DrumBeat: July 6, 2006

Update [2006-7-6 9:46:19 by Leanan]: With new record highs set for oil yesterday, there's a flood of peak oil stories today.

Billionaire investor Jim Rogers says Oil will hit well over $100 and stay high:

"We're going to have high oil prices for a very long time. The surprise is going to be how high it goes," Rogers said.

Reiterating earlier comment oil prices would hit at least $100 a barrel, he said: "It will be much more than $100 before the bull market is over."

What's more likely - stagflation or depression?
Yes, we had an oil shock in the ’70s. That oil shock was caused by an embargo. The oil shock now is caused by Peak Oil. Is there a difference? Yes, there is: In the former, wages rose to meet rising costs. Are wages rising now because of Peak Oil? I think not.

Saudi Crude Production Falling:

Apparently the story coming from the technical experts in the oil fields is very different than the story coming out of the political types in the royal family and the oil ministry. The ministry says it can boost capacity by 25% in two or three years, when there has been no ability to increase it at all over the last two years despite record prices. The technical types are saying that it will take fairly heroic measures to keep production flat.

My bet is that the technical types have it right. If the incremental oil to meet growing demand does not come from Saudi Arabia, it is hard to see where it will come from. If so, the bull market in oil is only beginning and we are unlikely to ever see $50 oil again, not in our lifetimes, our children's or our grandchildren's. In other words, peak oil maybe happening even sooner than I had thought, and I have been on the relatively pessimistic side. I hope I am wrong, but fear I am right.

But others aren't worried:

Non Peak Oil

...Every year we have more proven reserves at the end of the year than we did at the beginning, thanks to vigorous exploration and improved extraction technologies. This has been the consistent theme for as long as oil reserves have been calculated. There has never been a time that the oil industry has had less proven reserves at the beginning of the year than at the end, even with the intervening 365 days of consumption being factored in. Odd circumstances indeed for a scarce resource!

Old king coal to reign as fossil fuel continues to fire the future

Malthus was wrong: the world's population has risen sixfold since his day, while life expectancy has doubled. So will contemporary Malthusians prove right about energy?

The answer is: No. Moreover, without extraordinary action, the future lies with oil, gas and, above all, "old king coal", the fuel with which the industrial revolution began.

Grain production dropping; fuel thefts rising

Gunmen kidnap guard at Nigerian oil rig

Hit with rising gas prices, boaters are scaling back on trips

Saudi Aramco sees rig fleet at 121 by year end

China, Russia benefit from energy co-operation

Update [2006-7-6 10:39:11 by Leanan]: The EIA Weekly Petroleum Supply Report is out. Oil is dropping on stronger than expected gasoline inventories.

High gas prices are affecting retail sales:

Wal-Mart's sales at its stores open at least a year - a key retail measure known as same-store sales - rose just 1.2 percent in June, the company reported Thursday.

The world's largest retailer said total sales for the five weeks ended June 30 rose 10.4 percent to $33.12 billion from $29.99 billion a year earlier.

In a statement, Wal-Mart's chief financial officer Tom Schoewe said customers were consolidating their trips due to increasing concerns about high gas prices, but maintained the profit forecast for the current quarter.

Sales increased 3 billion dollars over June of last year, but it's a disappointment because same-store sales rose "only" 1.2%.

I guess 1.2% won't support the Ponzi scheme...

Question:  Since Walmart and Costco now sell gas at their stores, is the gas included in their "retail sales"?

If so, wouldn't the higher gas prices increase their retail sales?

That seems to have worked for CostCo.

However, it's becoming more and more difficult for independent retailers to get good prices on gasoline.  The gas stations that are connected with oil companies have a pricing advantage, and even large independents like Wal-Mart are hurting.

Interesting that same store sales are not keeping up with inflation, even after the added "juice" from the fueling stations. Even more interesting is that Wal-Mart same store sales track (at least by my recollection) the increase in non-salary wages. These increased much mre rapidly in the Clinton years, which accounts for most of Wal-Mart's growth.
I don't know about the rest of the nation, but in the Southeast, the gasoline concession at Wal Mart is contracted out to Murphy Oil Company. I don't know what the terms of the contract are, I am sure Wal Mart gets a share of the sales. But basically the company selling the gasoline is Murphy.
Must ... resist ... ponzi ... flag ... and remember that retailers are as old as civilization.  Models may change, and WalMart has shown intent to change their model in response to energy prices.
No one is expecting commerce to end.  It's the economic model that requires constant growth that's going to suffer.  (And no, it's not just Wal-Mart.  I picked on them because they named gas prices as part of the problem.)  

I mean, think about it.  They make 30 billion dollars in sales in one month...but it's not enough because it didn't increase enough over last year?  Crazy madness.

It is a Ponzi scheme. People no longer buy stocks because company XYZ makes $1,000,000 a year, every year, and has $50,000 of profit a year, every year. No, they buy company ABC because it made $1,000,000 5 years ago, then $2,000,000 4 years ago, then $4,000,000 3 years ago, then $8,000,000 2 years ago... That sort of nonsense cannot continue forever and it won't. The notion that a company making a good profit has "problems" because it grew at "only" 1.2% rate is a mental masturbation only possible in the current ultra-warped perspective built around seemingly endless cheap energy. That's going to change and historians will look back and wonder what sort of mental illness gripped our entire culture.
This the kind thing I'm resisiting.  People invoke "ponzi" and then forget that WalMart is engaging in commerce, and providing a tangible service.  People cook WalMart food in their WalMart pots.  Ponzi, in the true sense, was selling a false hope of purely paper manipulation and profits (postal coupons).

Now ... you wanna go on about leverage and risk?  Pfft.  Retailers have been around since the dawn of civilization.  Wine merchants sold product shipped in those amphorae on those little Roman ships.  Were some of them leveraged too far, and did they suffer when ships sank, etc.?  Sure, why not.  That too is as old as civilization.

... but there is a clear difference between a retail business and a paper company.

If you can run a Ponzi scheme with a fake company, does it make it not a Ponzi scheme if you use a real company instead?
I think the obvious extremes are a good solid company with products and services ... and then out at the other end a company with nothing but paper.

In the middle we have to distinguish between companies that are merely "overvalued" (quite common) and companies that are running a true scam (somewhat less so).

I recall a computer add-on company of some kind (sound boards?) who was discovered to have taken massive numbers of returned and defective product, and stashed them in a warehouse ... trying to keep them off the books.  They certainly veered into scam territory, who knows by what incremental path.

It's not the company that's running a scam.  It's the entire system that's a scam.

When the music stops, the ones who came in late - the ones at the bottom of the pyramid - are going to be screwed.

I understand that this is your perspective.
Ponzi defrauded new investors (new devotees) by mis-informing them that the money older investors received came from profits recouped off of real investments when in fact it was just the money of new investors (new entrants into his system) being passed forward to older entrants.

Of course this sounds strangely similar to our US Social Security system.

Does it correspond to other parts of our "system"?
What other parts are built on mis-information and fraud?

Ponzi, Pyramid, same basic animal. One criterion for identifying a 'Pyramid' scheme is the proportion of 'product' that is moved, as opposed to simply expanding the pyramid by recruiting more suckers.

Seems to me that the Ponzi scheme idea is only partly true and only on a long time frame. Product is being delivered as long as we have the cheap energy for creating it. As cheap energy wanes off, the Ponzi component of the whole shebang gets larger because more is promised and less delivered.

It's really more of a 'Squander' scheme, with the empty promise of being able to squander endlessly into the future.

There is an interesting line between the two.  Market systems have always allowed, as part of the game, for the seller to make his best case for value, even as the buyer denigrates it.

In the market 5K years ago:

Trader: I have these jars of excellent imported wine, I will sell them for just 6 coins.

Merchant: They smell like they're starting to go off to me.  I'll be lucky to move them before they go sour. 3 coins.

Trader: Are you serious?  I should take these to the palace, for they are truly suited for kings ... 5 coins.

Merchant: You know, the local stuff is getting much better.  My customers are starting to prefer it.  4 coins.

... and so one.

If you ask me, they "analysts" on CNBC in the afternoon are just playing the role of "Trader," one (again) as old as civilization.  They are putting the best possible face on their products.

We've actually decided (as a society) what constitutes a scam, and embodied that in a whole series of laws and institutions.

Some people want to throw that over and say it's all a scam ... while I think it's useful to distinguish from things that are merely overvalued or oversold.

Traders of 5K years ago did not possess technology of neuro-linguistic programming (NLP), nor did they possess "mass" media for simultaneously programming the masses all at once.
If that stuff was so good, I'd be out driving my Chevy Avalanche right now ;-)  ... and neither of us would be at TOD.

Maybe we have enough generations history dealing with swarmy salesmen to develop neural countermeasures.

"Maybe we have enough generations history dealing with swarmy salesmen to develop neural countermeasures."

You do. I do. But advertising still has some sway with us. And a large fraction of society's neural countermeasures aren't nearly as well developed.

Heck, my university educated mother can't resist buying a new household product after a new round of advertising hits the television. And I don't think she's atypical.

Honestly, if it didn't work, do you think companies would spend billions on advertising? Check out No Logo by Naomi Klein.

Most people still are.
"There ain't no peak oil, it's just them dang oil companies gouging us!"
Of course, the oil companies are milking the Oil Peak! It would be no fun otherwise, in accord with that Jay Hanson character. Jay Hanson is the definitive Doomer. Doomer or not, I'm sure glad - and gladder by the day - that I never had kids for their sake. After all, it will get harder to go about daily missions as time goes by.

While the Cuba powerdown is romanticised, an alternative situation can exist in the form of North Korea. Not good! As if Cuba wasn't bad enough, North Korea is a micro-case of America but with capitalism - only making things worse. Get ready for a looooong ride doooooooooooown! We are misappropiating resources to the military NOW. To be honest, I don't want to see that wreck from a cockpit!

Things will not be good during ANY "powerdown". It seems that a powerdown does require a "command economy" but the way it's done make a giant difference. Fidel did maneage a "powerdown" though admittedly not optimally. Much more likely our own powerdown will be way sub-optimal. Democracy, like capitalism takes a powerup case, so all bets are off.

It's no wonder why doomers love the oil peak topic! PO allows for doomers to have fun. It is up to us and people to remediate it like Y2K but it will be harder by far. Can PO be remediated? We will sure find out, most likely the hard way, as TSHTF.

I think the mis-communication here is this: the retail sales are a real business, no problem there.  But the people buying stocks in the company are paying a price that is based on the assumption of infinite "growth".  If the company stops growing then the stocks lose value, even though actual sales and  profits remain the same.  The stock system is the Ponzi scheme, along with the whole "growth"-based financial system.  Without "growth", there is no reason for more "investment", and no way for "money" to "make more money".  Imagine that, making money will require work!

BTW I keep putting "growth" in quotes because the only thing that truly grows is the throughput of nonrenewable resources and the destructive impact on the planetary environment.  When economists learn to subtract as well as add, the externalized costs will show that the "growth" is a loss to most of us.

Growth for it's own sake is the ideology of the cancer cell.

I don't think anybody out there expects any company to exhibit "infinite" growth.  IMO you put the quotes on the wrong word ;-)
I think you're wrong on that.  

Like Kenneth Boulding said, "Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist."

Amen. Ken Boulding is one of my six favorite economists. (I've listed the others elsewhere.)
Don, can you list 'em again?  We need them all together in one convenient form.
John Maynard Keynes, Milton Friedman, George Stigler, Robert Heilbroner, Lester Thurow . . . .
Great list. I think Stigler is the best of the batch. His understanding of concentrated benefits and diffuse costs -- and how that shapes human investment and indirectly regulatory agencies -- is brilliant.
This is the first time I've seen anyone mention Kenneth Boulding anywhere. He was the subject of my senior thesis and I studied under him at University of Colorado.  If we had listened to him 30 years ago, it is unlikely we would be in this mess --- including overpopulation.  
Let us hope then that most of us are neither ;-)
I suspect most people who invest in the stock market buy into the infinite growth thing at least somewhat.  Some may think they can time the market and get out before it tanks, but most are probably like those Enron employees, who just never imagined the company stock could stop increasing in value, let alone decline.
I think we crossed timescales in the last few posts.  It's one thing to look for "the next Polaroid" as people did in the 80's (when they should have been spotting "the first Microsoft").  It's another thing to make aggregate growth predictions for US (or world) companies over longer timescales.

While fossil fuels last they will provide (in combination with technology of the day) a "harvest" or "return" or "growth."

We like to point out that oil shale has the energy density of mere baked potatoes.  Well, if there were a few billion tons of baked potatoes out there (even inedible) somebody would probably mine them too.

Ultimately, on the long timeline, we will be working with resources lower in energy density, but with a higher technological lever.  It's science fiction to say, at that far distant point, what the outcome will be.

Ultimately, on the long timeline, we will be working with resources lower in energy density, but with a higher technological lever.  

Then that's where we disagree.  I don't think we'll be able to maintain our technological complexity on a diet of inedible baked potatoes.

Pessimists seem certain about a lot of things, but to be certain about the far future seems like the riskiest proposition.
I consider myself a realist, not a pessimist.  :)

And I think our past is a pretty good signpost of what our future will be like.

The old line is "to predict the future, you've got to invent it first."

Can you tell me what the best shale technology will look like in 100 years?

Depends on how you define "best."
Another old saying is "don't count your chickens until they're hatched."  I try to keep that strategy with respect to energy technologies.

It stikes me now that both "cornucopians" and "doomers" are making the same mistake and counting chickens.  The cornucopians see infinite chickens, and the doomers see zero chickens.

;-), moderates wait until they hatch.

By then it will be too late.
That, again, presupposes an outcome.
You say that like it's a bad thing.
I always say "prepare for the worst, hope for the best".
Some things to note about our past: ball bearings are easy to make, but we only started deploying them widely in 1900. Ball bearings have a profound efffect on our lives, an effect that was masked by oil.

Shiny reflective surfaces (i.e. solar ovens) are a recent invention. But people in Africa love them, even though for many these things ("cookits" is what they call them) are the only modern trapping in their homes.

I can think of corner reflectors, those things that reflect radar to the radar station from which it comes. Small boats have them, but could be easally made.

If that Kin Jong Il were to launch a 4-stage rocket with one and some boulders the would would take notice if in orbit like Sputnik. The boulders would serve only as added weight to prove he can do it. If he can launch a 500 pound (245Kg or so) payload into space he proves he can launch a 500 pound-weighing weapon -including nuclear - to any spot onto Earth. Not good. BTW the boulders if released serve as a road hazard to space shuttles :)

It is possible though not probable that Kim Jong Il launched that long range missle as a deliberate dud. By launching a known dud you get the rest of the world to think you're not up to the job yet - a bluff in reverse. That way, you get the diplomatic adavantage of not being a "full scale" danger BUT you wait until America is done with Iraq then you fire off an underground nuke PLUS put those boulders in orbit then America is militarily and diplomatically stuck. Any time you get a rocket to get 500 pounds into orbit you can get a nuke anywhere only if you aim good.

BTW, you say we disagree ... when I actually said it was indeterminate.
I emphatically agree with "indeterminate." I can write convincing doom scenarios and convincing semi-cornucopian ones. The future may or may not lie somewhere in between.

There is absolutely positively 100% certainty that there is no way to KNOW the future.

Not for nothing did I read some tens of thousands of pages of philosophy;-)

I suspect most people who invest in the stock market buy into the infinite growth thing at least somewhat.
Only if you invest in long positions, and for the long term. A lot of people invest in short positions, and if they invest in long positions, do so only for the short term. A lot of TODers believe that infinite growth is impossible, but have invested anyway (in Peak Oil-based portfolios).  My point is only that the only important growth is for the company whose securities you hold (in long positions), and only for the duration you plan on holding it.
I understand that, but most American investors are not that sort.  They are ordinary folk who are investing via their company's 401(k).  Like those Enron folk.  The payroll deduction and forget it crowd.
Ah, yes, that is correct.
I took econ 101 in college 30 years ago, that's the sum of my expertise!

But there are two ways to make money in stocks - dividends and capital gains. On the surface it looks like dividends is the sustainable route and capital gains not. But the tax law favors capital gains. Companies can use stock buy-backs to turn profits into higher stock prices. So a company making a nice steady profit can still have a rising stock price even though the total value of outstanding shares is fixed. Toss in the occasional stock split - my guess is that profits can sustainably be returned as capital gains instead of dividends.

Somebody might suppose that profit itself is unsustainable. It gets a bit absurd though. Prigogine's notion of dissipative systems seems like a pretty good model for life. The game is just to tap into the flow of energy from the sun into deep outer space. As long as the sun shines, there is a flow of energy to tap. Sustainable enough for me.

As long as the sun shines, there is a flow of energy to tap. Sustainable enough for me.

