DrumBeat: August 23, 2006

[Update by Leanan on 08/23/06 at 9:14 AM EDT]

Russia oil production overtakes Saudi Arabia

Russia is extracting more oil than Saudi Arabia, making it the biggest producer of "black gold" in the world, figures show.

The statistics, from the oil cartel Opec, reflect a trend that has seen the Russians periodically surpass the Saudis as the world's biggest oil producers on and off since 2002.

These latest figures are being hailed in Russia as evidence that such periodic production spikes are not one-offs though and that Moscow really does have a right to lay claim to the No 1 spot.

Oil Profits Help Russia Pay Off Soviet-Era Debt

Eight years after it defaulted on more than $40 billion in debt and slid into financial chaos, Russia transferred $23.7 billion to the Paris Club of creditors Monday, wiping out the last of its Soviet-era debts and underlining the extent to which oil and gas revenue has transformed the country's finances.

Katrina, Rita Cost to Oil Industry Rises to Record $17 Billion

"Hurricanes come every year, and we are accustomed to dealing with them," said Roger Plank, chief financial officer with Houston oil and gas producer Apache Corp., which had as much as $700 million in damage from 2005's storms. "But what, as an industry, we are not accustomed to are 100-year storms, and we had two of them last year."

Energy Bulletin has posted several articles about ASPO-5:

Robert Hirsch scares me out of my wits…

Richard Heinberg on the Oil Depletion Protocol

Colin Campbell Puts the Oil Age Into Perspective…

World oil demand growth brings dilemma for Opec

Energy focus for Chavez in China

Oil producer Venezuela wants to reduce its reliance on the US, the destination for most of its oil exports despite the two countries' ideological differences.

China, in need of oil supplies to maintain its rapid economic growth, offers a lucrative alternative market.

More protests over power shortages in Bangladesh

The Sylhet Bibhag Ganodabi Parishad, a citizens' forum, yesterday took out a procession in the city and laid a siege to the Power Development Board (PDB) office demanding smooth power supply.

...With Md Turan Mian presiding, speakers at the rally said power stations in Sylhet region produce 180 MW electricity a day, which can fully meet the demand of four districts in greater Sylhet. But the region reels under severe power crisis as power is supplied to other districts.

They demanded that Sylhet region's requirement has to be met before taking power for other districts.

Nigerian oil unions consider quitting Niger Delta

Nigeria's oil workers' unions may pull out all members from the Niger Delta over safety fears following a spate of abductions by militants and a military crackdown, the head of one of the unions said on Wednesday.

U.K.: Winter power shortages loom

Namibia: Fuel Hike Starts to Bite

NAMIBIA'S farmers expect to be severely affected as fuel prices continue to spiral up, with last week's increase alone - 50 cents a litre - pushing up their operating costs by 20 per cent.

...The fishing industry is hunkering down, predicting "millions of dollars" in extra running costs, while transport companies anticipate the increase will add 10 per cent to their input costs.

[Update by Leanan on 08/23/06 at 11:16 AM EDT]

Summary of Weekly Petroleum Data for the Week Ending August 18, 2006: Crude oil fell less than expected, distillates grew far more than expected, and there's a surprise build for gasoline.

From Scientific American:

Lower Fertility: a Wise Investment

Plans that encourage voluntary, steep reductions in the fertility rates of poor nations pay dividends in sustainability for everyone
Another way of looking at where reduction should occur is to measure the oil and ecological footprint of one U.S. citizen versus one citizen of a poor nation.

The results might be interesting.  

That is a frequent argument made when world population issues are discussed.

However, the U.S. would be at steady-state or slightly declining population growth, if not for immigation.  Everyone wants to move here and get a piece of the American dream.

Sure, but isn't the real question (for this forum) whether the ecological/energy footprint of the U.S. would be at steady-state or less, even without the immigration issue? Although America's population growth can be "blamed" on immigrants, I don't think that the same can be done with it's ecological/energy footprint. Maybe I'm wrong.

As a Canadian, I'm accutely aware that we not only have more immigration but a much higher average ecological/energy footprint. If America is bad, we're worse. Much of the reason we're worse is that we are supplying America with energy and resources, but that doesn't get us off the hook in my view.

Nit-pick: Be careful using "everyone".

Sure, but isn't the real question (for this forum) whether the ecological/energy footprint of the U.S. would be at steady-state or less, even without the immigration issue?

IMO...no.  That is an issue separate from population.

And yet....the two go hand in hand, do they not?

It is pointless to control population without also understanding the impact of individual (and collective)ecological footprints, just as it is futile to moderate individual (and collective) ecological footprints without understanding and adjusting population.

I agree that they must be dealt with in tandem, otherwise it's useless. They don't always correlate, i.e., a burgeoning but low energy-using population will eventually use up the resources, just as a low growth but higher consumption society will.
Disagree.  Ecological footprint is gonna take care of itself, via the market.

Well, overpoplation will, too, but that will be a lot nastier than not being able to afford an SUV or plasma TV.

Leanan, what the hell are you talking about? The market will not take care of your ecological footprint; the market does not give a damn whether or not you destroy the environment. In fact, the market, if allowed to do its work properly, will completely destroy the environment. Trees sell, wilderness and wildlife do not.

And the market will not take care of overpopulation. The laws of nature will eventually curb overpopulation, not the laws of the market.

Methinks you are mistaken the market with Mother Nature. Malthusian principles will prevail in spite of the market, not because of it.

The argument, basically, is about whether Americans are using more than their share of resources.  Obviously, we are.  And Malthus isn't necessarily going to fix that.  

No, I think what will fix it is the market.  We are using more than our share of resources because we're sucking them from the rest of the world.  That won't go on forever.

what will fix it is the market

No. what will "fix" it is war.
(It being America's taking of 25% of resource flow in comparison to her 8% rank in world population)

You forget that we are the "ownership society"

We "own" all the resources of the world and if they don't hand the stuff over to us, we go to fight them "over there" for it before they fight us over here.

Our notion of being the "ownership society" will end when we are bankrupted by our nonprofitable military adventures or when "they who hate our freedom to take what we want" vanquish us militarily.

"the meek shall inherit the earth. but not it's mineral rights"
J. Paul Getty
Depends on what you mean by 'meek'. If it's blue green algae, then they may not care about mineral rights.
Well, I still disagree. How is the market going to equitably distribute resources? There is nothing equitable or egalitarian about the market. The market is a very unfair system of distribution because he with the most money gets the most goodies. If everything is left to the market, some will always have an unfair share of resources. (Fair in a moral sense I am speaking of. But actually in nature there is no such thing as fair or unfair.)

There is nothing inherent in the market that will assist the current have nots to become equal with the haves. While it may be true that we will not always have more than our fair share, the market will not be the instrument that changes that. In fact, if it is ever changed it will be in spite of the market, not because of it.

And you said, in your previous post, that the market will also take care of the overpopulation problem. It is the principles of Malthus that will eventually fix that problem, not the market. What the market will do is insure that those with the most have the best chance of survival. Very unfair but that is just the difference between the market and Malthus. (Again, fair only in the moral sense.)

How is the market going to equitably distribute resources?

Who said anything about equitable?  

>Well, I still disagree. How is the market going to equitably distribute resources? There is nothing equitable or egalitarian about the market

Utimately the rules of nature and the market system is connected. I can best summarize the connection between markets and nature by borrowing the title of Darwins famous book "Survival of the fittest". Those without wealth, resources or can't adapt will suffer and probably die off.

The rules of survival, the market, and natural selection are all the related. People that can adapt and have access to the necessary resources will survive. Those without will perish. We can see this all the time in business. Successful businesses that provide good or services that meet the demands of tje market survive and flourish, those that don't go bankrupt. Businesses also need to adapt to the changing market. For instance during much of the 20th century, camera film manufactures and processors flourished. Kodak was part of the dow 30 for many decades. When film was replaced by digital photography, these companies no longer served the market. Some adapted and some went bankrupt.

Market forces will bring about changes, but they aren't going to save humanity from the trouble ahead. The only option is to adapt or die. Those that believe that Communism and socialism can solve the problem are dead wrong. Our planet's history has been dominated by the market system since life began about 2 billion years ago. During this time, nature has never developed an eco. system based upon the ideas of communism. It has always been based upon a market system and always will be. In the end the rules of the market system will prevail, it just won't be one that is any regards, equitable.

Our planet's history has been dominated by the market system since life began about 2 billion years ago.

No, "the market" is a much too coarse approximation of Darwinian selection AND vice-versa!
Survival of the fitest does NOT have the same meaning in these two cases.

This is all because of several reasons, among which :
- In nature more is not necessarily better.
- In nature the various needs are regulated by idiosyncratic mechanisms which do not "trade" among themselves thru a neutral medium, neither money nor raw energy, a lack of such or such protein is not "fungible".
- In nature cooperation between individuals, groups, species and even across genres (bees / flowers) is regulated by hard-wired mechanisms which evolve only VERY slowly, like our "basic instincts".
In the market these are replaced by the rule of law which can be arbitrarily crazy and changing fast.
Never had a tax rebate repealed or the like?

In the end the rules of the market system will prevail, it just won't be one that is any regards, equitable.

Nice to you to care for equity but this is not the direst problem, SUSTAINABILITY is the direst problem.
The market does not appear to be sustainable in a FINITE RESSOURCES environment neither are "Communism and socialism" which are just a reframing of the growth trend with more "equity".

>In nature the various needs are regulated by idiosyncratic mechanisms which do not "trade" among themselves thru a neutral medium, neither money nor raw energy, a lack of such or such protein is not "fungible".

Your absolutely correct. Althought I was just refering to the rules that that they share, such as the rules of supply and demand. If a required resource becomes depleted, it becomes expensive to obtain. For in a drought, food and water are harder to obtain for both man and animals. More labor or energy is required to obtain adquite supplies to sustain life. A society, herd, or even single cell organisms either adapt or fight to obtain what remains. These rules apply to business, societies, or even single cell organisms. The market system isn't fair nor is survival fair.

>Nice to you to care for equity but this is not the direst problem, SUSTAINABILITY is the direst problem.

We don't have a sustainabe system, and there is no way to support 6 Billion or even perhaps even 2 Billion in any sustainable system. FWIW: If I had some sort of magic wand I would use it to waive all these problems away.

We don't have a sustainabe system, and there is no way to support 6 Billion or even perhaps even 2 Billion in any sustainable system.

Most probably, any other idea beside the "magic wand" ?
Prayer, Rapture, Singularity, Armageddon, Nukular, what's you pick?

>No, I think what will fix it is the market.  We are using more than our share of resources because we're sucking them from the rest of the world.  That won't go on forever.

Darwinian is right:

When the US is no longer able to import the required amount of fossil fuels, Americans will start to use what ever fuel is available. That being trees, coal, garbage, etc. What ever they can use to heat their homes and run the power grid. Search the financial websites for growth in wood pellet stoves and coal consumption to see that its already begining.

A decline in oil and gas imports will be the beginning of the biggest ecological disaster in history. FWIW: The entire Northeast of the United States was deforested by the beginning of the 20th Century (mostly for heating and steam power). Since that time, the land has recovered because Oil and Gas was cleaner and cheaper than wood and coal. You could say that Oil and Gas production came in the nick of time to prevent a real disaster. This time there is no new source of energy to save us.

In Collapse, Jared Diamond made a very good point that resonated home with me. Paraphrased, it went something like this "we can either deal with these problems now in pleasant ways of our own choosing, or we can wait and Nature will solve them, in unpleasant ways which we do not choose".

In other words, overpopulation will be solved, either by birth control and family planning, or be depopulation. The same with the other problems we currently face.

I would much rather take the first route instead of waiting for Mother Nature to do it for us.

Can't see in any way how the market will solve this, equitably or not?    

Overpopulation has only 3 solutions as I can see.   1.   Mother natures kitchen solution - Global warming or bird flu...or both.   2. War   3.  We wake up and convince several generations to stop having babies so we can reduce the global population 2/3rds. (yah right)  

Maybe the outcome will be a hybrid,  some of Momma's wrath,  a few nukes, and then who ever is left is involuntarily forced in realizing that they should have less babies(however this is against procreation principles).

In any case,  growth must stop somehow as you stated.

If you have other solutions,  love to hear them.

It's all about population!

4. Mass starvation
>4. Mass starvation

5. Malnutriention resulting in wide spread of pandemic diseases (The dark ages during the little ice age).

I agree that it is against the human instinct to reduct population - and it extends into everthing we do.

If one person makes the decision to only have one child or no childern then somebody else decides they can take up the slack and have extras.  The first person had reduced the chance of continuing the blood line and somebody else filled in.

I carpool, but that just allows one other car and that much more gas to be used by others on the road.

I lower my electrical consuption by using a programmable thermostat and turn off the AC during the day.  But that just allows somebody to run a little bit cooler without overloading the grid.

Samething with NatGas in the winter. . .

The Easter Island story has been mentioned several times here.  I can imagine the last group of survivors as they watch the trees disapear with each day.  At some point either one person, a small group, or even the entire population looks at the remaining trees and realizes that they are running out.  Maybe even as a collective they decide they should not cut any more down for fires to cook food.  But all it takes is one person to decide that they are going to go out and cut down a tree and use the wood for fire.  He has just increased his chance of surviving.  Then somebody follows suit and cuts down the next tree to increase their chance.  As individuals they feel justified because just one tree isn't going to matter, but pretty soon everybody has cut down a tree.

Maybe the person that stood up and said that they need to save the trees holds true and does not cut down a tree.  He cannot cook food or provide shelter.  His chance of survival is reduced.  

Even though the long term solution is to reduce there will always be masses that 'pick up the slack' of those that are conserving.  It is human nature - and I don't see how we avoid it.  

you just described the crux of jevon's paradox.
Sounds like a variation of the prisoner's dillema to me.  
I conserve, you conserve - sustainable world
I conserve, you don't - I suffer a lot, you enjoy yourself
neither conserves - we both suffer greatly because of an eco-collapse.
That is the "Tragedy of the Commons."

There are two ways around it, according to Diamond.  

One is to be such a small society that everyone can understand the problem and everyone has a stake in the solution.  

The other is a central government strong enough to force compliance.  

The other is a central government strong enough to force compliance.

This is all a problem of priorities, which kind of goals is a "strong enough central government" likely to look for first?

- Survival and enjoyment for government employees (of "sufficient" rank of course).
- Necessary but unpopular measures which may bring trouble with the masses.

It did occur to me, reading Collapse, that a hereditary monarch might be more inclined to result in a sustainable society than a democracy.

As Diamond points out, a king has incentive to protect his kingdom.  He gets his wealth from the entire kingdom.  And he hopes that his heirs will inherit that wealth one day.  He has reason to promote sustainability.

In a democracy, where your time in power may be fleeting, perhaps there's more incentive to just loot the country while you can.

OTOH, our system of government isn't as egalitarian as we like to believe.  Maybe King George II would like to leave something for his heirs, future Presidents Jenna and Barbara.

hereditary monarch might be more inclined to result in a sustainable society than a democracy.

That was Votlaire's idea of an enlightened despot.
That won't work either, not only because we cannot get back to this, but because if by any stroke of luck you DO get an enlightened one this always turn sour in a few generations.
Enlightenment is not hereditary.

Speaking of enlightenment, do you really think that "King George II" COULD manage to "leave something for his heirs" ?

And yet...it has worked for some societies.  Some of the societies Diamond discusses have been sustainable for thousands of years.  King and all.

Not that I think it's an option for us, but perhaps the idea that "all despots turn bad eventually" is a myth?  Or, as Tainter would put it, it's one of the "nonmaterial elements" used to legitimize our society.  The Emperor is a God.  Democracy is the best form of government.  Etc.

I think the most pertinent example of "enlightened despot" in our age is good ol' Uncle Fidel.

The pretty violent downward adjustment in energy consumption of the 90s was handled, overall, unexpectedly well (no mass starvation or mayhem; human contentment index probably not substantially lowered).

I'm not advocating it as a transposable model or anything. For one thing, I would be prepared to tolerate a fairly high degree of mayhem before surrendering my freedoms. For another, the ratio of "enlightened" despots to overall despots is not terribly high.

Jared Diamond wrote a whole book to justify a rehash of 1970s Paul Elrich writing that was a rehash of Thomas Malthus.  Joseph Tainter's "Collapse of Complex Societies", while written for an academic audience, is a much more useful work, far better footnoted and actually analyzes relavent collapses such as the Romans, the Egyptians and Chinese dynasties and not small groups of people living in the arctic or on isolated pacific islands.  IMHO, it will give you a far better understanding as to what our civilization can do to deal with peak oil that will NOT wind up involving a cure worse than the disease.  If you get bored of reading the endless pile of historical examples that Tainter enumerates I would suggest you skip to the part about what the Eastern Roman empire did to preserve itself in the midst of the Western Roman empire's collapse.  It's the only example of a complex society willfully simplifying itself in recorded history.  It would be the equivalent of the Libertarian party getting 2/3rds majorities in congress and the presidency and completely dismantling the central government down to its bare bones and restructuring the whole civil structure around militias, requiring every landholder to serve.
If you get bored of reading the endless pile of historical examples that Tainter enumerates I would suggest you skip to the part about what the Eastern Roman empire did to preserve itself in the midst of the Western Roman empire's collapse.

Contest. This is a college essay. Or an essay on a college entrance exam (just shutup, and pretend):

Explain what the Eastern Roman Empire did to preserve itself.

All entries must be between 50 and 5000 words. No quotes or links are allowed. Immediate disqualification for any comments that include either.

Points awarded for conciseness, accuracy, and writing style. In that order.

1st) A fictional "Cadillac" mentioned by the Alec Baldwin character in Glengarry Glenross.

2nd) a brand new set of steak knives.

3rd) You're fired.

Uh, you mean, like, they had to grow their own food and stuff?
OK. I'm going to take your post into special consideration. The Beavis impersonation is priceless. I'm actually going to start the points race off using you as the standard 100 points. Just like IQ.

Now let's progress to the bonus round.

Wait, we have a complaint - somebody is saying you were not actually anwering the question, you were asking a question...Judges?...yes, sorry. Minus 5 points!

Beavis and Butthead? Your remarks?


OK. Plus 10.

Final score - 105. Congratulations. You are the Leader.

I've always wondered. Does DIY mean Do It Yourselfer?

LOL, I was just watching TV last night. Couldn't sleep. An ad for the B&B DVD came on... got bored with TV and wandered over to the computer.


Yes, that's what DIY generally stands for. It was a handle I used in another forum, and lack of creativity or a limitation on handle length or a desire to limit typing prohibited using say, "ConcernedButUnpreparedAndNowScared****less" or something. Of how large a company are you CEO?

I'll take a cue from Westexas on his answer to how big his house was: How big is Oil?
Wow. That big! :)

So now I suppose we have proof that Beavis and Butthead cause brain damage, even in a 30-second spot.

Beavis and Butthead cause brain damage

No, it's the crystal-meth, he is hosed.

Ok I'll bite :) .  I'm summarizing most of Tainter's excellent analysis.

Byzantium (Eastern Roman Empire) was the only society that ever simplified itself on purpose.   At its nadir it was almost completely destroyed.  Byzantium had 1/3rd of its population killed by plagues, the currency was so debased that it became no longer used and their empire was at one point almost completely overrun by Visigoths and Arab Muslim invaders yet they were able to recover from their nadir in the 700s and survive till the 13th century (600 years!) even though they faced almost constant invasions from the Muslim empires to the east and goths and other barbarians to the north and west.  They were able to do this through a number of clever simplification maneuvers.  

  1.  The Government had run out of money to pay soldiers so instead they gave them land in exchange for hereditary military service organized in "themes" or military districts.  The soldiers were responsible for purchasing and providing their own rations, equipment, and uniforms.  This got rid of almost all the military bureaucracy and a large part of the taxation complexity.  Can you imagine the government devolving the military into local farm owner's gun clubs purchasing their own heavy military equipment?  It reflects an amount of trust in the people by the government that is unthinkable today.

  2. The civil administrations were merged into the military.  There was no distinction between the military and the local governments.  The Military ran the courts, the police, and local government functions.  No Posse Comitatus but the military was the equivalent of these local farm owner's gun clubs and would therefore be far more trusted with their authority by the people.

  Because of the above reforms soldiers were fighting for their own land and family and the military was exteremely efficient and inventive, the arab invaders were unable to make any headway against them despite almost constant attacks.

  1.  They gutted all the glamour of their central government to keep things together.  At one point they paid the army by melting down 20,000 pounds of gold from the emporer's throne room.  Equivalent to selling off most public lands and buildings.  Administrative ranks and honors were done away with.  

  2. Cities contracted to densly packed fortified hilltops.  That would mean abandoning the suburbs.

  3. Aristocratic life (what rich educated people were doing) was focused around the imperial court.  Meaning that rich educated people mainly passed the time by hanging out at city hall with the politicians,  drinking wine, wearing fancy clothes and gossiping but otherwise didn't have many luxuries, compared to Roman times.

  4.  Education was simplified.  Basic math, reading and science were the order of the day.  New books were mostly the lives of Saints, the ancient traditions were preserved and copied.

The Western Roman empire collapsed however because they tried to survive by tightening the screws.  They raised taxes to very high levels on farmers to fund the inefficient army that was doubled in size.  They hyperinflated the currency, they conscripted labor, and tried to control who was in what occupation and increasingly tried to regiment all aspects of life.  It failed, the farmers started to abandon their land in protest so the government forced them to be hereditarily bound to the land at which point they welcomed the barbarian invasion and the overthrow of the empire.  They took all the productive parts of their society and burned them at the altar of keeping the power structure alive.

Tainter points out that a) a government can wreck itself by trying by all means to sustain itself and b) complexity in problem solving destroys governments slowly, subtly over long period of time and that simplification is very hard because so many have tied their interests to growing and maintaining the complexity of the centralized power structure.

I haven't actually read your response. I'm going to do that now. But I want to get on with this and make others work.

This is subject to immediate revision(before 5 am EST) based on actually reading response.

For now it looks pretty good.

Initial estimate 260 points. Leader. Congratulations, you wear the yellow jersey.

OK. I started reading your post. You are going to score a lot higher than I initially estimated.
500 points. Subject to review. If you were lying to me and are completely full of it, yet managed to slip that by me - you earn another 300 points. Otherwise, you're just simply in first place. Good job. No, sorry - Excellent Job. Amazed by how fast you wrote it.
Agree about Tainter and this example.

Note that it was not without cost, though.  They call this period a "dark age."  Literacy rates plummeted.

And they basically made the military their government.

Any society trying to get out of the declining marginal returns trap will have some very difficult choices to make.  What is worth saving, and what will you sacrifice?

The market!  Don't you mean Jesus.  Or some other magical being.

Let's tick off some fun things the market has brought to North Americans
(1) very large homes in sprawling urban zones with as little regulation and planning as tolerble.  Hello Lakewood California!

(2) very large motor cars that generally cart around a single occupant.

(3) efficient and effective corn and soy delivery systems, often highly processed, and packaged in shiny objects.

(4) Airconditioning!  And the subsequent movement of people from colder north to hot and humid south (beach front property anyone)

(5) overweight, corn fed residents of #4 and #1, drivers of #2 and avid consumers of #3.

(6) Southpark (though maybe this one is a good thing)

Yup, "The Market" will solve our problems just fine.  Always has before, always will in the future.  

I never said the market was going to solve all our problems.

Indeed, if you've read many of my comments here, you'll know I am not a fan of capitalism.  I think it is inherently unsustainable.

I'm just saying it will solve the problem of Americans consuming more than their share.  

This doesn't mean it will solve the problem of overconsumption in general.  It just means the resources will start to flow to the countries that have something other than paper to offer the world.  Likely oil-rich countries like Russia.

Why batter ourselves against the wall trying to reduce American consumption?  It's going to happen anyway.

Population, OTOH...I think we're in serious danger of losing all the progress we've made toward slowing population growth rates, due to peak oil.

It's a matter of priorities.  

Yes, I agree with you 100%. Perhaps the market will provide us with a new generation of Made to Break nuclear power stations or will bless us with some other cool MtB solution.
The only thing more frightening than the population growth curve, IMO, is the consumption growth curve...
Why don't we combine the two questions to get a more useful number? Eco-footprint growth. An ecological footprint is not much use if we don't know how many people have said footprint, so why don't we extend the argument to "how fast is our eco-footprint growing/shrinking."
That would be interesting if peak oil weren't looming.  I think things may change rapidly as energy prices rise.  Our standard of living is going to drop, and presumably our ecological footprints, too.  
Long term: yes, they will drop.
Short term: the exact opposite.

