DrumBeat: July 24, 2006

[Update by Leanan on 07/24/06 at 9:23 AM EDT]

Heatwaves and biofuel demand in Europe and US to fuel bread, pasta and beer price rises

Grain Drain: With unstable supplies of staples, we'll need to rethink ethanol as an alt fuel source.

Brace yourself for crises at the cash register. Major price hikes for food are coming, as Peak Grains join the lineup of life-changing events such as Peak Oil and Peak Water. Unless this year's harvest is unexpectedly different from six out of the last seven, the world's ever-decreasing number of farmers will not produce enough staple grains to feed its ever-increasing number of people. Quite a shift from obsessing about obesity, isn't it?

Gas tops $3 a gallon, hitting 25-year high

Bush told to plan for Chávez oil shock

"Venezuela's leverage over global oil prices and its direct supply lines and refining capacity in the US give Venezuela undue ability to impact US security and our economy," Mr Lugar wrote in his letter to Ms Rice.

Iraq ready to restart northern oil pipeline

LONDON - Iraq has completed repairs to one of two sabotaged oil pipelines that export crude from its northern fields to Turkey and aims to restart the flow this week, Iraq’s oil minister said on Sunday.

India: Soaring oil takes us for a ride

Discontent clouds Angola's oil boom

...On the outskirts of the African nation's bustling capital of Luanda, the talk is not of a more prosperous future but rather of a stolen one.

Led by a collection of reformed Marxists and Western-leaning technocrats, Angola's government is struggling to convince sceptical citizens that it will use the proceeds of vast oil reserves to improve living standards in a country shattered by a brutal 27-year civil war.

100º - get used to it

They were the images that finally demonstrated the irreversible climate change now taking hold in Britain. Where green parklands once provided cool refuges in our cities, newspaper photographs last week showed them to be bleached, white landscapes. Reservoirs were revealed as cracked, arid deserts. And from Cornwall, pictures of the nation's first cage-diving trips for shark-watching tourists, an experience normally confined to Australia's Great Barrier Reef.

In addition, schools closed, steel railways buckled, and road surfaces melted.

[Update by Leanan on 07/24/06 at 12:02 PM EDT]

Will Mexico Soon Be Tapped Out?

A rapid demise of Cantarell, the country's chief oil field, could pose a serious economic threat.

Output at Mexico's most important oil field has fallen steeply this year, raising fears that wells there that generate 60% of the country's petroleum are in the throes of a major decline.

Production at Cantarell, the world's second-largest oil complex, in the shallow gulf waters off the shore of Mexico's southern Campeche state, averaged just over 1.8 million barrels a day in May, according to the most recent government figures. That's a 7% drop from the first of the year and the lowest monthly output since July 2005, when Hurricane Emily forced the evacuation of thousands of oil workers from the region.

Produce or perish

The EB (Energy Bulletin) has a very good/scary series of articles on food and on food versus fuel.  

In regard to my ELP (Economize; Localize & Produce) recommendations, I would start making preparations now.  If I'm wrong, you will have less debt, more money in the bank and a lower stress way of life.  

Texas billionaires Richard Rainwater and Boone Pickens--hardly a couple of guys typing out dark conspiracy theories in their basements--have tried to warn us about that the dangers posed by Peak Oil.  In fact, Mr. Rainwater questions the survivability of the human race.

According to the 12/05 Fortune article (search EB for Rainwater Prophecy), Mr. Rainwater is currently trying to expand his ability to grow his own food.

George Ure can always be counted on to post some interesting comments.  What if the Neocons believe in the Richard Duncan (Olduvai Gorge) dieoff theory?  What if seizing control of the oil fields is the only thing that matters to them?



"And the Russians are having a field day with U.S. policy putting us into the box where we don't have much room to move.  I mean, there's a reason by Condi is not calling for a cease fire: in the crass world of oiltics, the number of dead doesn't matter because it will be such a small number in comparison to an oil drought induced die-off."

You gotta hand it to "Richard Duncan (Olduvai Gorge)," his claim about increasing failures in the grid seems to be at least possible. Maybe he didn't anticipate the impacts of climate change (forced by us or not), but he sure did mention the grid becoming less and less reliable.

As for the oil fields, there are a few others who have mentioned this before, and I tend to agree with 'em. I see no reason why the oil fields grab needs to be viewed as a failure thus far.  As long as the area is occupied, that seems to be a win to me. With the huge complex in Baghdad a permanent presence seems assured. Much of this stuff is at least alluded to in PNAC. As well as the multiple theatre military assertions. Will they keep it up? Will that require conscription? Will there be another 9/11 as Pearl Harbour incident? Guess we'll find out in due course.

To cary on with the oil point, from http://msnbc.msn.com/id/14001903/:

Richard Lugar, chairman of the US Senate foreign relations committee, has urged the Bush administration to adopt specific "contingency plans" for a potential disruption to oil supplies from Venezuela.

In a letter sent to Condoleezza Rice, secretary of state, last Friday, a copy of which has been obtained by the Financial Times, Mr Lugar warned the US that it needed to "abandon" reliance on a "passive approach" to energy diplomacy.


If somebody was saying those oil fields matter at any cost, this might be them. Maybe that is all that does matter to the Neocons.

The "Grain Drain" article and past reports we've seen give a figure of 57 days worth of stored grain for the global food supply.

From that article: "Unless this year's harvest is unexpectedly different from six out of the last seven, the world's ever-decreasing number of farmers will not produce enough staple grains to feed its ever-increasing number of people."

The "scary part" you mention from the Energy Bulletin's list of articles is that this year IS going to be "unexpectedly different" from the last six or seven in that grain harvests could be much, much worse than last year as the result of the heat waves in the U.S. and Europe.

Has anyone seen any forecast or discussion of where that storage cushion may be at the end of the year?

Also, how quickly can ethanol production be ramped up? Can ethanol expansion really have such an immediate impact on supply and price, or is that something more likely to occur 2-5 years down the road?

Has anyone seen any forecast or discussion of where that storage cushion may be at the end of the year?

Crop Prospects and Food Situation

Thanks. I wonder about the extent to which the prediction takes into account this season's heat waves in the U.S. and Europe. But they've forcast a nearly 10% reduction in end-of-season stocks.
I've been watching grain prices for about a year, expecting to see some reaction in the markets for grains related to either fear of a bad harvest (given falling stocks) or the rising price of oil.  It just ain't happening.  Soybeans, corn, rice and wheat are all running close to their ten year average prices, with rice and wheat showing an increase during this year.  The others quite stable.  It raises the question whether rising oil prices really affect farming so much or are the markets not acting rationally?  Or what?
Where are you getting your info from?  I just read an article yesterday/mon maybe that was talking about peak commodities.  Not every commodity, but they were pointing out grain stocks being lower the last 4-5 yrs and it isn't getting better as we add more souls.  The article was from itulip.com and generally, very reputable.
I wish everyone could be fed, perhaps with the exception of those who, knowing we are running low on food to eat, want to burn it in automobiles.

The other day I was taking a plane flight, and the fellow in the seat next to me was reading Jared Diamond's "Collapse".  At the time I was reading "Limits to Growth - 30 year update".  We briefly chatted about Collapse, and then he asked what my book was about.  I had only started in on it, but I had an idea what the basic idea behind it was, and I mentioned that LTG is referenced in Collapse in numerous places.

Don't know what kind of impression it made.  Just an interesting story.

Re: heat waves and biofuels...
Corn and barley prices are also likely to rise, which may push up the cost of beer and breakfast cereals.
We live in "interesting times". Beer should be subsidized, not heavily taxed.  

Arrrggghhhhhhhhhh, aye, me hearty, and rum too.

Brews yer owns beers 'n ails, thas' what I sashesz.

Yo ho ho . . . .

I heard last week that some Louisiana refineries were closed by the government and then I found this story today..

Crude Tops $71 on Louisiana Refinery Snags

Crude oil futures extended their gains and topped $71 a barrel Friday, boosted by continued worries about several refinery disruptions caused by a waterway closure in Louisiana.