Did you read Mike Hearn's contribution?  It explains (among other things) why usury - charging interest - was such a grave sin in Biblical times, and why interest makes growth necessary.

Hmmm.  The grass did not grow before usury?
No.  The grass did not grow fast enough to support usury.  
The amount of grass was constant over the long term.  As some grass grew, other grass died.

Of course, a finite (and long-term constant) amount of energy from sunshine was captured each growing season to keep the biosphere operating.  But there was no "investing" to be done, other than the zero-sum kind: whatever grass one animal ate was not available to others.  We are heading towards that kind of world economy.

And that is so foreign a concept that the average American can't even comprehend it.  A world where charging interest is as evil as murder.  
I guess I've always visualized the agricultural model as what underllies: investment, growth, increase.  If you "invest" by planting a crop, you have to wait for "growth" before collecting the "increase."

The whole argument about interest was about how to proscribe the sharing of investment risk.  "Parners" presumably share both up and downside.  "Lenders" do not.  That's a social judgement about how to manage the underlying growth and risk.

You want to plant an orchard?  Would you prefer a lender today over a parnter?  Why?

The whole argument about interest was about how to proscribe the sharing of investment risk.

IMO - no, it wasn't.  The problem with interest was that it's "unearned income."  It's money you get for not doing anything.  You don't produce anything, or do any work.  A steady-state economy can't support much of that.

And a silent partner ...
Neanderthals seldom would lend their tools. Cro Magnon man was probably more enlightened.

Study the topic of "roundabout means of production" and you will begin to understand the logic of borrowing for business to make a profit. There is nothing wrong with that, so long as interest rates are reasonable.

I do think it's really important to be thinking out of the box. Our economic system is going to have to change significantly to respond to the coming population / resource crunches.

What seems fundamental to me is that one can improve the productivity of the land through wise investment. This might be through planting seeds, or by building some system to save up rainfall to water the soil at a more measured pace, or by using some more efficient tools for harvesting, etc. Similarly, if one invests e.g. in better insulation, one can use less fuel to heat one's dwelling.

Then there is an interpersonal aspect to all this. Young folks won't have had time to have built up infrastructure. Old folks might have built up some beautiful infrastructure, but the joints are getting creaky and they don't have the physical strength and stamina anymore to get all the tasks done. So it seems natural enough to make a kind of deal - the old folks can partner up with the young folks. The young folks can use the infrastructure built up over the lifetime of the old folks to get lots of efficient farming done. The young folks can then share some of the harvest with the old folks.

We can use some of the surplus energy from one year to build up infrastructure to make our work more efficient next year, or at least to repair the infrastructure and maintain our efficiency.

Accounting goes back to the origins of agriculture. How exactly to negotiate and regulate these bargains interpersonally - if my accumulated surplus can make your work more efficient, sure seems like we can all share in the benefit, but how exactly to structure that sharing - I'm happy to let the economists model and analyze and optimize the various possibilities.

But I like to keep an eye on the fundamentals. If I put in the time to patch the broken pane in the window, I get a continuing reward in a more comfortable cabin, or I don't have to burn as much wood in my stove. There is an underlying reality that is not a mere fabrication of economists or politicians.

Good real estate discussion on www.urbansurvival.com

I predict strong deflationary headwinds as consumers and businesses try to unwind highly leveraged holdings.

Excerpt from Urban Survival:


Why focus on California housing? Because it is a big deal - it represents some 25% of the dollar value of the US housing, or $7-8Tr.! Someone from North Carolina pointed out to me that the housing is doing great in NC, but it is no more than 1-2% of the dollar value of the US housing. A 20% drop in the price of California homes has the potential of taking the US and the world economy down with it because of the leverage, reckless lending practices, pioneered in Southern California, and the globalization of the financial system.

I have long thought that too much of the real estate business was a quasi-ponzi scheme. Take my home town. Over my lifetime the population has been slowly declining and new construction is small because there is little vacant land. Yet property that just sat there without improvements has grown in value based mostly on the salesmanship of realtors.  They have continually harped that home prices will always grow faster than inflation even though on a national average it hasn't. Its only been certain times in limited areas that this has been true. Florida's market is collapsing because retirees have gotten tired of hurricanes.  Michigan is dying along with the UAW. Southern California is dependent on the military-industrial complex, Hollywood, and drug smugglers. Crime, stories about crime and violence, and war is not a sustainable economic foundation. These things have made it way over priced and rising energy costs are pulling the rug out from under it.
I agree. Keep up the good posts, Tom!!
Ponzi!  ... slowly I turned ...

Just kidding. "quasi-ponzi" might be fair, but better IMO just to call a bubble a bubble.

The original article is probably one by Jas Jain which can be found at FSO:

I couldn't find the discussion at Urban Survival. Jas has been talking about Calif property prices for over a year at FSO and substantiating his comments with plenty of hard data, his posts there are easy enough to find but I'll make it real easy:

If I recall right the GDP of California is about 7th in global terms if it were a separate country; since a significant real estate value decline there would probably have knock on effects in other US regions it is quite plausible that a 20% decline would be sufficient to precipitate significant upset in the global economy. When we are near the depths of the coming depression declines of 60%+ versus the peaks of last summer are plausible:
providing this economic system continues to function.

Of course, a significant population reduction also takes the upward pressure off property prices. I expect at least 20% of US residential property will be effectively free, in the financial sense, some time in the next 20 years. Even more positively: property taxes may well be much lower or even absent, as could utility bills be ;)

California housing comparisons are at least somewhat misleading. It is clearly wrong to compare listing to sales now with 2004, a time when the market was hottest and nothing stayed on teh market longer than a few days - many sold the day it listed. Better to look at overall averages for, say, teh preceding 10-year period. Current statistics, at least so far, are not much different from long term trends.

Of course, it may get much worse. BUt, previous sharp downturns have always in the past occurred when either a) interest rates went very high, or b) a recession arrived, or both. Neither are yet present.  The fed looks to pause now, probably until late Nov, and the economy is still strong.

I must presume you have not read Jas Jain's articles over the last year. From what I've seen the market (price) peak was around July 2005 though it varied from place to place.

Current sales, unsold inventory, inventory / sales, data are all well out of kilter with the last 10 years' data, just waiting for the price dimension to properly catch up (that is, down).

The economy is still strong? In the sense that a basket case is waterproof, yes. If the GDP statistics were 'unfiddled' the US economy would be in recession already. Nonetheless the official US stats will show the US entering recession (growth less than 0% for a quarter) in 2006 Q4.

Fed pause now? Only if data over next month are dire, and they shouldn't be. 5.50% looks near certain at next (probably) or subsequent FOMC meeting. A desperate rate cut for Xmas is plausible.

Or one can buy a boring company that owns a bunch of hydroelectric dams and is looking for opportunities to occasionally buy or build another one, rehab one that they own and increase production by 9%, or perhaps build a wind farm (leverage wind + hydro) in a slow measured way.  Most of the power is sold under long term contracts that WILL expire and be renegotiatated "one day".  Reinvest dividends.  Wait.
Well, if oil continues to increase in price, oil company profits will continue to rise, and reduced production may in fact increase profits, maybe quite substantially. Barrels used to sell for $3, then rose to $30 in 1979; the last 10% may well sell for more than the first 90%.
Quite right--profit increase on diminshed output goes along with price inelasticity of both supply and demand.
Re:   Saudi Arabia & Kuwait

The Lower 48, Russia and the North Sea have never exceeded the peak production that they reached in the vicinity of 50% of Qt, based on the Hubbert Linearization (HL) method.  

The recent revelations about lower internal reserve estimates in Kuwait closely matched the HL estimate that Stuart did.  

And based on the HL method and historical comparisons to Texas, Saudi Arabia seemed to be on the edge of a production decline, and they have admitted to a 5% decline since December.

Deffeyes estimated that the world crossed the 50% of Qt mark in late 2005, and the EIA is reporting that world crude + condensate production is down 1% since December.

All four of the world's largest producing oil fields are almost certainly declining.

What amazes me is that anyone is predicting rising production from here.  

I agree with you.

Robert Rapier makes the contrary case, but I find your line of reasoning more persuasive. What is fascinating is that you largely agree on the facts but differ in your interpretations.

Love those dialogues!

While Robert disagrees with peak now, unfortunately he is unable to make the case because he has access to proprietary information he can't share, so we can't really figure out how to assess his position. He also doesn't evaluate the situation using a depletion model. His credibility comes from how well thought out his positions are in other matters.
He is a VERY clear thinker. Were he in my Logic class, I'd have to give him an A+.

Nevertheless, I question his premises.

Many of the petrogeologist types seem to have a lot of faith in technology.  The Saudi rig count is spiking; three years later, their production should, too.  

Of course, that assumes they aren't falling off the back side of the curve right now...  

We raised rig counts in N Sea (as did Texas); in both areas drilling could not offset declines in the larger mature fields which were inevitably discovered early.  I suspect the same will occur in SA - we should know in 3 years' time.
I think the spiking rig count is the test.  It's the ultimate test, really.  Either those rigs will produce a production increase (after the normal lag), or they won't.  If they don't ... then to put it mildly, we move on to discuss "after effects."

By the way, is 6 months a good ballpark for a lag between a drilling spike and resulting production?

"RockDoc" at PeakOil.com says three years is a reasonable time frame.
Man, that might be beyond my attention span.
You might not have to wait the full three years to get a result.  According to Stuart's graph the other day, the Saudi rig count nearly doubled between November 2004 and November 2005 while production remained flat.  Using the three-year lag, we should be able to get an idea of the effects of the increased rig count in about two years.  
Hello Tsulio,

Good point!  That also exactly corresponds with the four year 'Brink Period' of Duncan's Olduvai Theory.

Page 7, note 5: "The Brink from 2004 to circa 2008 represents the energy industry's struggle to keep up with rising demand."

I wish Duncan had gone into more detail on how he came up with the creation of the brink period and it's short timeframe.

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

Stuart did a HL on Kuwait? I thought this was your/Kebab's job.

Don't be amazed westexas. There are a lot of people who want to drill their way to energy independence.

The PeakOil.com server is being hammered today.  It's slower than molasses flowing uphill in January, with frequent 404s.  

Seems people only think about peak oil when a new record is set.  

The doomsters have an "black" view of humanity under stress.  But the experience in New Orleans belies that.

Before Katrina there were about 40 neighborhood organizations (some almost moribund).  Today there are 73 and most are very active.

Nathan Stroyer became frustrated working with the under stress, shrunken city gov't (for 6 months there was no one answering the main city # as "non-essential" personnel were laid off).  He started a resource center for the neighborhood groups.  Helped develop maps on where to find food, allocated out-of-town volunteers, produced free web page set-ups, shared information on the bewildering array of programs, FEMA bureaucracy (moan) and everything else.

The different neighborhood groups began talking with each other (GREAT comity BTW) and a Wednesday 4 PM to 6 PM organizational 6 PM to 8 PM informational meeting was set up.  This has evolved and the differences merged.

Yesterday they formalized this umbrella group to speak for all the 73 neighborhood groups and they were given veto power & coordinating power over the planning process (AFAIK).  There have been "top down" and "bottom up" planning in many dimensions & areas and this is now being consolidated with priority to the "bottom up" results but using the "top down" professional results as well.

In addition, thsi umbrella group will help allocate private donations.

I see some parallels between TOD and the evolution of neighborhood groups.  A high level of comity, diverse, knowledgeable people with the best of intentions, fact based discussions & arguments (and no sulking from the losers, just an acceptance of the group consensus), a HIGH level of commitment.

BTW, I am somewhere between the 2nd & 3rd level of those contributing.  Several others, including Nathan Stroyer, do far more.  He started out just finding a niche to help (resources for neighborhood groups) and ends up in a quite powerful position with lots of trust.

The general rule is that anyone that wants to spend the time can attend any meeting and have their say.  Votes are reserved for one neighborhood group/one vote.

Alan - I hope you're not still not stewing about the Social Capital post. I agree it's not an airtight analysis of what makes a community work. And I think NO is a fascinating case study post-Katrina, even better than NYC post 9/11. Both communities are bonding in ways they couldn't previously imagine over a common traumatic event.

People do come together during emergencies, especially long lasting ones. Perhaps one of the reasons why Putnam's analysis showed higher social capital in the coldest/snowiest areas of the country is that every winter is a 3-5 month long crisis where neighbors work together - help dig out each others cars, shovel their sidewalks, etc.

One of Putnam's best points IMHO was that poverty can be greatly allievated or altogether avoided by strong social networks both within and between different communities. I'm glad to see NO rise to the challenge and work across all the different communities.

New York City lost 16 acres (although a Very important 16 acres) and one vital transportation artery (PATH trains).

New Orleans lost 80% of the habitable city and vital transportation arteries (I-10 East & two freight rail lines).  A comparable would be if all of Queens, Brooklyn and the Bronx became uninhabitable, 1 in 400 of the population died and Newark and Long Island took major hits was well (most of Long Island becomes uninhabitable, but most of New jersey stays or gets up and running within a week or two), leaving Manhatten & Staten Island in battered but habitable shape (without utilities for extended periods, many buildings damaged and destroyed, but most buildings are fixable in a few weeks if resources can get to them).

The above scenario would be a close comparable.  Spend a minute considering that.  No Outer Boroughs except Staten Island, Long Island a MAJOR mess, Newark a medium mess, and all those lived there dispersed accross the country and really nothing for them to come back to.  Manhatten gets back in business in 5 or 6 weeks (but with much business lost to London, Chicago, Toronto & Tokyo), NYSE reopens, some HQs move but most stay, you struggle along with what you can get from NJ, Upstate and CN but without Queens, Bronx, Brooklyn and most of Long Island.

IMO, Putnam took a valid concept, social capital, and then applied the anti-Southern bigotry which is all too common in the NE elites, and VERY selectively chose metrics that favored his bigotry.

If I were asked to find the statistical measures of social capital, the first and strongest (most heavily weighed) metric I would use (and it is available) would be weekly attendence to church, synagogue and mosque.  But he ignored that in favor of NATIONAL organization memberships, (local organizations do not count).  He chose statistics that ignored reality.

I think that the concept of social capital is valid.  I think Putnam's analysis of it was pure BS likely motivated by bigotry.

Anti-southern bigotry?????

How about anti-crime?

How about pro good schools?

How about anti-mass-poverty?

How about anti-school-dropouts?

How about taking seriously the undisputed fact that Louisiana has the highest murder rate in the U.S.A.

Like it or not, you live in the U.S. murder capital.

Bigotry? Or FACT?

Also, how about:

Teenage pregnancies?

Infant mortality?


% not covered by medical insurance?

alcoholism and drug addiction rates?

Please do check the data.

How about rates of HepatitisC and other STDs, including HIV?

How about widespread exploitation of illegal aliens on sugar plantations (especially Haitians)?

How about crooked politics?

How about neglect of N.O. levies cf. flood control in a nice state such as MN??????????

Really, Don. Perhaps you should relax. I lived many years in Roseville, MN and worked in St. Paul. Loved it for the reasons you describe, but it had warts too. Remember St. Paul staying out of gang wars in the 30's by cozy deals with Chicago gangsters who could come & relax unmolested in town as long as they left their business at home and money in MN? I was flying out of Holman field in St. Paul except when it flooded - we had quite a bit of flooding in the 90's as you recall, along the Red, Minnesota & Mississippi rivers. And there were lynchings earlier on as well in the North. When I got there early 80's, it was frankly a food desert. Nothing like a Norwegian smorgy to make you crave some form of seasoning. Finally with Asian, African and Latino immigration we got some flavors!

MN was wonderful, but not perfect.


We're not perfect, but the farther upstream you go on the Missouri and Mississipp rivers the better it gets. And the further downstream you go the more toxic it gets.

Perfect? Hell no. But we know that and hesitate to brag. Well, most modest Minnesotan's hesitate to brag . . . but not Sailorman:-)

Reminds me of canoeing in idylic weather at Lake Itasca.


Sailorman's episodic rant reminds me of Orwell's great line in The Road To Wigan Pier: "The price of freedom is not so much eternal vigilance as eternal dirt." I like poor people. I like dirt. I cherish my encounters with the Blackstone Rangers. I live in Chicago and it's dying a sloe death from chasing the poor out. I've never been mugged and only lost a few things from an unlocked car, but I've been beaten by the police (for the crime of riding a bicycle) and rescued by poor Africans who owed me nothing.
I'll happily risk a mugging some day if I can hear great music. The Mafia has always been one of the great supporters of jazz. New Orleans is all the best of what was America. Loyalty to a great city is as deep a human trait as love of one's children.
Chicago (where I live too) is dying a sloe death by yuppefacation. An example is in 1992 there were 3,000 bars, mostly neighbourhood bars. You could walk to a corner bar and meet people easally. Now you'd be lucky to find only 1,000 bars increasingly theme bars like you'd find at a Disney theme park. Peak Bars was close to the time of Lower 48 PO. I guess everyone drinks at home with the cable and 500 channels of rubbish.