We will scramble and fight and dig and drill so hard, using so much energy and other resources, that our footprints will go through the roof . We'll be too busy trying to get our fix to care about the environment any longer.

This happens already, of course, because we use more enrgy than ever, with on average lower EROEI. Hence, we spend more energy per energy unit, on more energy units. The 2nd law is quite clear on that one.

A somewhat forgotten effect of peak oil will thus be that pollution and climate change will increase, probably quite dramatically.

A somewhat forgotten effect of peak oil will thus be that pollution and climate change will increase, probably quite dramatically.

Probably true, and I don't think it's forgotten at all.  (If I had to bet, it would be on a catabolic collapse.  Plenty of time to trash the environment.)

However, I think we Americans would become increasingly constrained.  We could trash our own country, but not others, as we are doing now.  

Unless we really decide to nuke their @$$ and take their gas.  Then all bets are off.

"We could trash our own country, but not others, as we are doing now."

Actually, all countries are colluding to trash the globe. C02, other airborne pollutants, and water-borne pollutants often have little respect for national borders.

Good observation! That's why we have the UN.

And the World Bank, IMF, Bank for International Settlements, Bilderberg. CoF......

Which Ammurikans still thumb their noses at...
Do all these alternative words for America(n)s have some deeper meaning? It sounds limke it comes from some subculture and refers to something I am missing.

I refer to Ammurkins, Murkins, etc

As far as I can tell, it is unique to this website. Either that, or somehow, I'm missing all the "cool" websites. I hope you're ready for answers from fleam and sendoilplease. I'd say they are the experts on this one.
Amurkins in Google yielded this:


Other variations came up blank. Seems like another version of Sheeple, which translates to "people aren't smart like me".

Nice detective work. I dunno if you've had the chance to read Simmons' "critique" of CERA's report yet. He never uses the term "sheeple," but when he quotes Lincoln, I certainly got the feel that's what he was getting at. I think sheeple was a term our own step back had a huge hand in popularizing. I've only become accustomed to it cuz I love the step man so much. Plus it's only offensive to sheep. And they wouldn't understand it anyway. I meant 'because' - cuz is just shorter and conveys the exact same thing. Ever wonder what the language will be like post-peak about 200 years from now? That is - if the doomers are wrong, and everybody lives and is "fine." I do. But I don't spend much time on it. I'll be dead. I think.

I'm starting to think though, if everything "comes from the movies" like Angry Chimp believes...crap, I've gotta rethink this. I've seen most of those movies. This just totally brought havoc upon my databases...errror...error. Does not compute. Alright, we'll have to take this up after a quick reboot. I hope.

Would you repaste the Simmons CERA critique link?

The level of scrunity all of these issues (oil supplies, corn-based ethanol, sheep) have gotten recently - because of the web, access to information and smart people - is profound.

Yeah, I will. Give me a couple of days though. I'm working on a rebuttal. Hopefully Westexas will read this and oblige us now.
Great. Thanks. Who are you rebutting?
Not you.

Seriously. That's my problem. I'm not trying to rebut anybody. I'm trying to keep the fight even and fair.

Both sides so far are just talking past each other.

One of the best debates I have seen [edited] And you actually walked away victorious (in my mind). It's a weird thing. I totally disagree with you(on that subject) - You scare the shit out of me about ethanol. You are actually convincing. That's why I recommended you to Khosla. Yet you won the day. I won't even engage on the ethanol thing. I tried that long ago. My thing is oil. and gasoline.

Is there some way we can continue this conversation privately? As far as who I am trying to rebut on CERA thing. Simmons. I can do it. I bought his book. Cost me eighteen bucks. Plus I had to read it. CERA was all free. And they gave me the deal up front. CERA doesn't F around. Their detractors make a business out of F ing around.

1200 words.

I'll drop you a line on your blog in a couple of days. - Jack
I've been gone for a few days and just got back to read that ... it is excellent.

We are relying on the market, but misinforming the market ... brilliant!

The Market replies: Caveat Emptor
  It's not misinformation, it's just advertising puffery.

Translation: Victims "deserve" their ill fates.

If it were just CERA it would be one thing.  The article also hits some rosy predictions from the EIA (U.S. Energy Information Administration).

We old TOD readers probably feel EIA and CERA work and in glove to deliver this advertising puffery ... but the danger is that less cynical planners are out there taking the EIA numbers as the best available.

It's frankly sad that some people honestly trust the market, while being blissfully unaware that the market might be misinformed.


Bring it on....

Lock & Load
Shake 'n Bake
Cut and Paste
Rock and Roll...only for class of '62 though

Now to town to get a fat .45 set of reload dies...and BTW I ordered the highly recommended bumper sticker about 'fat asses and wildlife' but in Magnetic Backing(I am not stupid enough put one on permamently since some states dont' allow Deadly Weapon Concealed Carry).

Ordered a few for my friends and now I have done my part to save 'Merka'.

Who cares anyway? I notice you got two response from Chris Cook. Nice one.
Yes and yes. I just commented back to Chris. I think he may have half of the truth. Iran can't run and excahnge and an exchange can't crash the dollar. But if he knows how intermediaries are scamming, I'd like to learn more.

The Energy LLP idea sounds interesting. I think it only amounts to securitizing project outputs, but if it could standardize or expand that market, it could be useful. It's better than sitting around complaining about how bad everything is and speculating on the end of the world.

I use 'Merikans'...

You definitely need to get out more or visit some other websites.

Its a sarcastic term..used mostly with a thin sheen of disgust overlaid.

I was once a proud patriotic Merikan lad who saluted the flag, got choked up seeing it, believed in our politicos, went to church regularily and really believed in a lot of this shit.

I found it all to be a ugly pack of lies, ego and greed wrapped in a genxer marketing, stock huckster image of the Real Merica and the Merican Dream disguised. I looked at the video images of Bill Gates and realized we were all toast.  

When my previous employer's CEO raided the company and stole millions by killing off the benefits of those who had made the company the best..and turned it into into a vast sucking machine then I began to realize...this wasn't Kansas anymore Toto.

The scales fell off mine eyes and I beheld a shining light reflecting off the Steppford wives happy, shiny faces and knew the Apocalyse was not far off.

Part of the above is definitely TIC(tongue in cheek). You figure out how much.

airdale-- "I looked a behold a pale rider..yada yada"

I was once a proud patriotic Merikan lad who saluted the flag, got choked up seeing it, believed in our politicos, went to church regularily and really believed in a lot of this shit.

Confession: Me too.

I don't remember anymore when exactly I took the red pill instead of the blue pill (ala Matrix)

Confession: me too. I hear you, airdale.
what he said. It's becoming a badge of shame these days...anyone read the torture article in the current Rolling Stone?
Not yet. Who's on the cover? Rolling Stone has actually always had some of the best political/issues writing. I like Matt Taibbi. Pretty sure I spelled that wrong. He's great. He's no Hunter S. Thompson. But he will do until he discovers peyote!
Christina Aguilera
I think it's a tribute to ignorant leaders with lousy diction. Ones who say things like "nukeyuler". LBJ comes to mind; can anyone think of another example?
"tribute" probably wasn't the word I meant
The first time I saw the world "Murkin" used in print was in a humor book from the '70s: The Jimmy Carter Dictionary.  The guy's a nuclear engineer, but because he had a southern accent, he was assumed to be dumber than dirt.

What about the term 'footprint-equivalent' population growth?

one standard footprint unit = 1 Indian peasant?

Regarding ecological footprint:
Here is a site you can go to in order to calculate yours. The results can be quite fascinating -and disturbing.


Thanks for the link. 20 acres. That's not so bad, right? Somebody somewhere else is just going to have to do with a little less than the 4.5 acre average per person.
There are 57,000,000 square miles of land surface approx.  that gives every human 5.6 acres of land.  This does not account for the fact that a lot of land at the poles can not grow much food, or that mountain tops and deserts are not great for growing things.  

Our footprint has to inculde the facts that we are globally over fishing.  That we are using vast amounts of fossil hydrocarbons to grow our foods.  That out climate is changing and going into cycles we will not fully understand until way after the damage has been done.

I can live on an arce of land if I can get my crops to grow, and can plan well in advance how I am going to use everything.  But I can't have the food resources I have now, and very little of the health care.  I and anyone like me would have to form some kind of community to better serve the mutual futures we would want.

As in yesterday's talk of tiny houses, even with them we have needs that have to be met, or we slowly just die off.  As the energy we use in the US gets harder and harder to find, we will lower our foot print.  But, we will also shorten our lives and make them a whole lot harder to live.  Growing all your own food is not an easy task.  Very few people do it even today.  In the future I know that a lot of people are going to wish for the local grocery store, and be telling their kids about it as the fairytale it'll seem to them.

There's a newer footprint analysis out, Ecological Footprint 2.0.  

I interviewed one of the authors of the new report here:


The new EF includes the oceans and the authors claim has more realistic numbers of "energy area."  

Graphs of EF over time are available per nation, and the US number is amazing!  

See:  http://www.ecologicalfootprint.org/

It also has new calculator for individual footprints.

Thanks -- fascinating stuff
The best investment any poor country can make is in the education of its girls and women. Educated women get jobs and have far fewer children than those trapped at home with no socially acceptable role except being a traditional mother and housewife.

In India it is striking that the provinces with the best education of women have lowest birth rates--and lowest death rates too; these are not by any means always the richest provinces.

Where women are forbidden the freedom to work and opportunity to learn, in these places the outlook is bleak--and getting worse in many cases.

I've read that the LONG TERM carrying capacity for the U.S. is 150 million.  Given the realities of peak oil with fossil fuel scarcity and declining amounts of fresh water adversely affecting agricultural yields, this number seems to be correct.  We could pack people in more tightly and severely ration food and water but that would make for a poor quality of life.

I believe that the end of the age of oil will find that the rapid population growth of America's arid SW regions was foolhardy, to say the least.  Large cities like Las Vegas and Phoenix will see a massive exodus of people and eventually return to a something of a no-man's land.  

Can you imagine living in the desert SW with summer temperatures reaching 120 degrees and no air conditioning?  This summer we saw the introduction of "cooling centers", expect many more to crop up in U.S. cities in the summers to come.  I imagine plans are already in the works for winter time "warming centers".    

150 million under what ecological footprint? I can envision ecological footprints by 150 million that could be worse than what we have now. In fact, some aspects of the 1920s and 1930s were worse than now, particularly air and water pollution. You can't separate carrying capacity from lifestyle because lifestyle dictates resource consumption. Are we talking about 150 million hunter gatherers? I don't think so. 150 million peasant farmers?

The problem is more complex than that but generally, the more resources we use, the fewer people we can support in a given ecological niche.

Yes, there are numerous variables involved in determining carrying capacity and these will differ by region based on growing season and available water.  Lifestyle issues are relevant too such as the typical diet (e.g. industrialized countries consume more meat than necessary for adequate protein intake).

However, the main thrust of my comment was consideration of long term carrying capacity, meaning 50 years, 100 years and beyond.  It seems safe to say that in 50 to 100 years fossil fuels will be accessible to few humans.  Pessimists like Deffeyes think we will be driven back to the stone age in a few decades, but for a discussion of long term carrying capacity whether a crash occurs in 20 years or 50 years is irrelevant because the end point is the same: sustainable population levels with few or no fossil fuels inputs for agricultural production.

We've already seen that overshoot is possible even when there is little to no access to ff for the average person.  When this occurs, the unfortunate consequences include malnutrition, famine, and ecological damage from deforestation and water contamination.

The debate over what constitutes a reasonable ecological footprint is too subjective and involves too many variables to be the main determinant of carrying capacity.  Besides, in today's world the term "ecological footprint" tends to be a moving target.

The bottom line is:  In the post-oil era how many people can be expected to have a diet that supplies adequate nutrition for basic health maintenance?  For sustainability the procurement of said diet must not depend on practices that damage the ecosystem and thus reduce the chances of survival for subsequent generations.

Based on these parameters, my guess is that 150 million may be too high for U.S. since this figure was proposed prior to wide spread knowledge of the peak oil paradigm.

We desperately needs experts to revisit this question.

THIS JUST IN: Peak oil, but no shortages. Are these people for real?

I'll admit, no clue what UBS is, but frankly dear, I don't give a damn.
Oh, it's a Swiss investmant bank, the world's largest wealth manager. Whatever...

USB, through Reuters doesn't agree with Westexas. Natural gas to the rescue. To infinity... and beyond....

Oil production looks set to peak in the mid-to-late 2020s, but the decline will be offset as high fuel costs accelerate the quest for other energy sources, notably natural gas, UBS said in a study published on Wednesday.

Advocates of the peak oil theory that supplies are close to their maximum levels say it is gaining credence in the investment community.

"The cry of peak oil production has been made several times and on each of these occasions the prediction was incorrect," the UBS report said.

"Exactly when it will occur is very difficult to estimate ... However, the fact that consumption is outstripping new discoveries by more than 400 percent suggests that further increases in global reserves may be nearing an end."


UBS predicted natural gas, still in its early stages of becoming a globally-traded commodity, would eclipse oil production by 2030 or even sooner.

For those seeking to capitalise on accompanying price movements, the Swiss investment bank, which is the world's largest wealth manager, advised investors to take an active rather than passive investment approach.

That would mean using hedge funds.....[..]

I love the analytic diarrhea coming from that article.

The money quote:

"However, the fact that consumption is outstripping new discoveries by more than 400 percent suggests that further increases in global reserves may be nearing an end."

We're consuming more than we're finding, by 400 percent, so that "suggests that further increases in global reserves may be nearing an end"?

If you are consuming way more than you are finding, your "increases" in reserves are not merely "nearing an end."  The "increase" in "reserves" is, by definition, already over.

And no, never use passive index investing, you need active managers.  The experts.  Like UBS!

Companies like UBS must love it when they can get free advertisements disguised as news.

"Exactly when it will occur is very difficult to estimate ... However, the fact that consumption is outstripping new discoveries by more than 400 percent suggests that further increases in global reserves may be nearing an end."

It only "suggests" to them that You & Us is hosed?
What do they need for conviction, an indictment?
A swift kick in the cornucopian caboose?

Maybe you could re-post this on Thursday's Drumbeat.

California Hemp Bill Passes Final Senate and Assembly Votes; AB 1147 Heads to Governor's Desk for Signature

8/21/2006 9:06:00 PM


Has anyone taken a look at the www.Steorn.com website?  Is this another "cold fusion"?  
Worse.  There may be something to cold fusion.  This sounds like a perpetual motion machine to me.

Steorn is making three claims for its technology:

   1. The technology has a coefficient of performance greater than 100%.

   2. The operation of the technology (i.e. the creation of energy) is not derived from the degradation of its component parts.

   3. There is no identifiable environmental source of the energy (as might be witnessed by a cooling of ambient air temperature).

Their stuff is like shouting "Fire!" in a crowded theatre.  I hope that there is law which can jail these guys for some sort of fraud.  I also hope "The Economist" takes some flack for this too.
Here's another article about it:

Perpetual Motion Claim Probed

Sounds like one of the "magnet" perpetual motion machines.

It is a crude "perpetual motion machine" using magnets. Not even a sophisticated fraud.
Scam, been on TOD last Sunday

An Open Letter to my Friends in the Media:

Russia Overtakes Saudi Arabia as World's Leading Oil Producer -- OPEC
Created: 23.08.2006 11:24 MSK (GMT +3), Updated: 13:39 MSK


"According to OPEC, in June 2006 Russia extracted 9.236 million barrels of oil, which is 46,000 barrels more than Saudi Arabia. The statistics also showed that Russian production in the first half of this year increased to 235.8 million tons, a year-on-year improvement of 2.3 percent."

I assume that most media outlets that report the captioned story by the Moscow News would describe it as good news regarding Russian oil production.  What the Moscow News is not reporting is that current Russian production is 2.8% below its December level.   As I outlined in a recent article regarding net oil exports, "Net Oil Exports Revisited," (http://www.energybulletin.net/19420.html), I estimate that oil exports from the top 10 net oil exporters are probably now falling at a double digit annual rate.  The captioned article provides additional evidence of the decline, since the June production number is below the May (EIA) production number for Russia.

I have a question for my friends in the mainstream media.  Who among you is going is going to have the courage  to step forward and "break" the story that the lifeblood of the world economy--net oil export capacity--is declining?

I just read this morning in the Dallas Morning News that a builder is breaking ground on a new suburban McMansion subdivision that is closer to the Oklahoma border than it is to downtown Dallas.  Perhaps if we had a mainstream media that reported the hard truth about our energy supplies, we would not see stories like this suburban insanity.   Builders in the Dallas/Fort Worth area continue to pave over prime farmland for suburban McMansions that will soon be wildly unsustainable, covering up the very farmland that we will soon need to feed the cities.

As I said in an "Open Letter to Two Texas Newspapers," (http://www.energybulletin.net/14606.html) "The US media have two choices regarding the Peak Oil issue. To paraphrase Winston Churchill, you can now have either your honor or the status quo. If you do nothing regarding Peak Oil, you will soon have neither the status quo nor your honor."

I should mention that, to its credit, the Dallas Morning News did prominently feature a pro and con segment regarding Peak Oil.  However, this is not a one time story.  We are looking at a fundamental transformation of our society.  Richard Rainwater said that Peak Oil was the only scenario that he had seen that made him concerned about the survival of the human race.  I agree with Mr. Rainwater


Jeffrey J. Brown


A direct oil question for the experts here at the oil drum - Is it possible that SA s putting oil in storage right now for a possible US/Iran conflict/bombing/something?, so that they could then pull a bunch out of storage just in case?  I.e is it possible that their real production has been flat and storage accounts for the decline?

Thanks in advance

Hello Fringy,

Read this article to possibly answer your question.

According to the IEA in this article-- OPEC has 2 million barrels/day of spare capacity to provide a safe cushion if Iran chokes off its production [true or not true?].  If this is true-- war with Iran seems more likely now instead of later because Japan disagrees on oil cutoff.

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

Hi Bob,
Thanks for the interesting links.
Stephen Richards
Hey Jeffrey, that looks like a useful letter. But then again....

This story: World oil demand growth brings dilemma for Opec shines an entirely different picture.

World oil demand growth will quicken next year as China's fast growing economy sucks in more fuel, a Reuters poll found yesterday.

But Opec will face a dilemma because non-Opec producers can easily supply the extra oil if they hit their output targets, according to the survey.

Non-Opec producers are expected to increase their output by 1.48mn bpd next year, about 200,000bpd more than projected demand. Caspian states Azerbaijan and Kazakhstan will account for much of the rise.

Not only will demand grow, the growth will "quicken". But not for OPEC oil?! OPEC needs to cut its production, or so we read. An increase in biofuels and OPEC's own NGL will further reduce demand for OPEC oil.

The Reuters spin is quite simple: there is too much of the stuff. The best OPEC can do with all that surplus is to boost its spare capacity.
The same media people that get your letter may read this report and think you are nuts.

Declining production figures look like many oil fields are quickly declining (Cantrell).  We're back where we started or worse a step back.
In Texas in 1972, every looked rosy.  Production had gone up an average of 100,000 bpd per year for 10 years.  In the next 10 years, Texas would increase the number of producing wells by 14%, as we experienced the biggest drilling boom in state history.  I think one of the biggest Rolls Royce dealerships in the world was in Midland, Texas.  Only M. King Hubbert was predicting a decline, which we saw, as Texas oil production fell by 30% from 1972 to 1982, even as we increased the number of producing wells.  
"What the Moscow News is not reporting is that current Russian production is 2.8% below its December level."

You the man, Westexas.

Hello Toilforoil,

We need to consider if Russia is choking production as the Texas RR commission did back in the US prePeak days.  Consider the Russian-Lithuanian pipeline problem I have posted on before.  Consider this diplomat's 'accidental' fall from a Brest, Belarus hotel window, -- reads like a Tom Clancy novel doesn't it?  Don't forget the Ukrainian Pres. was nearly poisoned during their Orange Revolution, and a Russian billionaire is in prison.  We talking trillion$$$ and global power as we go postPeak--we should expect bloody corpses in the snow.

More links for consideration [but googling yourself is best for info]:



A very cold Eurasian winter could be a possible tipping point.

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

Bob, the role of the Texas RR commission was supply management in order to stop the bottom from falling out of the market.  This could hardly be a concern for the Russians.  The Russians would be wise to constrain production, but why expect wisdom from them anymore than anyone else?  Besides they need the money to pay competitive salaries to their hockey players.
Interestingly enough, Russia, after having defaulted on its loans back in the 90s, has now repaid all of them after making a $23.7B payment this week.  How many American companies, after having secured bankruptcy protection, would go back and pay the original amount they owed?
It's fairly obvious that Russia, now oil rich, realized that the penalty of default on future loan rates would cost more than just paying back the $23.7B. In this situation, I think 100% of American, or any nation's, companies would "go back and pay the originial amount they owed".

It seems you have an alternative view, although you haven't stated what it might be. You don't think they are just being nice, or that integrity overrides any thoughts of self interest the Russian government has, do you?

Westexas,  Great letter let's hope it gets some results.

When I hear about the economy in the parts of Texas effected by oil prices I can't help but think of  Andrew McKillop and his forecast that high oil prices increase growth to a point. I understand that home prices and  the economy  in certain parts of Texas is doing very well.  

Economy is booming here in Tyler,TX.
Your letter is great BUT there's just too much conflicting information preventing most people from taking the drastic actions you propose.  You say Russian production is down 2.8% since December while they claim it's up 2.3% year on year.  You say Saudi production is dropping and is now below 9 MBD while they claim it's at 9.2 MBD with plenty of spare capacity.  Who's right?  How is a lay person supposed to sort this all out.

Even the so-called experts can't seem to agree.  Deffeyes says we are past peak already while Chris Skrebowski says production will increase for another four years.  And of course Yergin and the USGS says we won't peak for at least another 20 years.

Those McMansions will keep getting built as long as we are able because people want them and that's how people make their living.  They aren't about to drop everything and become organic farmers.  And you can count on a continuing stream of conflicting information to keep the issue cloudy enough to justify their inaction until the whole thing collapses.

Well said, SD.

The core problem is that the economy is extremely good at reallocating resources via the price mechanism, but only in the short run.  Virtually all the discussions we have about peak oil involve, in one form or another, getting people to do things now before the price signal is there to "force" them.

If we sit back and let the market do its thing, it will cause far more pain throughout the transition than if we act collectively in our own best interest now.  Not building McMansions, avoiding low efficiency vehicles, improving structures to minimize climate control energy consumption, etc. all pay off now, but will pay off a hell of a lot more in the future.

The only way we can exert that collective will is through public policy, which in the US currently means state-level actions, because the federal government is worse than useless on energy and environment issues.

Post-Bush, I predict that US energy policy will improve dramatically, no matter which party is in power.  


I certainly agree that pulic policy is needed.  However, it is likely doomed to failure because:

  1. Competing economic interests - there are too many powerful vested interests in the status quo that have the capability to influence legislation and public preception.
  2. Growth economic paradigm - I believe that growth will undercut any policies or actions taken.
  3. No consensus - do we want to head toward Ecotopia, maintain the status quo albeit less energy intensive or what.  In addition, there are issues such as population that would have to be part of any realistic policy and they would likely set off a firestorm.

Lastly, and I don't know how to put this, my gut feeling is that were there a policy(ies) to redcue energy/resource consumption, that a lot of people will feel that the bridge has been crossed and life can go on as it was.  Let's say all the coal plants were shut down and replaced by wind and PV, might not people then feel they could keep on consuming "stuff" at present rates?


Post-Bush, I predict that US energy policy will improve dramatically, no matter which party is in power.

Hmmm, you have some previousily unknown evidence that the majority of the US political class is not as tied to our fossil lifestyle and subservient to the energy powers that be and the rest who profit from it?

He didn't say what you suggest. He simply stated that energy policy will improve dramatically. I agree. I also think it will occur in spite of the politicians, simply due to the resource pressures that are rising now.
Solar Dude,

IMO, Chris Skrebowski is underestimating the decline from the large old oil fields, like four largest producing fields.  If he had done his analysis of Texas production in the early Seventies, I'm sure that he would have produced a much too optimistic forecast--primarily because of the sudden decline in the large old oil fields.  