Gasoline futures have climbed nearly 15 cents a gallon in the last three sessions as an oil spill closed the Calcasieu Ship Channel in Louisiana, forcing

four refineries in the region to scale back operations.

Twenty-nine ships were waiting to exit or enter the waterway Friday morning and refineries owned by ConocoPhillips (COP)(250,000 b/d), Citgo (425,000 b/d), Calcasieu Refining (85,000 b/d) and Pelican Refining (15,000 b/d) had acknowledged curtailed production because of the blocked supply route.

The refinery disruption "is not terribly serious at the moment, but we're in a supply chain situation where even the slightest problems are magnified, said John Kilduff, senior vice president for risk management at Fimat USA. "The market is hypersensitive to even the slightest refinery slowdown" or supply snag.

That article is dated June 23 - a month ago.  I think the Calcasieu Ship Channel is open now.
I have a couple of questions for US-based TODders regarding commuting. One of the acknowledged characteristics of the US labor market is employees' willingness to relocate when changing jobs. In fact, unemployment rates here in Europe are routinely blamed, in part, on people's refusal to look for jobs beyond their region. With that in mind, you guys sure seem to do a lot of intense, long-range commuting by car - which seems to me like a contradiction. After all, if I'm to move because of a job, I might as well move as close to it as possible. My guess regarding the reasons for the contradiction is a combination of factors:

  1. There isn't that much long-range commuting going on and the amount of coverage it receives at TOD is out of proportion, with the worst cases making up a body of patchy anecdotal evidence.

  2. Due to a combination of ample free space and over-zealous zoning laws, minimum possible distance between home and workplace can be substantial.

  3. Neigborhoods which are not strictly residential are considered (or maybe actually are) unsafe due to traffic or crime. Employees are willing to sacrifice hours of commuting time each day to avoid these problems.

  4. A large, good-looking house is highly desirable in the American culture for aesthetic or social status reasons. Employees are willing to sacrifice hours of commuting time each day to enjoy such housing.

  5. Apart from a few exceptions, there is no tradition of high-density residential development as there is in Europe. In other words, most Americans "don't know any better".

These are just my impressions, any further enlightenment is highly appreciated.

Another question: I was a high-school student in rural Wisconsin about twelve years ago - have there been any major changes in urbanization patterns since then, or was it as bad then as it is now? (I wasn't aware of any issues at the time, obviously, maybe apart from inner-city crime).

"After all, if I'm to move because of a job, I might as well move as close to it as possible."

A very European attitude, don't you think? If gas is cheap enough, distance becomes less of an issue, especially when you have no choice anyway.

Well, what would bother me more than the money is the time and effort involved. I do enjoy driving but there are a ton of things I enjoy much more, and being forced to spend so much time driving each day would be a major issue. Do you guys enjoy driving so much or is your time not that expensive? Or are you simply resigned to the status quo?
"Do you guys enjoy driving so much or is your time not that expensive? Or are you simply resigned to the status quo?"

Though I'm an American, I'm not one of "you guys" as I live in Germany. It doesn't sound like any of "those guys" felt addressed by your post. Of course, there aren't that many of them at TOD.

My attitude is similar to yours. I drive when I have to, but I take the train when I can. To me, driving to work is a complete waste of time. But many people (here too) really are forced to drive, or at least feel that they are, or feel "freer" driving.

The points you listed in your original post explain the situation well enough. The zoning in many areas pretty much forces people to drive. Cheap gas made driving more bearable, and cheap credit allowed people to buy bigger cars and build bigger houses farther away. That brought them to where they are now.

Back in the day, I put my belongings in storage and spent a year living in the office. I could get away with it; most people can't even consider such a possibility. No rent, relatively little driving. It was the best year of my life up till then. I paid off my debts and haven't been in debt since. Even then, I wasn't a typical American.

SE Wisconsin continues the pattern you must have seen 12 years back of rapid suburbanization.
Whatever absolute figures may be longrange commutes are considered normal. I have a neighbor who commutes 5 days a week from home in Chicago to Manhattan, no one blinks an eye.
That's incredible. The phrase "get a life" comes to mind.
I'd say the right answer is #4.  

The U.S. was a country of farmers only a few generations ago, and it shows in the our preferred housing.  Suburban homes are symbolic farms, with back yards instead of the back forty.  

Laura Ingalls Wilder's father used to say that when you could see the smoke from your neighbor's house, it was time to move on, and a lot of Americans seem to have similar ideas.  My boss grew up in a row house in Boston, and hated it.  He now lives a 45 minute commute away from his job, on five acres so he won't have any neighbors.  

"He now lives a 45 minute commute away from his job, on five acres so he won't have any neighbors."

What's so funny about this is that just this spring, as I visited the 138-acre family ranch in East Texas, I sat outside at night with a camp-fire crackling in the woods, and could hear the neighbor's music blaring away, from a home at least a half-mile off...

It's apparent that even 5-acres (and 138) is just symbolic isolation.  Perhaps a penthouse apartment downtown may provide a greater sense of distance from the rest of the populace. If that is what one seeks.


"Perhaps a penthouse apartment downtown may provide a greater sense of distance from the rest of the populace"

Ummm... well if we have another blackout and the elevator fails to appear when summoned I'd say you would be right for sure. Most would rather walk a mile in the outdoors than up 40 flights of stairs in the dark ;)

As another John Milton said

When I consider how my light is spent,
 Ere half my days in this dark world and wide

But those 40 flights would be so invigorating! Though one might get a bit dizzy goin' round and round... ;o)
Nah.  He really lives out in the sticks.  One morning, he was late to work because there was a black bear in his driveway, and he was afraid to leave the house.  

For many, though, it is symbolic isolation.  Those huge McMansions on relatively small lots, for example.  

IMO, it's not so much the noise as the sheer human presence.  People want to putter around their homes and yards without having to talk to their neighbors.  

I live in an apartment complex, and I confess, I often do things at night, so I don't have to deal with my neighbors.  Take out the trash, do the laundry, etc.  Not that they're bad neighbors.  I just don't want to deal with them.

Oh, fer christsake - what a pussy.  A black bear, and I suppose there wasn't even a cub around.  I have seen many black bears in the wild, and it really isn't a big deal.
Just tap the horn and it will run off into the woods.
Well, like I said, he's a city boy.  Born and raised in Boston.  

And we have had some surprisingly aggressive black bears around here.  One pulled a toddler out of a stroller on the porch as its mother was trying to get her other kids inside.  The bear killed the kid, and the cops eventually killed the bear.

Leanan -

That wasn't in NY was it - I remember a couple years back that same kind of incident happened near the Catskills.  Maybe the same one ?

My sister has been much troubled on her five acres in the foothills of the California Sierra by a black bear that kills her chickens (by breaking fences, etc.), and the DNR is so backlogged (read underfunded) that the one trapper guy who has a HUGE area to cover won't get there for weeks--or until somebody's kid is mutilated or killed. For various reasons, I think there has been a black bear population explosion in many areas.

The auto body shops love the black bears. You hit one doing sixty miles an hour in your full-size newish SUV and do about $15,000-25,000 of damage--not quite enough to total out a valuable vehicle, but enough to make several boat payments;-)

Well, I lived in an apartment block more or less my entire life and it was the same as you describe. I'm shy by nature and many times have I chosen the stairs when I saw that someone was coming down in the elevator, just not to have to talk to them. But it always bothered me and I always told myself that once I move into my own I would actively seek contact with the neighbors (I have learned to overcome my shyness over the years a bit).

A few months ago I did move into another apartment block across the city, in a beautiful quiet area. It is a small block (36 apartments in total) and my plan is in progress, albeit slowly and in unexpected ways. There are 3 stairways in the house, 12 apartments each. I am disappointed in the neighbors living in my stairway - they are polite but uninterested in any contact beyond the obligatory greeting. There is one exception - a retired guy who is a part-time janitor for the whole house. Very polite yet never annoying. Just brightens up your day.

