating that the diesel is not for road use means you don't pay as much tax. If TSHTF you could barter fuel for food or other essentials. If not you could just use it yourself or sell at considerable profit several years from now.
Be sure to use special additives to prevent deterioration.

Ethanol, on the other hand, is stable. Expected life of a bottle of Everclear, maybe 50,000 years if kept underground. If I'm mistaken, come back in 50,000 years and tell me how it tastes worse then than now.

With ethanol you can do so many neat things: Rocket fuel, car fuel, napalm substitutes for flame throwers, and you can even drink it if it is not denatured.

An in regard to women, I believe it was Ogden Nash who wrote:

"Candy is dandy, but liquor is quicker."

Do you guys have tea-lights? Squat candles in a foil wrap. 2p each in bulk, burn 1hr+. In storage, they should last 'forever'. If you are lucky to find the windproof lanterns that house them, bury as many tea-lights as you need for a lifetime. You can always choose to forego the grid for lighting in the future. They should trade very well [batteries have a shelf life].
I have seen several posters here on TOD mention hydro-electric around the world as potentially a good investment.  Are such companies publicly traded?  If so, where does one look?  Thanks.
Posted elsewhere on this thread:

Some specific companies to look at:

Brazil: CIG & CPL on NYSE (Buy Brazil on dramatic downticks.  Good buy was when Finance Minister was visiting bordellos and someone else was picking up the tab, another recently when 3rd World equities were abandoned in "flight to quality")

Canada: (ranked by quality IMHO) Innergex, Great Lakes Hydro, Canadian Hydro Development (no dividend), Algonquin (one other that I do not own, B???)

New Zealand: Trustpower

Austria: Verbund

Switzerland: MotoColumbus and many others
Any suggestions for others ?  Brookfield Assets in Canada has a good hydro portfolio (including half of Great Lakes) BUT lots of offices & mining (I think they sold timber interests) as well.

Leanan, the article you linked by Andrew Nikoforuk on Alberta's energy plan is a shocker for two reasons.  The first is that for the first time in my memory Peak Oil got a mention in a mainstream Canadian business magazine.  And not just a mention the plan is criticized for not specifically addressing it.  Secondly, it is obvious that Canada is determined not only to drop the ball on PO/GW but to kick it as far away as possible.

If this "plan" is the actual blueprint for Canadian energy development, oil sands investors are going to make money, but it will be frankly catastrophic for Canada and the world.  The government of Alberta seems to be suffering from a severe case of recto-cranial inversion.

What's going on in Lebanon is very sad! 7 canadians got killed in south Lebanon, the entire family of Hassan El-Akhras got killed last sunday (four kids from one to 8 years old, his wife and other family members). It happens that I know the guy, he owns a Pharmacy near my place.

Lebanese casualties of the bus bombing. WARNING: very graphic photos!

Talk about news hitting home.

I have a feeling that the news is going to increasingly impact all of us.  

Using some very special family connections of mine, I was able to get one Lebanese family out. You do what you can. That is all anybody can do.
I don't have the link, but the following story was sent to me this morning:

Kan. Crops Wither Under Stifling Heat Wave

Source: Associated Press/AP Online
Publication date: 2006-07-18


WICHITA, Kan. - Harvey Heier checked his dryland fields and watched helplessly as his corn plants withered under the unrelenting heat wave. The plants along the edge of his fields are brown.

Before the scorching temperatures hit his farm, it looked like he might have a decent corn crop thanks to scattered rains earlier in the season. But now he figures he's losing bushels off his production every day.

"It is like the death of a loved one," he said.

In Kansas, the state Agricultural Statistics Service reported that the high temperatures continued to stress row crops. Corn condition has deteriorated, with the agency rating 12 percent of the crop as poor to very poor. About 34 percent remained in fair shape, while 45 percent was rated as good and 9 percent as excellent.

The heat also has taken its toll on livestock. In rural Doniphan County in northeast Kansas, one cattleman lost 32 head of cattle in Sunday's extreme temperatures. Veterinarians are urging farmers to water pens frequently and keep their livestock under shade coverings to help farm animals beat the heat.

It was the largest loss his family has seen in the 50 years it has raised cattle, said Jerry Boos, who operates a 450-head cattle herd.

"I came out Sunday morning and there they lay," said Boos. "There's just not enough air moving and too much humidity."

The heat wave comes as farmers in many parts of the nation have been dealing with a drought. In Alabama, a drought burned up most of the state's corn before it could be harvested, and now is threatening to ruin some cotton and peanut crops.

Jim Kelly, who farms 4,000 acres of peanuts, cotton and some corn near Hartford in southeast Alabama and northwest Florida, said the only corn that appears to have survived the drought was corn that was being irrigated.


Also in Alabama --- giant yellowjacket nests bigger than a Volkswagon.
Those would add a little something to the PO disaster movie ;-)
My (revised) recommendations:

(1)  Assume your income drops by 50%;

(2)  Assume that food and energy prices go up, from here, by at least 100%;

(3)  Try to become, or work for, a producer of essential goods and services.

I saw earlier that 'core' inflation is up just 0.2 percent this month! Of course, that didn't include energy, or food, which alone was up at an annulized rate of 16.8 percent (1.4% for the month). Nothing to see here, keep moving...
Tragic. Another reason that has been cited for not putting our eggs in the corn ethanol basket.
Minnesota corn is doing fine, as is Canadian corn. In Minnesota one of our biggest complaints in rural areas is that the Canadians keep dumping cheap pork in the U.S. because they can produce feed somewhat more cheaply than many places in the U.S.