Yergin, et al are smoking some good stuff.

In regard to Russia, it is accurate to say that their year over year production is up, while it is down since December.  Note that Texas production, which peaked in 1972, did not fall below the 1971 level until 1976.

This why I think that Defffeyes is correct:

Repetitive information follows

Following comments based on HL method.  Qt = URR.

The Lower 48 peaked at about 50% of Qt in 1970.  Using only production data through 1970, actual post-1970 cumulative production through 2004 was 99% of what the HL method predicted it would be.

Russia peaked, in 1984,  in a broad plateau centered on 50% of Qt.  Using only production data through 1984, actual post-1984 cumulative production through 2004 was 95% of what the HL method predicted it would be.

The North Sea peaked at about 50% of Qt in 1999.

The world, based on Deffeyes work, hit the 50% mark in late 2005, and world crude + condensate production is down 1.3% since December.

Saudi Arabia, in 2005, was at the same point at which Texas started declining.  Saudi production is down by as much as 5% to 7% since December.

The top oil exporters, based on Khebab's HL work, are more depleted than the world is overall.  In January, based on Khebab's work I predicted an export crisis this year.  I estimate that exports from the top 10 net oil exporters are probably now falling at double digit rates.

Will we add new production?  Yes--just like the 14% increase in producing wells that Texas put on line between 1972 and 1982, as total production fell by about 30%.  Why?  The big fields like East Texas started a permanent decline.

Today, it's highly likely that the world's four largest producing fields are all declining.  Cantarell is crashing.  Ghawar may be crashing too.

 The world is declining--just like the Lower 48; Russia and the North Sea.

Hi Jeffrey,

Despite your efforts, the prevailing view is that big increases in production are just around the corner. This guy uses EIA's graph to justify sub-$60/b very soon:


I bet if you had asked the Texas State Geologist in 1972 what the production repsonse would be to a 1000% increase in price, unrestricted drilling and no TRC limits, he would have made the same kind of predictions as the EIA is today, don't you think?

I've talked to several "old timers."  Everyone I have talked to was shocked that Texas couldn't show  a sustained increase in production when the RRC went to a 100% allowable in 1972.   We did show a big increase over 1971, which is why it took until 1976 for production to fall below the 1971 level, but 1973 marked the start of the permanent decline.  (Note that 1973 was about 6% over the 1971 level--analogous to Russian production up year over year, but down since December).

Very good point.

We also should consider that Russian production peaked in the late 1980s at about 12.5 mb/d, so their production is far below their actual peak.

As Westexas mention many times, its only a matter of time before steep declines return to Russian production. There production increases is just a small blip on the radar.

I have a gut feeling that a lot of the large fields are going to drop in a very short period, and it will probably start within the next 24 months. I think we'll see Mexico go first, followed by Russia and then Saudi Arabia. Although, I hope I am dead wrong on this prediction.

First, those comparisons are not necessarily conflicting. Down 2.8% from December and up 2.3% year on year is not necessarily in disagreement.

The Saudi history is filled with deception, and there seems to be an emerging  consensus that the discrepancy has to do with heavy sour crude that is not particularly wanted.

Somebody else argues that Chris Skrebowski seems to be more optimistic than many experts about the rate of decrease of production from mature wells.

More importantly than these (minor) discrepancies: how much does it matter to you and to society if the precise peak is December 3, 2005 or March 15, 2006 or April 7, 2008? The lead time for necessary changes, both individually and collectively, is long.

My plan is to create my own small sustainable organic all-electric wind-powered farm in a rural region of the upper midwest that so-far gets ample rain and has ample deep reservoirs of good water. But I am currently in Southern California and the date of social disintegration matters to me because I need to sell and move and build my new, super-insulated house before gypsum, concrete and gasoline (for the moving truck) go through the roof. I think I have time, but, I think it will take me three years, and  I am shopping for land, now.

I assume by three years you mean starting with raw land and having a functioning small farm.  I think this is grossly optimistic. 5-7 years is more realistic unless you have a lot of ag and construction experience.

Here is a post of mine on another forum that might be of interest.  With comments, it prints out at 20 pages but you can just view it.



Depends on what your criterion for functioning is, and on how much you can afford to spend to have others construct stuff, how much stuff you need to construct. (I might buy land with barns, machine shed, house, driveway, septic tank and a well).

I can plant vegetables and start raising chickens and pasturing calves the first or second year (depending on the season in which I take possession) and have some food within months. Fruit and nut trees, in contrast, take more like 10 years to begin to yield significantly, perhaps more. I am doing it to feed myself and my family, not to earn in substantial amounts.

But my point was that the lead time is substantial, and you're saying it's even longer. OK. Lead time for society is even longer, considerably longer.

There is nothing inconsisent on being up the first 6 months of this year compared to the same period last year and still being down from December. You would see this if Russia had a peak around the end of last year. You always see this around a peak. I'm not claiming this is the peak - although I'm wondering - I'm just saying it is not inconsistent with a peak scenario.

I didn't see anyone in the article say they have plenty of spare capacity - do you have a link?

Here's the relevant paragraph from the article:

"The Saudis are famous for their ability to access spare capacity and raise production at short notice and if they really wanted to reassert their leadership role the feeling is they could do so easily."

Again, it's the inference and conflicting information that matters.  Most people are not as knowledgeable about this stuff as you and I are.

Sorry, I realize I didn't read it carefully enough - I was in a hurry at that moment. I thought you were suggesting Russia had a lot of spare capacity but obviously you were speaking of SA, which most believe has at minimum some spare poor quality oil.
Super letter, again, Westexas!

I suppose my difficulty writing such letters is that my passion and often frustration get in the way.  I tend to get a bit too "sweatily earnest."  This can put people off.

Well, back to do some very physical labor for me!

Keep up the good letter-writing, Westexas.  I'll try to follow your example of careful reasoning as I write letters or posts in my area.

A continuing note:  virtually all my work is based on an analysis of Khebab's excellent technical work.
Hello Westexas & Khebab,

Muchos Kudos from me for the hard work you two have done.  I tend to believe you guys are on the right track overall, but my hope is that you will somehow consider more political effects, if possible, into your projections.  I realize this is easier said than done, and sadly, I really have no clues to offer but to push for a speculative Foundation and ASPO's Depletion Protocols.  Rockefeller, Texas RR Commission, and OPEC seem obvious past oil market manipulators....any ideas on what or who lies ahead postPeak?

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

...any ideas on what or who lies ahead postPeak?

I think the next thing is that we realize we're running short of sucrose, and can't swim away from the ethanol :)

In different words, Saudi production is declining faster than Russian production.

Reminds me of an old cold-war era joke. Russian news report on an auto race in which only two cars run: "Russian car finishes second while its rival finishes next to last!"

And I don't hear anyone arguing that Russia is sitting on spare production to support prices.
B.P. stands for...

Brave Progressives?
Biomass Power?
Bullshit Publicity?

You choose.

They have just launched their "targetneutral" project / stunt.

Under the voluntary scheme, drivers can go to a website to calculate the cost of the annual C02 reduction needed to make their car C02 neutral. An average car, driven 10,000 miles a year, generates about four tonnes of C02. To neutralise that amount, BP says, will cost around £20 a year. It sounds like a piffling price to do your bit to save the planet. BP says a huge amount of C02 could be neutralised if all 40 million drivers in the UK signed up to targetneutral.

You can calculate your contribution (how much you owe the atmosphere) here. (In my case, about $64 a year.)

The projects they are funding look really excellent.

This neutralizes nothing.  Paying BP $50 per year doesn't keep emmissions from my neighbor's Hummer out of the atmosphere.  In fact, if that's all it takes to pay off his guilt then he may be more inclined to keep driving it.

BP made a big deal about how they are dedicating $8 billion to alternative energy development.  This is just a way to get the public to pay for it.  Who gets the profits?

Consume More,

After the Corporation takes it's fat cut from the profits (also called expenses), the stockholders.

Jack Greene,

It was a rhetorical question, but yes, you're right.  Perhaps the real question is: does the environment win?

"Perhaps the real question is: does the environment win?

Mother Nature Bats Last

Consume More,

I did recognize the rhetorical aspect to the question, but with the spread of IRA's it makes many many people paying more also getting some of it back in their dividends. The playing field is changing out there.

Certainly the environment loses. That is what makes the entire yin yang of oil and GHG so interesting.

I remember at my college graduation in 1971 and we had the dean of the Chicago Law School speak and he talked about the quality of life versus the quantity of life. My Dad, an older dad, executive for F.W. Woolworth, and he left the speech muttering that the guy was a communist!

It is good the playing field is changing, but I am not sure if it is fast enough!

Thanks for posting this. The ethics are complex. It's nearly identical to the medieval church practice of selling "indulgences"--a monetary payment that would take care of your spiritual indiscretions. Sin now, pay (literally) later.

The funds collected will go to good, environmentally-sound causes. They also do nothing to sequester C02, or reduce C02 output from existing sources. We're simply paying other people to be better citizens than we are.

I guess it's better than nothing. Martin Luther would disagree.

I'm surprised at how low the numbers come out. If it really cost tens of dollars a year to neutralize a car's CO2 emissions, I don't think anyone would mind paying it - especially if you point out that it's less than the cost of filling up. In fact, it would be a great model for a carbon tax. Imagine: a sum of about $50 per car per year collected into a single-purpose, transparent, publically audited fund, financing nothing but CO2 emission reduction projects.

The trouble with the BP scheme is that a) they are aiming at the low-hanging fruit, i.e. the emissions that are easiest to reduce, and b) it seems they are preventing hypothetical emissions from new industrial projects rather than reducing emissions from existing ones. A meaningful, massive offset program would be much more expensive per-ton. Still, this is definitely better than nothing as it gives another nudge to public awareness...

Hello TODers,

The Iranian military handed back over the drilling rig in the Strait of Hormuz.

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

Re: Nigeria
Nigeria's oil workers' unions may pull out all members from the Niger Delta over safety fears following a spate of abductions by militants and a military crackdown, the head of one of the unions said on Wednesday.

The two oil unions have called an emergency meeting after a bloody shoot-out on Sunday between troops and militants during a botched attempt to free a Nigerian hostage in the delta. It is not known whether the hostage, an employee of Royal Dutch Shell, survived.

The problem is now the military crackdown, not the abductions. MEND takes hostages but they always let them go. Here, they were trying to free one but the shoot-out with the Nigerian military may have killed him.

With this counter-insurgency, I think you can count on the cure being worse than the disease.

John Hofmeister, president of Shell Oil, advocates conservation:

"If we could conserve even 5 percent of gasoline we would see in a period of six to eight weeks a significant difference in the price of gas," Hofmeister told the Infragard National Conference, a critical infrastructure protection convention in Washington. "The political leadership has chosen not to actively promote conservation. So we continue to produce to demand and that's what keeps prices up," Hofmeister said.
Yes, of course, Shell would love to sell 5% less gas, or even 10%, why not, and at lower prices to boot. Nothing would make their shareholders happier than that. All for the benefit of mankind.
I'm not sure I would say Hofmeister is advocating conservation, but rather shifting blame.
Exactly.  It's a CYA if ever I saw one.  Big Oil is feeling the heat.
They feel free to lay the blame on politicians:
The political leadership has chosen not to actively promote conservation. So we continue to produce to demand and that's what keeps prices up.

If only Washington would allow us to sell less gas, we would all be so much better off. But alas, they are forcing us to rake in all that extra cash. So everyone will understand that a windfall tax would be extremely unfair. We never wanted that money!

In the meantime, all the Big Oil negative focus has shifted to BP. Shell and Exxon are of course checking their pipelines like crazy right now, but they got to love that shift.

Actually, there is more to it than that. I have heard my CEO make the same plea, in a small group of company employees. His reasoning is that high oil prices, while good for the bottom line in the short term, raise the risk of recession and harm the overall economy. He said he would prefer to see much lower oil prices going forward.

I, on the other hand, want prices to remain high so people will begin to change their behaviors.

Oh, there's no doubt there are conflicting opinions even in the executive circles. Sell less at higher prices, or more at lower? It's a bit like reading tea leaves for them as well, too much for comfort. Lower, yes, if you sell a lot more, of course, but how low will they go?

But what this comment made me think is that's it's PR field day for Shell. All the bad stuff on Big Oil in the media is directed at BP for now, and in the same move he blames politics for what bad taste is left about his company. He gets a free shot and takes it.

Heard anything about windfall taxes lately? I haven't. The focus now is gas prices  slightly lowering, oh what a rich feeling!, and 3 separate US government agencies investigating BP.

High fives all over at Shell headquarters. I would still love to know how many engineers are checking Shell's pipelines as we speak. That must be their -media- worst nightmare, corrosion. After Greg Palast's piece, BP is a "SMART PIG", it's hard to see how BP can maintain they had no idea. I'm sure one of those 3 agencies read it, the Guardian is not an obscure publication.

What's amusing is how easily that could be done...slowing down to about 60mph on the highway and not stomping on the loud pedal at stop signs and lights, rolling off it and coasting-ish to a stop.  People would rather complain though.  Pessimist 1, Optimist 0.
Come on, people! Look at what he's saying! He's admitting that if we consumed less that there would be a surplus, driving prices down but that they can't expand production any more to create a surplus where we sit now!

That's an extraordinary admission even if he does so in a backhanded manner.

From the Colin Campbell story:

It used to be that debasing a currency was a crime, but this is no longer so. Gold is heavy to carry around so people began to issue receipts. The banks then began making money from thin air, based on faith that tomorrow's expansion would cover today's debt.

This is a reference to the fractional reserver system, mentioned on TOD here before. Economics and peak oil go hand in hand.

U.S. highway deaths increase in 2005

Traffic deaths in the United States reached their highest levels since 1990, the government reported Tuesday, fueled by an increase in motorcycle and pedestrian fatalities.

They don't know the cause, but I can't help wondering if it's because more people are walking and riding motorcycles, due to fuel costs.

Not sure if this accounts for the motorcycle side - but I have read that motorcycle sales have risen dramatically due to increased interest in large cruiser bikes (like Harleys) among the boomer generation. Unfortunately, these bikes aren't replacing SUV's but are used for weekend touring.
People who have very little motorcycling experience who just up and buy one of these monster cruisers are looking to wind up as roadkill or plastered to a tree.  Those bikes have way too much power for inexperienced riders, but hey, it's all about big and shiny, I guess.
Talk about a long emergency that the media has never covered.  Something like 30-40 thousand people die every year since - I don't know - the 50's, 60's?  And, hundreds of thousands are maimed, paralyzed and otherwise seriously injured every year and yet you hardly ever hear about it.   The deaths have remained steady or increased despite all the saftey improvements in cars because we are driving more and more to compensate.  It's really crazy.  I still remember in 2000-2001 the big danger story was the shark attacks.  
1,200,000 deaths worldwide.
It says something about the meaning of our supposed commitment to freedom and democracy, that we surrender individual rights because of a small and largely self-induced risk of terrorism, but will not consider eliminating the capacity of motorized individual transport units to exceed, say, 20 kilometres per hour, in order to save hundreds of thousands of lives annually and reduce the injury toll by millions (worldwide).  Speed kills, so get out of my way.
Did you know that the chance you will die because of a terrorist attack is smaller than the chance getting killed as a result of the allergic reaction from eating a peanut?

So the real enemies are peanuts...

Let's declare a global WAR ON PEANUTS!

Newsweek estimated that close to 200,000 people per year in the US die as a result of preventable accidents and preventable complications in hospitals.  So, since 9/11/01, about one million Americans will have been killed by hospitals. . . call in the airstrikes.
Now I know why they bomb hospitals in Lebanon. Iraq. Nicaragua.
"Now I know why cry" -- Arnold Schwartznagger aka Terminator II
I have a theory that it is the gun lobby that is making SUV's less safe. See, gun-related deaths were climbing so fast they threatened to outstrip highway related deaths and make a huge propaganda point in favor of gun control, so the NRA had to do something to make highway deaths stay ahead of gun deaths...... Well, it's only a theory....
People are spending more time in their cars and a greater percentage of it is in frustratinig stop and go congestion.  The resulting stress on the driver leads to anti-social and dangerous decision making.  People are getting agressive and when the target of their agression is a pedestrian who dared to make the driver slow down by crossing the street, the pedestrian loses.

The Georgia Department of Transportation classifies sidewalks as "Automobile Recovery Zones".  GDOT doesn't like for their to be trees, light posts, etc between the road and ARZ because if a driver isn't paying attention (probably babbling on a cell phone) and runs off the road, their precious automobile shouldn't be punished by hitting a tree.  Nevermind if that tree would have prevented the car from running over the pedestrians on the sidewa, er, ARZ.

I live in a generally urban area with lots of cars and pedestrians.  There is one intersection near my house with what they call a free-right turn, basically a lane where you don't have to stop and have an acceleration lane.  There is a lamppost that kept getting hit on the sidewalk.  It was replaced twice but now they just capped it off.  So next time it will be the pedestrian that gets hit.  In traffic engineer's terminology, lampposts and trees are "fixed hazards" and pedestrians are "mobile hazards".  Really, mature trees of these are the only ones that stand a chance against an automobile so who is the hazard to who?
I love riding motorcycles, been doing it since I was about 8...but I've battled lately on whether it's worth it or not.  Most riders know that it's not "if", but "when" you have "the big one."  The one that lands you in the hospital or dead.  In about 7 years of road riding I've damn near been hit quite literally about 100 times.  This isn't even a heavy traffic area, and I'm a super cautious rider.  I can't imagine someone that hasn't been riding buying a street bike and going out on the road, but I think that's been happening a lot lately.  Cell phones, road rage (from traffic, high gas prices), pedestrian unfriendly streets.  All likely IMO.
OT, what do you ride?
1978 Yamaha 750 Special.  Touring/sport, three cylinder, about 68 horsepower, 550 pounds, 55mpg.  I'm a fair weather rider so I don't keep it on the road in the winter, and didn't put it on the road this summer.  I've been looking around for something a little lighter, more simple, and fun like a Suzuki Savage, or GS500...I think Yamaha Route66/Virago 250's are cute but I haven't tried one, so I don't know if 250cc's would be enough in the big scary world out there.  I like the simplicity of dual sports, but they tend to be on the leggy side my 5'6" shawty self.
I agree, real tough to think about those smaller models when you're still surrounded by SUVs and gigantic trucks on the freeway.
Or if drivers are pissed off and stupid due to fuel costs.
If most of the increase is due to motorbike riders and pedestrians, it might be due to a higher percentage of SUVs and other pedestrian-hostile vehicles in the fleet (I know the market share of SUVs and trucks is declining but that's a very recent phenomenon - this may be a manifestation of "peak SUVs"). Many people don't realize how much impact (ehm...) the design of cars has on pedestrian casualties. Ideally, the car should undercut you and let you fall on its front hood. The more time it takes before you slide under the wheels, the higher chance you have of surviving. Therefore, at a given speed, there is a huge difference getting hit by a Civic vs. a Tahoe. Think about that the next time walk past an SUV with a car-maker's logo at the level of your rib cage...
I have a layman's question for folks familiar with nuclear power and its physics. According to Wikipedia, the half-life of a radioactive material is the time over which its radioactivity drops by 50 %. Some materials get it done in 8 days, others need hundreds of thousands of years. Now, intuitively, it would seem that half-life should be inversely proportional to the intensity of the material's radiation. If I'm shedding particles so quickly as to halve my rate of radiation in a couple of days, I must have started with quite a massive burst, right? Conversely, if I radiate only 50 % less than I did a million years ago, it all must have been but a dribble, no? Now I know that a long-term radioactive substance must have orders of magnitude more particles to take care of but still... would I be right to assume that the initial intensity of radiation of, say, plutonium-239, is lower than that of iodine-131?
The radiation intensity is directly proportional to the number of particles that haven't decayed yet. Say a particle has a decay rate (probability) such that 10% will decay (with the products emitted as radiation) in a years time. If you start with 1000 such nuclei, after 1 year you will have 900 left, and so the radiation intensity will be 90% of what it was when you started. After two years, 81% etc.

If you "start" with equal numbers each of plutonium-239 and iodine-131, the iodine will be 5 million times more dangerous than the plutonium when you start measuring, and will continue to emit more radiation than the Pu-239 until the higher decay rate of the I-131 is balanced by the much smaller number of I-131 left relative to Pu-239.

The key point is that the danger is proportional to the amount of radioactive material present as well as the decay rate (which is inversely proportional to the half-life).

Sorry, bad math. About 1 million times more dangerous initially.
Half life means the population of emitting particles drops in half. Has nothing to do with energy of the emissions. A gamma ray is still a gamma ray (high energy) whether emitted from a mass with 100% of its atoms emitting or 50% of its atoms emitting.
Winter Man, You are correct to assume that, for a given amount of isotopes, the longer the half-live, the less intense the radiation. That is why the radiation level drops off exceptionally fast after a nuclear explosion. All the isotopes with extremely short half lives are gone after a few seconds, more after a few minutes, then hours then days and so on.  That is because most isotopes created in the explosion have very short half lives. Some have half lives in the nanoseconds, others in the seconds and so on.

But all radiation is not the same. You have Gamma radiation, the most dangerous, then Beta, the next most dangerous then Alpha, which cannot penetrate the surface of your skin but is dangerous if ingested.

But that still does not tell the whole story. Bikini Island for instance, measures very little radiation. One could safely live on the island without worrying about any residual radiation from the nuclear explosions there over half a century ago. However there is one small problem, Cesium 137. The Cesium 137 in the ground on Bikini is not great enough to be dangerous. But plants mistake it for Potassium and pull it up into the plants via their roots. People then eat the plants or fruit and ingest the cesium into their bodies. Cesium 137 gives off beta radiation and is very dangerous when ingested.

"Intensity" isn't such a precise term! I am not a radiation expert but still.... if you just count the number of decay events per unit time, you have the idea quite correct! But there is more to the story.

There are many kinds of decay events. Alpha, beta, and gamma are the three most common particles shot out of a decaying nucleus. A gamma ray is electromagnetic radiation, like an X-ray, but generally more powerful. Gamma rays come in a full range of strengths. So it's not just how many gamma ray particles (high energy photons) get emmitted per unit time, but how powerful is each photon.

Beta particles are electrons and alpha particles are helium nuclei. Each of these can also have varying energy - how fast do they come barrelling out of that decaying nucleus.

Decaying nuclei can also emit neutrons & really if a nucleus undergoes spontaneous fission then the fission products - two nuclei roughly half the size of the original nucleus - will also go flying apart from each other, but they are so big that they won't typically go too far.

So one thing to factor in is the energy released per decay event. Multiply that times the number of events per unit time, and you get the energy released per unit time, another possible meaning of "intensity."

Then one may want to consider where that decaying nucleus happens to be and where those energetic particles are likely to go. If the decaying nucleus is separated from your loved ones by a thick lead shield, not really a big deal. If, on the other hand, somehow that nucleus got smudged on somebody's cheek, or got ingested or inhaled somehow, if it chemically bonded and got incorporated into biological tissue and then decides to decay inside some loved one's body, that is not such a pretty situation at all.

Yes, the initial intensity is lower for the same number of radioactive atoms. However, the concentration of radioactive atoms can vary over many orders of magnitude so that it can be misleading to think about it this way. Also, different isotopes can produce different decay products -- alpha, beta, gamma, neutron -- that can have very different biological effects. Then energy of the decay products can vary greatly among different isotopes as well. Iodine is readily absorbed by the body and so posses a particular hazard. On the other hand, plutonium is perhaps the most poisonous substance known, quite apart from its radioactive hazard. It's very long half-life of 24,000 years is also a great concern.
Thanks for all of the above responses. What I'm trying to get at is an understanding of the nature of risks associated with spent nuclear fuel. If I'm to recapitulate the iodine vs. plutonium comparison: my general impression was correct but 1) plutonium contains many times more nuclei that need to fall apart before it ceases to be radioactive (since it is not found in nature, I presume 100 % of the nuclei disintegrate eventually), 2) the nature of radiation produced by plutonium is such that even small amounts are dangerous (i.e. mostly gamma rays?), 3) plutonium is highly poisonous in addition to being radioactive. Further points I just read in an emergency preparedness manual: 4) radioactivity cannot be detected by our senses and 5) its effects may be delayed and thus misinterpreted.
There are about a half dozen or a dozen fission products which are cause for concern. Couple of things figure into the measure of an isotope's danger:
  • Its half life;
  • Its uptake by living things.
note: Plutonium is not actually a fission product, it is the result of the fusion of a neutron with a U238 atom (followed by a beta decay).

