DrumBeat: August 4, 2006

And we were worried: Mexico sees no dent to oil output from Cantarell

A dip in output this year at Mexico's aging Cantarell oil field will be offset by rises elsewhere and will not alter oil monopoly Pemex's goal of steady overall output for the years ahead, a senior executive said on Thursday.
They blame the drop in production on well closures:
Morales said the drop occurred because 40 wells at Cantarell were shut as underground natural gas or water cut off oil. Some will reopen and others will be replaced by new horizontal wells that can reach into narrow oil seams.

"It is a temporary impact. We have not modified our forecasts," Morales told Reuters, a day after state-owned Pemex conceded Cantarell's 2006 output would fall 8 percent from 2005, rather than the 6 percent previously forecast.

Iran warns oil could reach $200 on sanctions

Global oil prices could hit $200 per barrel if the United States pursues international sanctions against Iran, an Iranian official said on Thursday, although analysts passed the comment off as saber rattling.

Near-meltdown incident at Swedish nuclear reactor

Sweden's nuclear regulator SKI will meet in emergency session tomorrow (3 August) to decide on a possible immediate shut-down of all but one of the country's nuclear power stations supplying up to 50% of Sweden's electricity. Greenpeace has called for the reactors to be shut down following a serious incident last week at Sweden's Forsmark nuclear power station, in which "it was pure luck there wasn't a meltdown" according to a former director of the plant.

Australia: States go cool on carbon trading

The states have downgraded plans for a multi-billion-dollar nationwide carbon trading system as they concede it threatens to increase electricity prices for families already hit by petrol and interest rate hikes.

The concerns have forced the states' emissions trading taskforce to propose subsidies for poor families facing higher power bills, while also looking at complicated exemptions for greenhouse gas emitters such as aluminium producers and petroleum refiners.

U.K.: World must race to develop green energy While some scientists want an Apollo-type program, at least one thinks industry should carry the load:

David Baker, a British scientist who joined Nasa's Apollo programme in the 1960s, said rather than copying the Apollo programme, oil and other energy companies should be forced to participate.

"We know what is happening to the climate and we need a concerted sharing of the problem throughout the whole of industry. Why should it be borne wholly by government when there are these companies making huge profits out of all of us?" he said.

3 Filipino workers kidnapped in Nigeria

Nigeria: Two Killed, Policeman Injured As Youths Protest Power Outage in Oturkpo

At least two persons were killed and one police officer injured Tuesday in Otukpo, Benue State during a violent protest by youths of the town against one week of power outage occasioned by a technical fault at the zonal office of the Power Holding Company of Nigeria, PHCN in the town.

New oil takes time

Everyone talks about the need to boost North Slope oil production. Actually, Alaska would be happy with just a slower decline. Production could fall below 800,000 barrels a day in the next year. That's a drop of almost 60 percent from the 1988 peak. Forget the dreams of getting back to 1 million barrels a day as too many candidates have promised eager voters in past years. That's swimming upstream, and the best Alaska can hope for these days is to tread water.

From Tom Whipple: Portland Takes the Lead

Heat converts Bush ally Robertson on global warming

Conservative Christian broadcaster Pat Robertson said on Thursday the wave of scorching temperatures across the United States had converted him into a believer in global warming.

..."We really need to address the burning of fossil fuels," Robertson said on his "700 Club" broadcast. "It is getting hotter, and the icecaps are melting and there is a buildup of carbon dioxide in the air."

The Wall St. Journal says Grid Operators Are Scraping the Bottom of the Barrel.

A shift in forces pushing oil prices higher

According to economist Rakesh Shankar at Moody's Economy.com in West Chester, 2006 has seen a shift in the forces pushing oil prices higher.

"The oil crunch has entered a new phase," Shankar writes. "While higher oil prices in 2004 and 2005 were due primarily to strong demand growth, supply-led constrictions have been the major driver this year.

"The symptoms may appear the same, but the underlying malady and the pain inflicted on the economy are different."

I am going to make an unqualified statement which many people will take issues with: World Crude Oil Production Has Peaked!

I track all nations very closely. I track crude oil. I do not track ethanol, biodiesel, propane or butane. Therefore I use the EIA's figures for Crude + Condensate for all my data. True, this data is not completely accurate but in my opinion it is the most accurate of any published data on the net. And it is the only data on the net that gives a country by country breakdown of all oil producing nations. And they make every effort to correct previously data that was wrong. And contrary to what some folks think, this category does include all crude. It includes deep-water crude, crude produced from the Canadian oil sands and if Venezuela ever starts to crack crude from the Orinoco Bitumen it will include that also.

The EIA breaks the oil production data down into 31 nations. Actually it is 30 nations then they lump all the smaller nations into one category, which they call "Other". Lately "Other" production has been increasing considerably because it includes the FSU states in the Caspian area. No doubt however many of the tiny producing states included in Other, like Denmark, Germany and others, are in decline.

I have noticed that in the past when a nation drops in production for political reasons, whether those political reasons are deliberate for pricing reasons, or because of war or strike, or because of economic collapse as was the case of the Former Soviet Union, they will recover when those political reasons pass. But when a nation is producing flat out and still goes into decline, then it is extremely unlikely that the nation will ever begin an upward trend again.

Currently most nations have either peaked or plateaued. Two nations, Nigeria and Iraq, are suffering from political disruptions in oil production. These political problems run much deeper than most people realize and it will likely be years, if ever, before they return to anything like their former highs in oil production. Also there are a few other nations like Canada, that have plateaued but may increase oil production a bit in the future. But only five nations, including "Other" as one nation, are still increasing production to any considerable amount. "Other" is the world's third largest producer after Russia and Saudi Arabia.

So for my analysis I have grouped all nations into two groups, those five nations that are still on the increase and those that are not. Those five nations are Angola, Brazil, China, Russia and Other. There are twenty-six nations in the latter group including all of OPEC. I shall call them "The Big Five" and "All Others." The Big Five produce approximately 30% of the world's crude oil and All Others produce the other 70%.

All Others (the 26 nations) peaked in April 2005 at 52,700,000 barrels per day of crude + condensate. After Katrina and Rita All Others dropped to 50,952,000 bp/d but recovered in December to 52,006,000 bp/d due to the US's recovery in the GOM. Then by May of this year the combined output of All Others had dropped to 50,761,000 bp/d, a point even lower than the post Katrinsa/Rita low. That is a drop of almost two million barrels per day or a drop of 3.68% in just thirteen months.

So unless the world' crude oil was to peak in April of 2005, it was up to the Big Five to save the day. They tried valiantly and did succeed in holding off the peak until December of 05. The Big Five produced 21,082,000 bp/d in April of 05. That had increased to 22,369,000 bp/d by December due to a burst in production from Angola, Russia and Other. This offset by 593,000 bp/d the decrease in All Others. But this was a burst in production that could not hold. Russia and Angola have lost production since December but gains from Brazil, China and Other have combined to bring the increase, since December, of the Big Five of 256,000 barrels per day. But the decline from All Others have far more than offset that gain. All others have lost production of 1,246,000 bp/d since December.  Combining the two we are left with a drop in total crude production, since December of 981,000 bp/d or a drop of 1.32%.