Corn grows in Alaska just fine, BTW. Plenty of water up there.

Go north, young people.

Find water.

Learn to garden, fish and hunt. Also learn how to do home canning without getting botulism.

I imagine the Canadian archipelago will be a nice place once GW really gets going. :-)
There's a lot of land that's going to have a longer growing season over the next century than it had over the last century.  Some of it has great soil and will be very productive, but for a lot of it, the soil quality isn't as good as an awful lot of land that used to be great farmland but is going to be too hot or too dry.
AFAIK one of the issues with GW is that soils are 'conditioned' by climate. i.e. if the transferr of warmer temps pushes tword rockier areas that have not been traditionaly prairie grass they may not be suitable for growing corn in large quantities. The midwest may not fair as well in this (even what is growing well today). Just one more reason large scale corn ethanol production over the long haul in the US is a blind alley.
Most TODers already understand this, but there's a new explanation of reserve growth (using a baked beans analogy) at Wolf at the Door, that I think is a useful education piece for folks trying to get a grip on the basics.
not sur if this has been discussed, but scary:

LNG Terminal for the Tar Sands?

I like the TOD(?) comment about turning gold into lead.
Added to the Alberta energy plan linked above, this is like listening to nails being pounded into a coffin.  It makes me want to scream, "Why are you burying us?  We're not dead yet in here!"  the Canadian and Albertan governments have gone insane.  To paraphrase Robert W. Service, "Clean mad for the muck called oil!"
The question is where the LNG is actually going to come from. The Russian exports on the Pacific are all marked for the Japanese and the Chinese, and Gulf natural gas is an awfully long way away. I suppose they must have a supplier in mind - Qatar, Id wager - but the Gulf isn't exactly stable territory these days.
Using LNG processed and piped through from Kitimat to fuel tar sands production while North American supply diminishes and people can't afford to pay their winter heating bills is just about the craziest thing I've heard lately. Somebody's priorities are way out of whack.
"We've had significant interest from oilsands producers," Rosemary Boulton, Kitimat's president and chief executive officer, said...
Yeah, I'll bet you have.

CNN reports:

A tropical depression has formed off the North Carolina coast. The National Hurricane Center has issued a tropical storm watch for parts of eastern North Carolina.

If it becomes a tropical storm, it will be Beryl.

Here you go, fresh from the National Hurricane Center (NOAA believes in yelling during forecasts):

WTNT32 KNHC 190233
1100 PM EDT TUE JUL 18 2006












Its just bold type, they don't follow the internet protocols. This way everything is clear and few things are misunderstood like when you use lower case and UPPER case lettering.

Remember upper case is not yelling to normal people offline, it is just a better clearer way of tpying something.

Thanks.  I have been reading those reports or 10 years, AVILA is old hand at the forecasts,  There is a group, one picks up the lead and signs his name to the forecast, every discussion and posting, they rotate on a schedule.
No I don't know the schedule but I know a lot of the names.

Avila, did the last storm of the season last year, I kinda laughed at how frustrated it all sounded by Jan when there were not supposed to be any storms that late in the year.

Well, a strike against the invisible hand came in today:

EPA: US MY2006 Light Duty Vehicle Fuel Economy Same as 2005

Wait a minute, I posted too soon.  I'm not totally sure I've got it now, but I think this is some kind of aggregate mileage for all models offered, and does not speak to what was purchased(?).
No, you had it right the first time ... it's the new vehicle fleet average, with each model weighted by the number of vehicles sold.  

And they use a harmonic average, which is the proper way to average mileage:  

i.e. 1 car  @ 40 mpg
     2 cars @ 25 mpg

Averaging arithmetically would give 30 mpg.  But you want to arithmetically average the amount of fuel used (i.e. liters per gallon) rather than the mileage.

So instead you average as 1/avg = (1/40 + 2*1/25)/(1+2), so avg = 28.6 mpg.  

Alternatively, in 200 miles, the 40 mpg car uses 5 gallons and each 25 mpg car uses 8, so combined you have 21 gallons for 600 miles = 28.6 mpg.

Certainly this reinforces the importance of improving the mileage of the worst vehicles.

Ford kicked off production of the hydrogen fueled V-10 engine today. Note that this is not a fuel cell but rather is a traditional ICE that burns hydrogen instead of gasoline. It will be first used in E-450 shuttle buses sold to fleet customers first in Florida then other locations later this year.
Yes ;-), my thoughts are in that thread ... I belive I called it "pure evil?"
I'd really like to see the overall fuel efficiency on that engine.  I looked at h2 powered IC engines in the early '70s and they were pretty bad without looking at where the hydrogen came from.  If you look at the hydrogen source its hard to imagine any value in this technology. This sounds more like the death-throes of the American auto industry, still trying to sell the sizzle instead of the steak while Honda and Toyota are focused on real cars.
Chinese growth surges in second quarter

Chinese annual growth bounded ahead to 11.3 percent in the second quarter, beating forecasts and heightening expectations of further tightening steps to restrain an economy gorging on plentiful cheap money.

The second-quarter clip appeared to be the fastest since the mid 1990s. China, now the world's fourth-largest economy, grew 10.9 percent in all of 1995 and 13.1 percent in 1994.

Of course, everywhere you read "power outage", you should think "backup generators" and "increased gas/diesel demand."  Anyone know of any figures for petroleum-based backup generation?  