There's a fair amount of Xenon in the fission products, but that drifts off into the atmosphere and is not taken up by life. So they usually don't worry about it, though it does raise background radiation a little bit. Sr90, I131, and Cs137 are dangerous because they are all actively accumulated by living things. I129 is probably less dangerous because of its long half life (a long half life means not very many of its atoms decay in a given time interval -- stable isotopes have an infinite half life). On the other hand, I131 has a half life of a few days, so it won't be around thousands of years like some others are. Something that has a half life of about 20 to a few 100s of years would be a long-lasting but still quite radioactive source. Things like Sr90 and Cs137 fit that description, along with a variety of heavier-than-uranium elements. Plutonium, being a heavy metal, is not strongly accumulated by living things, but it is an alpha source and you don't want so much as a speck of it in your lungs.

If stray Sr90 weren't a threat to life, it would have some wonderful industrial uses: it is a pure beta source and does not give off any other form of radiation, so you could use it to build betavoltaic batteries, for example. But humans being what they are, would just throw them in the garbage before all the Sr90 decays, and who knows where it would wind up.

Biggest problem with nuke waste is you have these components all mixed together in a nasty mess, and nobody wants to deal with it because it's a nasty dangerous mess. And the isotopes aren't destroyed by burning or any convenient physical process, so whatever you do with them, they'll be around until they decay.

I have pondered in idle moments whether it would make sense to put some of them back into the reactor and bombard them with neutrons until you make them into some less-dangerous isotopes.

Do you have any hopes for the recently reported German scientists' idea for processing the waste at very low temperatures?
The idea that cooling radioactive materials will enhance their decay rate sounds nuts to me. I've never heard anything like that before (and I worked in the nuclear field for 16 years). It seems to be just some guy's theory. Even if were possible to speed up the decay by a factor of 100, as he speculates, that wouldn't help that much. Some of the most dangerous isotopes, such as Pu-239, have half-lives of thousands of years. That means it would be necessary to keep these samples ultra-cold for decades. That sounds impractical to me. Then again, I think that the idea of a temperature dependence (macroscopic property of matter) of fission (a nuclear process) doesn't make any sense, anyway.
the idea of a temperature dependence (macroscopic property of matter) of fission (a nuclear process) doesn't make any sense, anyway.

I certainly don't want to argue with someone who knows much more about this than me, but as far as I know, there is a dependency between the absolute temperature of a body and its molecules' average kinetic energy, isn't there? Very low temperature means very low kinetic energy of molecules, if I'm correct. Wouldn't that have an impact on the rate of decay?
Very low temperature means very low kinetic energy of molecules, if I'm correct.

Yes, but...

Wouldn't that have an impact on the rate of decay?

No because the radioactive decay is from INSIDE the nucleus of atoms, nothing to do with the kinetics or chemistry of the whole atom (nucleus + "gravitating" electrons).
The nucleus doesn't "give a hoot" of what happens outside its boundaries.

This really smell like a SCAM on par with the "perpetual motion machine" which has been discussed lately.

You're right, I got it confused with a chain reaction. Intuition tells me that, in a chain reaction, an emitted particle is more likely to encounter a nucleus if the molecules are moving around rather than standing in place (which was what I alluded to in the previous comment) but I may be wrong on that. If I'm right it would mean lower rather than higher radiation in a super-cooled environment. The super-cooling proposal keeps making less sense the more I look into it...
My feeling is that we're not gonna chill nuke waste to 0.003 millikelvins and keep it there for 100 years. We'd run out of helium, for one thing. ... Anyway, won't the speeded-up decay cause it to heat itself up and stop the process?

My own favorite pet method for disposal involves embedding the crud in low-melting glass, casting the glass into big blocks of concrete, then hauling them out to sea and dropping them into a trench subduction zone somewhere in the abyss. By the time it ever sees daylight again, it'll be millions of years, not thousands.

Great short piece by Colin Cambell:

"In the beginning animals got their energy from their muscles, ... the first agriculture emerged, needed external energy in the form of horses and/or slaves... Slavery was an ancient practice that ended when oil replaced the slaves, however debt created new form of slavery...

Peak oil will likely lead to reductions in trade and a return to regionalism, possibly to the end of the nation state. Will power return to the regions? We can already see local currencies beginning to emerge."


I wonder how long before we see slavery blossom in the West again.  And if the First Batch of Slaves will be all the people who piled on the Debt, using their homes equity as an ATM.

Also, how long before the USA sees the individual states wrestle more control away from the Federal Government.  The dayze of Central Gubermints Control are coming to an end.  There is way too much waste to keep that giant parasitic layer of governent this TimezUp.

Also, I love the pic/article on the Energy Protests in Bangladesh.  I wonder how long before we see similar protests in the USA and then how long before we see Marshall Law in our cities.

Why go back to slavery when we have something so much 'better' now, that is a huge pool of hungry, eager workers who will work for diddly with no benefits and with rapidly disappearing safety regulations. The true slave at least had some minimal guaranteed care, being a valuable piece of property. The modern 'wage-slave' is a throwaway commodity.
Very true, our future migrant workers will probably be mostly displaced US citizens I imagine (very much like the Little Great Depression of the last century).  

I think the idea of "benefits" will be drastically redefined in the not-to-distant future.  Most of the people I know will probably die of shock early in this Transition when they learn the various Corporate, State and Federal Nipplez they were promised are no longer viable, and that there is no such thing as a "Safety Net" in Nature no matter how many times you click your heels together and mumble "jehovah" or "allah" or whatever prayer/mantra fits your personal cultural defect.

With the massive of personal debt in the US many people will probably become "indentured servants."  And in many places in the world outright slavery will become much more common as the Weak are used to replace the Oil energy we took for granted the past 150 years.

"One billion excess workers in the world."    From Mike Davis book  Planet of Slums.  Now that book has a very frank discussion on world population
"Why go back to slavery when we have something so much 'better' now, that is a huge pool of hungry, eager workers who will work for diddly with no benefits and with rapidly disappearing safety regulations. The true slave at least had some minimal guaranteed care, being a valuable piece of property. The modern 'wage-slave' is a throwaway commodity."

The Jungle by Upton Sinclair...

In terms of exploitation of immigrant labor, the Great Depression experience indicates that unscrupulous politicians will quickly give into voter demands to expel Hispanics.  Here in Texas, Mexican-American citizens were actually seized off the streets and trucked into Mexico by the government.  If US imperialism fails, the Army will be stuck at home, so it might as well guard the border.

However, I think under those circumstances slavery could be brought back quickly.  We already have prison labor, and we have privatized prisons that would like to exploit that labor.  The voters could easily be talked into easing restrictions on prison labor, and the profits from that could then be plowed back into endless media brainwashing campaigns to obtain support for creating more laws to justify imprisoning more people.  Of course, if a majority white electorate is presented with competing propositions outlawing:

a. something white people like to do, or
b. something black people like to do

I think you can see which way the vote is going to go.  As more blacks are imprisoned, there will be fewer left to vote, so it will get worse until they either revolt or are effectively stripped of citizenship.  Same for other unpopular minorities.

The above scenario also makes sense in a deglobalized economy.  If we can't ship it here from China anymore, we're going to have to force each other to make everything.  The corporations do not intend to lose out on this process.

Not sure we need any extra incentives to imprison more people...we're already number one in the world.
"THE price of oil would continue to rise until world oil production peaks in 2010 with any weather or political disruption able to cause a spike in price, an oil expert said today. The London-based editor of Petroleum Review, published by the UK's Energy Institute, Chris Skrebowski said in Perth [Australia] that world production would peak about 94 million barrels of oil per day, up from present levels of between 85 million barrels and 86 million barrels per day."
The new Scientific American special contains an article by Daniel Kammen on renewables, in which he claims that ethanol should yield a positive net energy of "almost five megajoules per liter." That is, he says, if you count the energy content of by-products produced along with the ethanol.

I see that Robert Rapier discussed the by-product claims in a May 24 post and conceded that they might boost the ethanol EROEI to as high as 1.27. What do we make of this figure? Does it argue for or against ethanol?

Also, how many MPM (miles per megajoule) one could expect driving, say, a Honda Accord :-?

Approximate energy densities (there are plenty of conflicting figures out there):
Ethanol 20 MJ/L
Gasoline 32 MJ/L
Diesel 38 MJ/L

A net energy of 5 MJ/L would imply having to put in 15 MJ/L to get 20 MJ/L.  In other words, EROEI of 1.33 - roughly matches the figure you quoted.

According to Honda the Accord fuel efficiency is:
4-cylinder with automatic: 9.7 L/100 km city, 6.3 L/100 km highway
6-cylinder with automatic: 11.5 L/100 km city, 7.5 L/100 km highway

Let's take the 6-cylinder and assume an overall 10.0 L/100 km.  That's assuming gasoline, of course, so that's 320 MJ/100 km, or 3.2 MJ/km.

For the benefit of those not using the measurement system used by 94% of the population of the planet :-) I will now multiply by 1.6 km/mile to get 5.1 MJ/mile.  (statute mile)  Take the inverse and you get roughly 0.2 miles per MJ.

See http://strickland.ca/efficiency.html for more such calculations.  I can't resist mentioning that a Combino tram - 28 metres (92 feet) long, with 60 seats and lots of room for standees (crush capacity 200 people) - uses roughly twice the energy of a Honda Accord per unit distance.  Let's see, 60 seats versus 5, for only twice the energy...


I post this site every so often as it is a world view of all disasterous currently happening.

I noticed 5 micro quakes in Alaska all today.  Anything to that?

I also have some thought in mortgage applications being up

All these people who were talked into ARMs want out.  They know what's coming and they will try to finangle their way into a 30 or 40 year(these might explode) fixed mortgage.  Now here's the kick that will decimate these people.  

These fixed rts are more expensive than what people are used to so they will still have to pay more for the house.  They will do this b/c the cost will be even greater if they let their ARMs reset, so they will seek to lock in a lower than ARM reset, but higher than their current pymt.

Now they are refinancing all this debt and meanwhile they are still equity negative as the houses left depreciate, but these ARM people are getting doubly screwed since they will lock in a higher price on too much debt and be stuck with it or get foreclosed.  So I suspect we should see apps going up for awhile as people try to mitigate the freight train barreling down on them.

Existing home sales see large drop in July

Sales of previously owned homes plunged in July to the lowest level in 2 1/2 years and the inventory of unsold homes climbed to a new record high, fresh signs that the housing market has lost steam.

I think with the rise in Mortage rates via ARM's and everyting being more expensive, It's going to get worse.

We will see Kids moving in with parents,  Parents moving back in with Kids.   These houses that they will be moving FROM will be on the market too.  And they won't soak up any on the market as they will be cohabitating with others.

Combined effect.

This will make the situation even worse.  

This's is the one that's gonna take things down I think.


Location, Location, Location!

Here in Atlanta, Fulton County and the City of Atlanta are experiencing a housing boom as folks from the suburbs are getting tired of traffic and transportation costs and are moving back intown.  The is lots of new condo construction and some infill in single family neighborhoods.  

What is really interesting is the results of gentrification of existing neighborhoods. The lower income folks are being priced out of the market and are moving into older suburbs as a result.  This is going to be really bad for them because while the blight of the inner city will follow them, they will now also have to deal with being automobile dependent.  During the 70s and 80s the inner city had all sorts of problems but at least the neighborhoods were dense, walkable, and had access to mass transit.  The suburban subdivisions the lower economic classes are moving to don't have these features.

The tragic-comedy part of this is that many of those moving to the suburbs are happy because for all their lives they've dreamed of one day being able to have that big house in 'burbs with the large yard and multicar garage.  Sadly they are going to discover that the dream no longer exists and that their old homes in the city have been taken over by the upper class who will once again oppose extending mass transit to the suburbs, this time not to keep city residents from coming to the 'burbs but rather to keep the suburban underclass out of the city.

One thing I wonder about is how the policing of a suburban ghetto works.  In a dense neighbourhood one of the advantages the police have is multiple possible witnesses that may come forward and talk.  If a crime occurs in the burbs where only a few people are likely to be around, the criminals will have an easier time intimidating them to keep quiet.  
The French government has a simple answer. Restrict means of entering and leaving the 'burbs so the proles can only foul their own nest.
This French citizen wants to know, what on earth are you alluding to?

I'm not saying the current government wouldn't do such a thing if they could -- I'm just wondering what restriction mechanisms you are talking about?

You should have told me that before. I thought you were Abeeracan. I mean Amurrikan. I mean, wasn't it just a Mear Can, just yesterday? I mean Mere. Mear was that Indy 500 winner. Anyway. Or was that Mears? Yeah, Rick Mears. He could drive.

Alistair? When is this Cease-Fire gonna cease-firing? Day 11. I won't guess. I just like the fact that Hezbollah can't seem to fire any more rockets into Israel. Looks like the Israelis won this round.

Well, that requires a whole new definition of "win". A month-long war (Israel's longest) that ended in a stalemate. The aura of invincibility of the IDF in tatters.

I had considered that the invasion of Iraq had at least one good outcome : Israelis no longer needed to fear the destruction of their nation. (in fact Iraq had had no capacity to harm Israel since 1991, but Israelis didn't know that.) Now I'm not so sure. Muslim entities will be looking at this little war and thinking, maybe we can take them. (I'm talking about non-state actors. Entities with capital cities are held in check by the nukes anyway.)

I just like the fact that Hezbollah can't seem to fire any more rockets into Israel.

That remains to be shown. There is no reason to believe they can't. They stopped firing because there's a ceasefire. Not because the IDF stopped them.

Thank you for responding. I only enjoy discussing with those who can discuss. Sorry about the delay. I'll be good to go on the Mideast very soon. In the meantime, I think you are spot on. Day 11. Who can say? I think this...Boom!... did you here a mortar just explode?.. or was that just me? Anyway. Try to dismiss the little things. There will be minor violations. No?

Look at the Greeks and Turks on Cyprus. Christ only knows how that has worked for so long. DMZ Korea?

I don't know, my man, how this thing in Lebanon is gonna work out. My reference is Bosnia. Except this time I think it will be worse. Guns of August it is not. Guns of some other month? Like September? Maybe.

Are you in Israel or soemthing? That would explain the strange hours you seem to keep.

The only booms going on here seem to be plots to blow up the Prime Minister, or plots to make it look like someone wants to blow up the PM, or plots to make it look like sopmeone is trying to make it look like someone is trying to blow up the PM. Thai politics is more confusing than oil markets.

No, not Israel. We'll discuss the rest in a few days. We definitely have plots where I am at, but interestingly, they are usually not carried out with Semtex. "Civilization." I guess a knife in the back still works wonders. Et tu, Brute? Or several knives, in that case.

"or plots to make it look like someone is trying to make it look like someone is trying to blow up the PM."

I don't know what your profession is, but you could give John Le Carre a run for his money. Cheers.

The Cites that are far enough out of city centers usually do not have too many roads leading out (and into other communities). In the event of a riot, the garde mobile can choke off those roads and contain the problem.
Frankly, where do you get this stuff from, Apuleius? Do you have direct experience of the French burbs? Or did you read some articles about last year's rioting?

People ended up trashing their own neighbourhood, because that's where they were when the riots started. They were unfocused and unled, spontaneous combustion basically. So they burned their neighbours' cheap cars, and junked schools in some instances, because that's all they had to hand.

If they had been focused and organised, the kids could easily have taken the metro to some rich neighbourhood, and trashed BMWs and jewellery shops.

There's not the slightest doubt that urban mis-planning in France has exacerbated ghettoisation. But the idea that it was all planned to keep people under control (if that's what you meant)... no, that's not an idea that I've seen before.

Though there is an emerging tendency towards gated communities for the rich. Something that needs to be stamped out real quick, in my opinion. Next year's elections will be absolutely crucial.

As someone said in regards to illegal immigration here in the states, show me a twenty foot wall and I'll show you a twenty-one foot ladder.

The same could be said for gates. They won't protect the rich if things go really south.

I didn't say it was planned this way, but it did end up this way, which is why the police can shrug what goes on in the burbs with a "c'est la zone." If trouble gets bad enough, they can shut down the subways and trams, block the roads, and the trouble will be contained. Most of the time all they have to do is bring riot police to one road to attract the rioter's attention.
Atlanta is VERY different from STL, but here there are 89 condo developments in the surrounding "city."  Of those I studied the PRIME area like Chicago's MI ave.  Here it's called Wash Ave and there are 37 developments.  I data mined and found that only 7 were at 85% or more sold.  The rest fell below 50% and several flat didn't report numbers.

Unless you've been or maybe lived here you won't understand, but no one WANTS to live anywhere near this downtown.  Subway closes at 6 for Pete's sake!

This's is the one that's gonna take things down I think.

I'm sad to say I agree.  Housing scares the crap out of me mainly due to ARM's, but when you're buying a house AT the peak WITH an ARM only to convert it into a FIXED 40 year note a few years later, it's going to be brutal to say the least.

See also: Are housing prices headed for a big fall?

Home builders are reporting a sharp drop in demand for new homes. Last week, Pulte Homes, the second largest U.S. home builder, reported a nearly 30 percent drop in orders -- on top of a rise in unsold homes.

Lon Witter's Barron's article is scarier, though: available here

thanks for the link
The WSJ has a cover story on the ongoing McMansion meltdown.  

 I'm glad I'm not in the ExxonMobil/CERA camp that has been promising abundant oil supplies.  

It's a great article, and appears to be free here:

Housing slump proves painful for some owners and builders

The rapid deterioration of the market over the past 12 months has caught many homeowners and builders off guard. Some are being forced to cut prices far below what their homes could have fetched a year ago.

"It would be difficult to characterize the position of home builders as other than in a hard landing," says Robert Toll, chief executive of luxury home builder Toll Brothers Inc., which reported yesterday that net income fell 19% in the third quarter ended July 31.

Case history from WSJ article:

Judy Guth put her stately five bedroom home in Herndon, VA for sale last September for $1.1 million (based on 2005 appraisal).  

No offers.

In March, she reduced the price to $899,900.

No offers.

She decided on an auction with a minimum accepted bid of $675,000.

High bid was $475,000.

Buyer and seller settled finally on $530,000--48% of the 2005 appraised value.  

Consider all the people who bought at or near the peak, paying little or no down, with Option ARM loans.  Consider all the mortgages that Fannie Mae has guaranteed.

I have one question:  Who's your buddy?  Who has been relentlessly--some would say obsessively and repetitively--warning you to Economize and Localize?  

IMO, this is not the time to stop the ELP effort, even if spouses and teenagers think you have lost your mind.  

BTW, the "tiny house" (with indoor plumbing) idea sounds better and better doesn't it?  Or a rented apartment in a New Urbanism community, along a mass transit line.
"Tiny houses" are losing value too.  So are condos downtown.  This doesn't have anything to do with McMansions or oil.  It's a housing bubble, everything is going down.
Of course there is a "slight" difference between $20,000 to $40,000 "tiny houses" and $1.1 million dollar McMansions.

The worst real estate losses are going to be in the areas farthest away from job centers that have shown the most price appreciation.  An interesting question will be how close-in neighborhoods will fare.  

In any case, if you had followed my advice and adjusted your lifestyle based on the assumption that your income was down by 50% and that gasoline prices were $6 plus, you would be ahead of the stampede out of suburbia right now.

Westexas, interesting. Especially since I have been following that advice since long before I found this site. Enlightened minds think alike I suppose.

As I pointed out before, this 'flight from the burbs' is all ready happening where I live.

Let me give a bit of an overview of my city so that you understand:
It is a well educated, fairly affluent mid-size metropolitan area. The total area -city, suburbs, rural hinterland -contains approximately 250,000 people. Almost 2/3 of them have bachelor's degrees and about 40% have doctorates. Most of the jobs are part of the military industrial complex, either direct government jobs or contractors.

The city itself is shaped like a long line with a slight bulge about the middle. It is about 20 miles long and at the widest point about 7 miles wide. I live at the eastern edge of the bulge and the protected forest area backs right up to the subdivision where I live. Because of this, I am technically in the city and the country. I chose my location carefully; I can be anywhere I need to go (church, downtown, grocery store, library, etc), save work, within 10 minutes of driving. Work is fifteen. If there were bike routes (which there aren't unfortunately) I could do the same in 30 minutes on my bike. So I have a good location in a relatively hidden area. The people in my neighborhood are a good mix of people, the entire subdivision is surrounded by protected land, and I have more than enough space for a good-sized garden. And believe it or not, I got this for a decent price.

Now about the suburbs. Over the past five to ten years suburbia has sprang up in all directions from the city. The city limits have actually expanded south to encompass some of the nearer suburbs. They reach piecemeal up to forty miles from the city limits. In some cases farther; I know one woman who drives 60 miles one way to get to work.

This sets the scene. Gas has been at or around 3 bucks a gallon for over a year now and it is starting to take its toll. Foreclosure rates in the hinterlands have shot up in the past few months and property values have tanked. People I know have traded in their SUVs and trucks for more fuel efficient economy cars. And some of them still can't make it. People are trying to move back into the city in droves.

How has this affected in town property values? I can't speak for the rest of the city, but in my neighborhood property values have gone up 10% in the past year, most of that in the past 6 months.

Speaking of foreclosures, find out what's going on in your area (or anywhere else) at:


Ok I give up, what city is this?
There's a stampede out of suburbia right now?
""Tiny houses" are losing value too.  So are condos downtown.  This doesn't have anything to do with McMansions or oil.  It's a housing bubble, everything is going down."

Assumption: 50% drop in house price.

Choose one:
A) $100,000 house  ->  $50,000 house ($50k loss)
B) $500,000 house  -> $250,000 house ($250k loss)
C) $1,000,00 house -> $500,000 house ($500k loss)

I agree with you, Substrate.  I just don't understand why we are trying to link the current housing bubble with peak oil by saying that there is a, "stampede out of suburbia" and things of that nature.  Which planet is that happening on?  Housing prices will fall across the board, and it doesn't have anything to do with oil prices.  By the way, while housing prices aren't falling because of rising oil prices (it's a correction from a bubble, pure and simple), oil prices WILL fall because of falling housing prices.  
I never said it was a stampede. Someone exaggerated my comments. But it has started, and it is definitely a flow.
I guess people are just imagining the 15% to 30% increase in oil prices since December, along with the "imaginary" decline--as I predicted--in production by the top oil exporters, and I suppose people are just imagining not having any money left over after paying higher energy prices.  Nope--that wouldn't have any effect on real estate prices.

Good article on energy prices & the 'burbs:

Could rising gas prices kill the suburbs?

When a high-cost commute reaches the point of no-return, home buyers will start finding houses closer to work. In fact, some already are.

Rising fuel costs are being blamed for everything from soaring utility costs to lower retail sales and higher airline tickets. And now, experts say high gas prices could reshape U.S. cities.

...Once the realization soaks into the American consciousness that high-cost gas is here to stay, Gabriel predicts, those high commute prices will pull more homeowners -- even young families -- to live in central cities and create a push for more public transportation.

Foreclosures are highest in the areas farthest away from job centers.

Foreclosures soar in North Texas

More losing houses because of poor planning, rising expenses

12:11 AM CDT on Friday, August 18, 2006

By STEVE BROWN / The Dallas Morning News


"There are a lot of people out there who live on the edge," Mr. Roddy said. "If our economy had stayed about the same as when they bought the property, things would probably be going OK for them.

"But add the tremendous increases in the cost of living, driving, cooling and credit cards, and it all turns bad," he said. "And of course, there have been bumps in interest rates which have dramatically impacted payments on adjustable-rate loans."

But most of the foreclosure distress comes from a familiar problem - not enough money at the end of the month.

"Wages are stagnant," said Gail Cunningham, with Consumer Credit Counseling Service of Greater Dallas. "And energy costs and other expenses are going through the roof.

"One hiccup can put someone over the edge," Ms. Cunningham said. "We are seeing people with electric bills that are higher than their mortgage."