Looking at the near future: OPEC production will show an increase of about 200,000 bpd in June but drop by a like amount or greater in July. In the long run OPEC is expected to continue its decline as Saudi Arabia, Kuwait, Iran, Indonesia and Venezuela have clearly peaked. Others like Libya are working on a secondary but much lower peak than their previous peak. Of all OPEC nations only Algeria, Qatar and The Emirates have not yet peaked.

Of the Big Five Russia and Other are expected to continue to increase but at a far smaller rate than in the past. Many oil geologists are predicting Russia to peak within the next few years. Angola still may have a bit to grow yet. China is looking at a peak within just a few years. Only Brazil is a question mark. But Brazil is such a small producer that any increase in production will be small potatoes. Otherwise All Others are expected to continue their current trend.....downward.

Looking at the overall trend, Deffeyes hit the nail on the head. We peaked in December of 2005.

Ron Patterson

I tend to agree with you.  I believe that you offered your spreadsheet to somebody yesterday...but I might be mistaken and am just confused.

If you are willing, I would love a copy.  I had planned on setting one up tomorrow using the data that you recommend.

rdezeeuw at gmail.com

Rick D.

FYI--I posted a message for Freddy on the EIA thread:


This was in response to the following post by Freddy:

[new] Freddy Hutter on Monday July 31, 2006 at 1:50 AM EST
Apparently u and greyzone know about as much about the pope's pre-omipotent days as y'all do about deffeyes seven predictions and all his backpeddalling.  They guy is on the book ciruit and looks only for notoriety. Simmons $200 public bet for $5k is of the same ilk.  Sleazebags both.  And we see the have any easy time attracting koolaid drinkers here at TOD.

I think the quality of the post quoted speaks for itself...
I do not know Mr. Deffeyes, but anyone who believes that Matt Simmons wrote "Twilight" and continues to raise concerns about the future of Mideast oil production knows absolutely nothing about him. I believe his primary purpose is to raise awareness of what he believes to be a coming global energy crisis in hopes that through full disclosure and transparency of oil production data and thoughful planning and action, the effects of the crisis can be minimized.
Freddy should look at the HL plot for Yibal, as posted by DuncanK. (I'm not sure if he did it or if he was just referencing someone else.) The fascinating feature there is that EOR methods badly distorted the HL plot and the higher plot crashed. Further, there is an earlier trendline, just before the EOR trendline that crashed that pretty well matches where the latest trendline for Yibal is going. Interesting, eh? Yet despite clear evidence that EOR does not significantly increase URR but only extracts existing URR faster (Yibal proves this in spades), Freddy wants to take the maximum optimistic view. And worse, his view is derived from a couple years of data and ignores the trendline of the prior couple decades.

I look at John Laherrere's plot as posted by Freddy in that thread and I'm going to say that the center trendline looks more reliable to me since EOR was not in play nearly as much during that period. And the increase in URR that the new temporary trendline indicates really says to me that we are overproducing existing fields (just like Yibal), which means that the decline has to be hugely catastrophic when it comes. This is where I start to disagree with Stuart. Yes, if historical extraction methods had continued to be used then we might have gotten the predicted long plateau. Instead, I think the entire world is doing a Yibal, and forcing out the existing URR faster giving the false appearance of a higher URR.

I expect a catastrophic crash in production, with perhaps even double digit decline rates globally when it comes, precisely because we will desperately apply more and more EOR techniques in order to maintain existing levels of production. I do agree with your assessment of Khebab's HL plot - the world is right near 50% QT so if production stays high or even grows slightly then the crash, when it comes has to be worse. In typical fashion just as we monkeys have always done, we're robbing our children for our own comfort today.

Hi Darwinian.

I do think that Deffeyes got it right, but only on pointing the epoch of the mathematical peak.

You seem to have a good insight of what's going on country-by-country. If you include the expected rises in production from deepwater in the Southern Atlantic you'll probably get a peak in the 2010 - 2013 interval.

See the article of Dr. Campbell article published recently by the Peak Oil Review.

Lads, thanks for the tip. Any idea which issue that article is located in?

At any rate I think Campbell is beind overly cautious. He does not want to prematurly pick a peak again. Also There is no way deepwater Southern Atlantic can overcome the decline in the rest of the world.

Any idea how long before this reservoir comes on line? Who does it belong to?

Ron Patterson

Hi again Ron,

Vol.1, No.27 July 10.

The 3 biggest deepwater producers and peak data:

Brasil - 2011 - 1.7 Gb/a
Angola - 2011 - 1.0 Gb/a
GOM - 2014 - 1.0 Gb/a

Basically the tandem peak in Angola and Brasil will probably mark the peak for World Crude Oil.

Laherrère gets about the same result using logistic modeling.


Lads, thanks for the tip. I gotta run now but I will check it out and post later today on TOD.

Basically the tandem peak in Angola and Brasil will probably mark the peak for World Crude Oil.

No, I cannot agree with this at all. Angola and Brazil will probably be the last two nations on earth to peak. As you notice they are both part of my "Big Five" referred to in my above post. There is absolutely no way that these two nations can hold back the declining tide from the rest of the world. Peak oil will happen, or did happen, when the declines from the vast majority of the world cannot be replaced by new production from the very few nations that have not yet peaked. That point was either in December of 2005 or within the next couple of years. I believe it was the former, December of 2005. But I may be wrong, but if I am, I am not off by very much. There is no way that the peak can be delayed until 2013, or will be held off until the very last two nations on earth peaks.

By the way, I think Campbell is just being overly conservative. He may be a bit gun-shy. He has been wrong before and doesn't want to get caught again.

I think you're misinterpreting what I reported; those are deepwater peaks, not overall peaks. Both countries will experience total crude peaks after 2011.

After Peak Oil there will obviously be regional peaks - nations might not be that important.

I guess the peak you are looking at is the Conventional Regular one. Even Freddy Hutter will agree that we already passed it. This might be the most important point because Conventional Regular is the liquid fuel with highest EROEI that we have right now.

2005, 2010, 2012 is it that important?

auote: 2005, 2010, 2012 is it that important?

It matters because the later dates give more people more time to prepare. The more people that wake up before it happens and take notice, the better off they will be when it does happen.

I'm an optimist at heart (hence my chosen screen name) and try to cling to hope that people will make it through.

I also won't finish grad school until 2013, so for me personally, I really hope it can be postponed another few years.