Affordable housing is a sick joke. Daley has lots of developers as friends and campaign contributors, so Daley lets them run amok. Gated communities are proliferating. The prices are so fantastically high for a single family home even a celeb newscaster would need an ARM mortgage. As you drive by these places, they are lifeless and devoid of human activity. They look as garish and plastic as anything Disney would build. Classic McMansion material.

Chicago is being destroyed by Daley II and made into a DisneyWorld shadow of itself. Even the people increasingly look fake. With yuppies able to afford (or put on credit) plastic surgery, even they are looking like "McPeople"!

I think part of the reason Daley the lesser has been eliminating bars is to eliminate gathering places where political discussion and debate can occur. Traditionally in Chicago bars where were you met with the local precinct captains, griped about things, or just plain socialized with your neighbors. Now politics comes in the form of a 30 second commercial. No one either knows his or her neighbors, or knows what is going on in the neighborhood. Chicago was a once city of vibrant distinct neighborhoods. Now it is soulless city that is not much a pleasure to live in.

Bruce from Chicago

Two of my favorite bars died this past year. My corner bar was actually a gay bar but no one in the neighborhood could have cared less,except Fri & Sat night when you left the boys to it. Ten feet wide, 30 feet deep, all original deco decor from early 1930's. Great jazz jukebox. Gay since it was a speak by neighborhood legend and you could always imagine Juhn Waters was about to slide in the door.
Now it's an Irish theme pub. Three times as big as the old spot and sells fewer drinks. The booster crowd thinks it's progress. It's nothing but the developer who bought the whole block hates gays and has no taste and should live in Lake Forest and leave us alone.
Then the fabled Lakeview Lounge closed. To be replaced by condos. Except with the real estate market what it is the project never happened and may not ever. Hillbilly heaven with  Larry on guitar and Elvis impersonators who were achingly sincere and bring exact change (lotsa singles) 'cause you will be shortchanged on principle. That place had gotten to where poor people were driving in from far cheap suburbs, they couldn't survive in Uptown anymore, but needed a jukebox with Johnny Cash, Johnny Cash, Johnny Cash and Merle Haggard.
Wicked Wanda's with the dirt floor. Where the Mariel boatlift crowd danced naked and the party spilled outside naked and the police backed off and let it be when the whole neighborhood went out to dance and play. The Let's Meet Here Lounge, place your bets. Even Rush Street where unable to get in to see some headliner we fell down the stairs to Punchinello's and caught young Barry Manilow and saw him for three more years and saw him when Bette Midler floated in to sing along. Happy couples and happy singles laughing down the street when the bars with 4 a.m. licenses finally closed as the sun came up.
Lord the Tropical Den is gone. Let us pray Fred can do one more miracle and the Velvet will return.
Peak bars. True.
I have stepped across the Mississipi River at Lake Itasca State Park. I used to live in the town of "Long Rapids" as described in the forthcoming "The Adventures of C.C. Eggum."
See my "Great Positives, Great Negatives" post.

How about rates of HepatitisC and other STDs, including HIV?

Any city with a large gay population will, unfortunately, also have high HIV rates and related STDs.  Poor people also have higher infections rates :-(

Public health advocates can get into rip-roaring debates over our Charity Hospital system; a form of universal health care left over from Huey Long.  It has some very good points (universal care fro any resident that shows up and some bad points (poor chronic condition health care, long waits).

My experience with Charity has been quite positive.

How about widespread exploitation of illegal aliens on sugar plantations (especially Haitians)?

BZZZT !  Wrong ~  

We were the last major city in the US (AFAIK) to do our own manual labor.  I have never heard mention of Haitians working in the sugar cane fields in LA (FL, yes),  Mechanical harvesting here.

I spent 30 minutes googling (it takes quite some time to respond to off-the-cuff remarks) and only found more about Haitians that moved to New Orleans & Louisiana after the Revolution in Haiti.  Doubled our population, including many more "Free people of Color".

How about crooked politics?

In the past, that was one of our "Great Negatives", but I scratched that off the list before Katrina.  Nagin won the first time on honesty (zero political experience), we had voted in reform school boards, prior governor was stupid but honest (Blanco is honest, but her husband is not is "the word"), tolerance to corruption was "WAY" down and I was hoping that we could clear out the last major corrupt figure "Dollar Bill" Wm Jefferson.  Not as clean as MN, but getting zlose to the US average.

Corruption in Repblican Metairie was increasing though.  Two judges were caught.

How about neglect of N.O. levies cf. flood control in a nice state such as MN??????????


This is part of a twenty year project (I heard $350 million in toto) to improve drainage.  The Napoleon Avenue project, with associated pumping stations and canal improvements would allow us to have 24' (.6 m) of rain in 24 hours with only minor street flooding; up from 20' in 24 hours.

The I-10 pumping station (featured on CNN et al) was designed specifically to dewater the city with it's own fuel & generators, etc.  It came on-line in 2004.

So we had not been neglectful of what was our responsibility, pumping the water out. Many of the S&WB pump operators stayed at their posts until power was completely out w/o hope of return or water flooded the statiions.

The levees are a US Army responsibility since 1928.  The 17th Street Canal had not even been turned officially over for maintaannce to the State.

The levees failed due to malfeasance of the US Army.  The US Army did more damage to New Orleans than al Queda could have dreamed of.

This link has expired.


They admitted that the failure was a design fault

*B*A*D* engineering that they knew about in 1985, but chose to keep building the same faulty design instead of going back and redoing what had been done.

No maintenance or construction faults on the 17th Street or Orleans Canal failures.  Jury is still out about the multiple failures on the Industrial Canal (a loose barge hit the levee at a critical time which confuses the issues).

If we could only use the US Army & gov't !  They could not afford Iraq anymore.

It has been said that Minneapolis has a larger gay population than San Francisco. I do not know how to count gay men;-) BTW, many of my best friends are gay. Gay men and Lesbians are WONDERFUL people. The more gay men there are, the more straight women desperately seek out we straight men. Two of my best women friends are lesbian and another one is bisexual. They are great and fine and good people.

I am NOT trying to knock N.O.

I think N.O. should relocate to St. Louis, however, because I do not believe in fighting Big Mama Nature.

IMHO you flung an insult, a canard, a cheap shot at Putnam with nothing but hand waving and warm fuzzies to support your position.

When I'm wrong I quickly admit that I'm wrong.

We can disagree agreeably. For example, IMHO you are totally absolutely and 100%+ wrong about the benefits of BART. BART was an almost unmitigated catastrophe. I was in Orinda and Berkeley before BART, during BART and after BART. I liked the "Humphrey Go Bart" buses. They are cool. But let us continue to disagree agreeably in a few places, because 92.44% of the time I agree with you;-)

Don, I'm surprised by your harsh words there on BART. How could you be against it?
  1. BART contributed enormously to urban sprawl--I mean humongously to the far, far exurbs.
  2. BART resulted in a HUGE, MONSTER, Gigantic transfer of income from low and mid-income tax payers to wealthy BART Riders who commute from Tracy (etc.) over the Altamont Pass to the far eastern terminus of BART. Then they ride to their $200,000 and up jobs in San Francisco in greatly subsidized comfort and safety by rail.

Simply because something is light rail does not make it, ipso facto good.  
I am aware of debates over #1 and tend to agree that without BART, employers would have moved out of SF.  This would have resulted in more sprawl.  But others argue that it sprawled anyway so what good did BART do ?

It is a hypothetical question.  What would SF look like today with & without BART ?  Or with a tighter, more compact BART with closer stations ?

OTOH, BART did little good for Oakland's CBD, which it was hoped to revitalize (perhaps post-Peak ?)

In the case of DC, GAO said (and had influence of what got built first) that w/o DC Metro they would have moved gov't offices out into MD & VA suburbs. Would the same be true of SF and private businesses ?

#2 is simply not true from an operating POV.  BART has a very high cost recovery ratio; the farebox pretty well covers costs (almost no bus even gets to 50%; 30% is "typical for a decent bus.  Austin gets 8% from the farebox for it's buses).

And BART is most definitely not Light Rail but "Rapid Rail".  Some systems are borderline, BART is not even close to Light Rail.

I'm with you. Grew up in the Bay Area well before BART. I take Don's point about sprawl, but I believe it is only BART that continues to make the place liveable and will continue to do so as TSHTF. Sprawl and growth was going to happen anyway and I think things would be much worse without BART. Parents still live in Walnut Creek (before BART or even freeway 680). We visit, take BART to the City - I think it's a great system although with flaws like all human creations. It simply could never stay how it was in the 50's or early 60's anyway.
You are correct that BART is rapid rail rather than light rail. The cable cars in San Francisco are light rail, and I passionately love them.
San Mateo Co. voted against BART way back when because of the urbanization issue. Didn't seem t make any difference to growth.
BART has exceptionally low costs per pax-mile and very good cost recovery.  Two convential metrics.

BART decided to "reinvent the wheel" with nonstandard guage, operating voltage and a dozen other design issues.  All but aluminum cars were a mistake.  Al cars is debatable.

The "other TOD" question is interesting.  The consensus (sort of) is that without BART SF would have shrunk and there would have been more sprawl.  BART was not designed for local travel but for longer distance commuting.

DC Metro & BART have almost euqal pax-miles , but BART has less than half the # of pax; but average trip length is more than double.

Now, by which metric is BART not a success ?

BTW, Many people will not ride a bus but will ride rail.
The exclusion of ANYTHING church related from Putnam's metrics (from brief sample given) 1) invalidates his work and 2) is a MAJOR anti-Southern bias.  

Church giving is not included in his measure of philantrophy (MS is tops in % of income in giving of all types from old analysis but near the bottom in non-Church giving).  Sunday school teachers & deacons are not included in his metric of "club officers".  Sunday church attendence is excluded.

He only includes membership in national but not local organizations (Kiwanis & Lions count; Mardi Gras krewes do not).  I suspect that the national to local organization ratio is lower in the South.

So he excludes the largest source of social capital in the South and then says the South is deficient in social capital.

I have found that anti-Southern bias is quite common in academics.  The acceptable bigotry.  I do not let examples go past unremarked upon, because silence only helps bigotry.

"the consensus" on BART??????

References, please.

I find not the slightest shred of anti-southern bigotry in Putnam.


Ed Tennyson, a gentleman in his 80s (90 ?) with extensive operational experience and excellent transit theory as well.  His last major job was installing the Tijuana Trolley in San Diego.

Before the first line of DC Metro opened, he predicted ridership for the completed 103 mile system. He was off by 3% (I think consultants were off by a quarter).

One random quote from Google:

The story above was very much "in the news" at the time among transit enthusiasts who felt that large-scale replacement of surface electric transport was a serious mistake, or worse. We wonder how many of them took a careful look at Duncan's figures.

We suspected - incorrectly - that TTC had calculated unit costs per passenger-km (pass-mi). TTC had obviously adjusted for passenger traffic density in some manner - but the derivation of the "cost per passenger" statistics was not clear.

E. L. Tennyson, P.E., former Transit Commissioner, City of Philadelphia and former Deputy Secretary of Transportation, Commonwealth of Pennsylvania, recalls the presentation:

Amazing - I was there at that 1957 meeting. Walter McCarter was head of CTA [Chicago Transit Authority] in Chicago and he had just finished ridding Chicago of street cars. He moaned that his buses were rapidly losing passengers but the Rapid Transit was gaining - so how could he continue in business with more rail riders and fewer bus riders? Duncan demanded the floor. He contradicted McCarter - and demanded a delay in the meeting so he could wire Toronto and get the official numbers. I had no idea that it got out to the press.

(Ed's eyewitness account suggests, but only suggests, that some participant might have "leaked" the TTC statistics to the "enthusiast" press. We are certain that we saw these figures ages ago in some U.S. publication.)

Leroy Demery (I quoted one eMail of his recently on economcis of tar sands vs. Urban rail).  Foremost US authority on Japanese rail (IMHO, we look too much to Europe and too little ot Japan for knowledge & examples of rail transit).  He is compiling all know US transit studies and comparing traffic densities,  I am going to "steal" that database for my own uses.

I have come to believe his analysis of viability for proposed rail routes more than the offical FTA methodology.  I am working on my own more compelx & ad hoc method though.

Putnam excluded the data set that would have likely put the South in the "above average" social capital ranking.  And then takes his conclusions (apparently w/o a caveat to the excluded data set) and comes to conclusions about the paucity of social capital in the South.

An honest academic would have prepared an addendum with the excluded data and shown how that would affect the results & conclusions.

I respectfully disagree with you on this issue. But we've run it deep into the ground, so let's drop it and go out and have some Herbsaint.
Alan - Agreed that Katrina was much more devastating than 9/11 in physical destruction, particularly to people's homes, not just their places of work. But I'm not sure of relative impact on social capital development. We New Yorkers bonded tremendously over the heroic efforts of our police, firefighters and public officials - remember that they did manage to evacuate something like 90% of those under the impact zone - we could have easily had 10-15,000 deaths if they had not done such a good job. There was a great outpouring of affection and pride in civic duty, which I daresay made NY stronger and more united than ever before. I have no basis to compare to NO.

Putnam's reason for not using religious attendence was based on the fact that statistically (on average) for mainline Protestant and to a lesser extent Catholics, their religious attendence was HIGHLY associated with involvement in a broad array of civic affairs including their church (Bridging AND Bonding Social Capital), while some of the more evangelical churches attendence and participation was NOT associated with broader civic involvement (so they more of the Bonding social capital and less of the Bridging). And this is seen in the outcomes data as well. Mere church attendence did not necessarily relate to better social and economic outcomes as much as people who were broadly involved in their communities. But as Prof Goose says, it all got normative very quickly...and as someone who took stats, I know they can be massaged or manipulated. I just haven't seen a good counter case to refute his findings and they seem pretty legit.

I hope we can just agree to disagree on this. I really like your electricification of urban and intercity rail ideas.

I kinda of swing a bit.  One day its doom and gloom the next maybe its more hopeful.  Some of this is likely my own mood of the day.  Though a large part is the news I hear locally, the people I talk to, the things I see and my knowledge of the Human condition and how people react to things.

In just over 7 weeks New Orleans will be one year out from Katrina.  I got to help several families that Moved to Huntsville Alabama.  Several people in my Chruch, Ascension Lutheran, Worked long hours with the Area help teams getting people food, shelter and helping hands.  I had contact with 5 families.  Only one lady in the group owned her own home, all the others were renters.  Only one family did not have connections with other New Orleans folks living nearby in Huntsville.  I have heard some of the stories.  I have seen personal pictures of the damage and was amazed at some of the things flood waters can do inside a house.  

Though I am sure the Gov't could have done better, The system was not geared to handle this kind of problem.  Soon the Hurricanes will be back and next year too and years after.  We the People need to stop depending on Governments and do more for ourselves and those around us.  The world of New Orleans is rich in Community, or at least that is the Impression I have always had.  How many other cities can say the same thing?

I still think that given a big enough event and enough time to handle it things will settle out some.  But if events keep hammering at the area, if You get another Hurricane that floods the place, Will the network you have in place handle it?

What if its Hurricanes this week, and wars next and the week after No gas, and the week after that California falls into the sea?  Worst case we all fail, best case we all help someone in need.  

But I have seen a city for 29 years go from 10 killings a year to 36 before the end of June.  Maybe its just me!

I've read and learned a lot from your posts. Keep up the electric rail work.

I lived in Asheville NC for a long time and we had a great neighborhood so I can appreciate the value of this.

One reads a lot about the high crime rate in NO and I wonder that you haven't really addressed this. Is it overblown in the press, is it neighborhood specific (some neighborhoods bad, others good)? Altogether, what is your take on how it affects overall life in NO? And how might it affect the ongoing rebuilding? Thanks.

Befreo Katrian, I descrined New Orelans as a city with Great Posiyives and Great Negatives.  

GREAT Positives included food, music, Mardi Gras, architecture & "Old Urbanism", community, history, comity & tolerance/acceptance.

GREAT negatives were crime, public schools (Catholic & other private schools were 1/2 of students), economics (we were a poor city) and the weather.

We hope to keep our positives and eliminate all but one of our negatives (Global Cooling would be needed to improve the weather !)

All but one white local person that I have talked to wants the city to be at least half black (not shared by those from Chalmette).  I can think of no other US city where an overwhelming majority of the white citizens would not want majority status if they had a chance.

But both white and black do not want a certain group of blacks back.  Different names for that group.  One City council member (black) said that "If you can physically work and don't, we don't want you back.  We don't have room for you !"

Public housing was being phased out.  There is an unstated policy in gov't NOT to rehab & repopulate the housing projects (at their peak, 10% of the population lived there, and well over half the crime came from them).