This is just the very edge of the storm. Many of the jobs in the job centers are going to disappear. Why? Because many of the jobs are just as dependent on the mortgage credit expansion as the growth of suburbia.
> guess people are just imagining the 15% to 30% increase in oil prices since December, along with the "imaginary" decline--as I predicted

By and large the decline in the real estate market is largely cause by the increases in interest rates and loss of the home ATM affect. As Property prices rises people cashed out there equity for supplimental income on the crazy believe that housing prices where going to the moon.

The market was also largely fueled by low rates, creative loans and bare bones lending requirements that permitted anyone with a breath to go out a buy a home. Everyone that wanted to buy a home or upscale has pretty much make a purchase. Home builders where expecting the good times to keep on rolling and have created a glut of new homes. Now the tide has turned. The interest rates have go up and the easy credit via the GSEs (Freddie and Fanny) has dried up forcing mortgage lenders to raise lending standards.

Now its a race to see which causes a recession that leads into a depression: higher energy prices or credit crunch. Maybe a little of both.

...by saying that there is a, "stampede out of suburbia" and things of that nature.  Which planet is that happening on?

Kunstleria. But astronomers have recently downgraded it from planet status, and it is now considered a planetessimal.

Yeah, but the value of the home only matters if you're selling. If you're settling down and trying to join a community instead of moving as soon as you get a raise or think you can make a quick buck on the real estate roller coaster, devaluation doesn't matter.
Wow. This IS scarier than I thought.  Thanks for the link. The following excerpt jumped out at me. This trend looks like it is headed for a crash even faster then PO or global warming!

"Some more numbers:

  • 32.6% of new mortgages and home-equity loans in 2005 were interest only, up from 0.6% in 2000

  • 43% of first-time home buyers in 2005 put no money down

  • 15.2% of 2005 buyers owe at least 10% more than their home is worth

  • 10% of all home owners with mortgages have no equity in their homes

  • $2.7 trillion dollars in loans will adjust to higher rates in 2006 and 2007.

These numbers sound preposterous, but the reasoning behind them is worse. Lenders have encouraged people to use the appreciation in value of their houses as collateral for an unaffordable loan, an idea similar to the junk bonds being pushed in the late 1980s. The concept was to use the company you were taking over as collateral for the loan you needed to take over the company in the first place. The implosion of that idea caused the 1989 mini-crash.

Now the house is the bank's collateral for the questionable loan. But what happens if the value of the house starts to drop?

The answer, at least from banks, is already clear: Float the loans. The following figures are from Washington Mutual's annual report: At the end of 2003, 1% of WaMu's option ARMS were in negative amortization (payments were not covering interest charges, so the shortfall was added to principal). At the end of 2004, the percentage jumped to 21%. At the end of 2005, the percentage jumped again to 47%. By value of the loans, the percentage was 55%. "

Yikes!  Are there any financial instruments that would let you short the real estate and mortgage industry?  

 Are housing prices headed for a big fall?

No, they can't be ready to drop.  This spring we told our realtor we were going to hold off on buying a bigger house and she told us not to wait too long because interest rates were going up and so are house prices.  :o

I think she may have actually believed that too - it is her job.  I told my wife I expected house prices to fall, and now she has been seeing it happen in the real estate section, which she still checks religiously.  I've tried explaining peak oil to her (my wife, not the realtor), but she doesn't quite accept all of the economic ramifications yet.  She thinks it means people will just have to drive smaller cars.  She is very conventional in an American sort of way, so she dismisses things that sound too far outside the box.  But I did score some points with her by beating the realtor in house price predictions.  We have a very modest mortgage right now and I really don't want to blow that just before a housing crash.

The picture, to me, sums up the profligate nature of the US compared with other countries. No, not the number of signs (we get that here sometimes), but their construction. In the UK, a "For Sale" sign (if it is not directly attached to a window with magnetic clips) is one wooden post, with a laminate sign directly attached to it.
The picture clearley shows that each sign has:
 a post,
 a cross piece,
 some link chains,
 a laminate sign,
 some more link chains,
 another "agent" sign (or telephone number sign),
 a holder for flyers attached to the post
the flyers themselves.

And people in the UK think that estate agents charge excessive amounts (1% or 2% of purchase price rings a bell). I hate to think what the US real estate agents charge for their services.

Would you believe 6%?  I'm not kidding.
"I hate to think what the US real estate agents charge for their services."

7%, 6% if you negotiate well.

we sold our gouse last Dec in NE Atlanta with Century 21 for 5% listing.
Agents split at 2.5% each.
They will deal if you demand it!
"we sold our gouse last Dec in NE Atlanta with Century 21 for 5% listing."

yea, but if you sell a house, then they want 7%

Thanks tate for posting that link to real-time world disasters.  That is fascinating - especially the biologic ones...
Someone posted it here once and I actually kept it b/c I thought it is fascinating as well.  I'm still curious as to the 4 mini quakes up in Alaska this morning that no one is talking about.
A question about the Katrina situation: some TV reporter here made a quick reference to a report yesterday that stated that only 16% of the people afflicted by Katrina have moved back and regained a "normal" life one year later.

The reporter did not mention which report he was referring to. Anyone seen that report?

Maybe there is no report.  I can say that I doubt anything close to normal resembles ANYONE's life in New Orleans right now.  Alan would best answer that though.
Algiers (1800s subrub accross the river) is close to normal (except schools, police protection, housing density, congestion, rents, garbage pickup ...).

Rest of city is without normal fire protection, health care, schools, mail delivery, garbage pickup, police protection, courts, and just about everything else.  Debris pickup was just over 70% a week ago; but FEMA wants to jump the # for the 1 year anniversery, so lots of OT for out-of-state no nbid contractors.

Wanted to ask you, Alan, if you saw Spike Lee's movie the last two nights on HBO, and if so, what your impressions were...
I flew out just before "World Premier" at New Orleans basketball arena.  Might have gone if I was in town.

TOOO busy with Dad for much TV watching lately.

"Word" was that Spike Lee was looking for specific types that fit his view for his film; but I am uncertain of that.

So, sorry.

I'm sure they'll be running this one more than a few times, just saw on CNN yesterday Bush meeting with a Katrina victim--"don't forget about us," he reportedly said. Not a coincidence he decides to meet one yesterday.
Consumer Reports: Fuel economy most important to car buyers

Mileages beats out reliability and safety among factors that car shoppers consider, survey says.

Of course, what people say they want and what they actually buy are two different things.  Still...it's interesting.

The shape of the peak.

I've read with interest everything I can find on production and I'm increasingly convinced that were going to face a plateau followed by a fairly steep decline 8%-14% for a few years then a gentler slope and back declining again. The slop of the decline is only decreasing after a year or two because of significant demand destruction.

The main reason for me believing this is that once a few big fields start and significant decline the smaller fields will be pushed harder leading to there own significant declines.
And modern extraction methods lead to a plateau swift decline profile at the well and field level.

I've as yet seen decent evidence for the gentle decline hypothesis i.e 2-3% overall decline rates. The main thesis is that since all the declines are staggered and infield drilling greatly reduces the decline rate we won't see major drops. I've not seen this scenario handle the situation where say Cantrell production collapses or some big field in Russia China or KSA. My point is that sometime in the next few years at least one if not more of the big fields will go into significant decline Cantrell is almost a sure bet.

As far as alternative extraction deep water NGL's etc maybe they can cover but were talking losing between 2-4 million bpd of production as the big fields go in addition to overall decline.

Finally for all intents and purposes were at peak oil now.
To increase production say by 10% in the face of world wide depletion and decline that we know about is probably not going to happen unless we find another ghawar. 10% of 84 mbd is 8.4 mbd that's almost a new KSA it ain't going to happen.

We may not know the exact maximum in real production but I'm not sure its relevant since were probably talking about a variation of 1-2 mbd variation say 2% of our total once you take into account depletion so at best from now on we can grow slowly.

Which takes me back to my concern what is the post peak shape ?  A reasonable scenario is that at least two major fields will go in to serious decline along with a slew of smaller fields on top of our current decline rates.

We should begin to seriously try and understand how the worlds oil will decline since its the rate of decline that is the single biggest factor in peak oil.
Physically the evidence for a steep decline if even one of the big fields collapses is very compelling. The gentle slop scenario seems to just consider business as usual.

That's a very compelling argument.  I've been putting together a PO talk for a sophisticated but less informed audience, and all the data I've put together points to exactly your scenario.  I'm convinced that the biggest risk we face on the downslope is the impact of "Extreme Production Measures" on the short-term peak production rate, followed by an aggregate of exacerbated decline rates.

It makes sense that producers will try to keep their numbers up as long as possible, especially because none of them want to be seen as failing humanity in the face of a sharp decline from a big field. This approach is counter-productive for a couple of reasons.  As you point out it will steepen the inevitable subsequent decline, but even worse IMO it will preserve the notion that everything is OK, and mask the corrective signal we collectively need to get changes happening.  After all, as westtexas has pointed out on a number of occasions, nobody saw the decline coming in the USA even the year it started to happen - it just looked like more business as usual.  This problem doesn't signal itself well to begin with, and when you have a masking influence like this in play alongside the lack of data transparency we all know and hate, well it's going to be very hard to convince people to duck in time.

I suspect (fear?) that Cantarell and Ghawar are going to start showing 10-15% declines virtually simultaneously, leading to exactly the kind of overproduction scenario you outline.  And any serious thinking about the consequences of a sustained 8% decline will keep you awake nights.

Once you add in the prospect of one or worse two of the big fields going into decline you reach the point that you really don't want to read about peak oil. Since your basically going ohhhh s**

So here is what I'm doing.

I keep watch mainly to see if I've made a mistake and we will get slow decline rates. I live in Orange County CA the heart of the beast but I already talked with my parents in Arkansas who have a lot of land about moving back if times got rough.

Arkansas is in pretty good shape a lot of water and low population. Lots of negatives stemming from lack of education and religious crap but ...

Personally I work on sustainable computing/networking which is basically developing computers that are efficient and can run off of solar or battery power so I feel like I'm contributing to solving some of the problems post peak.
I really feel that keeping the internet going esp when people are going to have to learn about gardening and share  ideas on innovative solutions is really important and doable. I don't agree with people who feel that were going to ditch high tech.  I do see the potential for someone to plow a field with a mule then read the weather on his solar powered internet computer. I just don't think we will give up on the internet its simply has to much value.

"Ohhhh sh**!  Yeah, I think many of us here have had that feeling.  I listened to the interview with Robert Hirsch on globalpublicmedia.org, and even he says it - once he'd figured out what was going on it became the most frightening situation he'd ever seen.

I'm luckier than many. I have the option of staying put in a small house in a mature, walkable urban neighborhood in Ottawa - this is my 2-3% decline solution.  I can also move to the family farm in Southern Ontario, with 40 arable acres and an energy-efficient house, about 10 miles outside a city of 350,000.  That's my 8% solution.

The one huge advantage the world has at the moment is the Internet.  We need to keep it running at all costs.

I very much like your optimism, and would love if it could be done, but I don't see it. I think all large scale networks and grids will come under enormous pressure. You would need a huge number of servers and computers, all solar-powered, to keep an Internet going that has an actual meaningful presence.

The Olduvai Theory states that the electricity grid will be the first to go (since it's the most complex machine ever devised), but I would say the highway system, intenet, running water, etc., will all be hard to maintain. Many roads already need urgent repairs, and don't get them. We've all seen stories on black-outs this summer, both home and abroad. All this is still in a time of abundant energy.

Perhaps an idea for a separate thread, where experts on the various networks/grids can shine their light on what can be expected when there is much less energy to run them.

I can also imagine a situation where it's politically handy to shut down for instance the internet, like when unrest and tensions in a society rise because of resource depletion and financial hardship.

The Internet core is extremely resilient by design.  Network traffic can route around outages at one or more large centers fairly quickly, and tier 2 outages cause nary a blip.  It's the "last mile" connections that may be at greater risk, imo.  Most ISPs, larger corporate data centers, and reputable web hosts have redundant connectivity into the core.  Most home connections and many smaller hosts do not.

Advanced datacenters have the ability to withstand power outages of varying duration.  Most have multiple connections into the grid.  Most have large battery and diesel capacity to maintain critical systems during grid outages.  Many have contracts with diesel providers to keep generators supplied during long outages.  The "Internet" itself can survive local and regional grid outages.

As far as access goes, the more connections you have available to you, the better.  Municipal access points (like most libraries and schools) may be pretty stable.  Your home DSL/cable/etc. may or may not, depending on your location and ISP.

Access to the Internet is pretty low on my list of worries if the SHTF.

It's not so much access to the Internet as the existence of the Internet I have doubts about.

I think the net will slowly unwind.  If people have to choose between food and fuel, they won't be paying for DSL or even dialup.  People who pay the hosting fees for sites like this one may not be able to afford it any more.  This will make the net less valuable.  Sites disappear, your friends are no longer online.  More and more people will decide it's not worth paying ISP fees, accelerating the collapse.

I disagree. The infrastructure of the Internet is already in place and while it has high capital costs, its operating and maintenance costs are almost negligible. The capacity is there, and there will most likely be companies that want to profit on the capacity. If the economy goes down, I'll bet DSL prices will plummet.

For a significant percentage of the population the Internet is already pretty much a necessity. Most of my friends would much rather give up their TV than their connection.

And I might add that getting electronics and communication equipment to use a lot less energy is a big big thing these days. As long as the fiber has been laid the electronics can be replaced. Another cool approach is the solar powered plane or blimp as a communications platform. At 100,000 feet you have a pretty good footprint.

I think these solutions are viable today and will become commercial soon.


Server farms can be located near wind/solar/geothermal/water

Obviously I'm in the business so I think its possible.
More important I think in the future keeping the Internet may be the biggest contribution we could make to our pissed off descendants.

Those damned 20th century bastards ruined the planet.
Yeah but at least they developed the world network.

There are in my opinion only two really good things we have done
1.) Better medical care.

So far we have not been responsible in controlling our population to respect this advance but that does not belittle it.

2.) Communication and information ( ability to model a system on a computer) (Real science and understanding)

These are real gains we have made over our forefathers.
Transportation gains I dunno its cool but to costly.
Same for the "American" lifestyle. If we can make it through the next 50 years and keep these two gains I'd be happy.

For a significant percentage of the population the Internet is already pretty much a necessity. Most of my friends would much rather give up their TV than their connection.

Me, too.  Heck, I'd give up my telephone before I'd give up Internet access.

But we may not have that choice.  It's hard to justify paying for cable or Internet access if your kids are starving. During the Great Depression, a lot of houses that had phones gave them up, and the same will happen with Internet service.  

The ISPs may be forced to lower their prices.  Many will go out of business, meaning even some who can afford Internet access won't be able to get it.  

And as more and more inviduals and companies drop off the net, it will be less and less valuable.  If there's no Amazon or eBay or Wikipedia, if your grandkids or mom are no longer online to chat...is it still worth paying for Internet access, when there are a lot of other things you need that money for?

It's not so much access to the Internet as the existence of the Internet I have doubts about.

I've run an ISP since 1994, primarily ecommerce and publishing. Virtually all the money we make comes from small businesses that ship or small business that serve travel. Very little in community use. I don't see what good the backup generators at the data center will do if the planes don't fly. The things my clients sell won't be getting bought.

Airlines shut down, I'm out of business. That is obvious. And when the grid gets less than reliable, the internet loses much of its purpose because the network isn't there continually. It doesn't matter if the server is up in the colo if the doctor's office can't connect. All sorts of industries depend on real time network connections.

I've been thinking for years about the in community services, mostly about local delivery. But such new ideas founder in an atmosphere of LESS. I don't see what will pay to keep the internet up; it's not going to be streaming video and reruns of "I Love Lucy". Online shopping isn't going to pay the rent when people aren't shopping.

Email, asynchronous services, I can see that continuing like the old FIDONET, yes. But doctor calling up your medical records from across the globe, no. She won't be able to count on it working.

cfm in Gray, ME

Wondered what you've been doing the past few days--now we know.  Thanks.  I always pay attention to your posts because you are a real independent thinker here, one not afraid to think outside the box.  So, when you make a statement, we know you haven't just made a conclusion by reading posts of others here.  Do you care to go out on a limb and predict how long our plateau will be until the rapid decline?  Too many variables, I know, but no consequences for educated guesses around here.

To be honest I don't know. I'm a chemist and in chemistry when you have reactions that have a certain yield you never get more product. Thus if you have two chemical reactions that you need to run to make a product and they both provide 90% yield your overall yield is 90*90 or 81%. Applying the same logic to oil fields if you have decline rates of 8-14% or higher at the well or field level its impossible for the total to be less then the base decline.  Now infield drilling new discovering etc help lower this number but obviously on thing about post peak is that infield drilling is no longer arresting the natural decline rate so for declining fields you will see the decline rate approach the natural decline rate 8-14-32% or higher with fields extracted using advanced methods. I think a lot of people don't realize this.

I see new discoveries not only at best capable of making up for the normal decline rates which have benefited from infield drilling in slowing. As fields collapse there is nothing really stopping the overall decline rate from rapidly approaching the natural decline rate.

Anyway that's my thesis. And I have not seen any evidence that its wrong. I really really want to be wrong  I'm waaay to close to LA.

"I suspect (fear?) that Cantarell and Ghawar are going to start showing 10-15% declines virtually simultaneously, leading to exactly the kind of overproduction scenario you outline."

If/when such a decline does take place, the TPTB and MSM would have three options from what I can guess:

  1. Admit to the decline.
  2. Spin the story and come up with reasons for the shortages and price increases.
  3. Engineer dramatic demand destruction.

Any thoughts?
I'd go with mostly #2.  There will be a growing chorus of skeptics that will keep pounding on them to admit it, but I think we will see the information tap close off "as tight as a bull's butt in fly season". Behind the scenes the producers' knowledge of the actual state of affairs will cause them to pursue "Extreme Production Measures" while not telling letting on what they're doing.  The source of any production increases from those activities will be obscured, and the production gains will be used to support the reassurances that Things Are Just Fine, Really.

In fact, I suspect that's already going on in KSA, which makes me very receptive to the notion that Ghawar is already crashing.

#4 - Start a "really" big war to cover up the real decline reasons.
ding ding ding   "We have a winna"
and as a consolation prize we all get jobs in the military/industrial complex
Ok, so you're thinking a plateau starting now, for maybe 2-3 years, then a net decline of 8-14% over several years (maybe another 2-3), then another plateau for maybe another 2-3 years, then another period of decline of maybe 5% per year?

Don't let me put words in your mouth, it's just interesting to be as specific as possible for a "medium-case" projection here.

Yep that's basically it in a nutshell. Here is my predictions out to 2015.

It has to do with how many fields get to the point that infield drilling no longer works. At that point we hit natural decline. The leveling is caused by massive demand destruction.
( You have no idea how much I love that phrase :) As prices spike.

Then the level period then down again.

To put it further in perspective I think the US EU and China and Japan etc will probably be okay during the first downward jump. Its the rest of the world that will basically be destroyed. Sure we probably will go into a depression but our economies will continue to function. I don't think the US will default for example. There will be a significant amount of war I think though. I think you will see countries
like Mexico if Cantrell crashes literally drop out of the 20th century ( the us will prop develop Mexico's deep water plays) Other South American and African countries will probably collapse also along with parts of china and India and South East Asia ) This wholesale economic collapse is what will allow the wealthy countries to creep along in depression or major recession.

As demand destruction wrecks havoc with the rest of the world we will finally get to a point that the worlds economies can function on the remaining oil and a lot of probably environmentally unfriendly projects like GTL and more oil sands will allow a little bit of growth then boom down we go again since the growth economy is not viable.

The second time down will be what causes us to really change our ways or who knows maybe it will be the third time down.
Your talking 2010-2015 now and GW will certainly be a factor at this point. There will be so much crap going on at this point its hard to say what will happen. There is a good chance the US could fracture I can easily see the NorthEast become a no-mans land since they don't have the resources to support there population at the minimum free travel within the US would probably be restricted and expensive if you can get a pass to move. Cities along traditional water transport routes or with reasonable rail access will probably do okay. Thats a lot of the US. The problem areas will be the NorthEast and California/Arizona I think.
To a lesser extent Chicago.  

But I really think that California and Arizona will empty during the first recession
most people in these states are not from the area and its not going to be pretty as California's economy collapses. I think we well see a massive migration to the cheaper fuel rich southern states and central US.  Along with this will be practically open ware along the Mexican border causing lots of problems. West Texas will suffer a bit also because of this. The North East has a fairly large native population so I think they probably will stay too long.

For California I think the northern half of the state will probably far better after the initial population exodus.

Southern Cal where I am will be a tough place with basically war in LA and in Mexico.  No doubt in my mind that LA will burn the only question is how far it will spread.

There is a good chance that the California waterworks will get disrupted either because of power outages our outright sabotage leaving the southern half other the state short on water or from the effects of global warming. I think there will be a lot of disruption of the local electric power networks.

Longer term I think enough of the water works will remain or be rebuilt for Southern Cal to go back to being a primarily agricultural area providing via new electric rail lettuce etc to the rest of the country. Orange County will again live up to its name. Plus I think that recycling of all the empty homes will be quite profitable for some time. There is a lot of really good farmland in Southern CA and I can't see that it will be wasted forever or even for very long.
Finally note how I split the state in half I think the two halves of the state will legally split sometime in the future.

Oregon Washington etc will see some migration overall expect some of the larger cities to practically burn to the ground as rioting gets out of control. I think these incidents will be contained but with the big cities destroyed and probably have large parts simply sealed off.

Overall its simply the economies of certain regions reverting back to what there capable of locally. For a lot of California this would be agriculture.  For the North East it means going back to being a shipping region. There are good harbors there. Basically turn the economic map back to the 1800's and your talking economies based around local renewable resources along with specialization for some advanced technologies. Silicon valley will probably make it and still be the center for electronic goods same with Taiwan. In Southern CA there are two great ports also these will eventually reopen and I'm sure there will be a big military presence along the border. Sorry for the focus on CA but this is where I live.

Final prediction is what will cause LA to burn.
I have three.
1.) Gasoline riot that spirals out of control.
2.) Electric grid meltdown during a hot summer.
3.) Major earthquake post peak during the recession period.

My bet is actually on 3 I think if were post peak and have a major quake in the LA area all hell will break lose and we won't recover. So I'm actually hoping we have the big one before the economy tanks.

For New York Boston and other East Coast cities.
1.) Gasoline riot spirals out of control.
2.) Grid failure
3.) Hurricane
4.) Fuel Oil riots.

In the big picture I think its the cost of oil for heating thats going to drive the collapse of the north east.

Chicago Atlanta other central cities.

I see gasoline riots effecting parts of the cities
along potentially with what I call poverty riots.
But in general I don't see why the central US won't fair resonable well one of the reasons I think there will be significant migration back into the Mississippi and Ohio river valley regions.

Gulf coast my guess is Houston will get wacked along with Lousiana agian by strong Hurricanes. I think the Gulf oil/gas production will drop a lot and begin to just supply the central US. I really think a big effect here will be that the Amazon will burn and the Atlantic will get a lot warmer so big Hurricanes will become a lot more common on all along the gulf and eastern seaboards.

South Flordia will basically follow the same pattern as California but in this case driven generally by basic structural breakdown after hurricanes. Eventually it will also revert back to a sleepy if storm tossed agricultural state providing out of season food shippded via electric rail or up the rivers and along the seaboards.

Rocky moutain area massive migrations back the central river vallies a few riots in Denver and maybe boulder but basically as the economy contracts most people will leave and the states will revert back to farming.

All the cities along the Mississippi will become boom towns to some extent with the influx of reasonably wealthy skilled labor expect all of them to grow so basically from Upstate New York across the central and southern US over to the Missouri will probably have a a significant influx of wealth from California Colorado and the North East. Georgia and the south east away from the costs will also see a influx.
But I definitely see the Mississippi river becoming quite the lifeline for the US the only trouble would be hurricanes destroying the required docs at the river mouth but I think we will keep these facilities open as much as possible. In any case a lot of the traffic will be barge traffic of goods manufactured internally. This new growth will actually extend up through central Canada and the great lakes region.
It supported by Oil flowing down from Canada and up from the gulf along with LNG and CTL production.