I used to take overloads both before and during grad school and also both summer sessions to graduate and get advanced degrees faster. This paid off for me, Big time. (And yes, I did a bit of work on the side, while I was in school, fun stuff such as editing and cooking.)

When will TSHTF? Who knows. But 2012 is as good a bet as any.

Why not just go with December 21, 2012.
It has such a nice apocalyptic dimension to it.

Makes for a nice juxtaposition between our civilizations collapse an one from antiquity.

I understood that, after a few very expensive dry holes in the South Atlantic, they stopped looking.

With the high price of rigs, these days, I would suspect that all the deep-water rigs, which were in the South Atlantic, have moved to places that they know for certain that there is oil!

Campbell may be relying of the new fields that we know are going to start producing in the next four years to more than make up for the decline in existing fields.

World Crude Oil Production Has Peaked!

If true, this is where things really start to get interesting.  We get to see, among other things, if society responds in the ways our respective guts tell us it will.

Yours, with cautious pessimism,


I've been reading those things, when I can stand them.

There are big problems here.  I've been looking for signs of a pendulum swing back in the other direction since the invasion.  I think I'm seeing it, a little bit.  At least things are not as bad as (in my opinion) they might have been.  As I've said before, God help us if Iraq had been a cakewalk.  The slippery slideo to a militaristic state would have been that much easier.

But keep up the good work.  Thowing links like that is part of the process.

Bush's push to put security above liberty always reminds me of the conflict between democracy, fascism and communism prior to WWII.  Hard times always seem to bring out the worst in people, as they clamor for a solution to their plight.  People are going to want an "easy" solution WTSHTF, even if it ultimately become a disastrous solution.
I am puzzled.  If you are looking at 30+1 producing countries month by month, then you should see many countries production decline and increase month by month.  Are you not seeing that?

I am not sure which data you are using, but unless you are comparing year over year, it makes no sense that once the numbers go down, they never go back up.

I am puzzled. If you are looking at 30+1 producing countries month by month, then you should see many countries production decline and increase month by month. Are you not seeing that?

Nth, just check the data for yourself:
Click on 1.1a for OPEC, 1.1b and 1.1c for the rest of the world. Yes, every month some countries increase and some countries decrease, but more countries are decreasing than increasing. And most, except the Big Five I quoted, are decreasing. True there is a lot of noise, but it is the trend we are looking at. And that trend for 26 nations is down, down by almost 2 mb/d over the last 13 months.  

I am not sure which data you are using, but unless you are comparing year over year, it makes no sense that once the numbers go down, they never go back up.

No, I never said that the numbers never go up. The point is once a trend has started down, even thought the country is producing flat out, then that trend never reverses. The monthly data however will bounce around. A perfect example is Texas. Just check out their data in the last six plus years. In January 2000 they produced 34,757,611 barrels. They have never since produced more. Sure, some months have been higher than previous months. But the trend is down and will never be reversed. In April of 2006 they produced 27,998,535 barrels. And the annual totals show that every year, the production level was less than the previous year. The trend downward actually began way befoe 2000 but I don't have that data.

A country can deliberately choke off production to raise world prices, and then reverse that trend. OPEC has done so before. But now we are talking about a trend due to depletion. A depletion trend never reverses. An example of that is the US production trend since 1970. The URL is the first one listed above, click on 4.1c. Prudhoe Bay caused a slight hump in the downward trend, starting in the late 70's and lasting until it headed down again in 1986. Every year after that there was a decline every year. But even with the giant field Prudhoe Bay coming on line, US production never again approached its peak of 1970.

Your original post, you were ringing the alarm bells.  

If countries don't have new oil projects coming online, they will trend downwards.  If countries have several large projects coming online, they will trend upwards.  The new oil projects coming online from now to 2010 are pretty well known.  They are limited to a few countries, so anti-PO advocates are betting these few countries can pick up the slack.

It is my bad.  I thought you were seeing downtrends on countries that are not supposed to go down.


Why would we take issue with it?  There is absolutely no way on Earth to either prove or disprove what you say.  It's the same as a "how many angels on the head of a pin" discussion.

Remember that in the early 1980's, we peaked worldwide on production for a HALF DECADE before returning to the old output level.  So, If I am going to take issue, I will get back to you on that in about 2012.

Roger Conner  known to you as ThatsItImout

Roger, I was referring to those who have recently expressed some irritation at us "very near-peakers". They feel far more comfortable with those who are predicting a peak sometime between 2010 and 2015. Those who predict a peak between 2010 and 2015 are called "near-peakers" by the media. They don't even have a category for those predicting the peak before then.

So I am a "very" near-peaker and saying so just pisses a lot of other peak oil folks off. Those who wish to be overly cautious consider predicting a peak before 2010 heresy.

Ron Patterson

The other shoe drops--Ghawar crashing?

Middle East at a crossroads
August 4, 2006

 by Richard Heinberg


At the ASPO conference a well-connected industry insider who wishes not to be directly quoted told me that his own sources inside Saudi Arabia insist that production from Ghawar is now down to less than three million barrels per day, and that the Saudis are maintaining total production at only slowly dwindling levels by producing other fields at maximum rates. This, if true, would be a bombshell: most estimates give production from Ghawar at 5.5 Mb/d.

I moved the Heinberg piece to its own open thread on the front page...
June 2006 is a notable month. Since Aug. 1971, when Nixon took us off the gold standard (closing the gold window to other nations), the CPI has increased 5 fold.

This means that, if someone gave you a $100 dollar bill in Aug 1971, and you put it in a book and forgot about it, only to find it today, you could only buy what cost $20 in 1971.

Put another way, in order to buy something that would have cost $100 in 1971, you now need $500.

One more very generalized example:

If that $100 bill would have kept it's value, you could have purchased 165 gallons of gas ($500/3.03 for regular unleaded as of 8/4/2006 from http://www.gasbuddy.com/ )

Because of the silent tax (inflation), you are only able to buy 33 gallons ($100/3.03 for regular unleaded as of 8/4/2006).

Who got the $400 in VALUE that the $100 bill has lost???

The Federal Government and Banks.

The Federal Government gets money 3 ways:

  1. raise taxes
  2. sell bonds to people or other governments (our savings)

When the government spends the money that comes from option 3, it buys with dollars that have not lost value yet. By the time any of that money gets down to you or me (the govt. buys a tank, the tank company pays it's employee, the employee buys a car, the car company pays its employee, the employee ... until the chain finally gets to me) the inflation has already shown up, so the same dollar that the govt. spent has less VALUE when I finally get my hands on it. Generally, this can be summarized by saying that those who receive and spend the new money first get the most benefit, and the government is the first one to spend the money it got through option 3 above.