Most of my contacts, however, are with two neighbors from the other stairways. One is a thirtysomething teacher who I met at the apartment owners meeting (most owners at the meeting were over 50, younger people generally don't care about such things). We've exchanged visits and my girlfriend even takes care of her dog sometimes. Another neighbor I talk to is a guy who started organizing people interested in high-speed Internet (no-one here has broadband yet and if there are at least X subscribers in the same house you can get bulk rates). So slowly but surely I'm building up social capital.

I think relationships with neighbors are an interesting challenge. You don't want them to be your best buddies (they're tough to avoid when you fall out over something) but you don't want them to be strangers, either (who knows when you might need them). You also have to tread a fine line between tolerance and assertivity. I always felt, though, that avoiding neighbors is a wrong response to the challenge.

2, 3 and 4 are the reasons, and 5 is also in most of the country.
Agreed, plus in many urban areas halfway decent housing in the city itself is so expensive that families with modest incomes end up in the outer suburbs, farther out each year.  

A couple of random collected thoughts....

First you have to define "long-range".  60 miles each way?  100 miles each way?  Those folks are indeed rare.

One complicating factor is that you have married couples both of whom have jobs.  One may change jobs, but if they move to be closer to that job then the other one might be further.

Another complicating factor is affordability - housing closer in tends to be a lot more expensive.  On the flip side though, there are lots of people who wouldn't consider a condo or apartment and just gotta have that standalone house, and if that's what you want then you end up living further out.  Another complicating factor is just the crass materialism in our country - this causes people to buy lots of crap, and if you have lots of crap, then you need a larger house to hold all of that crap.

Some of the problems are self-inflicted by goverments.  There is this tendancy to have separate areas for businesses and housing, and they aren't always close to each other.  In fact, inner suburbs have tended to emphasize office buildings, which means that there is insufficient housing nearby for all of the people who work in those office buildings.

There was a 15 minutes news story on CBS morning yesterday about people with problems of getting rid of their junk.  Something like $6B gets spent on "organize consultants."  It was something to see with these people and all their JUNK!
In NYC storage container warehouses seem to be a growth industry. I've noticed three new ones on my path to work.
We used oned for a couple months while we were between houses, but we never thought about paying to keep crap stored.  They have auctions all the time too, where you can bid on boxes sight unseen and there have been some rather valuable deals.
Another issue is the problem with spouses that have jobs that are quite a distance apart. This happens quite often with professionals, because jobs are not concentrated in the centers of cities. If a couple is close to one job, the other has a long commute.

I work in the Buckhead area of Atlanta (which is farther from home than downtown Atlanta). My husband teaches at Kennesaw State University, in a suburb of Atlanta. We live near my husband's work, making a long commute for me.

Then there are couples who "split the difference."  I know one family where he works in Poughkeepsie, and she works in Albany.  So they live in Columbia County, where they each drive about an hour to work.
Considering that I am in the relocation business and I alot of tthe higher management types, I would go with answer #4. Most of these upper management types move from one Mcmansion to another one with an emphasis on going bigger.. This has been he trend over the past 4 years that I have been relocating these people. Although there are always exceptions to the rules and a few people are actually trying to downsize but they are in the minority!! It would appear that most are still not worried about the commute or the costs..

But on the good news front, my brother may have sold his Mcmansion in Orlando and is going to downsize in the big way despite his wife's objections..

My impression is that the exurban growth pattern has really taken off in the past 12 years.  I hadn't heard the term exurban twelve years ago although I certainly had seen that sort of housing development before then.

I think one of the key reasons for the long commute is the undesirability of the inner suburbs as a place to raise a family. This isn't necessarily because of crime,  it is also because of the quality of schools,  the busy streets and the air polution.  When people have children they will sacrifice almost anything including many hours of their life commuting so that their children have the right environment in which to grow.

In my opinion, raising children has something to do with people's choices of where to live. Quite simply, people raising children almost always want houses with yards. Suburbs and exurbs also usually have good school systems, extensive athletic fields, etc. Exurbs have traditionally provided the most economic value (i.e. houses, yards, school systems and the like for the money). Commuting costs are often not even factored in to people's buying decisions. My guess is that this is starting to change, albeit slowly.

Furthermore, once settled, people are reluctant to move as their children become embedded into their schools and neighborhoods. Hence, commutes often get worse as people's jobs change while their kids are growing up.

One final perceived advantage of an exburb is that young families often want to build a new house and it's often easier and less expensive to build a new house in an exurb than it is in an older more fully built inner suburb.

I don't fully understand why so many people are willing to build huge houses on small lots, thereby giving up most of what could be nice yards.

I would like to thank you all for such thoughtful and illuminating answers. They don't paint a pretty picture, I have to admit. Some radical attitude adjustments are bound to happen - voluntarily or otherwise. In contrast to most people this side of Atlantic, I think there are things to be learned from Americans - like resilience, confidence and self-reliance. But it seems your healthy self-reliance has grown into an absurd allergy to sharing. I don't know how to fix that but I hope you figure it out.
For a great book-length answer to your question, consider reading "crabgrass frontier" by Kenneth Jackson:


I live in a rural county.  The "American Dream" around here is to have a lot of land so that you can't even see any of your neighbors.  Nearly everyone who can afford it lives on a mult-acre lot and commutes on back country roads to work.  The land is very cheap, and until recently, the extra driving might only cost you a dollar or two a day.  All of these properties are on former farms.  As farming became unprofitable, the 150 acre farms got bought by an investor, who then sold it off in multiple 5 to 20 acre parcels for individual development.  If grain production continues to drop, however, one good thing is that this land can be easily converted back to a farm.  For some strange reason, these people insist on mowing their lawns.  It's not unusual to maintain 10 acres of lawn even though they never use it at all (unless you consider 5 hours every weekend on a riding lawn mower to be enjoyable).  I live in town.  If I lived out in the country and I wasn't running a farm, I would want to live in the woods, not in the middle of 20 acres of grass.  It seems that people around here have a strange notion that we have to tame nature.  That keeping a lawn is somehow improving the land, whereas to let it grow wild and back into a maple-beech forest would somehow be a moral failing.  

If you're going to go for woods, you might as well plant the tree variety you want and create a harvesting plan. Some maple that you tap for your own syrup, fruit and nut trees that are climate appropriate that you harvest your own, this would be practical use of the land and you could keep some lawn for the kids to play games in. I can't understand mowing that much lawn. Whatever do they do with the clippings?
yea I agree with your idea to cultivate useful trees in a wooded lot.  Since land is so cheap around here (for now), and especially if it's still cheap once I get my student loans paid off, I'm considering buying some land to use for just this purpose.  I think timber will become more valuable post-peak for two reasons:
first more people will try to heat their homes with wood as other energy sources become more expensive (this is already happening around here)
Second, plastics and metals will be more expensive and more difficult to produce, and wood or wood by-products can make an affordable substitute for many applications.
Furthermore, displaced farm land will probably rise in value post-peak.  Crop yields are already dropping as per the above discussion and this type of land may become viable again for farming.
How U.S. Homes Are Hurt by Rising Energy Prices

Those who are furthest from their jobs are most vulnerable to energy-cost run-ups. As home prices rose in the frothiest areas, homebuyers mainly have done two things to augment house affordability: They financed with risky, interest-only loans to ensure the lowest-possible payments and moved farther out from employment centers, where prices are lower.

It's not unusual for commuters to drive more than 60 miles (97 kilometers) one-way in southern or northern California or for New York-bound workers to live in eastern Pennsylvania. This has happened where houses were already priced well above the national average. Four-hour commutes aren't unusual now around several large cities.

We are looking for a place near Lamoni,Iowa to move to so my daughter can live off campus. Part of my calculations was how far away we could live and still pay less for gas than for the dormitory ($2500/semester).  Based on $3 gas and 75 days of class/semester and 30 mpg I concluded we could live 133 miles away and still pay less. Of course we won't be that far away but it shows some of the lengths people go to save money but not fuel.
... let alone time.
Almost thirty years ago I built my house in Grand Rapids, Minnesota about four blocks from an elementary school, seven blocks from the Middle School, less than a mile from the high school, and easy walking distance (about two miles) from the community college where I worked and where my kids started their higher educations. Back when I was married, my wife worked at the hospital, about a mile from our house. With four kids active in all sorts of activities, we were able to get by with one car, good winter boots, and a bicycle for each family member.