Tropical depression two may be forming of the coast of the Carolinas this morning NHC Advisory.

I don't know of any figures, but in parts of Africa, where they are suffering regular "load shedding," everyone has a generator, and that's adding to the fuel shortages.  
US sees widespread record power use amid heat wave
Mon Jul 17, 2006 2:48pm ET

HOUSTON (Reuters) - Blistering temperatures from New York to Sacramento on Monday will boost power demand to record highs and strain electric resources across the United States as people try to escape the sweltering heat, according to utilities and power grid operators.

Several grid operators, including the nation's largest, the mid-Atlantic PJM, have called for consumers to conserve electricity or for utilities to hold off from any maintenance as the situation was expected to linger for several days.

Generators were expected to have sufficient supplies to avoid blackouts, the North American Electric Reliability Council said in its forecast for the summer issued in May.

But extreme weather conditions "present a significant reliability risk" to parts of the country, like Connecticut and Southern California, which have not added new generation in the past few years,

Highs of 100 degrees Fahrenheit (38 degrees Celsius) were forecast due to a dome of high pressure in the upper atmosphere has spread from the western U.S. to the central plains and northeast, said meteorologist Dennis Feltgen of the National Weather Service.

"It's preventing any cooling air from moving in or out, and as a result, we are cooking," Feltgen said.

The Northeast may see some relief by mid-week, but the heat wave will continue across much of the central and southern plains, Feltgen said.

"Much of the country is going to see 90-plus temperatures and triple-digits," he said

Grid operators in the New York, the mid-Atlantic, Midwest, Texas and California expect to break last year's all-time power-use records on Monday afternoon as residents and businesses crank up air conditioners.

The heat also strains transmission lines and generating facilities so grid operators are watching operations closely.

PJM Interconnection, asked customers in Pennsylvania, Maryland and New Jersey to conserve energy for the next few days as demand could reach an all-time high of 138,000 megawatts, breaking the current record of 133,763 MW set on July 26, 2005.

PJM, which runs the grid for more than 51 million people, issued the conservation request as a "prudent precaution."

"Conserving electricity will help ensure adequate power supplies," the grid operator said in a release.

The New York Independent System Operator, whose lines serve 19 million people, forecast peak demand would hit 33,000 MW, breaking its all-time high of 32,075 MW on July 26.

On Sunday, NYISO told customers it might activate the emergency demand response programs on Monday to limit power consumption during the hottest part of the day.

The Midwest Independent Transmission System Operator, which operates in 15 states, forecast demand of 115,400 MW, above the 2005 peak of 112,197 MW, while in California, the state grid operator forecast demand to rise to a record of 47,050 MW, up from 45,431 MW.

Texas was expected to set a fourth record for the month with demand to exceed 63,000 MW, topping the 2005 all-time peak of 60,274 MW
http://today.reuters.com/news/newsArticle.aspx?type=domesticNews&storyID=2006-07-17T184824Z_01_N ...

Shoot. Spaced out that I got that story here.
Sorry about that.

Space Rat

Another subway line went down during rush hour in NYC this morning, due to a power outage.  

In my office building, a "power curtailment emergency" has been declared.  They haven't sent us home, as they do sometimes, but they have turned off most of the lights and turned up the thermostat.

Getting pretty warm and dark in here. :-P

Should this be considered normal in a few years?
Casual dining restaurants hungry for customers

Got a hankering for an Outback steak but the budget for a Big Mac?

Apparently, many folks feel that way, as the slowing economy dulls the nation's appetite for casual dining. For the first time in years, the $70 billion casual dining industry -- sit-down eateries that generally serve alcohol and sell entrees from $10 to $20 -- is taking a hit.


Weaker real estate market, higher credit card payments...and gas prices.

A home with two SUVs in the driveway needs an extra $1,500 per year to pay for costlier gas, Oakes says. "And the consumer is thinking the price hikes aren't temporary this time."
That happiness is to be attained through limitless material acquisition is denied by every religion and philosophy known to mankind, but is preached incessantly by every American television set.

- Robert Bellah (1975)

Our numbness, our silence, our lack of outrage, could mean we end up the only species to have minutely monitored our own extinction. What a measly epitaph that would make: "they saw it coming but hadn't the wit to stop it happening."

- Sara Parkin (1991)

99.9 Percent of the world is just trying to pay their monthly bills.  

Plus most people lack the intelectual capacity to think abstractly.

Or maybe it's our evolutionary psychology which makes us unable to meaningfully pay attention to abstractions.  Witness the blood lust and happiness of the people as bombs drop on the desert peasants.

Blood lust, not everything is that cute in human nature...

Cruelty’s Rewards: The Gratifications of Perpetrators and Spectators

That kind of stuff is not to be forgotten when looking for collapse mitigation.

Hello Kevembuangga,

Great link--recommended reading for all.  Maybe people will finally realize that: "Our genes are not our friends".  We would be much better off using our grey matter to plan our decline.

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

Bob et all,

"Genes are not our friends"

Please have a read...


A quick teaser,

" ...Blind selective pressures have acted on living organisms over hundreds of millions of years. Darwinian evolution has powerfully favoured the growth of ever more diverse, excruciating, but also more adaptive varieties of psychophysical pain. Its sheer nastiness effectively spurs and punishes the living vehicles of genetic replicators. Sadness, anxiety and discontent are frequently good for our genes; they're just psychologically bad for us. In absolute terms, global suffering is probably still increasing as the population explosion continues. Human ingenuity has struggled, often vainly, to rationalise and somehow derive value from the most frightful anguish. But over the aeons, the very anguish which intermittently corrodes the well-being of the individual organism has differentially promoted the inclusive fitness of its DNA. Hence it has tended to get inexorably worse...."