Instead "Section 8" housing vouchers will be given out.  But there is no market for those vouchers, so we keep "them", the perceived criminal element, out.

When there was a major flare-up of violence (no turf today, so that has to be established), the National Guard was called in to patrol the heavily flooded areas, state Troopers to handle local traffic and NOPD police concentrated on the trouble areas.  Despite negative national PR, there was very widespread support for an early, hard crackdown.  Courts are just barely functioning and they need to get caught up.

OTOH, we want out working class (black & white) back ASAP.

BTW, Nagin was re-elected with 79% of the black vote and 80% of the Republican vote.  An "odd" coalition.

But both white and black do not want a certain group of blacks back.  Different names for that group.  One City council member (black) said that "If you can physically work and don't, we don't want you back.  We don't have room for you !"

No whites meet that description?

The local white criminal element moved to Chalmette. The Mafia pretty much went to the suburbs as well.

I have been the victim of armed robbery twice in New Orleans, both times by whites.  The first time was two (one in Izod, the other button down shirt). I suppose they were Tulane frats that discovered the wonders of crack cocaine.  Definitely had northern accents, very polite, upper class/upper middle manners.

The other one was a gutter punk arrested two weeks prior in Austin on a minor offense.

I have never ever had anything stolen from me. And for a year I lived on the south side of Chicago in the heart of Blackstone Ranger territory (1955-56) where it was as bad as anywhere.

Muggings in MN outside of Minneapolis are exceedingly rare.

Since this is your most recent comment Alan, I'll drop this for you here:

"Cambodia's homebrew bamboo trains

Entrepreneurial railway hackers in Cambodia have built "bamboo trains" powered by electric motors that ply the abandoned rails of the nation's decrepit rail system. With only one scheduled train per week, these jerry-rigged trains are an easy way to move people and cargo around the Cambodian countryside."


And looking forward 30 years:

"Entrepreneurial highway hackers in Georgia have built "peachwood cars" powered by electric motors ripped from abandoned Priuses.  With only a few in existence, these jerry-rigged autos are an easy way to move people and cargo around the 23-lane freeways left over from the days of the carbon-belching automobile.

HMMMMM, . . . wonder why new and expensive Priuses are being abandoned? Is there something Toyota is not telling us about them?
I think you'll have to wait 30 years for the answer.
I live in the Atlanta area, in a cohousing community which is a mostly-white enclave in a mostly-black area (south DeKalb county).  No major problems, just some petty theft, until last November or December when there were two incidents of residents being held up at gunpoint near the entrance to the community by groups of black youth.  The police were of the opinion that these were ex-New Orleans gang members.  We organized a security patrol which had quite a visible presence for several weeks and then phased it out, no problems since.  Evidently they moved on to some other part of town.  
Before Katrina there were about 40 neighborhood organizations (some almost moribund).  Today there are 73 and most are very active.

That's great. Really, it is. Having more active and interconnected communities definitely helps. But bad stuff still happens.

New Orleans has still experienced a huge demographic shift. Basically, the poor and the black populations have shrunk. In 2000, NO was roughly two-thirds black and one-third white. Current numbers have more than reversed that. (But don't trust me.)

I'm sure it would be worse without all those community organizations springing up, but for the New Orlean poor, it still sucks. And so I expect it will be as oil production falls.

EIA weekly inventory figures are just in.
Crude Down 2.4 million barrels.
Gasoline UP 0.7 million barrels.
Distillates UP 1.0 million barrels.
Thanks, I've added it up top.  

Interesting that gasoline inventories are up.  Everyone seemed to expecting a decline.

It struck me that the July 4th gasoline price rally could have started at the retailers, in "anticipation," and then percolated back up the chain.  I keep hearing bits of news that indicate gas prices are (seemingly perversely) driving oil prices.  It's like once gas is up, everybody else recognizes that they can take some of the profits.

I happened to see an old article yesterday.  It's interesting in a couple ways.  First, it predicts a much different gas/oil ratio:

If oil hit $80 a barrel and gas was $2.86 a gallon, consumers would shun big sport utilities in such large numbers that about 297,000 American automotive jobs would be jeopardized.

Should gas reach $3.37 a gallon (presuming oil at $100 a barrel), about 465,000 jobs would be in danger.

(The original article's gone, but quoted here)

Well, we've seen $3.37 here in California without $100 oil.  If that ratio was ever real, it's broken now.

... and I didn't hear about 465,000 lay-offs.

One thing that sticks out in this week's report...demand is not destructing, at least not among U.S. drivers.  Gasoline demand was up 1.4% over the same period last year.  Refining was down a bit, so the build in inventory must be due to imports.  
Bloomberg Radio states that this is the strongest one week period of gasoline demand ever.

So much for gasoline demand destruction caused by high prices.

I've said since last fall, that the temporary drop in gasoline demand after the hurricanes was a supply availablity problem - not demand problem (although indirectly demand of course will drop when supplies are not available).

Bloomberg Radio states that this is the strongest one week period of gasoline demand ever.


I've said since last fall, that the temporary drop in gasoline demand after the hurricanes was a supply availablity problem

I'm not sure about that.  That was part of it, no doubt.  But I think the sharp increase in prices did make people think twice.  The people I know did cut back...because they thought it was temporary.  

Now they are used to the higher prices.  They look around more for the best price, but they've gone back to driving just as much as ever.  

With a lack of any real alternatives, short of selling your current car and buying a hybrid, which I might add scares the bejesus out of most people, what are the people supposed to do?

Are you planning on staying in your boring suburb or 5000 degree city this summer?  

Neither is anybody else.  

Bush is right, we are addicted to oil or at least to frequent and easy travel.  And this is what our infrastructure was designed to accomodate.  

Until there is an economically viable alternative, which the population has no taboo's about, expect more of the same.  IMO  


Are you planning on staying in your boring suburb or 5000 degree city this summer?  

That would be a "yes."  But that's just me.  I'm a peak oil nut, y'know.  ;-)

Leanan et al.,

Have you ever had an addiction to any substance?  Coffee, Drugs, etc?

I have a rather strong addiction to caffeine & Coffee.  I recently had some dental work(laser surgery to re-whiten my teeth, very cheap here in Brazil) and had to do without coffee for a minimum of three days.  Long story short I had unimaginable head aches, my body clenched up like it was 20 below zero, I couldn't sleep well, felt depressed all day long...

Let me tie this in.  Most people justify there long work, boredom, mono relationships, barbie world suburbs, by making money, buying big houses and going on family vacations.  Trying to take these rationalizations away is basically taking away the meaning of there daily existence.  It's like going cold turkey in a manner of brevity.  

IMO, no way does a a gasoline surcharge disuade any but those on the dole to not take those summer, highlight of my year vacations to disney, the beaches, great lakes, canada, etc.

Good points. Re the teeth, you should have taken caffeine pills.
Or tapered off before the surgery.  Cold turkey is not the way to go with caffeine.
Last summer a few TOD folks admitted that they were taking road trips.  Some said that they expected it to be their last road trip, etc.

IMO, a lot of people "make hay while the sun shines" ... quite forgetting the original meaning of the term, and that "making hay" means putting it up in storage for hard times.

Isn't that exactly what it is, though?  It's experiential wealth stored up now, for the hard times ahead.  Oil hit it above--this is the one good thing in the average American's life, the one thing that makes it all worthwhile.  If you're going to take that away, you need to replace it with something else.  Preferably, to me, a real community, deep relationships, and that kind of "vernacular zen" that keeps the experiential wealth flowing.  Affluence in its original sense.  My mom always told me, never kick out someone's crutch unless you're willing to stick around and teach them how to walk.
Mother nature doesn't give a damn if you learn to walk or not and she'll still kick your crutch out from under you when the time comes.
Hence, "make hay while the sun shines."
Perhaps I should have been more specific. Supply disruptions and fears of supply disruptions contributed much - but not all - of the drop in 'demand' in fall 2005.

No doubt many did cut back gasoline usage, but even to this date of record high oil prices, cars are becoming more numerous and generally larger, with more energy consuming accessories. So for every person cutting back, there is so far a new energy consumer in the US using that conserved gasoline.  

EVERY DAY the pop. grows.

EVERY DAY we sprawl further, and the megative trends outweigh the positve.

Why on earth (ha ha) WOULDN'T gas consumption rise????????????????


Keep up the good comments!

Nah, looks like gasoline imports are down too.  The only big change I can see is an increase in reformulated from 4mb to 25mb.  Everthing else is either down or even from last week.
Does that mean a net reduction of 0.7 million bbls give or take a few pints?

A key parameter for me is falling US inventory correlating with high price.  In the past, prices have risen as stocks have risen - stock building driving up prices -  and vice versa. This trend was busted last September - for obvious reasons.  If US stocks are now falling with prices rising then the end may be in sight.  Seems to fit with all other key observations.

They only hedge by saying its RESERVES,  They don't even mention that PRODUCTION is the real meat and bones of this whole thing.  Sure if I have a billion dollars in my bank I have Lots of reserve cash.  But if I pulled 1,000 dollas a day out 5 years ago and can only pull 900 dollars a day out now and in 5 years only 600 dollars a day. I won't ever loss my reserve but I sure will feel it later when I want to buy something big and expensive.

Those RESERVES are TOTAL oil, not what we can Pull out and consume, They are comparing Apples and Oranges again and getting away with it.  

Education, Education, Education is what the Public needs in order to not be hood-winked by the guys who say Don't worry we have plenty of Oil Left.  Mr. Owens You still have never used more than you get in interest every year you will be fine if you only get 200 dollars a day this year and 100 next and 50 next and half it everyyear after, HONEST.


Very well-stated.

Thank you.

Thanks for the encouragement.

I just got through writting a poem apiece to two differant ladies this morning.  The creative juices were flowing by the time I got here for my daily read.

Now to wait and see if my poems get as much response.

Please post one or two of your poems now and then. I even began my winter macroeconomics class with a (humorous) poem to supple minds for aggregate supply and all that boring stuff.
Don, your reputation precedes you almost literally since you "returned" from something and I happened to find TOD in the interim.  You teach Econ?  I'm a Finance Major in my final year with a minor in Econ.  I enjoy Econ far more, but my realization came too late.  What books are available on specific economic consequences of Peak Oil?  I just got done reading Undercover Economist by Tim Harford.  Great Econ read even for those who don't dig into the meat of Econ.  

I just learned of TOD and PO during my spring semester and immediatly I peppered my Econ prof with questions and in true Econ fashion he debunked my assumptions b/c oil won't run out in "econ terms."  Then he surprised me though and said several of his colleagues (i suppose other prof at the college) all wished for $100/barrel crude.  He acknowledged the great imbalances that have set in throughout the system and felt that this was the price point for alternatives to become economically viable.  What are your preminitions considering PO, GW & current fiscal/monetary policy in the next 30 years?

Oh and I hope your odysey was a successful one.

Yes, it was. Thanks.
For my "predictions" see "The Adventures of C.C. Eggum"
Hello all, this is my first post in TOD, I have been lurking for some time, thanks for the work.

There are two seemingly contradictory statements that I have seen several times. One of them is, "the world finds one barrel of oil for each X consumed". Or in another way to say it, "since the eighties, the world consumes more oil than it finds". But in the article cited above ("Non Peak Oil"), and in some other sources, I have read that "each year reserves are higher than the previous year".

I guess that both statements can be true if there is a way of adding to "reserves" other than "finding". ¿Can somebody illuminate me on this?

I guess that both statements can be true if there is a way of adding to "reserves" other than "finding".

You've got it exactly.  There are ways to add to reserves other than finding.  

Often, oil companies low-ball the initial estimate for tax purposes.  Their reserves will then grow as they book the true size of their discoveries later.

OPEC countries have their quotas set as a percentage of their reserves.  When they switched to that method, there was a sudden increase in reserves, since the more they claimed to have, the higher their quotas were.

And sometimes, it's just outright fraud.  (See Shell.)

There are also increases due to better technology, which may be more what this guy was thinking of.  We can only get about half the oil out of the ground.  If new technology lets you get 50% out instead of 45% out, that's an increase without any new reserves being found.  But there's a limit on that, too.  The technology is pretty mature now, and expecting significant increases is probably not realistic.

In addition some major producers obviously are exempt from the oil depletion phenomenon. The official figures of most OPEC producers (notably SA, Kuwait and Iraq) are stuck on the same values they reported in the mid-eighties even though many tens of billions barrels of oil have been extracted since then.

The result is that new discoveries + reserve reassesment always outcompeted depletion on paper - and of course if nearly half of the depletion is not accounted for in the reported reserves!

P.S. I was looking for the graph of the flat OPEC reserves which illustrates this very clearly but couldn't find...

And, also, as the price of oil rises, reserves that were previously known to exist but not considered economically extractable can now be reclassified.
Oil company "A", with reserves of, say 10 billion barrels buys out oil company "B", which also had reserves of 10 billion barrels.  Voila!  Oil company A has just seen its reserves skyrocket to 20 billion barrels, even though not a single new barrel of oil was actually discovered in the ground.

Its called "Drilling on Wall Street."

Antoinetta III

More like - what happens when you have $1,000,000,000 left in the bank, but you can only draw out $1,000 each day, and you can only store about a weeks worth of cash outside of the bank.  Your expenses slowly rise over time from $500 a day to $600 and so on.  Then, the bank starts charging you a transaction fee (they have been all along but when it is 3%-5% nobody notices).  Pretty soon they are chaging you 10%, then 20%, pretty soon it doesn't seem renewable when for every $1.20 you withdraw you have to pay a $1 back.

You look at your statement that says you still have $990,000,000 left in the bank, but you can't seem to get it to your wallet.

As don asked for below, or now above.

Why is it when the wind rushes and the clouds
Boom with thunder and the lightening flashes
We either run and hide, or
Run out to watch and play in the rain?

Why is it when a man says
You look wonderful to a woman
She either blushes and shakes her head, or
Thinks we want something?

Why is it that some things
Are easy to explain, and
Some are not?

Why is it that when I meet someone
I'd like to get to know better
They live miles and miles away?

Ah you say,
Read the third verse!

 For Stef,           Third Verse.
   ceojr 6 july 2006

Free sytle, it works best for me.  Might seem hokey, oh well,  those that get the poems have thanked me a lot.

Thanks, Dan! Nice freestyle.
I like it too.
How about a poem a week for TOD?

Loved the one you posted.

Billionaire investor Jim Rogers says Oil will hit well over $100 and stay high

Yet another billionaire in what appears to be an acceptance of Peak Oil.  I think this scares me more than anything else.

These billionaire guys have access and insight to more information in this world than the average Joe.  When they start spouting off about record oil prices and Peak Oil, we either should be listening or wondering if they are just plotting to make more money.

Ten years ago T. Boone Pickens was worth several hundred million dollars. Today Pickens is worth several billion dollars. In the interim he has been talking heavily about peak oil and placing his "bets" on peak oil and the expected side effects thereof. He appears to have been right and he's just one example.
Others...Rainwater, Soros...who else?
Rainwater is the one I find most fascinating.  He may be the most powerful person that most Americans haven't heard of.  
Apparently his interview in Fortune was a one shot deal.  He apparently felt an obligation to publicly warn--at least once--those who will listen.  I wrote him a letter thanking him for speaking out on Peak Oil and asking him to publicly support the Energy Tax/Abolish the Payroll Tax idea.  I got a nice note back from thanking me for the kind words, but he said he is seeking "less publicity, not more."

Rainwater is drilling more water wells on his farm, putting in more fuel storage and putting in greenhouses so that he can grow his own food all year long.  This is the guy that achieved a hundred to one return on investment for the Bass family.

Wonder of it would be possible to run Sweden in a way that would attract "1/1000 of a Rainwater" people to invest in Sweden and have one of their homes here?

I have for some years wondered if a cultivation of our old freedom values from our farming culture, a continued retreat from socialism and a reasonable solution to our recent immigrant integration problems (No problems when we had plenty of jobs and people learned language and culture at their workplaces. Plenty of fairly mild problems now when we have experts, government money, lots of regulations and policy documents and few jobs. ) might lead to americans moving over here. I have that thought, a comparision with old US freedom ideals as a kind of benchmark.

This is not an especially odd thought. Manny Swedes have for a long time loved or hated USA. We have for generations known that USA is the land of the future where people are free and you recently won the second world war. You are still our hero or the bad guy socialist or communist minded people frighten children with. Although not manny like your current presidet, I think the most popular in recent times have been Reagan during term and Carter after term.  

I think you have an excellent idea. However, my ancestors come from Denmark, and I'm attracted to women who smoke cigars;-)
"as part of a sustained commodities bull run that has another 15 years to run, billionaire U.S. investor Jim Rogers told Reuters in an interview."

When a billionaire investor says a commodity has a 15 year bull run coming, I would ask him what happens in 15 years.  TEOTWAWKI?