In any case I think the rate at which population will flee CA AZ Co and finally the Northeast will be surprising to many. The central US east of the Mississippi has a lot of real natural wealth in land and water resources and housing will intially be quite affordable.

So except for a few of our big cities burning to the ground the US will do okay for a while.

You know, I've been a little environmental, and a little worried about peak oil.  So I wondered how low I could go.  I tried going last winter, in my coastal SoCal condo, without turning on the heater.  I pretty much suceeded (ran it less than a week all told).

That makes me wonder where the SoCal millions are going to go ... to some place where getting winter fuel is a survival issue?

I am not ready to sign onto dire scenarios, and for conditions less dire, warm weather looks pretty sweet.  Heck, when I was a kid I grew a winter garden as well as the summer one.  Sometimes tomato plants live into freakin' December.

I'm willing to hang in here as long as I can.
As long as some water can be brought in for irrigation its incredibly fertile farmland all through Southern CA. Paved over for the most part now but still potentially a prime agricultural region again.

I really think they will head to the Mississippi valley region.
As far as winter fuel goes it's one place that gets gas both from Canada and from the gulf plus there is still a lot of wood for heat. Generally from southern Missouri down you have few days that heating is really required.  GW will probably make the climate milder I know my parents in Arkansas report incredibly mild winters and early springs now. The problem is the heat in the summer months can be brutal. This seems more common in southern CA nowadays anyway.

People will go where there are jobs or at least where they feel there are jobs plus I think a lot of people will move back in with there families who are generally somewhere west of the Mississippi river.

In any case I feel that the California economy today is very fragile the vast majority of it is centered around import/export with the Pacific rim. A economic recession will really hit southern CA hard. In Orange County almost all the economic growth since the 90's have been from the housing industry that's not a good sign.
Orange county now has little real economic activity mainly it seems to be a place to put corporate headquarters.

In general its a bedroom community to San Diego and LA but its at the end range of unreasonable commuting distances into either city.

A recession especially one that leads to any significant drop in real estate prices and import/exports will hit the Southern CA economy hard.  I don't think Orange county really recovered from losing the Aerospace industry its just that the overall growth and massive commuting taking place has caused a housing boom.

Generally southern CA has grown on the housing boom and on import export and service industries. Also massive increases in commuting distances have occurred here as people seek out cheaper housing.

By just about any metric it seems to be the one economy that cannot handle  a combination of housing bubble bursting economic recession (drop in import/exports) and rising fuel costs. Whats happening now is almost the perfect storm for the southern California economy.

So I think regionally in the next few year you will see a massive collapse in the southern cal economy. Northern CA will get whacked to but there still more diversified then we are.

Once this starts and if fuel costs continue to increase I don't see any significant movement of people back into the area since a lot of the region will not be in commuting distance for most if gas is much higher then 4 bucks a gallon. And the main thesis is that peak oil and the attending massive increases and fuel prices along with decreases in global trade will prevent Southern CA from ever recovering. Thats the main point it won't ever recover from the next big recession if peak oil is happening and next the nature of the new economy  housing/long commutes/import export/services is exactly the areas that will get wiped out.
And anyone who has ever been in LA knows that city is a tinderbox with the largest slums I've ever seen. Its just a matter of the right circumstance before it explodes in riots.

But it once had a vibrant local economy centered on agriculture and can have it again.

I'm willing to wait and see myself because its a damned nice place to live even with all the crap.

I actually live in Irvine and work at home. I admit I do drive to the store but its only half a block away Irvine is like the ultimate in planned communities. And is very well designed. There are still fields around and I'm sure eventually they will start tearing down the houses to farm again. Not that I don't have a bolt plan if it gets to bad.
But I'd like to stay if the region power downs without too much violence or more realistic if it can be contained in LA and Mexico.

Sorry I'm rambling some in this post.

I don't remember if you were visiting TOD when I posted this:

WATER-ENERGY RELATIONSHIP, by the California Energy Commission

FWIW, I think we can make it in most difficult scenarios, just because we haven't really tried yet.  We live as if water and energy are cheap, because they are.  The steps to take are well known and well tested, across the drier southwest.

BTW, California has been shaken by other transitions.  In the 70's there was an Aerospace crash (post Vietnam) that resulted in huge middle-class lay-offs.  That was a formative experience for me, as I saw my friends dads leave engineering and never go back(2).  There was so much extra office furniture coming out of aircraft and defense companies that they would drive drive it all out to empty fields and line it up for buyers.  Like something out of a movie.

I'm typing now at a battleship of a drafting desk(1), 4x8 feet, bought off one of those fields for $35.

That could happen again, definitely.  But it wasn't the end of the world.

1 - every now and then I think I should get a new desk and go shopping ... everything out there looks so wimpy!

2 - I went into software engineering but never considered it "permanent"

Yes but its never experienced the results of ever increasing fuel costs along with decreasing import/export.

Each time the economy rebounded here it moved more and more in the direction of services and movement of goods. Along of course with the massive housing boom.

Its facing four massive punches

1.) Housing market collapse.
2.) Spiraling fuel costs
3.) Collapse of import/export (recession driven)
4.) Collapse of the service industry ( recession driven)

The problem is driving is intrinsic to the culture and economy in southern CA probably more so then any place on the planet. The moment the long distance subs become uneconomical because of high fuel prices is the moment the house of cards collapse. There will be basic pressure to keep the housing prices low to offset current fuel costs and if the world realizes that there only going up it will continue for a long time.

1 3 and 4 are recoverable but 2 spiraling fuel costs are in my opinion a death blow to growth in southern CA. Since the 50's basically the economy has been bolstered by continuous growth in ever more distance subs. A 50 mile commute is the norm in southern CA.  The benefit was good climate generally higher wages and generally significantly higher home values then the rest of the nation.  Rising fuel prices throws a major spanner into the works. What they cause is real and perceived current and future lower values for the far off subs. Especially once people come to the conclusion that gas prices will increase ( i.e the MSM realizes were post peak )

I see southern CA as the canary in the coal mine for peak oil and I think we should watch it closely if Suburbia is going to collapse as predicted then this is probably the place it will fall apart first since its the most extreme.

How do you deal with property values declining yearly as your house becomes less desirable because the cost of commuting increases every year it not the actual change in amounts that's critical just that each year owning the home say costs a few thousand more ???

If your commute is say 100 miles total quite common in southern CA then..

Say you work 220 days a year then your driving 22,000 miles a year commuting at 22 miles to the gallon that's 1000 gallons a year. So the cost is 3,000 at 3 dollars and rises to 6000 of course at six.  So go for 20 years and its a cost of 120,000 dollars if the price of gas peaks at 6 bucks a gallon.  If you live say within a 25 mile commute over 20 years this cost is 60 thousand dollars. So your looking at basically a 60 thousand dollar premium for living 50 miles from work vs 25 miles. Thats a pretty good chunk of change.
This is just direct fuel costs not to mention the general increase in all good and services from higher fuel prices.
I don't know what it is but it probably swamps your direct fuel costs everybody will suffer these for the most part but
this means that lowering transport costs will be important for increasing your discretionary income.

Of course increasing fuel economy helps a lot but this lowers costs equally for everyone so it does not change the differnce just the amounts.

Its important to realize that 3-6000 dollars a year is real money. If gas is say at 10 buck a gallon which would be reasonable your talking 10,000 year for a 22 mpg car and still 5,000 a year for a 40+mpg car. If your a dual income family which is very common your talking 10-20,000 a year for fuel this is a very very big deal in fact from 3 dollars up its significant enough to provide cause a real devaluation or real estate farther then say 25 miles from the from the city center. Halfing from 25 to  12 gives only a quarter of the savings for the 50 to 25 mile case.

My point is these far flung subs in southern CA are especially sensitive to the percieved and real cost of gasoline.

People that can move closer will those that can't afford it will simply leave.

I think everone should watch because just as Ghawar's decling probably seal the fate of the world oil supply I think the response to peak oil in southern CA will be the leading indicator to the rest of the country as far as how the subs will fare.

Just to wrap up.

The key thesis is rising fuel prices will stop any rise in value for subs greater then about 25 miles from the city center and in fact they probably will go into slow decline.
Except this is not a scenario acceptable to a homeowner no one is going to buy a house when they know the value will decline year after year so poof goes the valuations of the far flung subs.

The economy is grossly overdependent on the expansion of mortgage credit. There is no reason to commute once the jobs disappear.
A study was done comparing commuting costs to wages (it was posted on TOD) and from memory, the worst city was in Mississippi. California had two inland cities, Georgia had one or two. You make good points but the increased gas cost is only one variable- poor cities with lots of sprawl will crumble first.
I know people who were part of the Irvine "Bike Town" project, and still ride to work each day.  With those excellent bike trails and bike lanes it can be easy.

The difficulty with prediction is that we have to decide what is average for SoCal, and how the average will be affected by a possible one-two punch from a housing crash and peak oil.

If oil were even to peak now, but gently, there might be time for things to work themselves out before large production delcines set in.  I'm sure you know that the dire case you've put forward really depends on big declines (>10%) blindsiding everyone.

BTW, searching for averages:

When going to work, a majority of the burb residents drive alone, hardly anyone carpools, takes a bus or train to their destination. Their average commute is about a half hour (except for the San Gabriel Valley--which is about 40 minutes--and the city--45 minutes).

http://www.latimes.com/news/local/timespoll/socal/la-991019burbpoll-429pa1an,1,1850115.htmlstory?col l=la-news-timespoll-local

With today's traffic load 30 min isn't very far.  And the carpool thing happened before ... all it took was higher prices.

I'm going to hide out in some remote place in one of those tiny houses and then when you southern Californians have all left, I'm going to move in.  Maybe a beach house in Laguna Beach...

I think those are going to drop from 3-5 million range to a measly 1-2 million so still outside most peoples ranges.

I did not say that you would not keep your exclusive areas here I think they will remain they will be a lot cheaper but still beyond the means of most people. I just think away from these coastal areas you will eventually see farmland. So they will become enclaves for the wealthy.  I fly in to John Wayne airport a lot and the shear amount of housing stretching from LAX to Sand Diego is astounding.  Its these vast tracks of inland housing that I think will disappear in time at least back down to a few city centers.

I'm guessing that Irvine and the coastal region will remain fairly intact and probably still overpriced :(

But I could see a lot of the housing north through Santa Ann a Orange Westminster etc up to some where in Long Beach eventually become farmland again.

South of Irvine down close to Sand Diego the same.
So your probably going to have a pretty shrunken LA area extending now out to 20 miles or so then go for another 25 miles till you hit the Irvine/Coastal metro area. then again another 20-40 miles till you hit the Sand Diego metro area.

This would I think result in the population of the LA area dropping from its current level of about Ten million down to at least 6 million and maybe as low as 3 million.
In any case your talking about probably 6 million people migrating out of southern California if the subs prove unsustainable. It sounds like a lot but not really  it would be basically a influx of 50,000 people into 120 other cities. Or 25,000 to 240 cities. Many of these could be of course in California. In any case it could be absorbed maybe. You may be seeing a similar but smaller exodus from northern CA say about 3 million. And a similar stream coming from the North East when fuel oil becomes to expensive.

Basically the population in CA needs to get a lot closer to 10 million and also redistribute to some extent to get a distribution that's reasonable post peak.

Were quite possible looking at 10-20 million  peak oil internal migrants or refugees in the next few years.

It not horrible and it will result in far more people living within 20 miles of there respective city centers.

In fact if you assume you could redistribute most people in the us amongst cities of say 100,000 or more I think you will find its quite possible to remove the extensive exsub population. And of course everyone won't move the same year.
I'm guessing the first year of housing bust and recession with very high gas prices 5 dollar plus will cause about a million to abandon southern CA. This I'm sure will cause in a sense a knock on effect as all this money is gone leading to say 2 million the next year. After that it probably will drop reducing each year to say about 200,000 or so until the economy is sustainable. Again the same sorts of scenario's will happen in a lot of area's The North East parts of Chicago the DC area etc.

Of course other cities such as Atlanta etc will see the same migration patterns to a lesser extent.

The driving force will be the devaluation of housing beyond the 20 mile limit.  I'm thinking your looking at major city centers existing on at the minimum 100 mile intervals and extending outwards to about 40 miles in radius. Certainly the spread could be larger. Population might actually be higher and dense then normal in US cities say up to 3 million but probably around a million or so.

With this proposal assuming we have say 20 cities that exceed this by say 3 million each your looking at probably dislocation of about 50-60 million people post peak over say the next 6-7 years and starting probably in 2008.
The movement itself will probably take 2-3 years for the largest moves expected to come in two waves.
A initial massive migration followed by one that might actually be larger as remaining business close from lack of income caused be the first migration. Then it will be increasingly smaller movement as the economies stabilize.

So were maybe looking at I'm guessing
60 million moving total
3 years to move in so 30 million a year
spread though is probably
10 million first bad year
20 million next
10 million next
5 million
5 million

So the major movement will probably be year two post peak
or when oil hits about 200 dollars a barrel.

BTW, the above would make a fine novel or TV miniseries.

I should go up to LA and pitch it :)

Actually I agree with a bit of expert help it could be very believable and I think Americans would be fascinated with a modern portrayal of the break up of a state. I'm sure northern CA would be happy to host any show that had as and outcome the end of the massive movement of water to southern CA :)

Actually a good and reasonable near term mini series about peak oil and associated effects would probably do a great job of raising awarness and it would continue into the future with people having to increasingly deal with the effects of GW. Plenty of room for lots of cool charecters to be portrayed.

I'd watch it.

Me too. Some thoughtful scenarios you present. Scary as hell, though.
i seriously doubt fab plants will last. they require 24/7 power to keep the clean room area's clean otherwise it will result in months of downtime and allot of money lost from having to junk everything in the production line when the power quits.

They almost certainly will go nuclear regardless of what peoples opions are in CA. First they will get preferential treatment on electric supplies from existing power plants.

I hate nuclear as much as anyone but I think we have little choice but accept them for certian key industries.
I don't think we see a massive build out in nuclear power plants but I'm pretty sure we will see nuclear plants probably small ones to support various key industries.

Coal of course is the other bleak choice but I'd have to go with a small nuke over a coal fired plant if thats my two choices.

I would have said hydroelectric but with global warming I think most sourceso of hydro are going to be a lot less reliable.

Based on what I've looked at with Yibal and other sharp declines in major fields, here's my predictions for the next few years.

Dec '06 will be 2-3% below Dec '05 -> ~83mbpd
Dec '07 will be 5-6% below Dec '06 -> ~79mbpd
Dec '08 will be 7-8% below Dec '07 -> ~72mbpd
Dec '09 will be ~10% below Dec '08 -> ~65mbpd
Dec '10 will be ~12% below Dec '09 -> ~58mbpd

My WAG is that we finish the decade producing less than 60mbpd.

The above is assuming no major nuclear war that wipes out half the world's population.

Don't ask me about price because a recession or depression would make that very difficult to predict.  The above is my guess of the maximum we can physically pull out of the ground over the next few years.

By the way, I don't see how demand destruction can create a plateau on the way down.  Demand destruction cannot put more oil in the ground or halt the physical decline of oil fields, and in fact lower prices would reduce investment in oil infrastructure, therefore accelerating decline.

Anyway, neck is fully extended here, so feel free to chop away!

Dec '07 will be 5-6% below Dec '06 -> ~79mbpd Dec '08 will be 7-8% below Dec '07 -> ~72mbpd I think 07 will be a bit higher but you may well be right its a tough call certainly 8% and higher drops after sometime in 08-09. But my gut is your right just one year early. Cantrell won't really start tanking I think till the end of 07 so we should hang in there a bit longer. Dec '06 will be 2-3% below Dec '05 -> ~83mbpd Dec '07 will be 2-3% below Dec '06 -> ~81mbpd Dec '08 will be 8-12% below Dec '07 -> ~73mbpd(10%) Dec '09 will be ~12% below Dec '08 -> ~64mbpd Dec '10 will be ~12% below Dec '09 -> ~56mbpd The big drop in 08 is caused by Cantrell and one other major field collapsing along with steeper depletion rates worled wide and infield drilling can no longer offset natural declines which are steeper then say in Texas because of enhanced recovery methods. Thats why I'm saying a cliff. We need a bet here.
Formatted sorry.

Dec '07 will be 5-6% below Dec '06 -> ~79mbpd
Dec '08 will be 7-8% below Dec '07 -> ~72mbpd

I think 07 will be a bit higher but you may well be right its a tough call certainly 8% and higher drops after sometime in 08-09. But my gut is your right just one year early. Cantrell won't really start tanking I think till the end of 07 so we should hang in there a bit longer.

Dec '06 will be 2-3% below Dec '05 -> ~83mbpd
Dec '07 will be 2-3% below Dec '06 -> ~81mbpd
Dec '08 will be 8-12% below Dec '07 -> ~73mbpd(10%)
Dec '09 will be ~12% below Dec '08 -> ~64mbpd
Dec '10 will be ~12% below Dec '09 -> ~56mbpd

The big drop in 08 is caused by Cantrell and one other major field collapsing along with steeper depletion rates worled wide and infield drilling can no longer offset natural declines which are steeper then say in Texas because of enhanced recovery methods. Thats why I'm saying a cliff.

We need a bet here.

I'm a big believer in Westexas and Khebab's prediction of an imminent collapse of Russian production.

Since Dec '05, Russia is down 2.8% and SA is down at least 5%, and I think they will be down by similar (if not higher) percentages by the end of this year.  As they are the top 2 producers, that drop will be significant for the whole world production.  And I think next year can only get worse.

I'm hanging out for another EIA/IEA update from Stuart. Have I missed one?

The only reason I'm not agreeing is we have been drilling like mad world wide so we will see some effect from this and we haven't had on of the big fields collapse. Until the first big one goes I think we can stay at a 2-3% drop with massive effort at least for one more year in addition there is a small amount of slack in the market to hide real depletion by draining various reserves. Expect to see the strategic reserve opened this winter a few times. Plus of course other storage.

So in a sense the lack of decline in 07 may very well be basically fake since its hidden by brief growth from the massive drilling efforts underway plus additional NGL's and whatever bit of extra production we have. This is assume Cantrell or Ghawar do not go. If Cantrell collapses then yeah I think your right.

And of course depending on how much of next years production is storage draws and assuming Cantrell production really collapses near the end of 2007 then were are looking at going from 2-3% decline to my 10-12% decline in 2008 which is my prediction.

I'm not saying that the decline may not very well be greater then 2-3% in 2007 as you suggest just that it will be covered by a small boost in NGL storage draws and turning on the last of our spare capacity. After that its just a matter of when the first big field fails and don't forget the swarm of smaller fields that will have a significant percentage going into decline over the next few years this is coming on also.

But we will squeak by one more year are almost one more year depending on when Cantrell crashes. I think we will make it to 2008 but just barely before real declines become obvious.

I'm not sure I follow the Cantrell crash leading to a 10%+ global decline.  From memory, global production is around 85 mbpd, and Cantrell is around 2 mbpd.  Turn off Cantrell completely and you lose about 2%.

Are you counting on Cantrell as a bell-weather of some sort?

From the studies I've read, the best guess as to the elacticity of gasoline prices is about 500%.  That is to decrease demand by 1%, price has to go up 5%.  Just plugging in the numbers, (no judgement included) that gives your numbers the following price per bbl and gallon:

Year End Depletion  mbpd $/BBL    Gas $/Gal
2005         -              85         75         3.00
2006        2.5%         83        84         3.25
2007        2.5%        81         95         3.50
2008        10%         73        142         4.60
2009        12%         64        227         6.60
2010        12%         56        363         9.85
2011        12%          49       580       14.00

Hmmm, it looks like that hybrid might pay off sooner than lots of people think!

Interesting figures.

If your numbers are correct, then it is a bit sad that it takes another 2 years for gallon prices to get above $4.  In my opinion the gallon price needs to rise quick to add impetus to the 'conserve' mantra.


The article on Russia's overtaking Saudi Arabia in oil extraction makes fascinating reading.
Though the country may now come first in oil production, it certainly doesn't come first in peak oil awareness or peak oil preparedness.
The Russian for 'peak oil' is "pik nefti" (sorry, your comment box doesn't accept the Cyrillic alphabet').

Google statistics:
peak oil ==   4680000
pik nefti ==   227

A ratio of 1 to 20 000.

Indeed, most of the 'pik nefti' hits are translations from the English. But no debate, no blogs, on the issue.
Any Russian-speaking TOD reader feel like becoming a missionary?


>But no debate, no blogs, on the issue.
Sorry, but you are wrong. We are aware very well and it is disscussed here. Not everybody accepts it but most people follow idea. There are blogs, forums, articles and etc. There is very little insider information, someone says: "we have 10 times more oil then we tell to the world", someone says: "we are on peak". Hard to understand who is right and who is wrong.


Spasibo, piknik

Clearly I didn't look hard enough -- perhaps you guys just don't use the term 'peak oil' as much as the rest of us do.
Glad to know I was mistaken.

Dobrii Vecher

The phrase "Peak Oil" was a bit of a crank feeling to it now. Everyone seems to prefer "Plateau" or "Decline" or some circumlocution.

Means the same thing but gets more listening attention from the unconverted hoi polloi.


Most of the educated public (let alone the unenlightened masses) probably hasn't even heard of the term 'peak oil' often enough to remember it.

'The Guardian':        26 hits
'The Daily Telegraph':  8 hits

Compare with 'climate change'

'The Guardian':         4212 hits
'The Daily Telegraph':  1634 hits

U.S. Power Plants Reach All-Time High Natural Gas Consumption in Response to Summer Heat Wave

DENVER (August 22, 2006) - The U.S. has been sweltering under extremely hot temperatures during both July and August this summer, resulting in record-setting electricity generation coast to coast. As a result, U.S. power plants have been burning natural gas at all-time high record rates as consumers crank up air conditioners nationwide to beat the heat.

According to data released by BENTEK Energy, the leading provider of daily energy market supply and demand information and analysis to both the energy and financial services sectors, approximately 29.6 billion cubic feet per day (Bcf/d) of natural gas was burned in July or 17.5% over the record burn in August 2005 of 25.2 Bcf/d. August month-to-date is even higher, recording 30.2 Bcf/d through August 22nd with a record breaking daily burn of 42.3 Bcf/d on August 2nd.

Due to the significant impact this summer's unprecedented gas consumption could have on total gas demand and natural gas storage levels, BENTEK has created a new daily report of natural gas consumed by power generation plants. The BENTEK U.S. Power - Gas Burn Report covers 427 plants across the United States, representing almost 50 percent of the natural gas burned for power generation.

Thanks for this.  The natural gas story has been on the back burner (no pun intended) for a while now.  I was recently out on the site of a major suburban housing development collecting rocks for a (downtown)community garden rockwall. Everyone of the hundreds of 'executive homes' was being built with natural gas heating (this is Ontario), most will have natural gas fireplaces and natural gas water heating.  Just in time, so to speak.

Canadian natural gas production (marketable) is slightly up this year with well completions running at historically high levels. But as production per well declines, the cliff approaches.

I'm not sure which is going to come first: a transportation fuel crisis or space heating/cooling, electrical generation crisis.  Kind of like waiting for a kick to the gonads and then a knee in the face, to use a manly simile.

They're all natural gas because environmental laws make that the cheapest option (for the builder, not necessarily for the residents).  

Remember, a mere six years ago, the big energy companies honestly believed that we were "the Saudi Arabia of natural gas," with enough to last hundreds of years.

Read Mike Rupperts inteview with Matt Simmons(still the best interview of him yet).

From August 2003

"In the summer of 1999, we had thirty consecutive power events which unleashed the single biggest construction boom in history which built 220 thousand megawatts of new plants at a capitalization cost of six to seven hundred thousand dollars per megawatt. Ninety-eight per cent of those plants were gas fired."

"...But natural gas plants were built with no supplies. Synthetic contracts were used, Enron-style, to sell gas futures when the gas didn't necessarily exist."

"FTW: Yet even if we re-regulate there are still going to be problems with feed stock to power the plants. How serious is that?

Simmons: Someone's going to be left holding the bag big time. If natural gas consumption surges in ten days of excessive heat then it would require almost a complete shutdown of industrial consumption to compensate and protect the grid. As I have been reporting for years now, there isn't going to be enough gas to run those plants, let alone new ones.

FTW: You mean shut down the economy for ten days to keep people from cooking?