I remember in Econ class back in the early eighties when the price of gasoline came up, and I happened to mention that for a month I spent between seven and eight dollars for gasoline in one typical month, winter and summer. The students were incredulous; some burned 200 gallons in a weekend of water skiing.

Why drive when you can walk or bike or take the bus?

And power boats? An experiment that failed;-)

#'s 2, 3, 4, 5, = yes

Suburbanization pattern = accelerated and worse.

Interesting story on the problems associated with Massachusetts' switch to the gasoline additive ethanol:

Area boat owners discovered in the past few weeks that ethanol can gum up engines and filters and even lead to the deterioration of certain kinds of fuel tanks.

Depending on the age and condition of the marine vehicle, boat experts said the new fuel blend could be merely a manageable nuisance or a potentially explosive problem.

Nothing that can stall your engine can be called a "nuisance" in Massachusetts waters. An engine stall with a Nor'easter coming can kill you pretty quick.
Wow, an awful lot of finance/oil articles over the last two days.

I love the title of this article...

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-07-24T122653Z_01_SP 265591_RTRUKOC_0_US-ENERGY-ASIA-UPSTREAM.xml

Big Oil renews Asian crude hunt as reserves dwindle

By Maryelle Demongeot

SINGAPORE (Reuters) - Oil majors are stepping up exploration in aging or neglected areas of Asia, potentially helping lift output a decade after shunning the region to hunt for giant oilfields in more prospective patches.

You know according to this, we're all going to be OK since we're selling more equipment to tear up the planet than ever before!


Industry experts say that some of the US's traditional industries, aside from the ailing automotive and airline sectors, are outpacing the "new economy", thanks to a weaker dollar, high commodity prices and a wave of consolidation and cost-cutting that has weeded out weaker players.

The prediction by Caterpillar, the world's biggest maker of earth-moving equipment, that it is on course to record its highest annual profits and revenues in 40 years follows upbeat pronouncements by other global manufacturers such as General Electric and Honeywell.

This article talks about the looming crisis facing the retailers inability to transport goods into this country. I think the last paragraph sums it up. Damn we can't by more junk....


"We see this as the lull before the storm," said Erik Autor, vice president and international trade counsel of the National Retail Federation.

With trade increasing faster than the capacity of ports, rail lines, and highways to handle it, he said, "we know at some point we will be back into a very tight scenario."

"You look at what China and India are doing, the amount of infrastructure being built there, new roads and new rails and new ports," Autor said. "The last time we did that here was in the 1950s. These problems will cost the U.S. economy as a whole and hinder the competitiveness of U.S. businesses."


Doom & gloom about the nations power grid...

http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-07-23T191327Z_01_N 21456781_RTRUKOC_0_US-UTILITIES-SUMMER-DEMAND.xml&archived=False

By Leonard Anderson

SAN FRANCISCO (Reuters) - The nationwide heat wave last week and new peak demand records for air conditioning power mean the U.S. grid should be adding more generating plants and beefing up reserve supplies to handle emergencies, analysts say.

Electricity grids in California, Texas, the Midwest, the Mid-Atlantic, New York and New England set all-time record peaks during the week as consumers cranked up their air conditioners.

High prices have caused those once sleepy wells to become a bit more active, a they are bringing towns along with them.  Typical market behavior.

http://today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-07-23T144432Z_01_N 21245396_RTRUKOC_0_US-BIZFEATURE-TEXAS-DRILLING.xml

NEW YORK (Reuters) - Standing tall amid sunflowers and bales of hay, a greasy drilling rig roared loudly, a recent addition to an otherwise idyllic ranch north of Dallas, Texas.

Other signs of change sweep across rolling green fields -- green-painted gas wells, large trucks trundling across narrow country roads and a mesh of pipes peeking out of bushes.

This is Ponder, Texas, population 507, one of many towns north of Dallas where a natural gas drilling boom is transforming the rural landscape.

Far beneath ranches and fields in North Texas lies the Barnett Shale, a geological formation that has quickly become one of the most sought-after energy exploration hot spots in the United States.

Just a few years ago, it was considered too expensive -- laughable even -- to extract the vast gas reserves trapped in the Barnett's dense black rock.

Thanks to a steep rise in energy prices and advances in drilling technology, the Barnett is now the nation's fastest growing natural gas field and the biggest in Texas.

Last, here's an article about the lifestyle changes that people are being forced to make (finally) to cope with higher gas costs.


Almost 65 percent of respondents are reducing their entertainment and hobby expenditures because of higher fuel costs. Sixty-four percent are dining out less and 29 percent are choosing fewer extracurricular activities for their children. More than half are cutting back on summer travel, while 29 percent are canceling summer travel plans altogether.

Higher fuel prices may affect the workplace, too. Nearly one-third of respondents said they're considering switching to a job closer to home.

"...the world's ever-decreasing number of farmers will not produce enough staple grains to feed its ever-increasing number of people."

Maybe if people have to start paying what food is really worth, more farmers will start to grow it?

I agree with this, but I think we're going to run into the PO problem first.  I agree that more farmers will sense the price signals that will cause them to increase the numbers of farmers farming.  

However since it is mostly congolomerate ran, and petro intense, the new farmers will struggle to find ways to adjust to the higher petrol prices.  I think as the transport of all food becomes increasingly higher, at some point it will be more profitable to begin growing mostly local again.  When this happens, I believe more people will grow their own gardens at least.

But at the same time all of the costs are also rising for farmers - fuel, fertilizer, pesticide.  Add in the weather issues and there are a lot of reasons to be leaving farming at the same time.

Organic farmers have it easier for many of these costs.  They still have the weather to deal with though.
This is false.  Organic farming is chic right now and all, but it still needs fertilizer to work.  It's just not NG, instead it's poo from animals.  This cost needs to be addressed and calculated in any comparison.  Now I really believe it's better to grow organic, it's not like it solves all the problems we face.  They still need to haul their produce from town A to town B.  

And speaking of costs, the poop must cost a whole lot more than NG, b/c all organic products are priced @ a premium currently.  So either the farmers are getting some extra cash for the "organic" label, the retailers are getting extra, or the fact that you can't use fertilizers actually costs more per unit.

At some point, organic farming will become more cost effective and fertilzers based from NG will be abandoned due to prices.  However the poo needed comes from a circle of life and if we are busy killing the plants with GW, there are going to be less plant food, less poo, less food for all.  So even if we agree that organic is a better alternative, you start to run into some limits on poo input.  So there will be those who starve

Organic doesn't have the economies of scale of conventional agriculture because it is so much more labor intensive.
Right, and as soon as it becomes too expensive to farm using a big ass tractor b/c the price of diesel is too high, we will see a giant boom in all types of organic farming on a micro level to the inability to scale organic farming.  

We will all become producers to offset not only the cost of BUYING food, but the scarcity of those items.  It was done like this a long time ago, at least around here it was.  Regional farmers markets have made it through the tough times and I feel like they will have their renassaince within the next decade, give or take a few years.  We will all basically be micro farmers and the macro farmers will take care of the harder, more expensive crops (tobacco will still be needed).

Here was the reason for my cryptic message on Friday about "waiting to see what the media is reporting" with regards to COP's Wood River refinery:

Refinery Likely Down Until Next Week

Source: The Telegraph (Alton, Ill.)

By Dan Brannan, The Telegraph, Alton, Ill.

Jul. 22--ROXANA -- Officials are uncertain when operations will resume at the ConocoPhillips Wood River Refinery, which was shut down by Wednesday night's storm. "We should be prepared for a restart of the facility by next week," company spokeswoman Melissa Erker said. "We are working continuously, 24 hours a day, to be ready. We didn't have any damage to the structural integrity of the plant, but we have some internal and external electrical things that need to be replaced. The things that are damaged should be fixed by the middle part of next week."