Or... he might be using this same perception you have to boost his own investments.


                     Don Sailorman

Chapter One       Friendless

    King Farouk would bark no more. C.C. discovered the body behind some bushes a few yards from where he had found the shotgun shell. The animal must have been drugged, poisoned by the robbers to keep him quiet. The trusting, greedy, affectionate animal would gobble food given him by anybody. Poor old dead cold King Farouk . . . As long as he could remember C.C. had loved and overfed the smelly drooling shaggy mutt, from the time the dog had been a puppy. Now C.C.'s oldest and best friend--his only friend since longtime buddy Tom had moved away--had been murdered by thieves.

C.C. refused offers of help from his father. He dug the grave himself, a long hard job. As he dug, he thought dark thoughts, grieving the loss of King, a permanent feature in C.C.'s life, a focus of affection, security, normality. His mind a confusion of pain and foreboding, C.C. didn't notice the blisters forming swelling then breaking open on his soft hands.

What did it all mean?

He had sprinted down the hall, then pounded on the door to his parents' bedroom, yelling:

"Dad, Dad, wake up! The garden . . . thieves in the night . . ." C.C. squeaked hoarsely and then boomed as excitement kept him from even trying to control his changing voice.

                                  [to be continued below, same thread in a couple of hours]  

    Less than a minute later C.C. and his father, both wearing white terry-cloth bathrobes, ran down the steps and out the back door.

During the summer they had eaten quantities of early-ripening vegetables and berries from the ever-so-carefully-tended garden--lettuce, squash, cabbage, strawberries, raspberries--but the main part of the garden was the big corn patch. Almost every ripe ear had been stolen.

"I can't believe it," said C.C.'s father, Danny Lee Eggum.

C.C. could tell from the bewilderment, the anguish of sorrow mixed with anger and dismay in his father's voice that he was close to tears. So much work had gone into the growing of the corn--fertilizing, tilling, planting and weeding, watering at night so as not to waste precious moisture during this second summer in a row of severe drought. All for nothing. Even C.C. had overcome his chronic laziness to put in hours weeding and watering the corn. Now the gritty cold hard dry topsoil filled C.C. with an uneasiness, a harsh sense of foreboding, as he curled and uncurled his bare toes, uncomfortable, embarrassed, wondering if his father was going to break down and cry.

C.C. had never heard of anything like this garden plundering happening locally. He had always lived in Long Rapids, a small town in northern Minnesota on the Mississippi River. Here almost nobody bothered to lock their bikes. People left doors unlocked day and night. Crime and the fear of it had been evils reported from afar, for in Long Rapids everone know all the neighbors, observed all comings and goings, then gossipped endlessly.

                        [to be continued in a couple of hours]

   C.C. thought back to his getting up early that morning to beat his three older sisters to the bathroom. It was the morning of the last Saturday of summer vacation, the morning when the eldest of his sisters was to be married. He had put on his thick glasses to examine his face for pimples in the mirror. Moments later he had looked away, disgusted by his fat and repulsive face, distorted as it was from strong concave lenses. Then he had gazed at the bathroom scales with a surge of self-hatred, guilt and shame. Last week he had weighed one hundred and forty-four pounds, an all-time high.

"Don't worry about your adolescent plumpness, Caesar, you'll grow out of it just like your sisters did," his mother said. Often.

Plumpness. What a lie. He was grossly obese, practically a carnival freak, and his long-awaited growth spurt had raised his height to just a smidgen over five feet tall. It was no wonder he had no friends, with his gross appearance and weird name--Caesar Cadwallader Eggum.

While brushing his teeth, C.C. had noticed out the window in the faint light of dawn that the garden somehow looked different from the evening before. At first he stood, blinking his eyes, uncomprehending, diligently scrubbing his molars. Then the shock had hit him as he realized what must have happened.

   Whoever had looted the garden had been thorough. Danny Lee and C.C. searched for anything the thieves might have overlooked, but there were only a few ripe ears left.

C.C. found a clean new-looking unfired shotgun shell just beyond the edge of the garden, hidden in the tall withered straw-colored grass. Danny Lee examined the heavy brass and plastic shell, shook his head and sighed as he put it in his bathrobe pocket while they went back to their big and comfortable old frame house. Clearly, the garden looters had been not only thieves but armed robbers as well.

"Going to call the police?" C.C. asked.

"Yes. There isn't much chance that we'll find out who did this, but others should be warned to watch their gardens. Probably we weren't the only victims of last night."

They had worried about rabbits and deer, living as they did on the outskirts of town. Danny Lee had conquered the grubs, cutworms and other pests, but it hand never crossed his father's mind, C.C. now realized, to be wary of human predators.

The who of the theft was unknown. The why was not. For a year and a half the global record-breaking drought had worsened. This summer of the worst dry spell in hundreds of years had followed the driest year of the past three quarters of a century. While tens and now hundreds of millions starved in poor countries (as he, C.C., grew fatter and fatter, he thought with a pang of self-disgust), Americans had rationed food for the first time in generations. In the United States there was no hunger, because to help farmers the government had bought, canned, and then resold at low prices much of the meat that suddenly had to come to market when grass died on the range and the price of corn rose more than tenfold. Beef and gravy, beef and gravy, pork and gravy, there were hundreds of billions of cans stored in warehouses, waiting to be exported or distributed below cost to Americans who could afford nothing better.

Thieves would be able to sell the corn on the cob from the Eggum garden for thousands of dollars, because on the black market corn went for ten dollars an ear and up. Potatoes were up to twenty dollars a pound, but hot dogs were only about two dollars for a twelve ounce package due to the superabundance of meat. The buyers of the stolen corn, C.C. thought with bitterness, would neither know nor care where their delicious organic food came from.

The theft and murder of King Farouk marked the end of secure and familiar life for C.C.

This day began a time of changes.

         [The rest of Chapter One will be posted this evening.]

umm no offence but whats the point of this other then breaking copyright law?
What law is being broken?

I do not understand your comment.

I think TrueKaiser didn't see your earlier comments that you are planning to post SF books in the comments sections here, so didn't realize that you wrote this.

So let me rephrase his question: What is the purpose of this? I think it belongs on your own blog. At very most, you could stick a quick note in here that you have posted a new installment. Frankly I think even that is too much and that this site should stick with issues related to oil.

My apocalyptic future history hinges on Peak Oil and abrupt climate change. Read more on my soon-to-exist website, courtesy of Oil CEO.

Thank you for your remarks.

I think Don's book installments add a much needed break in the hard stats posted here.  

We are a community that has stuck together for awhile and his contributions belong here.

I do think he deserves his own weekly separate thread that is a more "creative" outlet for those inclined here at TOD.  It could also include some of the free style prose contributed by others.

Just my thought, but TOD has become more than "just" graphs and hard stats.

I agree.  A book recommendation here or there is one thing, actually posting fiction here is another.  Someone should start a separate blog for peak oil fiction.  I'm sure TOD would add it to the blog roll.
I don't mind the idea of posting fiction, but reading a few paragraphs here and there is not very satisfying.  I'd rather have at least a full chapter.  Given the space limitations, posting a teaser paragraph and linking to another site makes more sense.
Thank you Donal for this most excellent suggestion. It shall be implemented. Very soon . . . .

At age 64, he did not / could not / comprhend that he done wrong ...

No disrespect to the deceased, but some reports indicate that Ken Lay (ex-Chairman of Enron) never did understand that he did something wrong, even after his conviction.

Despite all the "facts" presented to him over the course of his trial, Ken Lay's mind was so cemented in a particular belief system that he could ignore the mountain of evidence poured over him. He could stick with his story to the very end --some other person(s) betrayed him; he had done everything right, by the book.

What does that say about human nature?

Are we wasting our time trying to ring the Peak Oil alarm bell for the over-40 (or over-60) crowd?

Are they too cemented in their belief systems to accept facts?

Maybe the only hope lies with the young-in's?

(Sure, the easy answer is that Ken Lay was a "liar", a crook, a cheat, not to be trusted in anything he says. But let us assume for the moment that what he reported was his sincere belief system, that he truly believed he had done nothing wrong --even after all the evidence was presented to him.
This sounds strangely similar to the behavior of the Cornucopians, the Perak Oil deniers, doesn't it? Maybe they sincerely believe what they believe despite the mountain of evidence building up against them?

Eh.  I personally have found it just as easy to teach old dogs new tricks as young ones.  Really, it depends on the dog more than its age.  ;-)

With Ken Lay, I think you have a certain personality type just because of his job.  Some believe that CEOs tend to be psychopaths. Even if they aren't outright psychopaths, I suspect they do have a tendency toward self-delusion that is greater than average.  

What do you expect from a Harvard MBA?

At U.C., Berkeley, we MBA students were required to take classes that emphasized that honesty and integrity was essential to long-term profit maximization.

At Harvard, with their vaunted (but dumb) "case study" technique, students basically learned to play mind games and not much else.

Count the Harvard MBA's at Enron--please.

Yeah right:  I'm sure that the school you went to 35 - 40 years ago really matters as to how you behave today. Darn, if only Ken Lay had gone to Berkley instead of Harvard, we wouldn't have had this Enron debacle.

Hell, Joseph Stalin once was a divinity student at a seminary, and Adolph Hitler was once an art student.   So, do we blame the schools for the horrible deaths of umpteen million people during WW II?

Well, I suppose an argument could be made that if some of Stalin's teachers had inflated his grades, he might have had a happy career as a Russian Orthodox priest in some quiet little village.  And maybe if Hitler had more encouraging art teachers, he'd have lived out his days painting  corny little landscapes of alpine scenes. However ...... that's just a LITTLE bit of a stretch, don't you think?  

What degree did Lay get from Harvard, since his Econ degrees are both from the Univ of Missouri.

Lay was born in 1942 in the southern Missouri town of Tyrone. When he was 16, the family moved to Columbia, where Lay's father was pastor of a Baptist church.

He graduated from Missouri in 1964 with a bachelor's degree in economics, earning a master's degree in economics the following year. He was named Enron's chairman and chief executive officer in 1986.

Sorry--I confused him with Skilling. However, Harvard MBAs have presided over most of the major financial follies of the past thirty years--from lending tens of billions to Latin American countries that obviously cannot repay (National City Bank) and on and on and on.

Now I challenge you: Find one single U.C. Berkeley M.B.A. or Ph.D. in business who has been involved with one single financial folly or skullduggery.

IMO, education makes a difference. A huge difference. Otherwise, I never would have been a teacher. And yes, a couple of my former students have done time; even some of Socrates's students got in trouble (notably, Alcibiades).

Do you mean that you think that education had little impact on how you (personally) think and feel?????????

I think THAT is a stretch;-)

I believe you were taking a poke at Harvard by implying  in a tongue-in-cheek manner that Ken Lay turned out the way he did by getting his MBA from Harvard instead of Berkeley.

Yes, of course education matters; but by the time you've reached the age of sixty-plus, so many other things that have occurred in your life exert far more influence, as the original education receeds into the dim past.

That is, course, unless you're an academic who hasn't left the college atmosphere.

So, when you get right down to it, if a person is basically no good, it doesn't matter where he's gone to school - he'll still be no good. It's like trying to give an ethics seminar to high-ranking White House officials. Yes, you can give such a seminar, but one of the prerequisites for such a job is a total lack of ethics in the first place.

What is it about people that makes some of them basically good and some of them basically no good? Is this already determined by the time a person is born? Or maybe it's still moldable up until they're seven years old and then the choice gets frozen into place?

Anyway, people have been arguing about these sorts of issues for at least thousands of years, so ... somebody was quoting Bertand Russell on scepticism ... but it is certainly unreasonable to refuse to admit continuing environmental influence on a person's character as at least a legitimate hypothesis.

This one has gone a bit deep, I'll go deeper, lol.

It's quite hard to see very clearly into other peoples' minds so much of what I say is somewhat circumstantial.

Abilities seem to be about two thirds genetically determined versus one third environmentally determined, if twin studies on intelligence are anything to go by.

Good and evil? It depends on one's perspective, I think. I would define 'good' as thinking and acting in the common good of humanity, all living things and the environment in general.

Probably the distribution is a bell curve with small good and evil extremes. There will be people who seek to take advantage of people in near every circumstance or inflict hurt whenever possible, I have no idea how they perceive themselves or can live with themselves. Most people (> 95%) are in the pragmatic middle, they mostly act selfishly but do some things in the common good to help them rationalise that they are 'good'. To be truly good I guess one must have near total disregard for self and be incapable of taking selfish advantage even if there was zero chance of detection.

I don't think I have ever got to really know anyone at either extreme so the pragmatists are probably the vast majority. This has implications. Societal detection and response to behavior will have effect on these.

Almost all our evolutionary history has been spent in small groups, individuals who were too 'expensive' due to evil / lazy / disruptive behavior would be exiled or killed. It's probably only in the last 5000 years that more than a very tiny fraction of humans migrated from one local group to another, and only in the last few hundred years that significant population movement between groups has occurred.

It's fairly clear that: increasing population, increasing scope for population movement, increasing practicality of relative anonymity, money being a sufficient resource to provide all essential needs; have contributed to a reduction in the 'environmental' control of the pragmatists' behavior and hence the general increase in crime.

Relocalisation in physical and social contexts will redress this to some extent. I expect strangers to be viewed with considerably more prejudice (since they may be asocials or exiles from elsewhere), execution to be the typical penalty for people whose perceived cost is greater than their benefit.

Meanwhile, expect crime to increase at all levels from individual to country until the population is down to more intimate and less mobile levels.

I love the word liberal in college.  It always gets the masses stirred up.  Truly though I'm finishing my last year of my undergrad.  I hated that I had to take all these BS courses when I was a business major.  However after taking the BS courses, they turned into some of the most interesting caveats to my learning experience.  I took world religion with one of the smartest men I've ever met.  The best part was he was a reformed pot head who had an ephinany while cleaning toilets and telling himself in subsequently louder tones, "i AM a janitor!"  He got serious after that and I'm glad he did.  

I digress though and just wanted to point out that this one class changed my entire view of the world through understanding peoples motivations.  Many of those motivations, outside this country, are deeply rooted in the religion of the land.  Buddhist's do not disagree fundamentally with Christians, they both seek the same ends just in different ways.  After taking a mind numbing course like that, you come out different if you paid attention.  Now that I'm finishing up, the classes are more direct and appeal to my stengths without forcing me to think different and outside my normal box so to speak.

    Now that you have studied all the dieties of the world, which one or more or none do you believe in?

  As a business major, are you a true believer in the Invisible Hand and the intelligence of its divine design?
How about your business professors, do any of them think outside the Smithian box? Are any of them PO-aware and do they believe with their hearts that the markets will provide?

just curious.

As for your moniker, I assume 423 refers to two steps back and one forward. So the sequence will continue as 4231201... maybe not.

Great questions...I'm so going to be a politician.  All of them have merit and I prefer to cherry pick the best ideals from each.  The hindu's & buddhist in particular understand the world order and try to be a part of it.  I mean karma has something to it.  It may not be in the same sense that they believe, but I honestly believe what comes around does go around.  I keep looking at life and I always point out that its about trade offs.  I could be filthy rich, but I know I will pay a price.  My family life will be in shambles etc.  There are few people who truly have it all, and those that appear to are more likely masquerading around.

I believe the invisble hand and it's concept.  However it is flawed in that the poor don't change in the macro context.  The wealth is concentrating as we speak, so to say that it trickles down is crap.  It needs to be examined further.

I had an econ prof who understoof my concept, but basically ignored it b/c he'll be dead as he put it.  So in the long run it doesn't matter...we'll all be dead.  It's frustrating when I bring it up in class, but the people who are listening perk up and look like a ghost might have walked by.  Many people have come up to me after class wanting more info, and I'm happy to oblige.

My name is actually in reference to my dog tate.  When I found this sight right after I read Matt Simmons, I registered as quick as possible with no thought to my name.  My dog's bday is 4/23 and his name is tate.  BTW, he's a goldendoodle in case you wanted to know.  Best dog ever "designed."  I like your thinking though

"All of them have merit and I prefer to cherry pick the best ideals from each. "

Seems like flawed logic to me. What happens when the views of one conflict with the views of another?  A has to equal A.

If I'm cherry picking, I'm picking the best of each.  Most religions have the same goal to promote goodwill in each of us, to create a better whole.  How you do that differs, so when I say I believe in Karma, it's in the sense of causality.  What comes around goes around and I choose to call it Karma, while Christians will say it's God's will. These two specific views of why things are bad are very different since karma takes control from Gods will and gives it to you.  So I disagree with christian reasoning, but in the end we both seek to be the best humans possible.

My dog is a golden of the nonretreiving retriever kind also.

I was wondering how young folk of your category (i.e. business majors) respond to the concept of Peak Oil while being educated about our infinitely glorious and technologically ever-expanding society.