Banks create money out of thin air via the fractional reserve banking system. Basically, the banks are allowed to lend your savings deposits out to their customers as loans. The customers put that money in their bank, who is also allowed to lend it out to another customer and so on. In other words, if you put $100 in the bank, the fractinoal reserve system (when the reserve requirement is 10%) can 'multiply' this amount to $1000 in loans outstanding, AND THEY CHARGE THOSE CUSTOMERS A HIGHER INTEREST RATE THAN WHAT THEY ARE PAYING YOU AND I FOR OUR DEPOSITS!

Material in this post lifted from:
Jim Puplava http://www.financialsense.com/series4/part1.html
Murray Rothbard http://www.lewrockwell.com/rothbard/frb.html
Federal Reserve http://research.stlouisfed.org/fred2/series/CPIAUCNS/9

I've been following financials for a while now and I believe finance is a part of the "Converging Catastrophies of the 21st Century", along with oil and climate change, for the very reasons stated by quaazy1. Another site with good info on the money supply that is very readable is thedailyreckoning.com.

Here are my predictions for the 10 year horizon:

  • The US Dollar crashes because foreign nations realize the Dollar isn't worth holding on to (so they sell Dollars to buy gold or Euros).
  • Oil becomes too expensive to fuel our economy.
  • The price of grain goes up due to drought and high temps.
  • The Dow Jones crashes and settles somewhere around 3,000.
  • The US Federal Government and perhaps foreign nat'l governments become irrelevant because they have no control over these events.
  • Lots of people die due do starvation and conflict.
  • The human population settles in at around 750 million over the course of 3-4 generations.
I agree 100% that finance is part of the Unholy Trinity along with PO and CC.  The fractional reserve system is at the root of the problem, as you've pointed out, but here's how I feel it will play its part in the decline:

  • The global economy stalls overall due to oil depetion;
  • Banks realize their interest stream is drying up;
  • Banks get nervous and start calling all their dodgy loans;
  • Foreclosures begin to go through the roof;
  • Ordinary people lose confidence in the banks, and start a classic run on deposits;
  • Banks run out of money and close around the world;
  • World stock markets melt down;
  • Systems that depend on the flow of money to enable the flow of goods (like food) can't adapt fast enough and shut down;
  • Lots of peeople around the world die due to starvation and conflict;
  • The human population settles at around a billion, but faster than you estimate - perhaps within a generation or two.

The big problem I see is that the financial system is built, not on a commodity, but on confidence.  The rate of public loss of confidence could to make a 10% oil depletion rate seem like a slide down the kiddy slope.  Confidence can in fact evaporate overnight, with potentially dreadful consequences.

That's exactly the problem. Every major economic meltdown in history has been caused by people losing confidence, going into a panic, and making a run on the banks. A major crash could come even before oil supplies get really tight. All it takes is for enough people to get spooked.
The thing is, humans are really just advanced-thinking wildlife. We're like a herd of bison. Let's say we're bison on the prairie, all in a big herd. A little fire starts on the west side of the herd. The bison on the west side of the herd get spooked and they run east, toward the center of the herd, bumping into other bison. The bison on the east, north, and south sides of the herd have not seen the fire, but they notice that more and more bison are running east. They're not exactly sure what all the commotion is about, but they don't want to be around when whatever it is shows up to get them, so they follow suit and run east.
This is what I believe is going to happen with people. Even though only a small fraction of the human race is aware of the root causes of the problem, the masses will start to catch on that something just ain't right and they'll follow suit to protect themselves.
We're living on the top floor of a house of cards right now.
An even better example, i'm sorry to say, is the World trade center disaster.  Both towers looked perfectly stable until the support beams for one floor collapses.  This was followed by an instantaneous collapse of the entire building, including all parts of the building untouched by the plane, and perfectly healthy.

I am afraid that the financial crisis coming is going to be the support beam collapse for the world.  Even the areas that look perfectly fine will collapse almost instantly.

I would like to agree with you but how many people have $ in the bank?  Are we not supposed to be as broke as our government?  I really don't know jack about it but I hear it often enough that we are a paycheck or two from being homeless.  I still think they have to print $ somehow.
It won't be a run on savings accounts.  I will be a stock market run, as everyone tries to pull their assets and get them into something safe.  The effect will be the same as everyone going to the S&L in Its a Wonderful Life.
"I will be a stock market run, as everyone tries to pull their assets and get them into something safe."

Enviro-att = I believe that is what happened in Argentina a few years back when their money become worthless.  And GM, Ford, Chrystler etc traded cars for wheat and other grain commodities for a while if I recall correctly.

# Ordinary people lose confidence in the banks, and start a classic run on deposits;
# Banks run out of money and close around the world;

The banks can't run out of money, since their central bank can create it out of thin air. They might run out of currency, but even that is easy to deal with: they just limit withdrawls to $200 cash, and you have to take the rest as a cashier's check.

"What do I do with this check?"

"Go deposit it into another bank."

You can no longer have the banking system fail due to a run by customers. Maybe an individual bank.

That's what I mean - individual banks run out of money.  I'm not talking about an event that takes place over the month or two that it takes the central banks to spin up the presses.  A run like this happens over a few days - a week at the most.  There are doubtless safety valves in place, rules that prohibit you from withdrawing all your money at once, but the loss of confidence in the system is virtually instantaneous.
See "The Penniless Billionaires" by Max Shapiro for more Real-World examples of Hyperinflations from the past two centuries.
Re:  Mexico--Denial runs deep

I can only quote the esteemed Texas State Geologist, who in response to a question from me at an oil industry meeting last year, said that "While Texas may not be able to match its peak production, we can, with the use of better technology, substantially increase our production."  

Texas oil production is down about 75% since peaking.  

Once the East Texas Field was where Cantarell and Ghawar are now.  Soon, Cantarell and Ghawar will be where East Texas is now--producing 99% water.

Yup.  I'm reminded of what Hirsch said.  The peak is sharp and sudden, and they never see it coming.
how is that still economical westexas?
Some people are making a little money because they can recyle vast amounts of water into existing wellbores.
One difference between the East Texas field and
Ghawar is the method of production. East Texas
wells are produced, from what I have seen, by
down hole pumps. Ghawar wells are still flowing
due to the pressure being maintained by high
pressure injection. The Ghawar wells have
much higher total liquid flow rates. I have seen
a few wells still producing in the Kilgore and
Gladewater, Texas areas that appear to be fairly small
pumpjacks which would probably be hard pressed
to get over 50bbls of total liquid per day.
Maybe some wells are using high volume downhole
electric pumps but I don't know.
(Incidentally,I did see the historical marker in downtown Gladewater
last weekend which stated the discovery well
which extended the field from Kilgore north six
miles to Gladewater came in at 1000bbls. an hour.
(I think it was in 1931.))
I would think that if one had say ten wells, with
pumping units (walking beam) large enough to make
a couple hundred barrels of fluid each daily, and a
disposal well to inject the water, it could be
economical in the East Texas field. Essentially
its just electricity costs and pump maintenance.
 You would probably have to be your own pumper though and
live nearby as a result.
Until the very updip edge of the East Texas Field effectively watered out, there were wells that were still capable of doing thousands of barrels per day.  Of course, the RRC would not let them.
This set of headlines is mind-boggling.