Erker stressed that it takes more than merely turning on a switch to get the refinery back in production.

The refinery has the capacity to produce 300,000 barrels of crude oil a day.

Dave Sykuta, executive director of the Illinois Petroleum Council, said the shutdown is a tough situation.

"The bigger problem is the lack of electricity," he said. "A number of terminals are also closed because of a lack of power, and that magnifies the level of the problem. We are requesting that everyone be calm in their buying of gasoline. A number of service stations are closed.

"If people go overboard on buying gas, it will have the exact opposite impact on prices that they would want. The last thing our guys want is to have gas prices to go up."

Sykuta said it would be some days before the refinery is back online producing gasoline and oil products.

I knew the refinery wasn't coming right back up, but I didn't want to start a stampede to the pumps. I was just puzzled that the media did not react quicker to this story.

I will reiterate that with supplies as tight as they are, any time you hear about a big refinery going down in your area (and this is a very big one) you better top off your tanks. Prices are likely to go up in an attempt to keep the tanks from running dry.

Can anyone in STL or the surrounding areas tell us what is happening there with gas prices?



As per: http://www.stlouisgasprices.com/index.aspx?s=Y&fuel=A&tme_limit=4

Low = 2.94
High = 3.19

Prices are within the last 4 hours.


Aa a general rule, any shutdown, even with no damage  (scheduled maintenance, false alarm evacuation) takes several days to first production on restart and a week+ top full production.

The MSM just assumes that "they" have enough in storage, can change shipping patterns, etc.

When Houston has a refinery fire, there is never a local shortage (except perhaps one brand) because of the massive exports from there.  Same for New Orleans, Baton Rouge, and Lake Charles.  Other than those locales, I do not think any other area can absorb the loss of the largest local refinery without a local supply issue (perhaps Midland as well).

Friday was something.  Gas stations everywhere were clogged and I had to get gas for the weekend.  Prices didn't rise throughout the weekend though.  Tops in my area were $3.09.  The local radio stations were encouraging people to call in and tell them where gas was still available in town.  So people were calling locaations, prices and people seemed to be listening and following directions.  It was insane, but things are calming down.  Still over 100K without power and I'm still baffled that I didn't lose power the entire time!
I must admit, I don't really understand. Was this privileged information? Would you have know this only as a result of internal corporate communications? Would anyone outside of the supply chain from crude supplier to gasoline retailer have had access to this information?

If not, why would you refrain from its mention? Seems to me, in this era of ever-icreasing secrecy and obsfucation, knowing about this and not mentioning it seems rather perverse. I know I could be wrong, but it seems to me that announcements such as this should be made public and if not by the MSM then by those who are aware of them in places like these.

I must admit, I don't really understand. Was this privileged information?

Yes. It had not yet been released to the public just how long we might be down, and until it was it has to be considered company confidential information. I knew that it was worse than the piddling mention in the media, but could not mention it because I would be releasing privileged information. Once that information has been released to the media, I can comment on it.

Understand that if I had come out and given that information on Thursday morning, when I knew about it, that would have been grounds for dismissal. It is no different than if you are doing a project at work, there are unforseen complications that will delay completion, and you release that information to the public. In some cases, your competitors could be all over it, and it could give them a competitive advantage. Your employer would also have grounds for your dismissal.



Understood. Weren't you also at risk by even mentioning the subject? Seems to me you run the guantlet even mentioning your access to priviledged information. Not that we mind, it just seems a risk you don't need to take.
I only mentioned it after the media had a brief blurb on it. I knew about it on Thursday morning, but the media first reported on it Friday morning. At the time, they acted like it was no big deal, and the national media didn't mention it when reporting on the damage in STL.

When I talked about it on Friday, it was in response to someone else having posted the story, and I just clarified which refinery it was, and how much production they have. Where I would have crossed the line would have been to say "And it looks like it will be down until next week, so STL will probably run out of gas this weekend."



You know your position better than I. Just, in today's environment, discretion is the better part of valour. Take care with exposure. OTOH, if you've got something interesting and fancy throwing caution to the wind, I'm all ears. :)
My local station was behind the curve. Since they were the last one in the area to raise their prices, up 16c today, they had cars waiting three deep when I filled up this afternoon. They are now out of regular unleaded.
That's always the Catch-22, Alan. Raise prices, and get accused of gouging. Don't raise prices, and run out of fuel.



Catch 22?  How about those dreaded words instead, hmmm...free market.
Last year Rosco Bartlett convened a hearing on Capitol Hill about PO.  The result of the meeting was for the national petroleum council to conduct a study of PO and world oil supplies.  Has anyone heard anything about this study or its results since then?
Nevermind.  I went to http://www.npc.org/ and got my answers.  It will be another year before they post their results.  There is some interesting information about the study there.  On a really bad note, the study is being headed by Lee Raymond, the ex CEO of Exxon, so I expect a whitewash already.
And the vice chair on demand is one Daniel Yergin.  I believe you may have heard of him.  I think he has a unit of measurement named after him like Ohm and Watt :)
The chair on supply issues is David O'Reilly the CEO of Chevron.  And the vice chair of the supply task group is Donal Paul aka Vice-President and Chief Technology Officer Chevron Texaco.  Good grief.
I wonder what Roscoe thinks of all this?
Are you talking about their Slide Show with notes (PDF warning)?
No worry, it's based on "sound" data and science.
Relax, they will get to the bottom of this, and all will be relealed.  There's no need for you to worry your pretty little head about it, just continue shopping.
This story will break your heart! especially if you have children:

Burned children bring war horrors home

Damn, I have no tolerance for such things involving children, none at all.  Every one has my child's face.
OT to Peak Oil but not Global Warming

Sugar Pine is the world's largest pine tree (grows to 81 m) and would be a good addition to Icelandic forests if it was adaptable to any of the Icelandic sub-climates (see GW).

The Icelanders have made several attempts in the past to get selected Sugar Pine seeds (from high (close to 2,700 m, 9,000'), dry locations in Southern California) and failed (it is a hard tree to collect from in difficult terrain).  I found a knowledgeable local, Todd Foster, who agreed to try and collect them.  Iceland wanted 200 seeds for a Phase I trial.

He misjudged this year's seed fall (it was early), and after two weekends effort managed to collect just five seeds from Mt. San Jacinto.  He will try Mt. San Gorgonio next weekend.  If no success, then next year.  These five seeds plus any others collected this coming weekend will be shipped to Iceland.

A few million sugar pines, growing to 30 or 40 m on former sheep pasture land in Iceland, could capture a fair amount of carbon.  Perhaps enough to set GW back a few weeks.

The Vikings released 6 million tonnes of carbon when they settled Iceland (annual release today is just short of 7 million tonnes of carbon from fossil fuels), but the trees that the Vikings cut down were never taller than 14 m and "skinny".  Reforesting Iceland with larger trees could make a small dent in GW.

An article "Forestry in a Treeless Land" by my friend Þróstur.


As others may note; I am not easily put off by a difficult task IF I think the task is well worth doing.  Even if I can only contribute a small fraction of a solution, I will work on that fraction for many years.

Mitigating Global Warming & Peak Oil and Rebuilding New Orleans are all tasks well worth doing.  One step at a time for many years.  Little immediate gratification but still worth doing.  Perhaps against the "odds", but things would be worse without my efforts (I think).

My partial solutions for Peak Oil also helps GW.



As a seven-month reader of, and very occasional poster on, TOD, I have admired your singleminded perseverance. But I'm posting to ask you a question about trees, since you are obviously involved with them.

When my wife and I began farmsteading in the mid-'70s, we were enthusiastic about honey locusts (not the ornamental variety, but the Gleditsia triacanthos that grows large seed-bearing pods). We had read several books on forest farming and thought they might be a source of protein for our few cows and goats as well, perhaps, as a source of protein for ourselves. We were particularly excited by a chapter in J. Russell Smith's TREE CROPS: A PERMANENT AGRICULTURE (orig. 1950, 1977), which cited some work at the Alabama Agricultural Experiment Station in the 1940s that seemed to show that ground honey-locust pods are equal in feed value for livestock to oats, pound for pound. We were excited, because honey locust trees would allow us to grow concentrate on our rocky, hilly soil, while helping to protect against erosion.