Simmons: Yes."
FTW: What is the solution?

Simmons: I don't think there is one... The solution is to pray. Pray for mild weather and a mild winter. Pray for no hurricanes and to stop the erosion of natural gas supplies. Under the best of circumstances, if all prayers are answered there will be no crisis for maybe two years. After that it's a certainty.

Mike and FTW has had some of the best. IMO

It's where I became "Peak Aware"  5 years ago

"because environmental laws make that the cheapest option (for the builder, not necessarily for the residents)."

You lost me.  How does this work?  Modern oil furnaces are highly efficient with minimal emissions.  For that matter, the best pellet furnaces also have minimal emissions.

I have some familiarity with the building code and environmental laws in the jurisdiction where I live and am unaware of any provisions that would favour ng heating.

I think it is done, because it is what builders know and believe customers expect.  Inertia.

Oil for transportation is a much greater problem for the US, as it has very roughly a 95% market share.  NG is only 18% of electricity generation.
NG market share
NG market share for power production is market/utility dependant. For Florida Power & Light, the largest utility in Florida, NG represents almost 40% of the fuel mix.  

California is about 50% NG.  OTOH, big parts of the country use almost none, like the Chicago area, which is half nuclear and half coal.

CA hopes to reduce peak problems by developing 3 GW of solar PV and about another 1 GW of thermal over the next 10 years, I believe, which would give them 8% solar capacity at the peak times when gas is used most heavily.

Am I right in my memory that FPL is investing heavily in wind power?

Regarding the Weekly Petroleum Data report, one of the few growing supplies on this report is NGLs, which has shown steady slow growth.

I think it mostly true that NGLs (ethane, propane, butane) are not used as transportation fuels, but are they part of the transportation fuel system as an input in the refining process for crude oil?  Obviously they are used as chemical feedstocks and for heat, but I'm wondering about the transportation fuel connection.  

Domestic production of crude continues to slog along at around 5mm b/d, making the NGL production of 2.38mm b/d a significant portion of U.S. total production.   Whaddya think?

NGLs include the C3, C4, C5, C6, and C7 fractions, but not the C1 (methane) and C2 (ethane), since they are not liquid at the surface.

NGLs are distinguished by vapor pressure--high VP NGLs are used for LPG (C3, C4), and though they have high octane, they are limited for blending into gasoline because of their high vapor pressure. Mid pressure NGLs (C5, C6) is often called natural gasoline since it is close in carbon range to distilled gasoline, and is an important blending component. Heavier (low vapor pressure) NGLs (C7, C8 at times) are generally called condensates, and are an important refinery feedstock for light distillates such as gasoline (and in some cases diesel)

Thank you.  So NGLs ARE part of transportation fuels and fuel refining.  

Is there a average composition of NGLs where one or two of the various hydrocarbons you listed predominates, or does the composition of NGLs vary widely?

Thanks again for such a solid answer.

NGLs are distinguished by vapor pressure--high VP NGLs are used for LPG (C3, C4), and though they have high octane, they are limited for blending into gasoline because of their high vapor pressure.

C3's aren't blended into gasoline at all, but C4's are. In the summer, the gasoline pool is only a few percent C4, but it can exceed 10% in the winter. That is one reason winter gasoline blends are cheaper: Butane is added to the pool in greater quantities, and this increases the overall gasoline supply. Also, butane is almost always cheaper than gasoline, meaning the blends cost less to produce.

Hi there,

I came across this regarding the diesel shortage issue :
Shortage has truck drivers fuming

Anton Adami, owner and operator of his own truck for HVH Transportation, said he got into Denver on Thursday night and "all of a sudden we have no fuel options." He said "it's just everybody is limiting their fuel to 50 gallons."

He said his truck takes 260 gallons of fuel to fill, and he fueled up last week at a gas station in Commerce City where "I got 180 gallons and it cost me $580 dollars."

"We are just trying to get enough fuel to get us out somewhere that does have fuel," he said.

I'm making a kind of list of places (countries, states and regions) where they face power outage, shortage, petroleum product supply shortage or rationing and fertilizers shortage.

I do this list for my next conference at the end of september.

It's not just Colorado.  There's some discussion of this issue here.
This is not an energy shortage issue, but arises from a conversion to ultra low sulpher fuel for public health reasons.

fyi  In Canada from 1990 to 2003, heavy truck fuel consumption (diesel) grew by 97%. The US numbers, which I don't have in front me at the moment, are similiar.  While Kunstler (yes, yes, I agree he is an irrational zionist lapdog) points to the 'suburban/exurban misallocation of resources as the greatest error; nonetheless history I believe will not forgive the deregulation of transportation beginning during the Carter Administration either.  This deregulation served to increase the competitiveness of trucking vs rail, mostly by effecting a cut in labour costs by some 25% (Sweatshops on Wheels, Belzer,2000).  Trucking's advantage over rail increased with declining real fuel costs.  And of course the railways were mostly managed by the brain dead.

It (transport deregulation) was defended by almost all economists who pointed to gains in overall economic efficiency.  Unfortunately, economists mostly live in a dimension of the universe where time is absent.

Short term gain for long term pain.

At least now there is a growing move to intermodal shipping, especially for long haul, with trucking companies like JB Hunt taking the lead.  We still have to confront the problem of natural monopolies intrinsic to rail transport.  Alan?

In case you're wondering why things are going better....there's a big course going on in Fairfield, Iowa.  This week in Barron's...

Tune In, Turn On, Outperform?
beat the market, but early
returns of an intriguing new
study show another way could
be possible--better returns
through active consciousness-raising.
It all relates to the effect
produced when a critical mass of people gets together to practice advanced
Transcendental Meditation, producing an underlying field of "pure consciousness,"
known as the "Maharishi Effect," after the physicist who introduced TM in the U.S.
nearly 50 years ago.
It so happens such a group has been gathering once again in the Fairfield, Iowa, home
of Maharishi University of Management, to deal with a threat to world peace. But the
positive vibes extend to other aspects of society, including the financial markets.
"We didn't come together to boost the markets, but it's a nice side effect," says John
Hagelin, a physicist who directs the Institute of Science, Technology and Public Policy at
MUM. "Sociologists as well as economists are aware that markets are an extremely
nimble and sensitive barometer [of] the collective mood."
So far, the mass meditation seems to be having a beneficial effect on the market. In
the weeks since the meditation began July 23, both the S&P 500 and the Domini 400
Social Equity Index have risen on average 0.7% per week, to say nothing of the Nasdaq,
says Ken Cavanaugh, a professor of applied statistics at MUM who has been researching
the meditation's market effects. That compares to a weekly decrease of an average of
.06% going back to 2000, when Bush took office.
"If you maintain that rate of increase for awhile, you're going to have a phenomenal
effect," says Cavanaugh. And if the method does away with all the sellers? World peace.
And then, who cares?
Copyright © 2006 Dow Jones & Company, Inc. All Rights Reserved
check out www.invincibleamerica.com

This idea is reflected in "Peace is the Way:  Bringing War and Violence to an End" by Deepak Chopra, also Hindu.  These TM centers are to be springing up across America.  This Fairfield Iowa group has purchased land in many states for new centers.  There may be one near you soon.
Regarding Fairfiled, see PBS interview


in which Fairfield is referred to as "Silicorn Valley. Where else in small town America would you find five Indian restaurants, three Thai, and more hybrids than Hummers?"

I'm curious to see how SA will respond to the news that they are no longer the world's #1 oil producer. They seem to be a pretty prideful nation, and this might induce them to turn on the spigot of excess capacity -if they actually have any.
I wonder if they saw it coming and that's why so many of the oil platforms in the GOM are now on their way to the Middle East.
It looks like the IEA is anticipating a cutoff of Iranian oil exports.  Are there really 4 billion barrels of oil stockpiles out there?

Excerpt from:  http://tinyurl.com/lq6n7

Oil producers prepare for crisis

Meanwhile, the International Energy Agency (IEA) has told oil exporting states to be prepared to increase production if Iran cuts off its oil exports in response to sanctions.

Claude Mandil, director-general of the IAE, said that if Iran stops exporting oil, he would want the Organisation of Petroleum Exporting Countries to increase their oil production.

The alternative is to use the world's emergency oil stockpiles.

"We are prepared for the possibility of releasing emergency supplies as always at the IEA. But we think our strategic stocks are only for use in the case of real supply disruption, and after other possibilities have been exhausted, in particular Opec spare capacity," Mandil said on Wednesday.

The oil weapon

Global oil producers have an estimated two million barrels per day (bpd) of un-used oil-producing capacity which could be switched on in an emergency.

In addition, the governments of the 26 IEA member countries own about 1.5 billion barrels of oil in strategic reserves, Mandil said.

That would be enough to compensate for the loss of Iran's 2.4 million bpd of oil exports for at least a year and a half.

The IEA members also have access to additional stockpiles totalling another 2.5 billion barrels that could be used if necessary, he said.

Using up stockpiles would leave the world with no oil stocks and no cushion to meet any further supply disruption.

If Tehran decides to stop exporting oil, Iran's income would fall sharply, but world oil prices would increase and the economies of Western oil-importing countries would be damaged.

Despite the continuing uncertainty over Iran's nuclear programme, oil prices fell on Wednesday with the price of crude oil dropping below $73 a barrel.

"Claude Mandil, director-general of the IAE, said that if Iran stops exporting oil, he would want the Organisation of Petroleum Exporting Countries to increase their oil production."

Good gawd.  How does this guy in good conscience cash his paycheque?

You're assuming he has a conscience.

Assumptions can be very dangerous.

Somehow, Americans seem to have come to the absolutely bizarre conclusion that the Iranians are all a bunch of crazy people.    Back in the real world, though, expect the Iranians to continue to reach out to the international community, to their longtime friends and neighbors, and even to countries which have declared themselves, "enemies of Iran," in meaningful and constructive ways as part of their continued efforts to diffuse this crisis.  Following their typical pattern of reasonableness, I expect the Islamic Republic to compromise and agree to a temporary suspension of uranium enrichment sometime this fall.  If the U.S. decides to bomb the hell out of Iran anyway, expect the Iranians NOT to respond by cutting off oil supplies, thus winning the battle for hearts and minds around the world, and strengthening the position of this great and rising nation on the global stage for years to come.          
"Americans seem to have come to the absolutely bizarre conclusion that the Iranians are all a bunch of crazy people."

Maybe Americans in general, but no I have never believed that the Iranians are "crazy".  So assuming they are educated, knowledgable, calculating individuals, why would they stop their uranium enrichment?  They have been under economic sanctions in the past... that is where they have learned to live with reverse engineering, and developing their own solutions.

With that said, I believe they have realized they need nuclear power (or nuclear weapons, or both... it's too early to tell), and being calculating, they have decided  that now is the time to do so.  The Iranians are also very determined, I don't see them backing down from this.

I do agree that I expect them to "reach out" to other countries, as they have been trying to do for a while now. I expect them to get the same re-buffs they have been getting from the western world thus far.

I really can't answer the question of whether or not they will withhold their oil, but I am pretty certain they will continue their rights under the NPT to pursue "peaceful nuclear power"

It depends. They might be left with no other option than to retaliate, which of course is what US ultimately wants. There could be many ways to do that, and that's why this surprising war against Lebanon scared the s**t out me. I was also resilient and was thinking that uncle Sam has no real options against Iran before it, but now I'm not so sure.
What if Iran had a way of increasing oil shipments to China over land?  I know China's pipelines reach into Kazakhstan now, but not all the way to the Caspian.  Iran borders the Caspian.  China could shift some part of its oil purchases to Iran, which would simply free up capacity and supposedly have no effect on oil prices, but what if Iran cut some production and diverted other production to China?  Net global production would fall, prices would rise, Iran would still get the revenue it needed to function, and China would continue to outbid poorer countries for the rest of the world's production using its infinite supply of dollars.  That would leave the US with the choice of sanctioning China, which could lead to God knows what retaliation.
The Iranians want high oil prices with a minimum of restrictions on their own sales of oil. (A basic businessman's rational approach to the market). Therefore, they are likely to restrict oil trafic thru the Staits of Humuz, which they seem to think they can control.  This would certainly come in response to a military attack, but might also be their response to "sanctions".   We've seen that they have some interesting land-to-ship missiles, so it might not be so easy for the US Navy to interfere with an Iranian plan to disrupt shipping.
Well... we may actually end up finding out how much "spare capacity" there currently is... should be interesting.
And no doubt Venezuela has plans if Iran is attacked, since they appear to have a mutual-aid agreement in place.

Here's how I see the Grand Chess Game:

U.S., Britain, Israel.

Russia, China, Iran. (Venezuela and Iraq.)

This is a Pandora's Box that no rational person would want to open.

I don't see it working out that way. Chavez is a publicity seeking blowhard who loves to have Bush as a foil and isn't going to overstep. If he trashes Venezuela's economy for some anti-American fantasy dream team, he won't last long.

China is dong very well right now, why would the want to blow up the boat? I know the doomer party line is that China is all powerful and has the US in the palm of its hand. In reality, China is halfway through pulling off an economic miracle that they have waited a long time for. Like it or not China is capitalist and the US is its best market. They ain't killing the golder goose.

I agree that it is a Panadora's box and no rational person would want to open it. The Chinese leadership, and even Hugo C, are rational people.

Hello TODers,

Here is an interesting viewpoint on the Mexican election standoff and what might lie ahead.

MEXICO ON A KNIFEBLADE headlines the British Guardian, but the typically short-term-memory-loss U.S. print media seems to have forgotten about the imbroglio just south of its borders. Nonetheless, the phone rings and it's New York telling me they just got a call from their man on the border and Homeland Security is beefing up its forces around Laredo in anticipation of upheaval further south. The phone rings again and it's California telling me they just heard on Air America that U.S. Navy patrols were being dispatched to safeguard Mexican oil platforms in the Gulf.

I have no idea if things are this bad down South.

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

Bob, thanks for your continuing updates. "Poor Mexico, so far from God and so close to the United States!" -- Porfirio Díaz
Excellent, always loved that quote from Díaz.

Turning an eye northward, Ann Coulter is quoted saying that

Canadians "better hope the United States doesn't roll over one night and crush them. They are lucky we allow them to exist on the same continent." On CNN's Wolf Blitzer Reports, Carlson stated: "Without the U.S., Canada is essentially Honduras, but colder and much less interesting"; he went on to say that instead of following politics, "the average Canadian is busy dogsledding." And on Crossfire, Carlson referred to the "limpid, flaccid nature of Canadian society."

"We can hardly join the Americans on our terms, and we never ought to join them on theirs" ~ Thomas D'Arcy McGee, 1862

The border between Canada and the United States has been described as a one-way mirror, with Canadian situated at the back of the mirror, well informed and unreflected, and Americans who happen to look northward seeing only reflections of themselves ~ John Helliwell, "Canada: Life Beyond the Looking Glass." Journal of Economic Perspectives, Volume 15, Number 1, Winter 2001.

Hello Dave Cohen,

Thxs for responding.  I am no economic expert by any means, but I will take a stab at SuperNafta and Peakoil.  Consider this speculation until maybe LouGrinzo or Sailorman can write their analyses.

First off, I believe the elite topdogs have known about Peakoil and our demographic trends for years, and their allowing millions of immigrants is merely a planned response to these trends.  Perhaps Foundation optimization since the '70s?

If one considers that Peakoil will force a huge labor shift to manual labor,  American demographics of too many aging Boomers spells disaster--they are just not capable of working in the blazing sun sledgehammering reinforced concrete and asphalt in a postPeak world as we shift to walkable cities and permaculture.  We need the untold millions of young Mexicans, combined with our own youngsters, for the coming redesign of our modes of living.

Dissolving the borders into a North American whole will also allow maximum 'seasonal migration' in mitigation of Olduvai Gorge Theory.  People will move according to temperature fluctuations, limited regional availability of electricity, planting and harvesting seasons, and adjust to global warming as best as they can.  I think it is not unforeseeable for up to 60% to 75% of the labor force to become mostly migratory nomads, living very simply as we struggle with detritus powerdown and biosolar powerup.

The Hirsch update and NASCO overlap is remarkable, as explained in my earlier posting.  The SuperNafta corridor, running through the continent's heartland, would tend to optimize our inevitably much smaller detritus infrastructure spiderweb.  This can be compared as the same phenomena of human hypothermia-- the extremities loose their bloodflow to keep the vital 'core' going as long as possible.

Mexico's longitudinal geography and placement astride the near equatorial tradewinds, combined with a spine of mountain ranges may be ideal for a huge network of windmills and solar generation equipment in a postPeak world.  This could help power an electrified north-south grid and north-south electrified railway network to ease the seasonal migratory flows to the SuperNafta corridor and other regions all the way up into Canada.  It can also be used for the speedy dispersal of manufactured necessities and critical food supplies.

Unified control of all three countries' fossil fuels under SuperNafta will facilitate the best methods and directions to leverage this entropic energy stream to achieve maximum efficiency in desired detritovore habitats, and to induce rapid change in those areas best deemed as biosolar.  In short, a distinct, designed MPP and Liebig's limits for each lifestyle mode.

As a fast-crash doomer-- this all seems impossible to accomplish, but who knows--maybe we will surprise ourselves?

Imagine most people carrying everything they own in their backpacks: clothing, IPOD, and a small hand-crank laptop.  The state provides everything else in exchange for your labor: food and water dispensed from mess-camps, free healthcare and clothing, free hotwater and bed in bunkhouses, and larger private rooms for a couple hours if you and another person want sex.  Your tribe, of roughly 200 people would basically migrate together, each with general knowledge and yet have sufficient specific skills to be a nearly self-sustaining tribal unit-- non-violently similar to a Special OPS platoon.

You could have tribal skills based on industrial need: agriculture platoons, RR track maintenance platoons, windmill repair platoons, bicycle and blacksmithing platoons, and so forth.  Compare this tribal effort with the present isolationism of suburbia.

Maybe it will work, maybe it won't--does someone have better ideas?

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


Will you pleeeeze take the time to define "Foundations" and all the other jargon you use such a OOP.  I am not going to spend money on Azimov's books, assuming that's where it comes from.

As far a super NAFTA et al; I think it's far more likely the US will experience a series of secessions resulting in a Balkanized, former USA, rather then roving tribes,


I can probably take 40 or so nomads on my small farm, but they're going to have to bring their own sleeping bags.
The relationship you describe is working just fine. It may change when the US needs to buy even more oil and gas with depreciating dollars. That's when the beaver attacks.
Molson "Attack Beaver" TV ad Quicktime  
Have any of you watched this???

I can not stop laughing  

Alberta, the 51st state. I have said it before and will say it again! You heard it from me first (I think).

I don't know, Rick.  I hear they've got killer raccoons practising on cats down Seattle way http://www.king5.com/animals/news/stories/NW_082106ANBraccoonsKC.219ca4d8.html

However, there still are a few muskets around from the last time we had to burn Washington to the ground back during the war of 1812.

It's a good thing I'm not in the Northwest. I have several cats and one of my dogs is a toy, so to me killer raccoons is an excuse for target practice.
they want to make sure the oil keeps flowing and to prepare for a tsunami of refugees if Mexico falls into revolution. They are doing the smart thing by preparing even though they could help even more if they let the public know there is a problem down there.
Hello TrueKaiser and JN2,

Thxs for responding.  Mexico has now reached a critical economic flowpoint--their economy is now powered by US remittances sent home, the amount is now greater than even Mexican oil exports:

For the first six months of 2006 remittances were Mexico's number one source of foreign exchange, over and above windfall oil profits and the automotive sector.  Actually this top position would have come much sooner if not for sky-high crude oil prices on international markets.

On July 31, the Bank of Mexico announced that remittances totaled US$11.425 billion for the first half of 2006, 23.1 percent more than during the same period last year.  Second quarter receipts were US$6.241 billion.  All of this puts Mexico on track for remittance transfers to families of US$24 billion in 2006 according to Banixo officials, calculations that do not include money carried back by workers and family members - so a conservative figure could put the total at maybe US$28 to US$29 billion.

I would like to read responses from the economic experts here on TOD in regards to this massive shift of funds flowing South-- does this mean that SuperNAFTA is a done deal?

As long as Mexican-Americans, both legal and illegal, find sufficient US employment to continue their remittances home-- does this mean that Cantarell's decline will have a greatly delayed effect upon the overall Mexican economy [assuming the US can still afford to import oil from elsewhere]?

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

Anyone catch this today?


A senior US military official said there is "clear evidence" that Iran is funding, training and arming Shiite extremists to destabilize Iraq.
"I think it is irrefutable that Iran is responsible for training, funding and equipping some of these Shia extremist groups, and also providing advanced IED technology," said Brigadier General Michael Barbero, using the acronym for "improvised explosive devices."

I'm from the show me state, so let's see it.

So if the chimperor and his minions attack Iran will the Iraqi Shiites just sit there and do nothing to the US forces?  Perhaps we are seeing the real reason for why there are only 130,000 US troops in Iraq.  Chimperor's strategic aims account for the possibility of a massive backlash against US forces in Iraq.  The real objective is to destroy viable middle eastern states that dare pursue and independent line and let them take decades to recover.
What do ya mean?  I completely trust my government's findings without question...  

They did have WMD's in Iraq too... thats what the government said...

Seriously though, it's funny that Iran basically told the 5+1 to go pound sand with respect to the nuclear issue and 1 day later, we have this "clear evidence" that I don't see.

 I think Iranian President Ahminajad (my apologies if I butchered the spelling) or the Iranian Ayattolah (ditto re. the apology)
said recently he has 130,000 American hostages in Iraq.
I came across an interesting piece in the UK Telegraph on the subject of the precarious nature of the US financial state.  It references the US going to China recently asking for money.  It references the great financial strain of the US empire and the Iraq war and the aggravating factor of the "rapid approach of peak oil."

From the article:

"Third, the US has even less leverage over China. Chinese imports from the US amount to only $4bn a year while Chinese exports to the US account for only 15pc of its total trading. American difficulties are now magnified by the rapid approach of peak oil, the expensive elongation of the Iraq conflict, and the unleashing of increasing opposition to the so-called War on Terror doctrine."

"The latter was never anything more than a cover for gaining US control over the lion's share of the world's oil supplies plus a justification for expanding the US military hegemony. However, the strategy depended on integrating Iraq as swing producer into a US-UK-Israeli oil cartel, together with the privatisation under Western influence of the former Soviet oil industry. If this had succeeded, wider gains might have included containment of Chinese expansion and significant limitation of Japanese room for manoeuvre."

Link to Telegraph article Dated August 18. I strongly suggest y'all read it!
GLT149, alwasy provide a link, when possible, please.

The writer, Michael Meacher, was the UK  Minister for Environment 1997-2003. He's not taking any prisoners. None.
A very good analysis from someone who's highly regarded in political circles. Well, at least until now.

... what prompted George Bush's recent Asian trip was no new political initiative but, crudely, a search for money. With US net foreign debt of over $4,000bn (£2,110bn) now approaching 40pc of GDP, and a current account deficit of more than 6pc, the US is reduced to seeking financial support from China, just as Britain was obliged to go cap in hand to the US after the Second World War.

The American response to its parlous financial state is eerily reminiscent of the strategy adopted by Britain when its empire faced a similar financial and security challenge a century ago. In the inter-war years Britain still maintained a global military stance dependent on Middle Eastern oil to fuel it but gradually undermined by a weakening home industrial base and rigid domestic wage structure.

The US exit from Iraq, which will be enforced under unfavourable conditions, will certainly not be the final day of reckoning. That will come when the US is compelled to make fundamental changes to its current financial-trade-political stance as being insupportable, as happened half a century earlier to Britain at Bretton Woods.
I wrote the following as a second draft of my response to the recent DoE report by Hirsch, Bezdek and Wendling written by my father's bedside.  Dumping quickly at a WiFi driveby >;-) Surgery went well and my father is at 95% percentile on his recovery.

This is (IMHO) more polemic and less persuasive.  Comments appreciated.

Several addendums will be attached; my "10% reduction plan", State by state analysis of old streetcar lines, "Ready-to-Go Urban Rail".