But it may take me a while to come to grips with the fact that Al Gore and Pat Robertson agree about GW.  Surely the two of them agreeing about anything is a sign of apocalypse.

Robertson is a peak oil believer, strangely enough.  He even had Matt Simmons on his TV show.

I would guess that peak oil and global warming tie in nicely with some of the apocalyptic beliefs of rightwing evangelicals.

They'll be in for a rude awakening when TSHTF and they're 'left behind' with the rest of us.
I think that is when Pat and his merry band of radical christian fundamentalists start behaving like the Iranian Allah-shiite Heads.

Woe be to those who ain't christian when the Rapture ruptures and they turn rabid.  They say there are not athiests in foxholes, and civilization is about to become one big foxhole...

I for one really hope there is a god.  I want to ask him alot of questions that only he can answer.  So if you are reading this god be prepared...a need a couple of days of your uninterupted time---hopefully not too soon. :)
[beeeeppp]...God is currently away right not...on vacation indefinitely...if you would leave your name and number he will try to get back to you when he returns....until then, you're on your own....[click]
God lives within you my son ...
Start talking to yourself ...
It's called prayer
Take your time ...
It is your time.

May be it is stupor?
I have a suspicion, at least for one of them...

Having been raised in the Bible belt, pretty much anything smacking of "End Times" is appealing to the right wing fundamentalist camp, and I understand that Belief.net is abuzz with prognostications of Armageddon with the worsening ME conflict.  GW and PO with associated droughts and famines both fit nicely into a world view dominated by the Book of Revelations.  Even when the Rapture does not happen and the "Fundies" are suffering with the rest of us they will just readjust their time tables and move along.  My worst fear is that they will also further intesify there intolerance of others AND are able to expand their power base--a return of the Inquisition is not unthinkable.
On the subject of right-wingers, in UK the British National party (look them up - not a nice bunch) are the only party to take on board peak oil.  They have been spotted at peak oil conferences in UK, sitting quietly, taking notes, saying nothing. They look to exploit the situation, saying "we told you so" when TSHTF, and makes gains in popularity they could never hope for in normal times.  As was remarked on a UK site (can't recall the reference), "right wing groups tend to thrive when times get tough".
Indeed they do thrive.  Theirs is largely a tribal "circle the wagons" mentality that thrives on in-group/out-group conflict, black/white, good vs. evil in the starkest of terms.  Exactly the kind of thinking that is likely to get stirred up as TSHTF and people become defensive and paranoid and start looking for ther "brothers" to watch their collective "backs".  
My question to everybody here is a simple one.

What will we all collectively do once its discovered that world oil production has peaked?? Throw a party??

I'll DJ.  I nominated Don as brewmaster.
Nomination accepted. Or I could be orgy master too . . . :=0
What party isn't livened up by a stylish troll?
I'll be the Weed-Master.

This 4th of July, 2006, we had our "First Annual ("PEaK-a BOO!) EOTWAWKI -and I feel Fine" PArty and plan on having many, many more to come.

Usher in the New World in style...

Yes (seriously!). The end of oil is the best possible thing that can happen. Oil gives us the power to destroy the environmental base that supports our existence. Since we can't seem to stop ourselves, running out is the next best thing.

And since we HAVE reached the peak, let's get it on! Throwdown in Seattle this sunday, Aug 6. I'll bring the booze, your bring your boat--see ya on the lake.

Seems to me that even after oil production has peaked there will still be umpteen billion barrels of oil to extract and burn.  Plus all the natural gas.  And then the coal.  We've got a long way to go and many .. millions, or billions(?) of tons of pollutants yet to release into the atmosphere.

So I'm gonna crank up the a/c today and enjoy it.

By then the party will be definitely over.
I'm new here, but I thought I'd make a comment to this.

I won't be throwing a party. I intend to pray -and hope. Lao-tzu, the ancient Chinese philosopher made the statement below. He was referring to war, but the sentiment is the same:
"on the eve of battle, the stupid general prepares to celebrate the victory -and the wise general prepares to mourn the dead"

If(when) this happens it won't be just a confirmation that the Peak Oil theory is right, or that everyone who believes in it isn't a nutter. Those are all small things. Those are insignificant compared to the real world effects of a peak in world oil production. The real consequences of a collapse in the world economy are as simple as they are grisly: a lot of dead people. Please keep that in mind when you talk about throwing a party to celebrate being right.

I hear what you're saying, and it is sad to think of lots of people dying. My reason for celebrating peak oil is that when it happens, humans no longer have unlimited license to destroy every other living thing on this planet. I think it's cool that Earth wins!
Some have called it "The Great Turning" which signifies a sense of new enlightment or awareness of our place in the world and how we can learn to get along with the world better.

Wow...that's so cosmic.

Some have called it "The Great Turning"...

... because "Rapture" was already taken.

I think that's a bit harsh.  The people calling it "The Great Turning" are not celebrating the death of other people like the "Rapturists", but looking at it as an overdue readjustment of our psyche.

Peak Oil "could" have some positive outcomes on our social evolution.  Just remember, during hard times, people tend to turn to friends and family for support.  

I see a lot of celebrating the death of other - less righteous - people.

I don't know whether this is coming from the "Great Turning" crowd, but there is certainly a lot of of doom lust out out there.

The message seems to be:

"We're all going to die - and YOU deserve it"

I think the basic message often boils down to:

"Everyone but ME, special ME,
is going to die (or suffer horribly, hee ha ha)
and the special Me will never die (or suffer)
because ME is special"

This defensive psychosis probably develops early in childhood when the developing cerbral cortex deduces something the reptilian stem has not yet figured out, that the life resource is finite and fragile. The brain parts then cooperate to develop a survival strategy myth: Bad things will happen to others but never to us/me --A parent-like diety will appear from the heavens and whisk us/me safely away to paradise while those unbelieving others will suffer excrutiating torment, which obviously "they" deserve because "they" are not kind and true hearted like us/me.

Its is obviousely correct, thousands of survivors from wars and natural disasters can attest to that...
Billions of survivors from Darwinsm can also attest to it .. as they, in fact often do ;-)

The T-shirt should read: "All my non-special friends are dead. I'm special though."
It's not coming from the Great Turning crowd really, except for a few on the far ends. No SANE person wants to see doom and gloom. The ones who do are at the far ends of the political/ideological/social scales. On one end is the 'humans are cancer, we must all die' group, and on the other is the religious fanatics crying 'God is coming back. Only the righteous will be saved. The rest of you heathen scum will suffer horrible deaths!'
I think it's cool that Earth wins!

Please show us the way!