Myself, I'm close to old-geezer category and have kids your age, some in college some post-graduate. They all think dad is an oil doomer kook and they all believe the next PlayStation will deliver the next level of real reality just as it always has their whole lives. None majored in science because they noticed that the system does not treat nerd science types like myself too nicely. None believes that a next Great Depression can happen or a next World War can happen. Humanity has leaped beyond that cave age mentality as far as they are concerned. My problem, they say, is that I think like a "Poor Dad" in the scheme of the get-rich-quick Rich Dads/Poor Dads. They believe everyone can get instantly rich if only they become "famous" and hit it big. I don't know for the ife of me what that means. I assume it is an MTV thing.

So I'm assuming your professors teach you about converting investment returns (ROI) into net present values (NPV) and calculating corporate bond returns, stock valuations and all that good "by the numbers" stuff. And I'm wondering how that jives with the cognitive dissonance that comes from knowing that our non-negotiable way of life hangs on the thread of a few last good, fossil pipelines and that the downslope of Hubbie's curve is just around the corner?

I think much of my personality has to do with my childhood. By the time I graduated high school, I went to 10 schools in total and 4 different high schools.  I grew up with no choice but to adapt and I've learned to do it rather well.  Since I was young I also never shut up.  My parents realized very quickly that I had a hunger for knowledge.  They started testing my and all that jazz and soon enough I was in the "gifted program."  Immediatly I got picked on hard core.

It was pointed out to me at a young age, that I didn't think like most people.  So I embraced it and read everything I can about anything that interests me.  I tend to be interested in Sciences, I took 3 years of Chem 2 in college for the hell of it.  It's just a math class in disguise.  My dad knew computers would be big and he bought a 486 back in the days.  Had like 16MB memory, but I learned very early what a computer was and I became fascinated.  Destroyed several computers learning all about them and then the internet boomed and I learned all about that.  Conquered 10 websites on my own, got bored and started looking at everyone elses.  

All the while my parents split and I learned that even your parents lie to you.  Those are the closest people and if that's the case I question everything I hear.  I was the thorn in my professors side, because I always take things farther than they might want to go.  What I don't get is why I'm one of the only ones who asks questions.  It's not like we are a giant lecture hall and it IS a lecture.  We are in roundtable discussions and people just show up.

In the back of my head, I'm desperately thinking of a way to jive economics, finance, and the real world.  One of the first questions in my first Econ class, was what happens when the oil runs out.  My econ proff just looked at me like, nieve little boy.  You may know the econ argument for oil never running out.  I couldn't base my argument in econ terms, since it was still new and I transferred colleges, but I've brought my argument with me.  

I got the same answer and when I took it further a new econ proff states that he wished for $100 oil b/c he believed it would start the renewal rush.  Academic economists are a particular bunch who baffle me when they can't step outside their box and really talk about life.  I still remember the second guessing I had when I first learned the long run/short run aggregate supply model and the assumptions needed to buy into it.  So I'm trying to ask anything I can to the people who have the knowledge I want.  I know my weaknesses also, and creativity usually isn't one of them, so I generally stick to finding holes with current problems and trying to improve on it.

Tate 423: I think you might like this guy- he is my fav economist.http://www.financialsense.com/fsu/editorials/willie/2006/0706.html
Tate423- That is one of the most amazing things about Peak Oil, it leads you into all sorts of cross-over topics: economics, religion, politics, agriculture, etc. PO is a microscope that forces us to question everything about our existence.

As for economics, one of Adam Smith's chief tenents was specialization: If only we each specialize then the collective will prosper. My take on it is that this approach allows for cracks to form between the specializations, planet swallowing cracks. Being an econ professor is a "specialization". It allows one to wash his hands of everything else. It allows one to say, "Well well, I AM not a doctor, not a lawyer, not a scientist, not a this, not a that ... and therefore I can arrogantly bathe in my ignorance and lack of curiosity."

As for religion, I was curious why the sheeple's eyes "glaze over" when you try to sound the alarm bell over PO. What I discovered is that we are all in deep denial, firstly about our motality and then about how the world truly comes together. Religion allows us to talk to our differents parts of the brain ... err, I mean pray and meditate.

As for politics, most of my life I was a firm believer in "democracy". In becoming PO-aware, I also started questioning whether our so-called democracy functions as advertised.

It is good that you are catching onto this so early in life --when I was your age, I was totally clueless ... just one of the sheeple (still am)

Thanks for the words of encouragement.  I've got miles and miles ahead to keep adding, so I'll do so as quick as possible.  I keep telling myself I need to get paid to read this stuff, but haven't quite figured out the best way to parlay that into cash, or maybe I'll only take gold :).

I've had several proff who actually acknowledged that they have the best job in the world once tenured.  My international marketing proff was excellent.  He JUST got his tenure during my semester.  Now this class is all gered at promoting globalization and while I agree with most aspects there are clear fauilures. At the end of the semester he looks at us and says good luck because the way things looked, he's glad he gets to teach because it's not real world.  In the last class he undermined the whole 16 weeks in my mind.  From then on I agree with the benefits of globalization, the costs are not being accounted for properly and we're getting a distorted picture.

I work with a devout christian (can't remember denom) and when I talked to him about PO, he leapt on the economic part and I got a new friend.  He said his pastor has been yelling about the financial collapse part for a few years now.  This guy is real too, he doesn't drive he takes rail and the bus.  That's far better than I at this point.  He gets it and he's worried like hell for his two grown children who get it, but not the long term consequences.  He believe a collapse is inevitable, while his kids think it will work out. Guess dad will be right on that one.

Lastly I am polarized by our government.  I've reread several versions of the same history to conclude that winner do write the books and LOADS of information is missing.  I'm still clueless too, I've just got a small head start on a lot of people.

Ah, Dogboy (yes, gratuitous, lol, get used to it) you will make a good politician in many ways. You do a good babble, know and think a bit. Just you being here and daring to post here makes you better than at least 90% of potential US politicians IMO.

Over the last 20 years the poor have got poorer, both within US and globally. Peak per capita grain and oil were both over 20 years ago. Trickle down is something the snake oil salesmen made a killing on ;)

I most wanted to discuss this: "I mean karma has something to it.  It may not be in the same sense that they believe, but I honestly believe what comes around does go around." You do go on to blow it with some naive generalisations but that is understandable in one young.

There is something fundamentally correct in what you say. I don't necessarily ascribe to the reincarnation karma scorecard view but I do have a view about karma and what makes it.

Most people are not completely honest. They lie to others and probably to themselves, soon that makes it hard to know truth. Apparently the average person lies about 6 times a day, often routinely and without noticing. Not being honest adds a significant overhead to existence, additional realities must be constructed and maintained within the self, one's interaction with the external world is filtered, slowed.

Perhaps one critical aspect of karma is honesty of self, its honest interaction with the external world, and the clarity of perception of the external reality.

Karma on a self and cosmic level may or not have fundamental reality and significance, but the effects described above are real and usually obvious (to some folks, anyhow). Honesty is a prerequisite for any positive degree of karma but may be an obstacle to being a successful politician - ATM, anyway, lol.

I've been a mite patronising in this post, I know, I'm both sorry and not, it's not easy getting into politics young, best get used to the patronising oldies. Damn, we do ramble, lol.

Actually I got a kick out of your post. I imagined you speaking to me in a half drunken british slur.  Yes we all do lie, but I suppose being a numbers kinda guy I'll just assume they all have a value and I keep mine low, most times.

Buddhists do not disagree fundamentally with Christians, they both seek the same ends just in different ways.

This is an really uncomfortable stretch. Buddhists and Christians have rather different maps of the world. Without a common map there it isn't possible to point out a common goal. There are enough internal differences among Buddhists and among Christians to make the whole thing massively confusing.

A cornerstone of Madhaymika Buddhism is that there really isn't any way to make a map that fits reality precisely. It's a bit like the via negativa of Christianity, except it's non-theistic.

There really does need to be a connection between a way and an end, if the way is to be effective in achieving the end.  The Madhyamika way involves understanding the limitations of the various maps that one might use to get around, in order not to be lulled into complacency by the map, to stay awake to the reality.

It's a curious puzzle. In the kind of turbulent times that we are headed into, which is a more effective strategy: pick a map and a route that look reliable and just stick to the plan no matter what, or keep your eyes open and dance with circumstances in as responsive a way as you can manage?

This is an really uncomfortable stretch. Buddhists and Christians have rather different maps of the world.Without a common map there it isn't possible to point out a common goal. There are enough internal differences among Buddhists and among Christians to make the whole thing massively confusing.

Not true.  These maps you speak of are the means...and the ends are the same.  They both believe that you strive hard in this "life" and be as "good" as possible (the maps) so that after you are no longer here you are better off(the ends).  Now you're probably going to rant about how most religions are centered around this concept.  You're right there, but I am talking about the pieces I liked of each, and specifically from Buddhism.

Further from wiki:

Karma is used as an ethical principle, rather than a cosmological explanation for the world. Buddhists believe that the actions of beings will affect their own future, and because of this there are no private actions: all actions have a consequence.

So in the end a Christian preaches piousness, while a buddhist preaches the same virtue.  I disagree with different versions of christianity on what constitutes piousness, so it's far easier to understand a principle such as karma and try to follow it as best as possible while making decisions in life.

Darn it, darn it, son of a GUN, education matters! Kindergarten matters most. Elementary education matters and is mostly pretty good in the U.S. Middle school is an almost unmitigated disaster. High school is a bad joke.

The college you go to and what you experience makes a huge, huge, huge difference in how you see the world. Three of my four children majored in economics. The one who went to Mankato State University and took her Master's in Econ there learned approximately nothing. She can (just barely) think like an economist and her math is, well, nothing to brag about. My two youngest children went to Carleton College (tuition currently around $44,000 or $45,000 per year) and they got genuine educations. We three are on the same wavelength. My youngest daughter and son think like me so much it is almost like telepathy. Why? Genes. But also education.

If education does not matter much, then why don't we save tons of money and scrap it all and just turn kids loose with computers and learning software????????????

Having also gone to a liberal arts college, with a medical arts major, I also thought that my world religions class and my ecology class were most life changing for me.  I believe that Christians have trouble with Buddhism, but Buddhists don't have trouble with Christianity.  On the other hand, since Buddhism is the fastest growing religion in the West, it seems many Christian churches are trying to introduce "meditation" and some Buddhist principles to maintain "hipness" and "market share".  The Dali Lama is so supportive of scientific knowledge and collaborates with physicists and neuroscientists frequently.
It is not just "hipness". You could make the argument that JC himself was a Buddhist. 2006 USA "Christianity" is 80% Old Testament fire and brimstone with evildoers and preverts lurking around every corner.
Excellent point.  I enjoy the infrequent visits from the various church organizations trying to "spread the word."  Most frequently it is the good ol latter day saints aka mormons.  I've invited them into my home to argue scripture and each time it's someone different and each time they are amazed at my tenacity at arguing points with specific references.  I question them and they return it, after they realize (some quicker than others) that I actually comprehend the bible, they leave.  However if you speak to a buddhist, they will agree with most points about christianity and point out the similarities.
"The power of education is seldom of much efficacy, except in those happy natures where it seems to be almost superfluous" - Edward Gibbon
It's only a little stretch, joule. People grow and mature the way they do for reasons. Stalin "went to school" robbing banks to provide funds for the Party. Stalin and Hitler both had youths heavily influenced by the largest and most catastrophic war the world has seen. Somewhat more contentiously, both were abused as children. Encouraging humane teachers might have made those two into Ken Lay & Andy Fastow instead of the marquee goblins of the 20th century.
Being born in 1879 and 1889, I think their personalities were formed well before the war, and while both got some cuffs on the ears from their fathers no doubt, nothing that was considered unusual in their time and place.
In general I would argue that psychopathology is a remarkably poor explainer of historical events.
You're right on birthdates & I'm way off. I would also agree that psychohistory is a weak tool at best. But psychic events occur and they matter even when there is no metric. The discussion was about education - there is no metric for that beyond gpa but most of us don't question that education does something.
Stalin got the gimpy arm from his regular childhood beatings. That's more than a cuff on the ear. And no surprise he was a bankrobber or that he passed the beatings around right across the FSU.
Good point.  I suspect the kind of teaching that keeps you from doing what Lay did happens long before college, perhaps before elementary school.

I was mostly bored out of my gourd during my formal education.   Though I did learn how to appear to be paying attention while I wasn't.  ;-)

Go Bears
And don't forget what "MBA" really stands for:

Master Bull!@#$ Artist!

PHD: Piled higher and deeper.
A new study that found an important reward centre in the brain responds similarly to avoiding punishment or gaining a prize.

In other words, knowingly committing an offence, and getting away with it may be as good as winning a prize for some people. If you have a certain kind of brain damage -- specifically to the medial orbitofrontal cortex (OFC) --- you may have a special propensity to want to do that.


Especially note the words "a certain kind of brain damage."

Actually, now that I click through, I think BoingBoing misinterpted the word "punishment" and then generalized.

The underlying study is really about loss-avoidance, and not rewarding bad behavior.

How's this for disrespecting the dead?  Gotta love the NY tabloids.

The conspiracy theories have already started.  He's not really dead, he's hiding out in Mexico, spending his ill-gotten gains.  Or Bush has arranged for his old pal Kenny-Boy to enter the witness protection program.  Or the CIA killed him to stop him from implicating Bush/Cheney.  

Conspiracy stories sell tabloid papers.

Wildass crazy conspiracy stories sell even more papers.

I'll admit it, it was the first thing I thought.  I expect he really is dead, but it's certainly not impossible to imagine pulling such a thing off.  

And why should he enjoy any more respect now that he's dead than he deserved when he was alive?  He certainly had every opportunity to do something worthy of respect before he died, but he didn't get around to it.  Too bad - I'll not be mourning that one.

80+ remembers World War 2...
I am 66 years young and have vivid memories of World War II, the rationing, the movies such as "Mrs. Minnever" (a most excellent film), the radio reports of Edward R. Murrow, VE Day, VJ day. In 1944 my favorite game was "Bombs over Berlin!" In 1945 it was "Bombs over Tokyo!" I rejoiced (along with my parents) when the two A-bombs ended the war without the millions of casualties that an invasion of the home islands would have caused. I welcomed the troops home in parade after parade. I was #1 in War Savings Stamps in kindergarten, even though my allowance was only two cents a week. Most of the money I made by begging for returnable bottles from neighbors and then taking them in for 1 cent (small bottle) or 2 cent (large bottle) refunds on empties.

We saved every scrap of metal. We saved every drop of lard or suet--to make explosives to blow up Nazis. My parents hosted two crippled RAF pilots (one was CRAF) who had been shot down in flames. One flew Spitfires, the other flew Hurricanes and was either an ace or a double ace, I forget which. He gave me his Zippo cigaret lighter, which I still have. At the age of 4, I used to light his cigarets, because his hands shook very badly and were severely scarred. He had almost no face, but my mother told me not to be afraid of him.

If you are 66 years old today, that means you were born in 1940, right?

So, you must have been a remarkably precocious kid to have so vividly remembered (and understood) all these WW II memories when you were only about 4 or 5 at the most.  

Are you sure these weren't memory implants you just got recently? :-)

No, I have documents.

Also, my older sister has identical memories.

Our mother took us to see "Mrs. Minnever" at least six times, "Fantasia" at least six times, "Lassie" at least four times and "Son of Lassie" twice. I was traumatized somewhat by "Son of Lassie" and had nightmares and horrible "daymares."

I vividly remember the RAF fliers (1944-45) who talked with a funny accent. One of them had false teeth and would take them out to scare me. Neither one would eat the most excellent Black Mexican corn that our mother grew organically in our Victory garden before anybody had heard of organic gardens. My sister kept a diary. My mother did some of that too. Thus, I do not rely on memory alone.

Movies were 12 cents--10 cents plus a War tax of 2 cents. Popcorn was in nickel and dime and huge 15 cent size with gobs of margarine. (Butter went to England and to troops.)
As a family we went to movies at least twice a week, at the Avalon and White Bear theaters. As a kid I'd bike on Saturdays for the matinee with the gang.

And yes, I was exceedingly precocious. Went to U. of Chicago when I was 15 and at U.C. Berkeley was elected to Phi Beta Kappa at 19, which, I believe, is a record that still stands. Also there I won the Kraft prize. Please do not ask my score on the Terman Concept Mastery test;-)

Don (this is just for fun among friends, please realize) I remember a bunch of types at MIT who had stamped their IQ on the front of their T-shirts and their GPA on the back.  Wondered what it got 'em.

And Issac Asimov, who taught at BU when I was in the engineering faculty there. Nobody could be around him ten minutes before being informed that his  IQ was 160.  Wondered if this very witty and fun guy somehow didn't realize that that score and up was common as fleas on a hound both ends of Mass. Av.