Another short quote from your link:

Genetic engineering and nanotechnology allow Homo sapiens to discard the legacy-wetware of our evolutionary past. Our post-human successors will rewrite the vertebrate genome, redesign the global ecosystem, and abolish suffering throughout the living world.

And you are denying the global warming threat, mmmm...
Singularitarian, Eh?
With conrad that makes 2.
Welcome, just bring in the tech savvy side of the Singularity and don't bother trying to dispel what you feel is "doom and gloom", this won't sell here.

P.S. Are you really Daniela Alves or is this just a PR trick?
(I would not be surprised ;-)

I think that is his wife.

Funny--It wasn't that many years ago that I fully believed humanity was headed for a full-blown Vingean technological singularity (the development of superhuman intelligence). I even wrote a science fiction story that dealt with singularity (see "Between Singularities," Analog, Feb 2003).

Then I began to research Peak Oil more deeply. I was familiar with the concept, having discussed it with colleagues in the mid-1990s when I worked for the Energy Analysis Program at the Lawrence Berkeley National Laboratory. What I learned about Peak Oil completely reversed my technologically-optimistic world-view. For me, the science behind Peak Oil was profoundly compelling, and completely dispelled any thoughts about humans reaching a technological demigod status.


Hold on a minute partner!  I never claimed to be a singulartarian.  I simply and solely think the site is a great read if you are interested in Evolutionary Psychology.  

If memory serves me, in the opening paragraph the author states that most of us will think this is a Utopian fantasy.

Count me in.

In my humble opinion, the author describes the human condition with a no holds barred style.  

That's all.  In the end I was more depressed then hopeful, which probably runs counter to his end purposes.  Draw your own conclusions.

P.S. Dani Alves is my wife and all pictures are for sale.


I have a couple of questions I'd like to see comments on.  If westexas is right and world oil production has been declining since December why are oil prices still only $76?  Shouldn't the price be closer to $100 per barrel if we have declining supply and rising demand?  And presumably at least $10 of the current price is a fear premium due to the Middle East situation and Iran.  

Also how long before people really start to panic?  And what happens then?  I get the sense that we're close to that point now.

Nobody really knows, but there will presumably be a lag between the actual peak and the investment community accepting that it has occurred. This lag could easily be measured in years.
"If westexas is right and world oil production has been declining since December why are oil prices still only $76?"

IMO, we are seeing, and we will continue to see, progressive demand destruction as importers bid against each other for declining net exports.  

Earlier this year, I suspect that $75 was too much for a lot of developing countries, which allowed our imports to go back up in the US.  

Where it gets interesting is when the more developed countries--like China and the US--start bidding against each other, instead of the developed countries bidding against the less developed countries.

Good point. We probably need a new name for those countries that cannot afford $75 oil-maybe "never to develop" countries.
I suspect that $75 was too much for a lot of developing countries, which allowed our imports to go back up in the US.

Do I believe my eyes? Is Westexas acknowledging that US imports have gone UP? :)

Note that rising US imports, following a 15% to 25% increase in oil prices, doesn't mean that imports are rising everywhere.  In fact, given declining oil production, someone has to be cutting back.

I think that we just finished one bidding cycle, and we are starting another one.  Note that imports started falling again, and oil prices have started increasing again, prior to the problems in the ME.  I predict a series of auctions for declining net oil export capaicty, with the low bidders forced to do without.  

with the low bidders forced to do without.

I agree, the poorer nations are screwed.

Is there any way of knowing if SA is emptying their tank farms to mask production stagnation?
There could be a way. The mixture of substances in oil vary from field to field. If SA dont mix everything before exporting and have not filled the tank farms with the same proportions as they produce from their export wells there is a way. A long measurement series from manny customers could then indicate a tank farm emptying as a shift in the exported quality into too large a percentage of a single quality.
Quick! Get Grissom (of CSI fame) to investigate! You can imagine Grissom and Company going all over the place with warrants to get samples from all the tankers then check them in their crime lab. Until Vegas melts from the GW induced heatwave!
If supplies are declining, they are declining very slowly at this point. Also, you can't just pick a number out of thin air and say prices should be there. What happens is the available oil enters the market, is bid up by those interested in it, and the bidders who can't pay drop out of the auction. We just saw a 10% swing in oil prices in a matter of days from $69 per barrel a few weeks ago to $78 per barrel last week, and not settling down in the $75-$76 range. This latest runup represents another small tick where more global bidders got shoved out of the market. It may have been enough shoved out that the current oil supply is adequate for the remaining bidders. (In fact, that is exactly what economists will tell us.) Personally I expect the next "burp" in the market to drive prices to about $84 per barrel and to settle around $80-$81 but I am not sure what will trigger it so I can't time it.

What we do not know is how high are we and others willing to bid up the price of oil and at what levels poorer nations fall out of the bidding cycle. If you knew that, you could predict what level of production versus  demand would drive prices up to $100 (or down to $50).

Got an interesting POV.  Kofi Annan has said that the peacekeeping troops stationed in Lebanon will be increased.  Are you asking the same question I did at this point?  The firing of artillery/missiles into Lebanon should be classified an attack on the UN, albeit a technical one.

On the financial front gold is looking up, maybe...