> hear what you're saying, and it is sad to think of lots of people dying. My reason for celebrating peak oil is that when it happens, humans no longer have unlimited license to destroy every other living thing on this planet. I think it's cool that Earth wins!

You got it all wrong. When Oil depletion kicks in the Humans go in for the kill. People will begin to consume what ever resources are available, for instance instead of burning oil and gas, they'll start to burn wood, coal, trash, etc. People will trash what remains of the enviroment. Laws that are designed to protect the environment will be thrown out the window in favor of human consumption needs.

Do you believe that people will just roll over and die when they can't get oil or food?

I agree!
Fascism, environmental degradation and a return to slavery are more likely than utopia.
be prepared!  Have a wood stove, alot of salt and pepper, a knife and a fork.  You can burn your neighbors house while you have him for dinner. Just like Hanible Lechtor..."vava beans and a nice chiante(sp)" yum yum
I suspect the first result will be more tar sands production, low EROEI, and more coal use, more CO2.
Do you know Richard Heinbergs "The party's over?"

A party then would be really dadaism. Here, most of my friends wouldn't understand anyway. So actually a good reason to give a party and explain in a lecture what has obviously happened!

Hold a wake?
Hold a wake New Orleans style...complete with a dixie jazz band!!
That's a great idea!
Collectively? are you referring to the U.S. or to the globe? And it will naturally vary depending on how high you feed on the capitalist food chain.

But in general I think you can count on a number of things - denial, dramatic attempts to hang on to what we've got, and a general lack of planning. There will be no coordinated response on anything more than a local level (and I say this as a long time student of human society and politics).

Here is my question for others - when will the U.S. government collapse (I don't mean date, but event wise)?

Simply put, the government will not collapase!
Oil prices will escalate between now and 2012. As prices escalate there will be increasing levels of protests and demonstrations. Shortly before the presidential election of either 2008 or 2012 there will be some "event" either internal or external that will bring the government to declare martial law and cancel the elections because of the seriousness of "The Situation". It will not make any difference which political party is in power at the time.
During the last depression we had President for life FDR who died in office during his 4th term. Remember how he tried to "pack the Supreme Court" to make it possible to do things the existing court said was Unconstitutional. He then, reportedly, knew of the impending Japanese attack on Pearl Harbor but allowed it to happen to get the US into "The War". He then rounded up the US Japanese civilians and put them in internment camps and his administration ran the intelligence/torture camp in the desert Southwest as detailed on History channel (The Last Mass hanging in the USA).
If the coming recession turns into as bad or worse depression the volatile situation in the USA will turn into a much worse nightmare than what happened in the last one.
Studying history can give you very good clues to what will happen in the future as human nature doesn't seem to change too much with time.
I suspect (perhaps I should say fear) that you are correct about the short term. I fully expect the US government to implement some pretty draconian responses to what is coming. But this will itself be a sign of its weakness. I'm thinking a little more long term, say twenty to thirty years. The government will have serious financial problems. Not due to the various credit conspiracies we hear, but simply because the tax base will have shrunk from unemployment and increased poverty. It will certainly try to grab as much oil as it can in order to keep the military going. But this country is a big territory with lots of people. My suspicion is that we will see "events" (Katrinas, wars, revolts) that destroy the legitimacy of the government. This will make tax collection even harder. At some point I expect the federal gov't begins to write of areas it can't control.

So, in general, I agree with you, look to history for lessons, but perhaps the collapse of Rome is a better analogy than the Great Depression. Of course, this is all just thought experimentation...

Shortly before the presidential election of either 2008 or 2012 there will be some "event" either internal or external that will bring the government to declare martial law and cancel the elections because of the seriousness of "The Situation".

I have heard this exact same story every year since Johnson was president. It makes great conspiracy theory reading but it never has happened and it never will. It is extremely naive of anyone to think the presiden could just cancel the elections because of the "Seriousness of The Situation." Only if civilization in the US had already collapsed could anyone pull off such a scheme.

UPDATE:  Sweden closes reactors on safety fears

Two nuclear reactors were shut down yesterday in the Swedish city of Oskarshamn due to safety fears.

The Swedish subsidiary of German power firm E.On said it closed a plant in the south-east of the country on news of possible defective power backup systems.

The cause of the near-meltdown?  A power blackout, apparently caused by high temperatures.

This is why I'm uneasy about nuclear power, even though it has thermodynamic advantages over other energy sources.  It's not only complex technology, it's technology that can fail rather spectacularly if something goes wrong.  As we wind through catabolic collapse, and our infrastructure becomes less reliable, it could be a disaster waiting to happen.

The cause of the near-meltdown?  A power blackout, apparently caused by high temperatures.

No, it were a short circuit during 400kV switchyard maintainance giving a voltage spike that thru several transformers damaged some kind of UPS equipment that were not up to specification.

The only blackouts this summer in Sweden that I have heard abot have so far been local one due to thunder strike damage to substantions etc.

Summer is over here the low load period with very small heating demand, lots of heavy industry maintainance and manny vacation closures. But also a lot of grid maintaince is done during this perid wich can lead to redundancy being comparable to the high load period. But this does not seem to have been a problem related to grid redundancy.

Airconditioning is getting more popular but is only routine in new offices, stores etc. Of GW gives us hotter summers this will change but most city cores are getting district cooling wich uses less electricity for chilling. This summer has been hot enough for me to buy a cieling fan.

Someone at PeakOil.com who lives in Finland called STUK to ask about the Forsmark incident.  He was told that yes, it was a near meltdown, but contrary to what Greenpeace said, it would have taken an hour and a half, not 30 minutes.  And also that it wouldn't have been as bad as Chernobyl.  And they have a great plan for cleaning up the mess if it does happen.

How reassuring.  

Thats odd since two out of four cooling/emergency subsystems running is enough to keep the fuel from getting damaged.

An hour and a half to very serious fuel damage if none of the cooling/emergency subsystems had started automatically and none of them then had been started manually seem plausible.

Perhaps he assumed that it had been close to a meltdown if they had had further failures?

If you assume a sufficent number of failures in a nuclear reactor you will get a release of radioactivity into the environment. Its not perfectly safe, only extremely safe. It reassures me that there anyway is planning for what to do if there is a major accident but then I am a technology nerd who thinks that preparations are meaningfull.

"It reassures me that there anyway is planning for what to do if there is a major accident but then I am a technology nerd who thinks that preparations are meaningfull."

::Opens accident preparedness and remediation book::
"Begin by clearing the population within 100 miles of the reactor core, 150 miles within the prevalant downwind direction.  Wait a few million years.  Repopulate cleared area."

Wonder if the highly contaminated areas around chernoble could be used for growing biomass that is distilled into ethanol.

Not manny contaminents should remain after the distillation.