As Smith himself notes, the Alabama honey locusts were all cut down and research was switched to peaches. When we were building our barn and house (ourselves, that is, not causing them to be built), we bought some honey locusts that, we were promised, were the pod-producing kind. Well, they turned out not to be.

One thing and another diverted our attention from honey locusts--and even from our attempts at self-sufficient living. (It was called that in those days, rather than, as now, sustainable living.) We got overly involved in our teaching careers and lost our way as farmsteaders.

Well, impending retirement and Peak Oil has renewed our sense of good fortune in living on 35 acres of our own land with a barn and all.

So, my question to you is: do you know anything about pod-bearing honey locusts, where we might get some, etc.? Any information or references you might be able to share would be greatly appreciated.

And do keep up the good work!

Thanks very much.

Bob (Vermont Agatha Zoe)

Honestly I do not know anything about pod bearing honey locusts (and too bad the studied specimens were cut down !).

What area are you from ?  Find an Arborteum in your gneral climatic zone and call them.  And then call another. etc.  This would be the most likely path to success.

I am waiting to get some Black Walnuts from Ohio from an abandoned USDA breeding program.  The parents were the second generation selected (from memory).  Plant them on my parents farm.

Be careful Alan, a black walnut in the pod has got to be one of Nature's all-time foul smelling objects. Truly repellent. Meanwhile, there are other types of nuts native to the southeast that are not now considered food nuts but were in the past.
This is a farm, not a yard.  Black walnuts have been spared selectively during thinning for generations (high value wood mainly, few gather the nuts).  I am just going to introduce superior (from a human perspective) genetics.
You do know that the trees change the chemistry of the soil in  their immediate area so that nothing else grows... Probably doesn't matter if you're looking for wood but you will not be able to garden food crops near them.
Juglans Nigra is VERY well known for the chemical warfare than it wages against all others.  It impacts pasture nearby (less growth but still palatable for cattle).
Are these seedlings you are interested in selected for better nuts? I have many, many wild black walnut trees on my land and keeping the seedlings out of my garden and flower bed is a constant weeding problem. They grow very rapidly compared to most other trees. Only the exotic trees like mimosa and tree-of-heaven can beat them. However the nutmeats are small and hard to pick out of the shells. I considered ordering some 'improved' black walnuts from Stark's last year bu ordered pecans instead.
I beleive they were selected for timber.  For nuts, you are better off with a named cultiver.

There is  amsll family nursery just north of Mammoth Cave in Kentucky with a good selection of nut trees and paw paws as well..

Contact me later (this fall) and I will look up the name & contact.  Better quality & prices than Starks IMHO.

Re Big Trees and GW; the thinking in some places is that the trees had to establish hundreds of years ago and recent seedlings will not grow as large. The tallest local tree at 97.5m (over 300') is a Eucalyptus regnans but when it slowly dies it will tower above its descendants. The future for most wild plants I think is woody, short and tolerant of drought and fire.
The money supply can grow and shrink no matter what the interest rate is.

I asked this late on Friday, but it may have gotten buried.  If anyone has an idea, I'm willing to listen.

Don you teach, so maybe you could answer this question I never got to ask in class.  The way I was stringently taught, was the good ol FED does not control interest rates.  They control the MS, which in turn controls the interest rate.  However the more I think about this, the more BS I want to call.  First off WHO says the FED doesn't directly control interest rates.  I've never worked at a bank, but my proff described the NY fed as hyper nimble and able to apply the new higher interest rates asap when called on.

Now if this were true, then it would imply speed.  He is saying that the NY fed starts selling bonds like crazy to take liquidity out of the system.  Now this in effect causes rates to go up.  While I understand the reasoning I think this is crap.  It seems more direct, and rational to simply "set" the new rate.  If I'm the lender of last resort, then I have the power and full control of monetary policy.  I can simply tell all banks in the system that money costs 25bp higher today than an hour ago and that will work too, right?  

The reason I'm confused about this is the inflation rate.  Now I understand cost push etc, so I would assume that oil rising as fast as it has, in short time has contributed to inflation in a large way, but it's not going away.  If the Fed has tightened the belt 17 times straight why is liquidity still so high?  Going from 1% to where we are now, you would think there would be a large contraction, but there has not at least according to MAR06 M3 data.  Combine that with recent discontined M3 data and this is why I come to the conclusion that maybe the S&D of money and "setting" interest rates is BS.  Where did I go wrong?

I'm no expert but as I understand it, the Fed does anounce changes to the interest rate but that to enforce it they must manipulate the market.  

Without market manipulation the Fed could lower the discount window rate but if they didn't perform and money supply adjustments the increased use of the discount winodw itself would increase the money supply.  Alternatively if they raised the rate at the discount window but did not adjust the money supply people would just not use the facility because they would be able to receive lower rates on the open market.  

Alternatively if they raised the rate at the discount window but did not adjust the money supply people would just not use the facility because they would be able to receive lower rates on the open market.

I agree with all of what you said.  Let's get specific though.  Your quote above is how I see it as well.  

However, that being the case....


Per their data @ 3/04 M3 stood at $9.0807T
Per their data, prior to discontinuance 3/06 - %10.2943T.

So in a little under two solid years our FED has managed to grow the money supply by 13.36%, yet they have raised rates consistently for the same two year period.  

Even if we stick to M2 data over the same period it comes to 9.5% over the two years.  So maybe this is where I have a hard time understanding, or I'm being lied to.  In the last two years only, money supply has grown between 9-13%.  According to BLS inflation figures, inflation can't be the culprit to explain an increase like this over two years.  Even at higher inflation rates, the numbers don't add up.

So if the Fed controls interest rates by controlling the money supply, I think they can't be controlling them too well at 5.25% since the only tool they have to control it, the money supply, has nothing but increase and at a faster rate than inflation!

So again I ask, how can the Fed decrease the money supply to increase rates, while liquidity has nothing but increase?  I really think it's arbitrary and simply a push of a button.

This post is related to Well, could we linearize this, then? story.

I will just express my personal opinions on the different methods of estimating URR and peak production years.

In this blog we are using two types of curves for modeling oil production:

  • A Hubbert curve
  • A Gaussian curve

Depending on what-against-what we plot these curves become different things:
  1. cumulative production (Q) versus the ratio between annual production (P) and Q (i.e. P/Q). In this plot a Hubbert curve becomes a line.
  2. time (T) versus Log of P. Then a Gaussian becomes a parabola.
  3. Finally, P versus Q. Then a Hubbert curve becomes a parabola passing through the origin.

My favorite plot is 3).
Pros of 3):
a) The first years of production (which usually are unreliable) are compressed around the origin, and the peak years are amplified (they take up more space).
b) exponential constant growth or decline becomes a line. This is a very nice behavior.
c) In fact, the slope of the line equals the rate of growth or decline, assuming that P is annual production (not daily production). This is also very nice.
d) The URR is just the intersection of the parabola (if you model with a Hubbert curve) or a line (if you model with a constant decline) with the x-axis.

Cons of 3):
e) You need the whole production history of the region, if you miss some years of production history you are dead.
f) It is difficult to get an idea of the time scale, unless some of the points are labeled with years.

I should note that Laherrere is very fond of plot number 3). See for example Jean Laherrère (pages 11-14). And he draws lots of lines in those plots, which correspond to exponential growth or decline.

When you plot production of fields, the decline becomes almost invariably constant for a period, and sometimes even becoming worse but not becoming better: "The only clear example of significant decreasing decline (save where due to previous poor management) that could be found after reviewing about 2200 fields of over 100 Mb, is Eugene Island 330 in the Gulf of Mexico." This quote is from Laherrère's document on page 14.