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/07/14/cngold14.xml&menuId=242&sS heet=/money/2006/07/14/ixcity.html

UBS said investors had begun to show keen interest in "call" options to expire in December with strike prices of $1,000 an ounce and above.

We are having a record setting heatwave here in the UK too. Imagine if all the air conditioners were driven by solar PV instead of coal powered power stations! No CO2, no global warming, no 65% wasted heat escaping into the atmosphere...
Just yesterday I joined a "green energy" cooperative.  I pay them instead of the power company (with a bit of a premium over the grid power cost).  They buy all my electricity from certified green producers who feed it into to the grid.  I extract my power from the gris as usual.  The co-op's production profile is 80% micro-hydro and 20% wind, so my share of the grid produces no atmospheric emissions whatever.

I was shocked to find out that my 1100 kWh/month house puts a tonne of CO2 into the air every month, based on the production profile of my provincial electrical utility.  Saving 12 tonnes of CO2 per year for about $300 USD seems like a good deal to me.

The more people sign up to these kinds of plans, the faster the renewable component of the grid will expand.  For urbanites who are not in a good position to install their own wind/solar/hydro supplies, this is definitely an idea whose time has come.  Also, near Ottawa I've recently seen a dozen flatbeds carrying  big wind turbine blades.  This is more than a bit encouraging.

When I was driving down to Texas (from California) in January, I saw all these "things" on trucks.  I kept trying to figure out what the weird shape could be ... storage tanks, portable shelters, ???

Turns out, (why didn't I think this?) they were (empty) wind turbine nacelles.  I saw a wind power segment on TV and the tv science girl was standing next to one in a factory.

It looked like a big effort though ... I saw at least a dozen of them on the road.

I had the same experience. We would see them on trucks on the interstate, and my son kept asking me what they were. It finally hit me when I was looking at one that it had to be pieces of a wind turbine.



Yeah, just two weeks ago, I saw the giant blades of a wind turbine on the back of an extra-long flatbed truck, going towards Portland, OR, on Southbound I-5. Each blade was perhaps 20 meters long! Awesome!!!


What's really great is driving through a giant windfarm, such as Lake Benton, Minnesota.  210MW up close and personal!


1100 KWH/month?  That's 5 times what I use.  Try some CFLs... and turn off lights when leaving a room.   If your fridge is more than 12 years old or so, get a new efficient one.  Also: dry clothes on a rope.  Cook and heat water on something other than electricity.  OK, the latter two move the load to another fuel source.  But using electricity (flowing through a resistor) to make heat seems like a very  bad idea, as the power plant is only 40% efficient (at best).  Save the electricity for uses requiring the higher quality energy that it is: lights, refrigeration, electronics, pumps, fans, and of course electric trains!
Doing it all already :-(  There are CFL's in 80% of the sockets in the house.  The fridge is 2 years old. SWMBO is a fanatic for clotheslines and turning off the lights.  Hot water and heating are both gas.  Our only electrical luxury is the A/C, buit since we're in Ottawa that only runs for three months a year, and we have it set well up.  I no longer leave my hi-fi on all the time, but one of the two computers does run 24/7.  I need to do a thorough energy audit, and maybe install some motion sensor light switches (we have an infestation of teenagers...)
For what it's worth, I have a kill-a-watt monitor (cheap, excellent, recommended).   I learned that I could afford to keep my hub/router powered up, but didn't like having my (15w) powered speakers on all the time, and certainly not my computers.  I'd switch to a notebook if I had to run 7x24.

Here are the results for running a semi-powerhog computer 7x24 (using my kill-a-watt monitor):

running 9 hours and 12 minutes consumes 0.76 kwh

average consumption 82.609 watts

KWH per year = 723.65

$67.84    per year at 0.09375 cents min charge
$123.32    per year at 0.17042 cents max charge

$5.65    per month at 0.09375 cents min charge
$10.28    per month at 0.17042 cents max charge

Interestingly that hog did draw 8w in the off condition, so I unplugged it:

based on an instant reading of 8.00 watts

KWH per year = 70.08

$6.57    per year at 0.09375 cents min charge
$11.94    per year at 0.17042 cents max charge

$0.55    per month at 0.09375 cents min charge
$1.00    per month at 0.17042 cents max charge

That was a dual 800MHz PIII in an Antec case, 512M, 2 HDs, etc.  My more modern Dells (2.4GHz) are a little more efficient, pulling 70w when in active use ... I haven't actually tested them for draw while "off" ... I might do that.

A notebook doesn't keep itself cool reliably enough for 24/7 operation. New processors are coming on the market that drive up the ratio of operations per second (i.e. pick the benchmark of your choice) to watts, and I am trying to keep up since power will be a deciding factor in future purchases I make for work.

Right now the best answer is not to expect 24/7 operation. Pretty much any data you need 24/7 as an individual is data you can keep on a cell phone or flash drive.

Heh, I haven't had a notebook since (trying to remember) speeds were right around the 1GHz range.  I did have an IBM notebook which I used at work all day.  It did fine 10x7

I have heard more recent reports of problems with some brands ... definitely something to research before purchase.

As an aside, I tested with kill-a-watt one of the IBM ThinkCentre towers and found it running at 40w rather than the 70w of an equivalent Dell (all 2.4 GHz P4).  I hope that the Lenovo brand (for those who don't know, they bought the IBM line) are still Energy Star .... er, stars.