Right, I know that Asimov had a lot more going for him than merely test scores, but I'm talking simple stuff here.

Now a serious question.  Everybody knows if you have two populations, A and B, and some trait like for example, stalk height, is about the same normally distributed in both, and A has a mean a little longer than B, then up three sigma stalk length, there are a lot more A than B, even tho around the mean there are nearly the same number.

So how come people are hollering and tearing their hair when they notice that there are a lot more  A than B at for example, both ends of Mass. Av?

up three sigma stalk length, there are a lot more A than B

seems to me that the ratio doesn't take off until the number of sigmas out matches the inverse of the difference of the means in sigma terms.

E.g. if the difference in the means is about 1/3 sigma, then the ratio takes off out around 3 sigma. But if the difference in the means is only 1/10 sigma, then you have to get out to 10 sigma to be seeing a big difference.

Of course, if the sigmas aren't the same, that's a whole different story.

Did I do the math wrong? Ought to be simple enough to get it right, but then my IQ is only 140, so what do I know.

Stanford-Binet I.Q. was designed to predict success in school. It is pretty good at that. The test is approximately worthless for anything else.

I've had the extraordinary good fortune in my life to know many geniuses who are way smarter than I am, including more than half a dozen Nobel Prize winners in various disciplines. (E.G., I helped Moto Kimura with his English.) To be around people who are way way smarter than one is, is IMO a good and humbling experience.

Both my father and I always tried to hang with extraordinarily intelligent people, working on the theory that they are interesting--and especially that one might learn something unusual and of great value from them.

All of that is sort of right, from my experience, and by the way, I was thinking of maybe 1/3 sigma as "hardly any difference" in my little story.

(Sigh, there is always that guy in the back of the room with an annoyingly right quibble to throw at my little homilies. Gotta remember never to put in specifics.)

I used to be in the business of hiring  young engineers for R&D jobs.  Standard test scores (SAT, GRE) did in fact seem to correlate pretty well with how good they turned out to be at the particular jobs we had, which required a lot of pretty heavy analysis.  As for creativity and invention, I am not so sure.

So then, what's the answer to the question about the outrage regarding disproportionate representation in faculties?

what's the answer to the question about the outrage regarding disproportionate representation in faculties?

I think it has to do with justice more than science. Should a person be punished or rewarded only for their actions, or for physical characteristics that they were born with & therefore aren't products of their actions. Should a person be punished or rewarded for some congenital characteristic that in itself has no positive or negative value to society, nor is there any clearcut causal line to any other characteristic with such positive or negative value, but merely a correlation to such values. The correlation may well be there because of some chain of causal links, including things like social attitudes.

It doesn't seem so far fetched, does it, to entertain the possibility that a correlation, between an obvious congenital characteristic and some other characteristic like ability and accomplishment in some valuable field, such a correlation could be maintained by a kind of feedback loop that includes social attitudes: People with characteristic X are rarely any good at Y, so don't support the ambitions of any X people to enter field Y.

If you happen to be an X person congenitally, and you really want to do Y, and there is no clear direct causal link between X and Y, it might well seem like an injustice that social attitudes block the path to a career in Y. It might seem like a worthy political battle to fight those social attitudes. Seems reasonable to me!

It also sounds strangely similar to his buddy.
Re: More peak oil debunking plus abiotic oil

There was an article on today's Lew Rockwell website (a well-established, strongly libertarian site) by one George Giles, entitled 'Non Peak Oil'


It contains the usual cliches about why we are not running out of oil, why the consensus theory on oil formation is all wrong, and why peak oil is a non issue that will soon go the way of all other crackpot theories.

The article is so fundamentally flawed and the author so obviously ill-informed, that I don't even know where to begin to send him an email rebuttal. Right now, I really don't have the energy to do so, and I seriously doubt it would change his mind anyway.

However, the Lew Rockwell site gets a lot of traffic and appears to well respected amongst those of a libertarian persuasion, so an article like this can do a hell of a lot of damage regarding public awareness of our energy problems. Evidently, they are pretty open about accepting guest articles, so perhaps someone should submit a well-reasoned and pursuasive rebuttal article. Or rather than an article directly rebutting this one, perhaps an article about peak oil in general, slanted toward libertarian concerns?

By the way, the guy George Giles doesn't present any credentials and only describes himself as 'an independent thinker' from Nashville.

Articles like this go to show that "libertarians" don't really care about liberty, or even about human welfare in general. They just want to let business people do whatever it takes to make money over the short run, even if it damages the well being of human life in the future.

Ironically, we've entered the energy-depleted "long run" discounted by our parents and grandparents on the advice of 20th Century economists.

from what i have seen libertarians seem to be whats left of the corprate world's attempt to control the government before they realized it was just cheaper to buy off both sides.
I'm one libertarian that thinks Mr. Giles is a few cards short of a full deck.  Certainly understand how Peak Oilers can grow weary of enlightening the denialist's whether they reside on the left or right. Myopic thought seems incumbent in attacking Peak Oil as either a tool of of the Big Oil conspiracy theorists or those who view oil a depletion free resource ala Mister Giles.  

Some people just defy logic

The latest propaganda tool of the aristocracy is sowing doubt. The facts are irrelevant. Just say the jury's out on evolution does the job in the bingo hall. Say climate change is a fact but that its cause is still debateable goes a long way at the corner bar. Say some oil fields seemed to refill from below is good enough on the golf course. The idea is not to win the debate in the science journal but to win at the ballot box.
You can thank Karl Rove for that one...
The article is so fundamentally flawed and the author so obviously ill-informed, that I don't even know where to begin to send him an email rebuttal.

That was my exact perception. I was thinking "This guy doesn't even understand the fundamentals of the debate." That essay was riddled with errors.


Short global warming coverage in the NYT...


An excerpt:

"We're showing warming and earlier springs tying in with large forest fire frequencies. Lots of people think climate change and the ecological responses are 50 to 100 years away. But it's not 50 to 100 years away -- it's happening now in forest ecosystems through fire."

So... storms and rising water on the coast. Fire in the wood.

I haven't watched it yet, but this on-line video looks good:

CLIMATE CHANGE: Author Tim Flannery predicts 'new dark age' if global warming not addressed

Tim Flannery, author of "The Weather Makers," discusses the potential effects of climate change, and problems with carbon trading. (Originally aired: June 19, 2006)


Hello Odograph,

Thxs for the link, but Hoyle says the hi-tech industrial age is a one-shot deal, never to occur again as far as humans are concerned.  Duncan's Olduvai Theory postulates scientifically the details--a never-ending dark age if you will.  James Lovelock ultimately predicts a few humans along the tropical northern coast of Canada.  

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

Hi Bob, this Hoyle is some sort of time-traveler I take it?
Hoyle of "according to Hoyle" perhaps?

Fred Hoyle? Probably not.

It was Fred.
Hello Smekhovo,

It was Fred.  The following is the intro to Duncan's Olduvai Theory:

My Odyssey with the Olduvai theory began thirty-two years ago during a lecture series titled, Of Men and Galaxies, given at the University of Washington by cosmologist Sir Fred Hoyle.

It has often been said that, if the human species fails to make a go of it here on Earth, some other species will take over the running. In the sense of developing high intelligence this is not correct. We have, or soon will have, exhausted the necessary physical prerequisites so far as this planet is concerned. With coal gone, oil gone, high-grade metallic ores gone, no species however competent can make the long climb from primitive conditions to high-level technology. This is a one-shot affair. If we fail, this planetary system fails so far as intelligence is concerned. The same will be true of other planetary systems. On each of them there will be one chance, and one chance only. (Hoyle, 1964; emphasis added)

I was fascinated--and stunned. His soft-spoken proposal seemed incredulous, bizarre, preposterous--and possibly inevitable. A return to the Stone Age? Deep cultural and material impoverishment? However nobody else in the audience seemed the least concerned. Perhaps Hoyle was just giving a lead-in to his next science fiction thriller. So for the next decade I went about my way: raising kids, building airplanes and teaching engineers. Haunted by Hoyle's hypothesis.

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

This idea is NOT original with Fred Hoyle. It goes back at least to early 1940s science fiction and possibly back to the thirties. Also, some of H.G. Wells's work foreshadowed this notion, though to the best of my knowledge he did not state it explicitly, as Fred Hoyle did.

(When I was about ten or eleven years old I tried to memorize word for word Hoyle's famous book on cosmology. I failed;-)

I love Hoyle.

Big bang, bah . . . . HUMBUG!

The NYT article refers to Global Warming causing more fires, but not vice versa.

Larger and more frequent forest fires can cause huge CO2 releases, which aggravates global warming, which in turn encourages greater and longer-burning forest fires (especially in tropical forests growing in thick peat beds).

This potentially significant positive feedback loop appears to be largely ignored in computer simulations, which tend to focus exclusively on fossil fuels. See Christian Science Monitor .

Another video on-line:

Energy Policy: Center for American Progress' Cohen explains campaign to 'Kick the Oil Habit'

CAP's Ana Unruh Cohen sees energy crisis as way for Democrats to gain credibility with voters.(Originally aired: June 6, 2006)


Israel Presses for Oil From Shale

Thanks to a technical breakthrough, it should be possible to extract fuel oil from the shale for less than $20 a barrel. That could allow Israel eventually to cut its crude imports by up to one-third.
Any takers there for underground nuclear explosions, I wonder?
From that article:

"How does it work? Older technologies squeezed oil out of shale by putting the crushed rock under enormous pressure at high temperatures. But the process developed by Gvirtz costs far less. The shale is mixed and coated with bitumen, a remnant of normal oil refining, then put through a catalytic converter under relatively low pressure. The output is synthetic oil that can be refined into gasoline and other products."

My minimal knowledge of chemistry says that a catalyst can only hasten a chemical reaction that "wants" to happen on its own, i.e., is exothermic.  E.g., the catalytic converter in a car causes remaining unburnt hydrocarbons in the exhaust to burn fast enough to be mostly gone before leaving the tailpipe.  But in the case of shale, isn't there a need for energy input to break the chemical bonds of the large "tar" molecules to turn them into smaller "oil" molecules?  Moreover, there is a need for a source of hydrogen to take over the links to carbon that get unlinked.  Typically the source for both heat energy and hydrogen atoms is natural gas.  Israel is currently struggling to get enough natural gas for its current power plants, as some foreign suppliers pulled out recently in the fallout from the Gazprom brouhaha.  Given the outlook for the NG market, I expect the cost of processing the shale would rise?  Certainly by 2011 or so, when this shale plant is supposed to be completed?

Catalysts sweet-talk a reaction that might want to happen ;-)

I guess it's possible that the addition of bitumen changes the chemistry of the shale so much that it's a new ballgame, and a lower energy/catalyst combination works.  In that case, you could think of the bitumen as a catalyst itself.

... but the sneaky question is how much bitumen they are adding, and how much energy gain is being made over all the inputs.

That reminds me of a question I've been wondering about for a while: Where does Israel get its oil?
Same place every other non-"producing" or energy-nonindependent country does, on the world markets.

Oil flows to wherever money grows.

So there are no Arab states that refuse to sell oil to Israel, or there are, but it doesn't matter because oil is fungible?
Oil is fungible, flows to the highest bidder onthe NYMEX (or other exchange) and then deliveries are made as is financially expedient at the moment of transfer of title. How is an Israel-hating country going to stop a US or other intermediary from reselling the oil to Israel?
Well, I guess there is no practical way. I wonder what the rhetoric is though.
I believe that Nigeria is a major supplier of oil to Israel. The last thing I read suggested something like 60%.

For more than forty years Israel has been aiding and cultivating the goodwill of Black Africa. Now it pays off for them. They have done well by doing good.

We should all be so smart.

Aiding and cultivating the goodwill of Black Africa or of the klepto-thugocracies that run most of the place, including Nigeria.

Antoinetta III

As opposed to the Arabs who surround them?
Marc Rich.

Light Sweet Oil vs Heavy Sour.

I was reading on the gasoline production from heavy sour oils and one thing really struck me a lot of sources site a 25% less return on gasoline per barrel for the heavy oils.

I think this effect is very significant since light sweet seems to have peaked. Thus for every 10% of light sweet production we need increase heavy oil production by 2.5% just to offset the differential in return.

I think this is driving a early peak effect in the worlds oil markets outside of lack of refining capacity.

In any case assuming that the only makeup for loss of light sweet crude is heavy sour declining production in light sweet fields such as Ghawar has a much larget impact then simple peak analysis indicates.

I'd love to see some of our experts delve deeper into the impact of shifting quality of oil I think its more important than overall peaking since even if heavy sour production peaks are delayed the real gasoline peak is earlier.

very good point. I had been wondering about this ..
maybe someone should do an article on it :p

The effect seems large enough to introduce a real peak in gasoline far earlier then overall peak oil indicates.
Whats needed is a analysis that focuses on peak light sweet vs heavy oil production. With a understanding of the large light sweet fields. If we get there decline rate and the 25% heavy tax is included I think you will find the markets are actually responding slowly to the peak once they figure it out in a few months then who knows where the price of oil will stop.

Also it means steep declines post peak with the mounting effect of this 25% finished goods decline.

Explains why the world loves light sweet crude.

On the timescale this is going to happen it is safe to assume that we will replace a significnat portion of our fleet with diesel. The driver will be the relative price of gas vs diesel which will certainly grow.

US is uniquie with gasoline being an almost exclusive fuel for light autos - explaining why 5% of the world population use 45% of its gasoline (that would be some 16 times more per capita that the rest of the world). In Europe and Asia diesel is much more common, and other fuels like propane and even natural gas are also gaining momentum.

I think it effect diesel also but I can't seem to find out the
differences. I do know that a refinery can choose diesel heating oil and gasoline depending on market conditions.

As far as replacing our car fleet I don't see that happening over the short term to any large extent. Sure it will happen but the negative impact of value loss on your old SUV will be pretty large. Again another topic that someone might want to investigate how much does it cost to replace our  car fleet for x% fuel efficiency vs rising costs and losses for the older vehicles.

Not to mention diesel pumps would need to be installed.

Now place this problem in the context of known depletion so you know that switching to diesel only buys a few years at most of breather space as depletion continues to eat away at production ...

I again don't see this preventing a major upheaval.

America and with it the world economy is going to take some major punches over the next few years.

Basically like global warming in the Arctic I think its too late to change anything the problem is already self reinforcing there is massive feedback loops as our oil based economy goes down.

Gass guzzlers value drops dramatically you can't afford to buy a new car since your underwater on your SUV.
You can afford to drive it.
You can sell your home your underwater on the morgtage.
Massive increases in divorce rates.
Massive increase in bankruptcies as people give up and walk

Now you have no credit.

See the feedback spiral as depletion sets in.

You are mixing way too many factors in here. Of course there will be an economic pain while we are adjusting, but this is what life is all about: adjusting to the environment, right? Nobody promised it to be a happy and easy ride at the the start and if you believe it then too bad for you.

switching to diesel only buys a few years at most of breather space as depletion continues to eat away at production ...

It's called adaptation. Diesel will buy us a few years, propane and NG several more, hybrid cars, mass transit, renewables and nuclear will buy us more and so on. The environment changes so do we - the real question is who will be faster. FWIW switching to diesel is one of the easiest and lowest cost options from the above mentioned and will add significant savings for the medium term (diesel engines are 10-15% more efficient) - therefore I expect it to happen big time. Even if things get that ugly as you describe, some smart guy will start importing used diesels from Germany - these at least we will be able to afford (OK, at least I hope so).

My point is its not cheap its expensive to switch and remember agian we have to switch a lot of pumps over also.

I of course don't know the cost of switching to diesel also I don't know the relative yield of diesel over gasoline I suspect the difference is not that high since the 25% loss is pretty basic for the heavy oils. The coking loss is before you further refine for gasoline heating fuel and diesel. There is ofcourse a much smaller loss in the cracker that could be made up via hydrogenation is suspect.
So the difference is actually tied to availability of natural gas and should be minimal.

Diesel would need to have a substantially higher yield for the heavy oils. If it did then even today diesel would be far cheaper then gasoline because of the compounded of using cheaper heavy oils and higher yields. Basically it should be 25% cheaper or more.

At the end of the day what were looking for is when the cheap oil economy falters and first stops growing then shrinks. This basic flip is what has the biggest effect on our way of life which is tied to growth.

There are two things we need to know. When we start the economic switch and its rate.
Peak Oil is the underlying driving factor but the implications of it at the individual level then government then on up is what matters at the end of the day.

Assuming we will basically do nothing until after the economy is already in a downward spiral makes sense in fact it seems like we are now. And we do nothing.

So any suggestions should be phrased in terms of the underlying economics switching to diesel in a robust economy is difficult in a depression ?????