In other words, he is saying that after the peak in plot number 3 you tend to see a straight line which intersects with the x-axis at a number that is an upper bound of the the final URR.

For the case of Romania, I just did an eye-ball linearization from Stuart's graph:
romania oil cumulative production versus daily production

For the case of US48 I did the graph and an estimate of 243 GB of URR:
US48 Oil Cummulative versus Yearly Production

Since the line has equation y= 5.56 - 0.0228 x, then the average decline rate from 1970 to 2004 is 2.28%.

Plot number 2)
Pros of 2):
b) exponential growth or decline becomes a line
e') You do not need the whole production history.
f') The time scale is on the x-axis.

Cons of 2):
a') The first years of production get stretched and the peak years get squashed.
d') It is not easy not visualize the URR.


Plot number 1)
Pros of 1)
d) The URR is just the intersection of the interpolating line (if you model with a Hubert curve) with the x-axis.
g) The maximum decline rate is just the intersection of the interpolating line with the y-axis.

Cons of 1)
a') The first years of production get extremely stretched and the peak years get squashed. A very good example of this is the FSU, where the 1990 collapse just looks like very minor ditch.
e) You need the whole production history of the region, if you miss some years of production history you are dead.
f) It is difficult to get an idea of the time scale.

good analysis! A few observations:
 In the cons of 3) you said: "You need the whole production history of the region, if you miss some years of production history you are dead." I don't see why, you can offset your cumulative production numbers in order to match a target cumulative production for your last available date (BTW, this is aslo true for the HL technique).

For the Lower-48 case (last figure), the URR estimate from the HL technique is very close to the URR even based on early production data (i.e. Q<25% of the URR):

Note that the URR estimate from a P vs Q chart using a straight line requires to have data post peak which makes its predictive value less attractive. I believe that the HL behaves well if: 1) the production profiles is almost symmetric; 2) P/Q are small and below 10% very quickly.

good comments! Thanks

About "You need the whole production history of the region", I
agree that if you have an estimate of the cumulative production
until a year, but you don't have annual data before that year you
are still alive. But that is a big assumption.

By the way, measurements of annual production have a certain
reliability. Some periods in time and some countries might be more
sloppy. How would these errors propagate to future predictions?
How robust are predictions to errors in measurements? In the Time
vs Log(P) plot if production of a year has an error it is not very
important. Have you though about these issues? I haven't.

About estimating the peak year on the P vs. Q plot: before the
peak you can use a parabola that passes through the origin. My
first impression without much empirical evidence is that this
method is not so good at predicting the peak year. But the
downslope of the curve looks very linear to me and I have seen
several downslopes of countries and fields, maybe the upslope and
downslope are very different in nature and should be treated

One more thing, for US48 you predict using HL an URR of around
195Gb!, my estimate is 243Gb. Your estimate looks very pessimistic,
don't you think so? US48 production should start a free fall very
soon to achieve that number.

But the downslope of the curve looks very linear to me and I have seen several downslopes of countries and fields, maybe the upslope and downslope are very different in nature and should be treated separately.

That's very possible. For the Lower-48, the downslope looks clearly linear. However, the model P= a + b*Q is a little bit awkward because it does not lead to a purely exponential curve due to the constant parameter (a) which will give an additional linear function of time.

One issue with the HL approach is that changes in the tail are dampened by high cumulative values. In short, the HL is less and less sensitive to variations in P as Q increases.
I've commented on this before, but I'm struck once again by the dichotomy between what I think, what I see on the news (not the MSM), what I believe is happening, and what I see and feel around me.  I get up everyday and go to the same job, I do typical things, and I interact with people.  Other than that the price of gas and food is a little higher, all seem normal.  There are goods on the shelves as always, the advertising barrage continues like always, people seem to be behaving just like always.

But it is disturbing because both these realities cannot exist at the same time, at least not long term.  One of them must be wrong.  I know what I think is happening, but the lack of obvious impact in my part of the world is surreal - sooner or later this must be reconciled!

both these realities cannot exist at the same time

Oh yes they can.
In my job I travel between differnt worlds (different industries). Some are doing great and have no sense of any impending doom. Some are on their last legs. Wasn't it like that in the Great Depression too? It wasn't one homogenous wash. There were pockets of prosperity in the midst of ruin.
I suppose you are right, but on the other hand it's more than "pockets" right now.  So perhaps the present situation is just a transient condition.
"I know what I think is happening, but the lack of obvious impact in my part of the world is surreal - sooner or later this must be reconciled!"

I know what you're talking about, and I have similar trouble.  I look at all the data, I use uncommon sense and everything I know tells me that Peak Oil and all the probable evils that it will bring are just years away.  But then I go to town and see everyone acting normal...not a hint of concern or trouble, a few people casually complaining about gas prices maybe.  Nothing that would lead me to believe TEOTWAWKI is just years away, and I'm left wondering if I'm just crazy.


Collapse is not going to come in one fell swoop.
It's going to be death by a thousand cuts.
Not everyone is going to get cut.
Not everyone is going to notice all at once.

I'll give you a personal example.
Today one of my doctors informed us he will no longer honor our health insurance policy --and he's not the first health provider to refuse this insurance company.
What does it mean? I didn't get fired. I just got a reduction in compensation, quietly with hardly any confrontation --and my employer can pretend they didn't know, they didn't do it. The finger of blame is an invisible one.

The price at the local gas station inched up another few cents.
Another cut. Another jab by the invisible finger.

Fruit at the supermarket shrunk in size by an almost imperceptable amount.
Another cut.

One cut at a time. That's the way it's going to creep up on us.

After a while you get numb to the pain.

I don't think it'll come all at once either, but I do think it'll snowball.  It'll start out small, sort of like we're seeing already (though I don't think we can really blame the current situation on PO) with small adjustments and at some point when it all sinks in, I suspect we'll see energy hoarding and husbanding leading to job layoffs, leading to mortgage forclosures, leading to a banking crisis, etc...we will at some point reach the last straw which breaks the camels back, and be unable to hide the underlying decline beneath small changes.
Finding an alternate to burning oil for transportation by instead burning food for transportaion seems insane. The transition away from oil will be as painful as possible because nobody in this country wants to change a single thing they are doing. The politicians are trying to keep their jobs by telling everyone that we will continue on as before only by using switchgrass, ethanol, and biodiesel instead of petroleum products. Nothing could be further from the truth. Short-term solutions and cheap fixes will cause extreme misery one day. Too bad the capitalist structure in this country does not allow for long-term planning or have compassion for future generations. (sarcasm on) Of course with the rapture coming soon and the Lord will give us a new earth so we don't have to worry. (sarcasm off;-)
I don't think it's going to happen. When oil goes into terminal decline, economies will be shifting resources from other sectors to shore up food production. Ethanol will be recognized as a dead end very quickly.

The real stampede is going to be toward coal. Burning as much coal as possible as cheaply as possible as fast as possible to shore up industrial civilization as long as possible. Coal gasification. Coal to liquids. And the desperation to ramp up coal quickly will ensure that all talk of carbon sequestration is forgotten. This is what the Hirsch report advocates. This is what David Goldstein predicts as the most likely scenario as well as the most environmentally destructive.

If the U.S. is the Saudi Arabia of coal, why would it forego exploiting that resource to the hilt regardless of the environmental consequences if that is the only option for retaining its economic hegemony?

Absolutely right.  The quickest, easiest, broadest way to mitigate peak oil are other fossil fuels.  So it seems to me that it is inevitable that we will burn every last bit of fossil fuel that we can get our hnads on, and do it as fast as possible.  Peak oil is just on milestone on the way to the bigger issue, peak fossil fuels (doesn't exactly roll off the tongue, does it?) coinciding with peak energy.

And we'll do it without sequestering the carbon because we will be in a panic.  The last phase of the Industrial Revolution will be the most destuctive.  As we switch from oil to coal our carbon generation will accelerate due to the less efficient use of the resource as we transform it from it's natural state.

Only after we use up all the fossil fuels, and go through an immense amount of pain, can we find a new sustainable balance.  Interesting times.