GliderGuider:  I live in the Ottawa area and am curious about those windfarm components clogging the queensway as well.  Do you know where they are being trucked to?  Guessing they are coming from Montreal.
Not a clue where they're going.  I've seen a bunch parked at a truck stop out past Casselman as well.  I'll see what I can find out.
To the Ottawa-area Drummers:  Is there any interest in having some kind of meet up (compare notes, form a lobby group ... ok, just to drink beer when the humidex pushes 43?)
There sure is from me.  My email addy is now available - shoot me a line.
Also in UK as we swelter in temperatures around 35C which may rise to a new UK record this week, news that the motor fuel duty increase announced in the Chancellor's budget early in the year has been "delayed" (actually cancelled):


This is, I believe, the third year in succession this has happened for fear of increasing petrol costs to politically unacceptable levels.  This "escalator" rise was originally devised to reduce CO2 emissions and combat global warming.  Some politicians seem to have perfected irony, to the level of a science.  

From out in money land....

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BFD411A74%2D9E6E%2D425E%2DA675%2D43DDFDC5361 4%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo

The details of the report showed strong purchasing for foreign private investors, but Treasury selling by foreign central banks.

Official institutions, including foreign central banks, sold $14.3 billion in Treasurys in May, although they increased their purchases of agency and corporate bonds.


More than half of college students have at least one credit card that is billed to them, a new study says, and about a quarter of those students have used their cards to pay tuition.

Overall, more than four in 10 student cardholders carried a balance from month to month, with a median balance of $1,000, according to an American Council on Education analysis of 2003-2004 federal data released Monday.

Fifty-five percent of students who used their cards to pay tuition were carrying a balance, compared with 38 percent who had not charged tuition, the study said.

What's funny about that story is my college just quit taking VISA cards due to the surcharge policy.  When you're charging $k's of $'s it adds up.  My college spent like $21M on charge card fees last yr.  They contracted a company to handle it from now on and there is a 2.5% additional fee to use a piece of plastic to pay for your tuition.  Ouch and sad...


As commercial real estate sales and construction surge across the country, federal officials worry that many banks are carrying more real estate loans today than during the 1980s boom.

And what the feds are doing about it has some community bankers shaken.

Several regulatory agencies -- including the Federal Deposit Insurance Corp., the Federal Reserve and the Office of Thrift Supervision -- are working on guidance that would implement a range of risk-management controls, such as strongly encouraging banks to have more capital if they have a significant number of commercial real estate loans.

Doesn't tell you much except to point out that our banking sector is heavily leveraged in the housing sector and is at risk of tanking like the S&L scandal could only dream of.  Well maybe that last part might be a stretch.


July 18 (Bloomberg) -- Uranium prices may gain as Japan, South Korea, India and the United Kingdom build more nuclear reactors to meet rising energy demand, Merrill Lynch & Co. said.

Uranium for immediate delivery may average $43 a pound this year, Vicky Binns and Daniel Hynes said in a July 12 report. This is 8 percent higher than Merrill's previous estimate of $40 and compares with last year's average of $28.

China, which has nine reactors at three nuclear facilities, wants to add two nuclear power plants each year. By 2020, nuclear power may generate 4 percent of China's total power, from less than 2 percent in 2005, Merrill said in November.

So in 1 yr it went up 56%.  Holy crap batman, something is in the water.  The world is set to build nuclear wether we've got it figured out here or not.  Meanwhile China is doubling output!  Anyone up for a new neighbor?  I promise the glowing is part of the show!


"The market is not preoccupied by the fundamentals of late," Eoin O'Callaghan, an energy specialist with BNP Paribas in London, said. "But the story of fundamentals will not go away."

Maybe the fundamental piece missing is peak oil.

http://news.yahoo.com/s/ap/20060715/ap_on_re_us/highways_for_sale;_ylt=A0SOwj80HLlE.ncBrwmyBhIF;_ylu =X3oDMTA2Z2szazkxBHNlYwN0bQ

Roads and bridges built by U.S. taxpayers are starting to be sold off, and so far foreign-owned companies are doing the buying.

Gas taxes and user fees have fueled the expansion of the nation's highway system. Thousands of miles of roads built since the 1950s changed the landscape, accelerating the growth of suburbia and creating a reliance on motor vehicles to move freight, get to work and take vacations.

In 1956, President Eisenhower pushed to create the interstate highway system for a different: to move troops and tanks and evacuate civilians.

To encourage more domestic investment in highways, former Transportation Secretary Norman Y. Mineta made a pitch to Wall Street on May 23.

"The time is now for United States investors -- including our financial, construction and engineering institutions -- to get involved in transportation investments," said Mineta, who left office July 7.

I actually think this is a great idea.  In the next decade I can honestly see myself quit driving.  Maybe it's not purely by choice, but I won't be able to pay for it I'm sure.  So getting other people to pay for improvements to the infrastructure while we use it seems like a win win.  The tax payers aren't having to pay for improvements that don't seem to help and there will be private parties with real nice roads and no cars.  This is government externalising at it's best!

I've noticed a change as the bbl price has risen the last few weeks. Six months ago there was a $1 price spread between retail gas and bbl price/42. That spread still exists but the spread between NYMEX gasoline and retail has shrunk by about 20c/gal. It looks like the refiners are taking a bigger cut while the distributers cut has shrank. What gives???
I'd like to find some good data on the natural arability of various areas around the globe.  How much could you grow on the Great Plains without fossil fuels?  That kind of thing.  It's a more difficult problem than it seems--you can't just use the old data from pre-Green Revolution, since the major element here is soil degradation.  That's why we started using all those fertilizers in the first place.  Did we ever recover from the Dust Bowl, or are the Great Plains still a desert covered in a layer of nitrogen fertilizer?