Who would be the lucky bunch to be digging up the soil and disturbing all the dust to plant and harvest said biomass?
Its a problem solvable with equipment and routines, if people care about solving it. It is a marginal resource that could be used post peak wich probably means it will be used. And since that will be poor times the equipmnet will probably be too simple.

Lets hope it stays a wildflife refuge due to other areas being prosperous.

My understanding of this incident was a failure in the UPS system failed to start 2 of 4 emergency generators.  Only 2 are required the other 2 are backups (which were needed).  If the two that started failed to start and operators failed to start either the generators manually or the additional backup gas turbine generator then disaster would ensue.  Plan for the worst and then backup beyond is the rule in nuclear generation.  This rated as a level 2 incident on the 1-7 regulatory rating system.
"My understanding of this incident was a failure in the UPS system failed to start 2 of 4 emergency generators."

You mean the IPS system? :)

In an actual emergency situation do you stay this cool?   I'm Swedish ancestry myself and I think about 100% of my family would be stampeding the exits>
The nuclear power plant staff needs to be trained to act cool to avoid making a problem worse. I cant tell how people in general would act but evacuating yourself in a random direction after a rumored problem is probably a bad idea, especially if a lot of people do it. My experience of stressing situations is too personal for a forum such as this but I have not had a car accident or equivalent.
Re: Cantarell

Good catch, Leanan. This article deserves comment.

Morales said the drop occurred because 40 wells at Cantarell were shut as underground natural gas or water cut off oil. Some will reopen and others will be replaced by new horizontal wells that can reach into narrow oil seams.

"It is a temporary impact. We have not modified our forecasts," Morales told Reuters, a day after state-owned Pemex conceded Cantarell's 2006 output would fall 8 percent from 2005, rather than the 6 percent previously forecast.

What do you mean, Mr. Morales, that you have not modified your forecasts? You are spinning that right now. Horizontal drilling?
At Cantarell -- the source of 60 percent of Mexico's oil but slipping from its peak production in 2003 -- Pemex will drill 30 horizontal wells, designed to access layers of oil trapped between natural gas and hard rock, through March 2008.

Dehydration plants will be completed in September to separate crude oil from water, meaning seven wells closed this year can be reopened.

"We already have the design for the (horizontal) wells, we have the drilling equipment, we will start drilling the first well in September," Morales said. "We are going to halt the decline."

Cantarell still has around 7 billion barrels of crude oil which Pemex believes are economical to extract, Morales said. He predicted Pemex will be drilling the oil field until 2043.

Output is predicted to fall to 1.430 million bpd by 2008, from 2.0 million bpd in 2005. Without horizontal wells and more nitrogen pumping to maintain pressure, output could plummet to below 800,000 bpd by the end of 2008, Morales said.

In my mind's eye, I can see the shape of that future production curve. The horizontal drilling may offset some part of the decline for a couple years and then it will drop off a cliff. Halt the decline? No way. 7 billion URR left? Just for fun, let's spread that evenly over 37 years and get a daily production number. That = 0.518/mbd until 2043. I'm not kidding! But Mr. Morales is. Let's stay based in reality. The directional drilling (and continued futile nitrogen injection) is supposed add about 0.630/mbd in 2008 in addition to the 0.800/mbd baseline. Horizontal drilling has never led to temporary production increases followed by steep declines, has it? [sarcasm] The field is tanking and these are what I have called Extreme Production Measures. PEMEX's statements are contradictory. They may delay the worst for a couple, three years at best.

From here (pdf).

Click to Enlarge
Original URR is 10.5 Gb with (in the fine print) Nitrogen injection having added an additional 2.3 Gb for a total of 12.8. This source (Uppsala, pdf) indicates a cumulative production of almost 10 Gb through 2003 with estimates of 11 to 20 Gb URR. Even assuming the generous 20 Gb, they are obviously past 50% of cumulative production and the field has clearly peaked. Halt the decline? I think not.

They like everyone else facing real Peak in their production want to take the sting out of it by Telling the General Joe on the street, Don't we have this handled.

We live in a Sound Bite world.  Most of the folks that read TOD look for the buried facts in the story, the hidden meanings of the quotes, tear apart the double talk and the SPIN of the MSM and anything else that is written as NEWS or even these Posts of ours.

Most people know something is going on, when day after day they keep spending $2.75 to $3.10 (USD) per gallon they pump.  I Tell people of When I made $6.50 an hour and bought gas for $0.799 a gallon.  Now they make $6.50 and spend almost half of it on a gallon of gas.  It makes for lots of conversation, Most of it blaiming the wrong things, but that is your opener.

We live in a Sound Bite world.

IOW, we suffer from ADHpHD (Attention Deficit and Hyper-parrisHilton Disease)

Speaking of Cantarell...the WSJ article about it has not appeared anywhere outside their paywall (that I know of), but the graphics are free.  Like this one:

Leanan, I'm writing something up and might want to use that graphic. Do you have a link to the WSJ article? (don't care if it's behind a paywall) --

thanks, Dave

Try here.

It's called "Mexico's Biggest Oil Field Sees Decline."

So they increased production from a little over 1 million bpd to over 2 million bpd in what.. 3 or 4 years?  Was that smart?
Was that smart? No! And now they are going to try and do it again using directional drilling. Sigh. Why don't they try to optimize their yields over time rather than engage in desparate measures to maximize short term production?

And this is going on all over the world.

Regarding the "near meltdown" in Sweden.

The problem as reported in media where UPS equipment that were not up to specification for voltage transients. This led to only two out of four emergency generators starting automatically and the other two had to be started manually.

Three other reactors have the same type of equipment and were closed. The reported "all may have to be closed" where probably the order for everybody to check if they had this equipment. The same information were sent to the Finlandian reactors of the same basic design and they had another system that were not voulnerable to this problem.

Five out of ten reactors are now not running, four due to this problem and the fifth for routine maintainance. The closed reactors now have to fix this voulnerability in their equipment before they will be restarted. Fortunately summer is the low load period over here.

Greenpece demands have absolutely nothing to do with what is happening. It follows the routines in the same way as when other problems have been found in our nuclear powerplants. As a technology nerd I like the fairly rich publication of technical information. Now if our hospitals had the same routiens when something breaks...

The being close to a near meltdown statemet seems to originate from one individual, Lars-Olof Höglund, who currently is suing two nuclear powerplants for not giving his engineering company work that he bid on.

My ears, in this case Eyes, picked up on the Yahoo News of Pat Robertson thinking that Global Warming was here to Stay and We should watch Our Fossil Fuel use.

As I have explained to my parents, Global Warming Averages do not mean everyone gets the same up surge in heat.  It is just an overall average that taken over a whole year in Thousands of Locations gives you an overall up tick in the GWA=(Global Warming Average).  I have done research for a Sci-Fi story where aliens change our climate for their own reasons.  

If ten sites on twenty days go over the GWA then likewise other sites can go under the GWA and in the end it all produces the GWA we see as the overall average.