While i agree this attempt will be made( Switch to coal) the fly in the ointment is called infrastructure. No matter what alternative you pick, the next energy de jour will require gobs of energy intensive infrastructure and a shitload of money.
Even a 2-3 percent decline does not allow enough time to replace. Prices continue to rise, infrastructure costs continue to rise, ala tar sands, and socio/ economic upheaval makes it all even more difficult. Don't look promising to me.
With the recent  of the connection between global warming and grain production, people need to understand that when we talk about sacrificing the environment, we are talking about sacrificing food production and the habitability of the planet.  In other words, the tradeoff isn't what most consider the nebulous, non threatening concept, "environment", the tradeoff is food to sustain life and habitat to sustain food production and therefore, life.  And for those who don't give a damn about animal life and plant life, we are talking about human life.

The trouble with the word environmentalist is the word "environment".  When one mentions the need to protect the environment, people think that's too bad but we are talking about something abstract here, so I don't have the time or inclination to worry about that.  People need to understand that from now on, we are talking about events like the death of the Amazon rain forest which may leave much of our planet largely uninhabitable.

The niches available that will not be too adversely affected by these changes may be very crowded in the future.  

This looks very much like a crisis to me but there are no adults in charge.  They are too busy spinning reality in preparation for the next election. If only terrorism were really our biggest problem.  The terrorism of the future may involve fighting over the few remaining places where food is stored.

"Availale niches" will be good for weeds and varmints. Hopefully some of them edible.
there are no adults in charge. They are too busy spinning reality in preparation for the next election.

Do you think then that they should qualify as "adults"?

From the National Hurricane Center:

Possible tropical cyclone forming in the Gulf of Mexico.

For those of you who like to point out Gore's use of private planes while he preaches about the detriment of global warming.


Gore said he and his wife, Tipper, who was in the audience, had adopted a "carbon neutral lifestyle."

"We've fallen into this pattern of consuming more and more and more and I'm part of it, I understand," he said.

I would guess those private planes still shoot his goal to hell, but what do I know.  This is nothing more than talk if you ask me.

Does any one have the link to the total amount of Coal Reserves in the United States and the amount already used in all the past years of consumption?  

I think we should run the peak production numbers on USA coal as we talk a great deal about using Coal to Liquids to off set declines in petroleum production we should know how long we have left on our Coal reserves as well.  Thanks.


Thanks for the link to the coal information.

After looking at the numbers we in the USA have around 270 Billion Tons of coal left after having consumed 70 Billion Tons mostly for electrical production.

So our total recoveralbe reserve was originally 340 Billion Tons of coal in the USA.  As of today we have consumed 20% of the total resource.  We now consume over 1 billion tons per year.  We will not reach a peak in coal production until we have produced 170 Billion tons.  With that logic we have 100 Billion tons to burn through.  

If we assume a growth rate of 5% in coal consumption to make up for loses in oil and natural gas then we could see a peak in Coal production from 2040 to 2045.  


You will find that USA has had 270 billion for quite a few years, despite buring 1 billion a year. I take coal reserve figures with the same pinch of salt used for OPEC oil reserves.
It all depends on the type of private plane. Big difference between a Kitfox and a Gulfstream V.  Many small planes get over 20 mpg at over 100 mph.
Twilight -

Up until a few weeks ago I thought that the likelihood of a US and/or Israeli attack on Iran was growing smaller and smaller.

But now, after Israel's major offensive against Lebanon, it has become apparent to me that not only does the US fully approve of what Israeli is doing, but is direcly complicit in the murder and destruction in Lebanon. Israel and the US are guilty of war crimes. And today that makes me very ashamed to be an American.

I think that the US and Israel want to morph the situation in Lebanon into an all-out war against Syria and Iran - the fulfilment of the 'clean break' envisioned by the neocons in their plan for the 'New American Century' and backed by the AIPAC.  

Whether this is more likely to happen before or after the November congressional elections is  not clear.  On the one hand, if the Bush regime is afraid of losing control of Congress, it might want to make such a war a fait acccompli by starting it before the elections.  On the other hand, if it thinks it will retain control over Congress, then it might not want to roil the waters before it has secured another term of congressional control and then start the war.  I think it's a toss-up.

Never let it be said that the Bush regime doesn't have an energy policy. It has a very clear and ambitious energy policy. And that policy is to militarily dominate the countries of the Middle East to such an extent that the US will have its hand on the oil spigot and can decide who gets how much and when. Of course, Russia, China, India, and the whole rest of the world have different ideas.

The Bush regime is basically going for broke and shooting its whole wad on this one.  If it 'works', we'll be guaranteed a goodly supply of oil at the cost of perpetual low-level war throughout the Middle East.  If it doesn't work, then we can kiss our collective arses goodbye, because these people have no Plan B.  

 I know it is not going to work.

Well, as I'm tired of the whole Israel support angle that's affected this and lots of other boards for the time being, this is the part I found most interesting:

A glimpse of an answer lies in the fact that the post-9/11 military geostrategy of the "War on Terror" does not spring from a position of power, but rather from entirely the opposite. The global system has been crumbling under the weight of its own unsustainability for many years now, and we are fast approaching the convergence of multiple crises that are already interacting fatally as I write. The peak of world oil production, of which the Bush administration is well aware, either has already just happened, or is very close to happening. It is a pivotal event that signals the end of the Oil Age, for all intents and purposes, with escalating demand placing increasing pressure on dwindling supplies. Half the world's oil reserves are, more or less, depleted, which means that it will be technologically, geophysically, increasingly difficult to extract conventional oil.
That is something I can agree with.
This whole "War on Terror" thing is a distraction.
TPTB do not want someone like Clinton standing up and saying:

"It's our oil economy, stupid."

So just like other despots in other collapsing societies, our PTB have created an "us" versus "them" game.

Sort of reminds you of summer camp doesn't it? You, you and you are on the red team, the rest are blue team. Never mind the mosquitos. Line up and start playing. We are here in camp to have fun people!

What a mess. The US has a policy of never negotiating with terrorists like Hezbollah and the and Hezbollah refuses to negotiate with Isreal. Insanity of insanity all is insanity.
Request for opinion of doomers, given these two conditions:
  • 1: oil is peaking now, and production rolls over like Hubbert says, etc, etc, (i.e. "bad" news), and...

  • 2: electricity production contiues to RISE by a small percentage or so per year like its been doing for a while, in an environmentally neutral/green way (i.e. "good" news)

then what is the doomer opinion if both these conditions are met going foward. Thanks for any thoughts.

I'm not a doomer, but I think the Hirsch Report addressed this. The question is whether replacement rate by alternatives can match decline rate for each kind of lost energy source.
I'm trying to get a sense of doomers opinions relative to, say, the Hirsh report.
$100 Oil Sure Bet, Rogers Says


 Rogers said declining supplies from existing fields and a lack of new oil discoveries will drive prices higher.

``The bull market has about 10 or 15 years to run,'' he said. ``How high it's going to go I don't have a clue during that time, certainly over $100 a barrel or over $150 a barrel before it's over.''

Has anyone seen an update to this:
?  I searched the EOG resources website but found nothing.  I first saw this last year on a Simmons presentation and jumped out of my seat.  I'd love to see an updated plot through 06.
Gracias.  Guess I should have looked harder.
Spanish firm claims it can make oil from plankton

MADRID (Reuters) - A Spanish company claimed on Thursday to have developed a method of breeding plankton and turning the marine plants into oil, providing a potentially inexhaustible source of clean fuel.

/ Vehicle tests are some time away because the company, Bio Fuel Systems, has not yet tried refining the dark green coloured crude oil phytoplankton turn into, a spokesman said./

Are these guys on to something?

This has been discussed already 4 days ago:

Pretty hard to keep up with the news on TOD, Eh?

BTW, though the TOD forum software is already excellent (many thanks Super G) it is still a bit difficult to search recent posts for some topics given that Google is lagging behind by about 3 or 4 days.
Any way to improve this?.