Can anyone help me out with some data, or where I might find such data?

Look up the Land Institute out of Salina Kansas.


Jason, I don't think there is an easy answer to this.  The original Plains ecosystem was characterized by deep black, humus-rich soils with a deeply-penetrating and very dense grassland vegetation.  The soils of that region were (and remain) classed as "Mollisols."  I would check the USDA-NRCS website for general information on these soils (I would get you a link, but I'm short of time).

I've heard that when the Plains were first "broken," plowing required huge tractors built specifically for the job and supposedly when they pulled a plow across unbroken ground, the breaking up of the dense root mat made a sound like gunshots.

Certainly, a lot of fertilizer has been dumped on these landscapes. But, soil testing is an art and some tests might show even "higher" levels of fertility now than they would have when this was virgin grassland. Relying on such measurements would give an incomplete picture because a plant nutrient exists in many forms, some readily available, some only slowly-available, and some for all practical (read "agricultural" ) purposes, unavailable.

The one defining feature of grassland soils is their high organic matter/organic carbon contents and, no doubt, any of these soils that have been under intensive ag for any length of time will now show reduced organic matter levels.  You plow up soil, you expose the soil organic matter to oxidation (Same story, by the way, for those organic rich soils that they grow sugar cane on down South).  You plow it long enough, it goes away.

The fact that we don't have huge dust storms blowing off the Plains now tells you that current soil losses there are greatly reduced.  And as far as N fertilers go, if they aren't tied up in plant organic matter or adsorbed by clay minerals, they are pretty much gone from the system (i.e. flushed into the groundwater table or into local streams).

To make a blanket statement, what you have is still highly-productive soil, probably somewhat reduced in organic carbon, certainly supporting far fewer species (soil invertebrates, burrowing mammals, etc.), suffering somewhat from accumulated pesticide residues and in some places, salts, but it isn't beyond repair given enough time.

If you are interested in grassland ecosystems, definitely, check out the Land Institute as suggested by Jason Bradford.

I thought I might write about this and it would turn into a big rant - so instead I'll just put it out there for anyone to comment on...

I overheard part of an exchange at a gas station about 15 minutes before writing (admittedly the context was not very clear but I'm assuming it was a discussion about gas prices, problems in the Middle East etc. etc.).  All I had to hear was one sentence from a customer to the attendant at the cash register - went something like this:

"We have way more oil in this country than they have in the Middle East..."

Then there was a bunch of noise and I missed anything else that was said...

Naturally my ears perked up when I heard the word oil.  After hearing what he had to say about it I felt so discouraged - we have serious problems coming and we are not even past this point with people yet ?  Can they really still believe that there is plenty of oil left even in the US ?  

I hear stuff like this and think that there really has been little progress made - that Westexas' Iron Triangle is clearly winning the (mis)information war...

They are and they will right up until they tell us, "whoops it ran out."
Probably one of those hateful chardonney drinking liberals waiting for tar sand to get real.
Yes, it is widely known that we are sitting atop a sea of oil.  It's only those pusillanimous pencil-necked pinko greenies that are keeping us from recovering it.
The housing bubble is bursting!

Builder Confidence Slips Again In July

July 18, 2006 - Increased concerns about interest rates and housing affordability caused builder confidence in the market for new single-family homes to slip three more notches to 39, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for July, reported today.

Hello TODers,

Bought your used scooter yet?
Scooter sales surged 17.5 percent in 2005, climbing 65 percent in the third quarter in top brands such as Suzuki, Honda and Vespa, the MIC said. "The trend is definitely still on the rise, and we're feeling pretty good for this year," van Hooydonk said.

The $23.3 billion market for motorcycles and mopeds saw increased sales in the first quarter of this year, with on-highway motorcycle sales up 8.6 percent, and scooters up 2.1 percent.

But some travelers are shunning fuel altogether, turning instead to pedal power.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Anybody have an idea WHY oil has been dropping over the past few days when there seemed to be every reason for it to increase beyond $80?  Israel has not retreated or the rhetoric cooled much and Americans are driving their collective asses off. I did read a brief bit about demand being expected to drop in 2007.  Anything else?  
On the first two days, people thought Issrael might attack Syria or Iran.
I still find it interesting that things in the ME remain very hot in the face of continued high demand for oil and prices still slipped back as they did.  Are Condoleeza Rice's blandishments regarding cease fire after a week of bombardment really that reassurring to the market?  
Yeah. I hope you weren't looking to engage. Move closer to the action.
Anyone know a place to get double or triple glazed window panels?  I've been planning on making a solar hot water pre-heater for some time, but I didn't have time to do the trenching.  I've just been looking at my house, and realized I've been an idiot - I have a perfect south facing stone wall, which I could build a low enclosure in front of.  There's a basement wiondow in it, so passing the pipes in would be easy.

Also, I'll need a simple un-insulated water tank - I've seen tham at Lehmans website, but I wondered if anyone knew another source.

IF I'M pickin up what yer puttin down. then use the the tank of an old water heater. just sawzall the skin off (carefull it's as sharp as robert rapier) and discard/reuse the insulation.
Thanks, I was thinking I might go that way.  I was concerned about having the fittings for the oulets and inlets in the right place.  But now that I think about it, there are usually several, so I should be able to work that out.

I'm also thinking that people tend to keep water heaters until the tank rots out, but you never know what you'll find out there.