Positive feedback is the root law of the universe.
Big bangs happen when you fall into positive feedback conditions.

Remember that Cantarell is heavy sour.  So we may have just passed a "light sweet" biased depletion, but are about to enter a more balanced depletion period.

MY SWAG is that 2006-2009 or 2010 will see more balanced depletion (but light sweet still goes away faster than heavy sour, but the ratio will not be as extreme as recent years). but once Cantarell shrinks in importance, and new heavy sour from Kazakhistan (Kasagan field?, last big one found) comes on-line , we may see near stable heavy sour production for a few years whilst light sweet production falls off a cliff.

One reason I drive a diesel :-)


This goes into gasoline vs diesel. The final word seems once you have the lighter fractions i.e post coking the differences are small. Agian the loss in early in the processing at the coking stage and I assume from this


Sulphur removal has a signifcant effect also.

Pre peak the price spread between heavy and light allowed a profit.

Post peaking of just light sweet causes a significant refinable depletion effect that been it seems overlooked in
the generic analysis that massively magnifies the depletion effects of light sweet vs heavy sour oils.

Basically you get a 125% replacement requirement or more for replacing light sweet oils with heavy sour sources.
This is the predominate effect I think we are seeing now and it will only get worse. I suspect we will see real shortages before refinery capacity can be switched and at that point depletion of heavy sour sources are significant and no way is it possible to overcome this refinable "tax".

Bottom line it seems the effects of depletion are going to hit both sooner and harder then I think even most peak oil aware people realize.

I love Stuarts and Khebabs graphs but I really think were missing the biggest problem. We don't have till 2010 even probably only into next year at best 2008 before the great economic flip happens from growth to long term recession.

Any efforts post recession to reduce the effects of peak oil suffer from the massive drag of crashing economies.

If I'm right then were not even worried enough.
My analysis indicates it already too late to avoid a major economic crash. I really hope I'm wrong but I don't think so.

Please Stuart or Khebab do the analysis.

You are probably correct but the US recession that starts in about 6 months may mask the PO related aspect. This may be the worst of all worlds, though it is unwise to pre-judge future things so, since that recession may well see us emerging but still weakened just as oil production seriously starts its downslope. Then we would begin the real economic downslope.

I doubt even Stuart or Khebab could do an analysis that would answer your question and ease your fear, there are too many imponderables. Note that my view of what happens economically in the next 6 to 12 months is at odds with most others. If you are looking for effective mitigating action to make PO relatively painless and maintain living standards through the transition you need to invent a time machine, that point passed at least 5 years ago.

Check out Richard Heinberg's inspired "An Open Letter to Greg Palast" over at energybulletin.net:


Let's hope that all of us here on TOD learn from Heinberg to treat our debate-buddies here (and elsewhere) with such respect.  We're all stuck in the same spaceship, after all!
"Let's hope that all of us here on TOD learn from Heinberg to treat our debate-buddies here (and elsewhere) with such respect."

I personally think that Heinberg treated Palast with more respect that Palast deserved--based on what I consider to be a slanderous attack on Hubbert's reputation.

BTW, Khebab and I  think that Heinberg's references were excellent :)

saw that...very cool.  :)
While my gut may agree with you on the respect question, I think Heinberg's tone does a lot of credit to himself and adds credibility to his argument.

By elevating the discussion to a higher level I think he is even more persuasive, especially to those less familiar with the issues. I even hold out some hope Palast will reconsider under these circumstances.

Greg Palast deserves no respect at all.  Like many other high profile supposedly anti-establishment commentators (Noam Chomsky, David Corn, Amy Goodman, Michael Moore and a host of others), Greg Palast is a professional liar.  He serves the very interests he claims to oppose.  See:


IMO, Palast deliberately mischaracterized Hubbert's work, and to compound his sins, Palast then suggested that Hubbert was part of some kind of bizzare global major oil company conspiracy.  
Yeah, but I still think emotional slamming, even if justified, only compromises the credibility of the slammer. If Heinberg's goal is credibility with the audience and to change minds, I think he took the correct tack. If his goal is just to vent then he should just have at it. I have said my piece against Chomsky already as the great Pol Pot apologist.  

I personally think that taken as a whole it's actually a pretty devastating slam at Palast's lack of critical thinking and integrity. It is just more of a subtle, underlying theme.

This is from the discussion board at www.omahagasprices.com. I'm posting it because I think it's typical of the kind of frustration this recent increase in oil prices has caused.

As Kunstler says, "They will blame the oil companies, the government, the Arabs -- they will blame everybody but themselves".

I am just disgusted with how I am forced to make sacrifices when i make a decent living. I can't imagine if I were living paycheck to paycheck prior to this jump, but I can tell you that I am sure living paycheck to paycheck now. Not only has gas prices gone up but all the little stuff that adds up, for example, laundry detergent, toilet paper, etc... I don't fit the fat and lazy profile that one of the gentleman talked about in an early reply to this thread, in fact I am physically fit but I have see the type. The fact of the matter is that I am stuck with an SUV that gets 10.7 miles to the gallon (it is a Jeep Cherokee, and YES that is what I get to the gallon)because I liked the vehicle and wanted something a little safer than the grand am death trap I had prior to giving birth to my daughter. Then a month later, Katrina hits and my life has spun into a cyclone financially. I can't afford over 200 in gas every month and shouldn't have to worry about freezing to death because the heat bill is so high. Oh and some background info, I live about four miles from work and now we don't go anywhere but to maybe Target on the weekends because we simply can't afford it so I can't imagine if I was still going places...I would be putting in like 100 dollars a week for gas...It just makes me sick. I know there are things our administration can do, but doesn't. I know that is why prices are so high. Sure there is a supply and demand issue and prices were moderately high prior to Katrina, but when Katrina hit they soared extremely high have yet to come back down. Seems like an excuse to me to keep money in the a certain person's pocket (not mentioning any names). Ugh...it just makes me so mad and I am sorry if there are souls out there that don't see my point of view. I needed to get my feelings out and I respectfully sat by and listened to opinions that may have differed from mine...Thank you for listening. I had to vent and I feel better than I have in months. Sometimes it helps to get your feelings out. You guys dont' have to reply, like I said I just needed to vent. My intention was not to bash anyone or hurt anyone's feelings and I am sorry if I did.
Well, you can't really blame her.  Cheap and abundant energy is the American birthright.  Or so our fearless leaders told us.  We might have to switch to ethanol-powered SUVs, but the American way of life is non-negotiable.  :-P
I saw a really fun commercial on TV last night, in which corn "pops" into Chevy Avalanche SUVs.  If only life were as simple as TV.
You know, I posted that tease about Ken Lay (64) not for the purpose of knocking him down but rather for the purpose of better understanding where he comes from, what roads did he travel to get to his recent mindeset where he claims (well, claimed) to possess about how he "did everything right" and yet bizzarely, people around him now tell him he done wrong.

You know, President Bush turned 60 today (birthdate 1946) and so he is close in age to Ken Lay. They are both leading-edge babies at the forefront of the massive Boomer generation that came onto stage 1945-1955. They saw life in America climb dramatically from a war-time rationed economy to a Levitt-town suburban wonderland.

There were certain concepts that got "educated" into their heads and it served them well over the years. The system "promoted" them from one position to the next higher one, all the while as they adhered to their "principles".

Suddenly everything has gone topsy turvy on them. The formula for "success" and advancement suddenly shows up in the polling places as the intelligent design for collapse and failure. I have no doubt that they are (were) bewildered and surprised by the sudden turn of fortunes.

I do not doubt the sincerity of their proclamations of innocence. It is just that "the system" promoted these personages of gross incompetence into slots they had no business being in. That kind of tells you that "the system" is a mad and mindless one. And we are mad and mindless to assume that everyone is "evil" and gets up in the morning saying, today I will be the worst person I can possibly be. I think GWB (much as I bash him) probably gets up hoping to right the world each day. He assumes that the "values" given to him during his "edge-occasions" will do him right this next time even if they seemed to fail him just yesterday. Perseverance, after all, and "staying the course" are noble characteristics.

I think it is very likely she has been pumping E85 into that Cherokee given that she is on a budget and it is $.10 or $.15 less per gallon. It explains her atrocious mileage figure.

We, at TOD, understand that E85 is 30% less efficient than gasoline. This woman does not. She is obviously not alone. Even, worse, the MSM is guilty of perpetrating the scam. This is an angry woman.

Let us imagine her reaction when she eventually figures out how she has been played.  

This ethanol thing is going to backfire in a very big way. And  this woman's post is an early indication.

Well, true enough, and yet the problem goes deeper. I know the wider public hates math, but let's do the math anyway. Gas is up almost $1 since she bought the thing. The commute is four miles, so 8 miles round trip. At 10.7 mpg (stop-and-go in the city, I imagine) that's 3/4 gallon, so the commute has increased in cost by, what, a whole 75 cents, since "a month" before Katrina. That's $225 a year even if the commute is made six days a week rather than five.

Now,$225 is $225, and of course there's that other driving. But if that is pushing her so far over the edge, then she couldn't afford the Cherokee in the first place. And this is America, so no one dares tell her that to her face. After all, no "consumer" can ever be expected to behave prudently, responsibly, or intelligently.

And that, not Peak Oil, is the real story in this case, and it has been a very real story across America for decades now - and it adds plangency to some of Kunstler's otherwise wild remarks. No generation prior to the boomers would have eagerly made themselves so hugely overextended that a feather could knock them over. (Some did occasionally get knocked over by "panics", as they were once called, but "panics" were by no means feathers.)

Of course the U.S. government hasn't helped one whit - instead, it has trained people to belive that vast overextension in housing is a free ride to riches. For example, the mortgage qualification standards that were meant to help prevent overextension have long since been cast to the winds. And thus far, the belief has been correct: no generation in all of history has ever enjoyed a free ride to match the one delivered effortlessly by the "housing ATM".

But alas, when all is said and done there, is no such thing as a free ride. The bill will come due, we just don't know when, but we hope not today - après moi, le déluge. And any politician who even whispers this truth will be Mondaled on a rail right out of town.

There has been a lot of talk about demand, and demand destruction here, but pretty much all the graphs are looking at time series i.e. with date as x axis...

How big a deal would it be to construct some consumption curve graphs for oil / oil products and N Gas

i.e. the x axis is price, in constant dollars, and the y axis is quantity purchased.

Related to this, as I would be more than willing to have a go myself at that problem if I had the numbers...

How big a deal would it be to have a link to the numeric data which is plotted on the graphs shown here, not just a link to the IEA site, but a table of the actual data points the author of the story used to plot the graph, or do folks consider this propritary in some way?

I don't think it's possible to plot a demand curve for gas. First, I don't think anyone really knows how inelastic the demand for gas really is/what price level will cause significant change in consumption levels. It depends on how the gas is being consumed and who is doing the consumption.

People tend to be piling on a lot of different ideas simultaneously when they talk about demand destruction from high gas prices, including:

  1. people choosing to drive less to compensate for high gas prices
  2. cost-push inflation as high gas/oil prices drive up the underlying cost of everything we consume
  3. people maintaining their gas consumption levels by spending less on other goods and services
  4. the aggregate recessionary effect on the economy of 1 through 3 with the potential to undermine demand for oil/gas,

with the whole thing (in the peak oil world view) driven by demand-pull inflation caused by fundamental and structural limits to oil production capacity.
All I'm saying is the data necessary to construct such a cure is contained in the data used to produce the other graphs seen here, if plotted we might see a line, or we might see noise, I have no preconecptions of which it would be right now, I'd just be interested inseeing if there is a fittable line there...
"to construct such a cure" should have been "to construct such a curve"
I see a rise in motorcycle purchases. The past few years in Illinois has had increases of people getting motorcycle endorsements on drivers license - and fatalities rising. In the news it's attributed to Baby Boomers buying Harleys as toys. But in reality I'm seeing a proliferation of Vespa-type scooters and smaller bikes. What gives? We all know here. It's the gas prices, stupid!

Last summer I was tempted myself to get a motorcycle becuse it's a lower-cost alternative to a hybrid car, and the fact I'm PO-aware. Of course, motorcycles have the drawbacks of not being good in bad weather and more dangerous simply becuse it's a balancing 2-wheel vehicle.

Inexperienced (i.e., less than 10,000 miles) motorcyclists are at great risk. In a few years I hope to join the "300,000 miles on motorbike without an accident" club.
Check your email.
There have been plenty of studies of demand elasticity.  See:

and links within, including:
http://cta.ornl.gov/cta/Publications/Reports/ORNL_TM2005_45.pdf (WARNING LARGE PDF)


If you go to the EIA's This Week in Petroleum page, I believe you will find the data you want in Excel Spreadsheet form.


At the top of the page, there are some tabs to click on. The default is 'Summary.' Click on 'Gasoline.' Now, at the top, right-hand corner of the page is a link that says 'Complete History XLS' - click on that and either open or download. Contained is weekly retail-price and demand/product-supplied numbers. The spreadsheet is named twipmgvwall.xls.

I have worked extensively with these numbers and have plotted them. The consumption numbers are extremely seasonal so you definitely need to run moving averages on them and break them into months.

If this is not the data you are looking for, let me know, and I'll direct you where you want.

Bush talks about turning 60 and personally solving the global warming problem. I think George is jealous of Al Gore inventing the internet. ;)
I can't believe he still trots out this sentence:

Pessimists seem certain about a lot of things, but to be certain about the far future seems like the riskiest proposition.

And he is doing that line in every interview for the last few weeks.  His base is whack.

Darn, how did that sentence get in there!  That's not the one.  This is the one:

I think we have a problem on global warming. I think there is a debate about whether it's caused by mankind or whether it's caused naturally, but it's a worthy debate.

That's the problem with having two paste buffers.

Bush thinks there is a debate.  I guess this debate will just go on at least through the rest of his Presidency.  Bush also refuses to see "An Inconvenient Truth".  He thinks there is a debate but has no desire to find out the truth.  Instead he invites fictions writer about global warming to the White House to educate him about global warming. He's got many brilliant scientists in the government who could come to the WH at any time to enlighten him but instead they are censured. Instead he has political types who are not scientists delete and modify beyond recognition references to global warming.  The man is a charlatan and a fool.  Perhaps if he weren't getting his info from Exxon that he might be able to wrap his very small, incurious brain around this very important problem.

In the mean time, the shit hits the fan.  

what are your suggestions on rectifying this global warming debate?
war of attrition
unfortunately we can only do the best we can possibly do, not everyone worldwide will play fair. so what you say seems to be correct. I have no answers on corrections. Most likely it will be a war of attrition. like you said.
Re: the "What's more likely - stagflation or depression?" posted up top....

The imagination economy

The problem is that Americans' pay isn't going up. That's remarkable because the economy is booming - growth is strong, unemployment low, productivity rising smartly. Yet the latest figures show that the broadest index of pay (inflation-adjusted wages, salaries, benefits) is no higher than it was at the end of 2003.

This is serious trouble because America's great economic story is that living standards keep rising, especially when times are good. But living standards are not rising right now. That is the kind of deep disruption that over time can lead to economic and political crisis.

Maybe we'll just imagine that our wages are going up...  ;-)

Seriously, the article argues that science and technology isn't the answer, imagination is.

I just got an invite !


You Are Cordially Invited to Attend
A Special Luncheon Program Featuring
His Royal  Highness
Prince Turki Al-Faisal
Ambassador of the Kingdom of Saudi Arabia
to the United States
Wednesday, July 12, 2006
11:45 a.m. - 1:30 p.m.
The Plimsoll Club, 30th Floor, WTC
(Free validated parking in the WTC Garage)

Hey, free parking! Get that old Mercedes diesel in gear . . .
I may take the bus if it is not raining.  A bit over a mile away.
Ask him why the Saudis are raising prices on their crude oil if there aren't enough buyers.
Hello AlanfromBigEasy,

Terrific!  Please report back to us TODers every detail of his speech so we can compare with the MSM's version.

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

Too many comments on this thread, but worth a look for those doubting the promise of Canada's tar sands:

http://ca.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-07-06T190503Z_0 1_N06447546_RTRIDST_0_BUSINESS-ENERGY-OILSANDS-COSTS-COL.XML

Nice find. News effected the whole industry and apparently Toronto Stock Exchange. People are paying closer attention then just the "178 Billion" barrels that is supposed to save the world.
Same story was picked up by the Times:

Slowly perhaps it is becoming general knowledge that it takes energy to produce, from basic resources, usable energy for human application.

Hello Apuleius,

I read your entire article, and the ignorant comments at the end. You are a very good writer, and would be most welcomed by me as a regular contributor here on TOD.

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

Thank you. I'll be more than glad to rewrite the series for TOD.
I found your article most informative. It greatly assisted my understanding of how the demand/supply dynamic for oil works, and how it differs from other products. Thanks.
That was well written.  Keep posting here.