Do the TOD editors want to use this as the core to a response ?
The recent Peak Oil mitigation study, Economic Impacts of U.S. Liquid Fuel Mitigation Options prepared by Hirsch, Bezdek and Wendling overlooked the "best" solution.  This overlooked approach can have a quicker and larger impact than any one of the proposed mitigations; and quite possibly more than all production orientated approachs together.  In extremis, it is technically and socially possible (see historical precedents below) for this one solution plus declining US domestic production to provide all of our transportation needs without resorting to coal-to-liquids, oil shale or accelerated enhanced oil recovery.  And do so in an environmentally positive way without any significant environmental obstacles to slow implementation.

The first of the two linked, and overlooked, approaches is to electrify our inter-city freight railroads (with some enhancements) and promote inter-modal transfers with free market and other incentives (such as Interstate Highway tolls).  The other is to build Urban Rail on a scale comparable to (or more intensely than) the Interstate Highway system.

A conservative estimate, based on a major but not a crash effort, is that these two approaches can save 10% of US Oil use in ten to twelve years.  (See attached paper).  A crash effort could do more today than the "Peak Streetcar" building era from 1897 to 1916.  As a nation of less than 100 million people, a majority still rural, with a GNP (inflation adjusted) of just 3% of today and primitive technology, the United States built 500 streetcar systems.  Most towns of 25,000 or larger got electrified transportation.  Clearly the United States has the technology and resources to do much more today than a century ago.

In addition, electric trolley buses and enhanced transportation bicycling can provide vital links in a non-oil transportation system.  Electric assisted "tricycles" can service a broad spectrum of the population with a non-oil alternative for local travel, such as to the closest electric rail stop or neighborhood grocery.

The changes in the urban form brought about by an abundance of electrified Urban Rail and a paucity of liquid transportation fuels would be of the magnitude of the changes brought about by deliberate federal policy from 1950 to 1970; when almost all downtown shopping and business districts died, most established neighborhoods declined and suburbia and shopping malls boomed.

We did it once, we can do it again !

Oil, or "Liquid Transportation Fuels", are not required to support an advanced Western industrial society with a vibrant democracy and a decent quality of life.  A premier example is Switzerland of WW II.  Due to strategic decisions made in the 1920s, and subsequent investments, they were able to function with 1/400th of current US per capita oil use in 1945.  Three years later, they were still at 7% of current US oil use, a level that would allow the United States of today to join OPEC as the 3rd or 4th largest oil exporter.

In a more recent strategic decision, Swiss voters approved in 1998 a twenty year, 31 billion Swiss franc program to improve their already excellent electric rail system.  Adjusted for population and currency, this is equivalent to the United States voting $1 trillion !  The dominant goal, of several goals, is to move all heavy freight by rail and not truck.  Semi-high speed passenger service and quieter rail cars are other Swiss goals.

The Swiss are not alone in taking strongly pro-active actions to get off oil today.  The Thais have budgeted 550 billion baht (~US$14 billion) for mass transit, are building a 95% renewable electricity grid and developing small scale rural bio-gas.  All from a Third World economy of 60 million people !  And the French are in the midst of adding one tram line to every town of 150,000 and two tram lines to every city of 250,000 as well as finishing their renowned TGV system.   Sweden and Finland are setting goals and deadlines for an oil-less society.  Even Russia is rapidly electrifying their railroads.  All of the above are working towards solutions that significantly reduce Global Warming emissions.

Electric rail and associated changes in development have, unlike the production alternatives studied in the report, a negative feedback relationship with tight oil supplies and an ability to scale up very quickly.  The more expensive oil becomes, the more effective Urban Rail and electrified freight railroad will become; thereby dampening the social and economic impact of Peak Oil.  Of the approaches studied, this is true of only increased vehicle efficiency.   And in a sudden oil supply interruption, both Urban Rail and electrified freight can be scaled up by 50% to 100% in a week if prior preparations have been made.  This is not true of any alternative proposed.

Coal-to-Liquids and Canadian tar sands use similar, and scarce, speciality industrial products and scarce personnel.  Several key industrial products and personnel are bottlenecks today in the limited expansion of Canadian tar sands production.  These existing shortages, with associated cost over-runs and delays, call into question the extremely aggressive schedule in the DoE paper.  Enhanced Oil Recovery likewise competes with conventional oil and natural gas production for scarce resources.

By contrast, there is a large and robust international industrial base supporting the very large installed base of electrified rail.  This international support can easily supplement any domestic shortfalls and allow massive implementation.

Electric rail, Urban & Inter-city, vehicle efficiency, electric trolley buses and transportation bicycling are the best alternatives available and can, by themselves, potentially deal with the consequences of Peak Oil.  All of these approaches are better environmentally, economically, socially and for strategic security;  they can be scaled up faster and will not suffer as much from industrial and personnel shortages.  There is no technological risk with electrified rail, unlike the extreme risks associated with EOR and oil shale and substantial technological risks with large scale CTL.  By every reasonable metric, they are "better" than CTL and oil shale production.

The crisis of Peak Oil may require that all alternatives, the best and the sub-optimal, be aggressively pursued.  But the best alternatives should be pursued first, most aggressively and most completely.

Alan, kudos for the work, sounds good to me.

Questions/remarks of the top of my hat:

1/ Where will all the electric power come from? Local generation?
2/ Switzerland is not at all like the US, in geography, political system (cantons), size etc. I'm not sure they are the best possible example. They're essentially a bunch of valleys that were isolated from each other until recently
3/ You will have to, at some point, prepare a financial rundown for the costs of light rail construction in every US municipality
4/ The decisions will have to made by politicians, who see their future vanish as soon as they suggest anything like your plan.
Europeans are much more courageous in this, but that's just the way it is.

In the US, you are asking people to approve something that will force them to pay for something that they don't even want today, and don't believe they will need.

my theory is that what they did was only possible because they could buy extra electrical capacity from neighboring country's with all the gold the nazi's deposited into their country. really they were the only winners in that conflict, they got all the cash :)
the smaller size of the country and the smaller population only made this easier.
1) The Swiss from memory are 55% hydro, 45% nuke, no wind, no gas, no oil (except emergencies).  They are, overall self-sufficient by MWh in electricity BUT they buy cheap French nuke at night and sell hydro at peak; so a money value exporter of electricity.  They are adding pumped storage to help deal with German wind.

SBB, Swiss Rail has it's own hydro plants and operates on 16 2/3 Hz.  Minimal interchange with rest of grid (16 2/3 is 1/3 of EU 50 Hz, so some conversion is possible but with losses & expense.

2) The US Federal system is an almost exact copy of the Swiss federal system.  Madison looked to Switzerland !  Switzerland is a VERY conservative nation (real conservatives, not neo-cons or corporate whores) that is worried about conserving Switzerland.

Switzeroland is the best "good example" that looks like the US.  Thailand is another "good example" but they look even less like us.  The other "good example" is the US in 1915.

3,4) Things change.  Quite simply, the pro-active choices are (IMHO) boil the planet a la Hirsch or electrify transportation.  Which political choice will the US make ?

I can make an argument for my path; Hirsch cna ignore GW and other environmental effects.

1) for US.  Gross estimate for a 5 million b/day oil transportation US (vs. 14 million b/day today) is 7% to 10% of current US electricity (very quick back of envelope).

Conservation alone could save that much (solar water heating replacing electric & NG for 1/2 of US, CFL bulbs, higher efficiency a/c).  Shortfall from conservation could be wind (and extra hydro, geothermal).

In twenty years, a soluable problem.


I don't see in your plans any measure of the energy inputs to put all the new infrastructue into place.  Have I missed something?

Only by hand waving inference.  Early 1900 America could build 500 streetcar systems (548 operating in 1930 per Leroy Demery) with MUCH less energy use than today.

One of my key goals (outside TOD) is to reduce the inputs ($ rather than BTUs, but there is a link) to build new rail.

Portland can build in-street streetcar track at $300/foot in 3 weeks (2003 #s).  Light Rail has a higher/more expensive standard and Rapid Rail (subway) higher still.

If we stop building highways, it will be a wash or net reduction in BTUs EXCEPT for steel, IMHO.

Redirected auto/SUV production to streetcars, LRVs, subway & freight cars will certainly be a net energy gain.

Hard #s ?  Give me a dozen research assistants !

I am working with resources available and reasoning by analogy against DoE funded researchers.

Backlog of listed projects was about $120 billion in current $.  I have started a worksheet where I add data as I find it.

It's interesting to note that in Namibia, bus, taxi, and truck operators are all raising their prices because of fuel prices, but the train company isn't doing it. Could this be because of the inherent fuel efficiency of rail systems?
I apologize for redundancy because I have seen this question alluded to in some posts in the past, but I am still unclear about the reality and size of the effect. Is the EIA (or IEA) including production that entails consumption of substantial energy, like the tar sands or coal to liquids? If they do, doesn't that substantially overstate net production? If we use a barrel of light sweet crude to produce 0.8 barrels of heavy sour something from tar sands, that should be counted as a negative 0.2 barrels, but I suspect it's counted as 1.8 barrels. And if they are counting it, what's the likely scale of the current over-count? If that's true, we could go well past peak and still see numbers saying oil production is increasing. Life is getting worse; prices are rising; oil is in increasingly short supply, but it looks as if production is rising.
While putting together a database, I ran across a piece of data that blew me away. The UK has increased its oil consumption by exactly 0% over the last decade? Is this correct? Can somebody comment. What is its accompanying GDP?

Now, this also. Of the top 30 exporters in the world. The UK ranks 25th. However, within this same list of 30 exporters, they rank 5th in consumption behind Russia, Canada, Mexico, and Saudi Arabia - in that order.

If this is true:
Reasons 1. Relatively high gas prices due to taxation.
2. Industry moving to the far east reducing domestic use.

The GDP has risen mainly due to debt and house price rises. I don't think this is sustainable.

Definitely, points well taken. I notice you are new here. Please keep posting. If these are your feelings, I urge you to expand on them.

Correct me if I am wrong. You are suggesting that consumption is dropping to 3rd world levels because the economy is dropping to 3rd world levels. Even as GDP rises. This is a tough nut to square for me, but I can do it, it is possible. I wanna see your calculations, first.

This from the ft - you need to subscribe - but it backs up what I say:

Landlords are biggest driver of growth
By Robin Harding

Landlords buying rental property were the biggest contributors to economic growth over the past 15 years, according to official figures that confirm Britain's transformation from a nation of manufacturers to one of property owners.

Income from letting private homes rose by £45bn between 1992 and 2004 - more than doubling - while the traditional industries of coal mining and clothing fell by 85 per cent and 47 per cent respectively.

We have also had a fair amount of immigration - about 1% population growth in the last year mainly due to Polish immigrants.

I lurk rather than post mainly as I am not a geologist.

Then keep posting. I expect geologists are less than 10% of the crowd here.
I was a little surprised by this too, but at least one website I found agrees with you. A wolf in sheeps clothing Click on graph C7 to see how UK consumption has barely moved since the late 80s.

I would suggest this is because

  1. Petrol (gasoline) taxes have increased significantly
  2. Cars have become more fuel efficient
  3. Oil for heating has become rare as people switched to natural gas

GDP has increased significantly. Nominal GDP 1986-2004 is up 205%. Real GDP has increased 59% over the same period. Economic history services
Thank you for this reference. I haven't had a chance to look at the website in detail. I just gave it a glance now, but will be going back shortly. I can tell you this. It looks great. Who is Paul Thompson?
As Prager says, the UK oil consumption has barely increased since the 80's (1980 was start of massive 5 year or so recession so a high point in fuel consumption). I checked with the EIA oil consumption database last year and was surprised to see that there had been no real change since 1980. Yes, it has gone up and down a bit, but over 25 years, the change is less than 5%. I think it is only recently that  oil consumption has increased above the 1980 level. However, NG consumption has increased dramatically from the 70's as North Sea NG production increased (we use as much NG as oil in comparative terms). Also the severe economic recession and destruction of the manufacturing industry in the 80's removed a lot of oil demand, as did the removal of oil powered stations and swapping/increased use of NG powered stations instead. The manufacturing base has never recovered from Thatcher's economic miracle and gets progressively worse each decade. That removed a lot of energy demand from a nation. Cars are getting more fuel efficient all the time, more fuel efficient diesel engines as a percentage of road users (40%?), again reducing oil consumption, although there are a lot more cars on the road now.

Higher energy taxes have made their mark, along with economic destruction of manufacturers, especially high energy users. I think it fair to say that the UK has virtually no spare fat to trim when cuts in oil consumption will be required starting the next decade. Another grateful benefit from the Thatcher years.

The manufacturing base has never recovered from Thatcher's economic miracle and gets progressively worse each decade. That removed a lot of energy demand from a nation.

I think many who point to lower oil use with continued economic growth miss this point.  At least in the U.S., energy consumed overseas doesn't count.  So if you mine copper or manufacture steel rebar or plastic gewgaws in the U.S., it consumes energy.  If you mine or manufacture them overseas and ship them here, it takes no energy at all.  

So we can grow the economy and increase our standard of living...all without consuming more energy.  At least on paper.  

You appropriately bring this point up on occasion. I think about it a lot. I believe it deserves more attention. It may be completely wrong. I don't know. A complex issue it is. You might want to turn it into a "theory" and give it a name. Maybe not :) The GDP-oil correlation is a favorite for those who look at oil. Especially for chart nutcakes like myself. Anything that makes that relationship more complicated or "messy" is probably a good thing.
We do it with paper.
"Another grateful benefit from the Thatcher years."

From Thatcherism to Blatcherism with no Major interruptions.

Thats great. I wish I was a clever enough wordsmith to think of something like that.
Didn't the English kill two light rail projects just before construction was to start ?  Leeds & Liverpool from VAGUE memory.

Meanwhile, the wise Scots, having thrown off the yoke of English rule, are going forward with a light rail and commuter  rail proposal.

I thought the UK had become an oil importer.
That's what I thought, too. And you may be right as far as August 2006 goes. The problem is we have to wait for the numbers. Here's 2002-2004:


I am currently working on an up-to-date version of this table. My aim being to either debunk Westexas' Export Theory or give him ammunition. I dunno how it is going to turn out.

And, yes, believe it or not, Samsara, I am keeping you mind. It's just that the work involved in producing a single graph is huge. I spend a good amount of time arranging databases and simply looking at the numbers to figure out a way it might work in graph/chart form. As of late, I can't figure it out, so I settle for posting tables.

I'm not going to do it for every country. But I'll do one. Take your pick. We can go from there.

The post I linked above never got any comments. I rely on feedback as I think we all do. The silence didn't help. Even if you have to knock my clock. Anyway...

I did look at this spreadsheet.  Rather than debunking the export model, it questions that 8/10 exporters are in decline. Certainly they were not in 2004... so most at tod, waiting expectently for peak to come into clear view, would have little to say.

I agree with westexas export model - it has to be true that greater wealth will encourage consumption, especially when prices are held artifically low. The question is, is this a first order or second order effect?  If the world has 6.6 billion people, 5 billion of shich are the real consumers, and 5% of the latter (250mm) are getting richer and increase consumption 5% annually, then overall consumption would go up .25%, which is barely visible.  The Chinese dash to gas is a larger factor in increasing world demand, and India's may be, either now or soon.

I see the asian boom continuing for some time, and pushing prices higher as their nouveau riche successfully bid against our nouveau pauvre during a period of flat output.

As an aside, I see no reduction in traffic.  Prices remain far too low to have much affect on driving behavior, regardless of whether starbucks is having problems.

I'm working on a much more detailed version that will also include populations and GDP type-stuff for at least top 30 producers. I'm also trying to at least extrapolate current monthly exports. This is time-consuming since I'm using all liquids and current production is only available in lease+condensate for a rather limited amount of exporters. I agree. There are many factors which we have to be sure to look at.

The decline, as you well know, is only recent and it is far fom clear whether this is the peak or a false-start. Or whether it has anything to do with geology and is mainly the result of choices and geo-political stuff.

Its possible to roughly allocate the different effects. For example, politics/wars affects iran and nigeria, summing to maybe 2mmb/d at this point.  And, kazahkstan and the other stans would have been produced earlier if the former soviet union had allowed it. It would be unreasonable to include some regions where production could be higher, eg venezuela, held back by incompetence, because the world has always been filled with incompetence.  So, overall politics affects at most 5% of world production, the other 95% must be geology.

We certainly don't know if we are at peak.  Although ethanol is mostly a conversion of ng to liquid fuels, there will be more conversions from low value hydrocarbons to higher value versions - the hidden hand never sleeps. But, as far as old fashioned production goes, it seems telling that producers can't (yet) produce much more even though prices are up 3x over the opec (SA) target of 25/b. It seems clear nearly everybody is trying their best at the moment even if some, like Kuwait, are fretting that this might not be in their own best interest.

THe following is an excerpt from an energy investment letter I send to a few friends. I did post it earlier at tod, at the end of a thread:

A Sad Little Tale
The following is a brief story I wrote regarding imaginary events in Saudi Arabia, and is based on the chart linked below.  Stuart's Saudi (SA) oil production vs. rig count chart has more than one possible explanation. However, the facts are not in dispute - the number of rigs drilling for oil in SA is up 144% since November, 2004, while output is down 6% over the past six months.  Here is the tale I would tell...


Not so long ago, in a land far away...

In April, 2004, and following a ragged decline in the Kingdom's output that began from a peak the year before, the young hands (TYH) realized that overall field declines could not be compensated by the number of rigs working in the Kingdom.  So, with some temerity, they requested a meeting with His Almost Excellency (HAE), ARAMCO's No. 2.  In due course the meeting was held in HAE's chilly but cavernous office overlooking hot Riyadh.
    After the usual lengthy salutations, TYH produced their charts and data.  HAE's jeweled hand carelessly waived them all away, with the following instructions: "First, we must maintain the Kingdom's credibility, and there have been some questions.  We must increase output to support His Excellency's and my trip to Geneva next month, where we will reassure the markets.  However, I recognize you do have some technical difficulties; you may seek advice from The Wise Old Hand" (TWOH.)  
A quiet murmur spread among TYH - TWOH was legendary; it was said he made all important decisions regarding the Kingdom's oil development, from the time the infidels were kicked out a generation earlier up to his retirement in 2000. None of them had ever even seen him - he had been a hermit even before he retired.  Meeting with TWOH would be something they could tell their grandchildren about.

In remarkably short order TYH met with TWOH, crowding into his modest dining room at his Spartan residence in a quiet, middle-class neighborhood in Jeddah, near the Red Sea.  This time, salutations were brief and their charts were carefully examined.  After a little thought, TWOH began, "the solution is simple; add a stream from the tank farms", when he was interrupted by one of TYH.  "We must save this reserve for dire emergency, such as when Saddam invaded Kuwait!", at which TWOH thundered, "Silence!"

Beginning again, and this time without interruption, TWOH described his plan:  "We are now facing a 10% overall annual field decline, and our 18 drilling rigs can only compensate for a decline of 6%.  So, we need 36 rigs to allow a 2% annual increase, or 54 for an 8% annual increase.  I propose we triple the number of rigs but meanwhile we tap the tank farms to allow us to meet the Kingdom's commitments.  We will be able to stop draining the farms before we get to 36 rigs, and will be able to rapidly refill the farms when we get to 54.  Do the math - all we need are a few more rigs."

And so it was done. Of course, tapping the farms was almost instantaneous, so by June, 2004 `production' was pushed to 9.5mmb/d, where it stayed.  New rigs took longer; first, the vaunted SA bureaucracy, including not just His Excellency but most of the other ministries as well as the Crown Prince and his advisors, had to approve a) the request and b) the funding, get bids, have the rigs transported to the Kingdom, etc, but by December, 2005 the first arrived.  Indeed, by March, 2006, the number had steadily climbed to 42.  However, at this point the farms had drained and were no longer able to add to exports, and meanwhile the overall decline was now above 10%/year in spite of the new rigs.  TYH again requested a meeting with (the new) HAE.

Salutations were briefer, less complimentary, and the office seemed even colder than before.  TYH' spokesman said, "as you know, we now have 42 rigs operating in the kingdom, but output is once again declining at 10%/year and the farms are fully drained.  We need to consult with TWOH again."  HAE replied, "sadly for us all, TWOH is in paradise.  I will advise His Excellency to issue a statement explaining that we have no buyers for some of our heavy oil.  Meanwhile, we must continue TWOH's plan.  We will authorize more rigs until production stabilizes and we can refill the farms.  All we need are a few more rigs."  Quietly, in a nervous refrain, TYH echoed, "all we need are a few more rigs."

Note - for this tale to completely explain the chart, SA would need tank farms of around 400mmb, or 45 days of their production, and the number I heard from somewhere is only 100mmb (but, all Saudi oil field/production details are state secrets).  Perhaps in addition to land based storage tanks they also have some idle supertankers.  By comparison, the US SPR contains 700mmb in salt caverns.

Late-breaking news:

This weekend I happened to speak to a petroleum geologist, probably around 60 year old, who worked for aramco from 1972 to 1977.  He had never heard of Hubbert and knows nothing about po.  Many think conspiracies, and the obviousness of po, explains things like too few refineries being built today.  THere are far simpler and more likely explanations, eg roi and focusing today on what we focused on a generation ago.  PO will come as a shock to many in the industry and in the exporting countries, as well as the importing ones.  

SOme do know, not least those deciding to spend $100k/b/d of production in canadian tar sands. Rather obviously, our administration has been clued in for some time - they're not as dumb as they look.

The world doesn't give a damn about po, or where the oil they pump in their cars comes from, but they care a great deal about price.  (Price is where CERA has been off, odd that they have any credibility left at all - they must be saying what people want to hear.) In the seventies a 9x (nominal) price increase was enough to persuade many to change their habits (and dropped ford stock to $1.) There is no sign of this here yet, traffic is worse than ever. BUt, price has been rising very steadily since around oct, 2003, at $1.40/b/month, maybe reflecting the relative plateau and asia's growth.  At this rate we will get to $100 early 2008, and $200 early 2015.  Will the frog notice?

Ahhh. Very Good. I lived in Saudi Arabia as you know during the interval you mention. We may have to post this tale again. I like it. I only think TWOH should have his residence in Dhahran. A little bit closer to Ras Tanura. Speaking of which. I don't know if you remember the Google Earth link I posted to the satellite pics. I've been told the the reason you can see shadows on the inside of those tanks is because they have floating tops. Of course not only would the NRO be able to document changes to make a count of barrels, but anyone else with decent satellite coverage. bjj did the math on the Chinese tanks about a month ago.

Someone said $1.20 a month about a month ago. I ran my own numbers and got $1.60. I'll buy a $1.40, no problem. But this is a long-term price. Using trailing moving averages - at least that's the method I use to mark trends. It could hit $100 in 2007, or earlier with a crisis, which a lot of people count on any second.

$200 by 2015? I'm glad you brought this up. Greyzone addresses(prices)this a bit forward. I've been thinking about this. It's a tough question. SAT thinks $57 in 10 weeks. He's going to have a countdown named after him. I wonder if he will give guidance for 2015.

So who knows? Certainly not the frog.

I grew up in the middle east, 1953-63, but never got to saudi.

I used the following graph to compute avg $/m increase. It seems the ramp begins around sep/oct 03, and the chart goes thru june 06, with an overall gain of about 45. Slope is unusually straight, so percentage is declining.  Frog should be fairly relaxed in the jacuzzi.

Extrapolation is both instinctive and easy but often wrong. Who knows what comes next...


Yeah, alright. This is the stuff I like to talk about. My crystal ball has been working well lately. Will need maybe two more days to verify on Ernesto, but so far, so good. And as I like to say, - so what? But it looks like I pretty much nailed it.

I use extrapolation because it is the only tool available - unless you are counting Super-SWAG. And I believe what Halfin says. I always have. I'm pretty sure the  "Hal" RR referred to recently was the same Hal. He's like the 007 of the oil world. Though I've been wrong before.

Who knows what comes next...
Not me.


This report takes you up to 2001.  You can see that UK primary and final energy consumption increased steadily from about the mid-eighties, regaining an earlier trend after a major recession.  Natural gas use climbed rapidly.

Tough times ahead for the Brits, given declining North Sea production.  But then they can always count on LNG, assuming of course that they can outbid the US, Canada, Japan, China....  

I think the Norwegians and Dutch are going to slide a pipeline or two our way for the winter, especially if the Froggies and Jerries don't sell us any NG like they didn't last year. I think the French were helping le Rostbeefs get into the conservation phase, especially when we have such brilliant planners as Energy Minister Malcolm "we have enough gas" Wicks.