Actually, alot of electric hot water heaters get tossed because the elements burn out in them. Even thought the elements are easily and cheaply replaceable, alot of plumbers just sell the whole shebang I guess. I've found two good leakfree electric ones sitting in the metal pile at the local dump. I used them to build my biodiesel reactor setup.

P.S. If anyone is interested in how home biodiesel is made, check out www.biodieselcommunity.org, its one of the best sites out there.

Cool, thanks - Even though I know better, I tend to forget just how extreme the throw-away society has become!  

By the way - as a mechanic with an ME degree, making biodiesel - it sounds to me you're well on your way, and probably better prepared than most.  It's not too different from my situation, in that I've got a lot of skills that will probably be quite useful in the future, but I haven't been able to figure out a way I can use them to make the kind of money I'm making now in my conventional job.  However, once that job is gone, then my standard of comparison will shift.

I have finally figured out what I want to do, but it will take me a couple of years to set up, and I'm going to need to acquire some new skills and equipment, and I don't have an appropriate facility (nothing extravagant needed, I just don't have it).  Problem is the damn job leaves me too little time!

I work with Whirlpool and after reading your post, I thought you might be interested in the Home Energy Blueprint, a nationwide search for ten energy inefficient homes to outfit with energy and water-saving appliances.  With energy costs continuing to soar, the Environmental Protection Agency, the Edison Electrical Institute and GreenHomes America are joining Whirlpool to help change the way people consume energy and promote more efficient energy practices in the American home.

The premise of the contest is simple: The program is going to determine which products will make a more efficient home - from new appliances, to insulation to lighting. Those homes that are deemed to be in most need of help will receive ENERGY STAR appliances and other energy-saving products to start saving money.   For more information on the contest, please visit www.whirlpool.com/energy

Yergin, plateau might be reached in fourth of fifth decade of this century.

...The sky is not falling. We have done a worldwide field-by-field-analysis of exploration projects, which indicates that the production capacity could increase by as much as 20 to 25 percent over the next decade, including greater output of nontraditional sources like Canadian oil sands, and increased recoverability from existing wells.

Spiegel: So the whole idea of peak oil is nonsense?

Yergin: The image is misleading. A more relevant description would be a plateau in production capacity that might be reached in the fourth or fifth decade of this century. So the major obstacle to the development of new supplies is not geology but what happens above ground: international affairs, politics, investment and technology.

Translate "analysis of exploration projects " as "copy and paste of press releases"
Westexas, you should enjoy this:
Crude oil exports from Russia in January-May 2006 were down 1% year-on-year, in May down 4,2% year-on-year.
Crude oil production (including condensate) in Russia in January-June 2006 was up 2,3% year-on-year, in June up 2,4% year-on-year.
Have you guys seen this recent paper on ethanol?

Environmental, economic, and energetic costs and benefits of biodiesel and ethanol biofuels.  Hill, Nelson, et al. July 12, 2006.

Negative environmental consequences of fossil fuels and concerns about petroleum supplies have spurred the search for renewable transportation biofuels. To be a viable alternative, a biofuel should provide a net energy gain, have environmental benefits, be economically competitive, and be producible in large quantities without reducing food supplies. We use these criteria to evaluate, through life-cycle accounting, ethanol from corn grain and biodiesel from soybeans. Ethanol yields 25% more energy than the energy invested in its production, whereas biodiesel yields 93% more. Compared with ethanol, biodiesel releases just 1.0%, 8.3%, and 13% of the agricultural nitrogen, phosphorus, and pesticide pollutants, respectively, per net energy gain. Relative to the fossil fuels they displace, greenhouse gas emissions are reduced 12% by the production and combustion of ethanol and 41% by biodiesel. Biodiesel also releases less air pollutants per net energy gain than ethanol. These advantages of biodiesel over ethanol come from lower agricultural inputs and more efficient conversion of feedstocks to fuel. Neither biofuel can replace much petroleum without impacting food supplies. Even dedicating all U.S. corn and soybean production to biofuels would meet only 12% of gasoline demand and 6% of diesel demand. Until recent increases in petroleum prices, high production costs made biofuels unprofitable without subsidies. Biodiesel provides sufficient environmental advantages to merit subsidy. Transportation biofuels such as synfuel hydrocarbons or cellulosic ethanol, if produced from low-input biomass grown on agriculturally marginal land or from waste biomass, could provide much greater supplies and environmental benefits than food-based biofuels.
It should be pointed out that this paper discussed corn-based ethanol, not other sources of ethanol.

That being said, the conclusion seems accurate. Bio-fuels using current technology almost always need some sort of government support to be viable. In many cases social and environmnetal benefits provide a justification for this support. In the U.S. context, biodiesel makes more sense than ethanol.

However, ethanol from sugar cane is far more energy positive and has worked in Brazil without subsidies. There it provides roughly 12% of vehicle fuel (on a BTU basis) and over 40% of all gasoline. It is being developed in other tropical countries and is likely to provide a growing portion of their fuel use and serve as an export product.

I think this only makes sense for tropical sugar cane and probably only to a level near 10% of global fuel use, which it could do in ten years or so.

These links provide very good detailed overviews of ethanol and biofuels:

1) World Bank: Biofuels for Transportation (200 page PDF)
http://wbln0018.worldbank.org/esmap/site.nsf/files/312-05+Biofuels+for_Web.pdf/$FILE/312-05+Biofuels +for_Web.pdf

Summary version (4 pages)

2) World Watch Institute and the German gov't (GTZ) (200 page PDF):