In the same news article they mentioned, ( in what I term a "We have to tell everyone what a crazy person he is cause he mentioned the end of the world" sentence ) Just to quailify what sort of news source this guy or that guy is just so you know not to believe anything else they say.

Peak Oil folks get done the same way.  They tell the readers that in 2000 we predicted a doom that never happened, or in 2004 or any other date.  It is a small bit of logic twist that the general reader can't get around.  Others on this board do it and so does most everyone I know.  They fail to also tell you that everyone misses things from time to time, but the overall Average of Information from these sources are "Spot ON".   We are dealing with the average joe that does not see past the sound bite and forms their opinion on just a few of them, never going into the details that really matter.

Maybe Pat won't sway to many people into doing differant, but a lot of folks that follow his other words might add to a bit of a ground swell that I see is going on slowly but surely.  We Hate that the MSM does not Yell and Scream that Global Warming and Peak Oil and other things are here to stay and we need to change course.  Even if you don't like his other ideas, Thank Pat Robertson for getting on the band wagon at least this once to bring it out a bit more to the general public.  It might not do any good, but the snowflake traveling down hill takes a bit of time before it becomes the racing avalanche.

Charles E. Owens Jr.

I'm ready for another one of your poems. Weekends or threads a couple of days old are good (IMO) for posting fun stuff such as songs or poetry.
Go check my blog


I still did not get my question in my e.mail to you answered.

I'll try for an energy and news worthy poem, or some such.

I am sorry, but I never found your e-mail. I'll check your blog.

In the meantime, feel free to try again if you feel like it:

You are not the only person to have trouble finding me there; for some reason about ten to twenty percent of people who try to get in touch for the first time fail to do so. It is an Unsolved Mystery.

hotmail does not like yahoo
This has nothing to do with any of the articles mentioned here, but I read a lot about how Oil Is Important Because It Is Needed For Transport and that Electrification (trains, trams) Is The Solution.

¿What do people here think of SegWays? They are electrical, efficient, low-footprint, personal (a big advantage from trains) and already in production. It has not lived yet to its creator's expectations, but maybe they could be a great model to point the way through Peak Oil.

Why replace walking and some bicycling when the problem is affording and getting wehicle fuel? SegWays is about as meaningfull as those golfing wehicles used instead of walking with your clubs.

Nix on the Segways.

They are high-priced toys.

There is something that is sort-of useful for actual transportation, and I own one.  See the scooter at


Their range figures are exaggerated, as usual, but I can make it to my university easily now with the extended range battery.

Electricity cost is nearly negligible; primary operating cost is battery replacement.

Nix on the Segways.

If they really like it they can build one...
Just kidding, that's useless crap anyway.

I don't believe Segways are a good solution. I don't believe any machine that uses non-human power to transport a single person is a viable option. I think we need to focus on using/promoting human-powered transport (walking, bicycling, etc) or machines that are very efficient and carry a lot of people at once, like electric trains. We will crash and burn if we try to maintain a lifestyle of single-occupancy, low efficiency transporation. Well, we're going to crash and burn anyway, but just for the sake of argument...

I disagree with that.

I'm the poster with the electric scooter.

I can get to and from work on 5-10 cents of electricity a day, and I can take two full grocery bags back home.  

Cars weigh 3500 lbs to take a 150 lb person, and then they go fast.  That's the central inefficiency.

The 93 page Portland Breifing Book mentioned in Tom Whipple's article can be found here:

Peak Oil Task Force home page:

Briefing Book:

The Drudge Report has a link to an article about a US Navy Petty Officer held in secret for four months.  The Bush Administration's position seems to be if they deem you a threat to "national security," you have no civil rights.


So goes the road from republic to empire. The empire will turn our rights into privileges, subject to the whims of the empire itself. And I don't see any way to stop this. No, electing Democrats won't help, but just cause it to happen slightly differently. And this is happening because the American people are unwilling to look up and see the cliff ahead. We can retain most, if not all, of our rights if we change course. But right now the majority don't believe they need to change course.

This was posted over at Energy Bulletin and I found it to be a fascinating read although perhaps to be taken with some salt since the author has a political agenda of his own:

Lebanon, Syria, Iran and the Coming Imperialist Re-Division of the World
by Steve Masterson


The article has a few gems but is contaminated throughout with outmoded and corrupt Marxist rhetoric. You don't need to be a genius Marxist to see the imperialist process unfolding. And in fact, the author seems oblivious to core issues like resource contention and population pressures, instead blathering on about the "highest form of capitalism" without regard to the real scientific issues behind what is happening.
What is the relevance of peak oil in terms of GDP? I ask this because I noticed a recent post that GDP figure may be manipulated by government economist book cookers to hide any problems. That post factored realestate into GPD, essentially suggesting that the current (optomistic) GDP figures were  riding on the back of spare equity from realestate. So bearing in mind that without this extra equity, GDP looked essentially flat.

So is a flat GDP indicitve of an oil production plateau? Looking at it slightly differently, is high oil price impacting on GDP via inflation?

Can a scenario(s) exist whereby oil consumption is reduced WITHOUT impacting upon GDP? (eg more cycling, more fuel efficient cars, local produce, renewable/nuclear energy etc..

Marco   (Still a bit new here!)

Very briefly:
  1. Yes, GDP in real terms can continue to grow even as global oil production declines, BUT
  2. This is unlikely to happen, because products derived from oil so permeate our economy. For example, we could put huge resources into nuclear, wind, and solar energy, and this capital investment would boost GDP, but the probability of this outcome is not very high. Possible, but not very likely, alas.

Note that the main importance of growing GDP is to generate enough jobs to keep unemployment from increasing. IMO, a huge growth in unemployment is going to be the most painful near-term effect of peak oil. New Deal type measures will be tried but will be, IMO, quite inadequate.

We live in interesting times.

US oil consumption was essentially flat (about 17 mbpd) from 1980 through 1990. In the 1980s we had healthy economic growth at least in the latter half of that decade, so some economic growth with at least steady oil supplies are possible. Prior periods in the 20th century that map to periods of declining oil also map to declining GDP, as far as I can recall. Perhaps someone has a specific example to the contrary but I can't remember one offhand.
More air passengers getting bumped

The worsening problem with bumping reflects the intensifying push by airlines to fill a greater percentage of seats. Grappling with soaring travel demand, continuing financial problems and record high fuel prices, airlines are filling planes fuller to maximize ticket revenue while holding down operating costs.

PeakOil.com considers the airline industry the "canary in the coal mine," and perhaps they are right.  It sure seems to be bearing the brunt of peak oil and climate change.

Summer 2006 is shaping up as the most troublesome for airline passengers in years, in part because of unexpected problems. During the week of July 16, New York City suffered a power outage, and Tropical Storm Beryl fouled up flights from New York to New England. On July 26 and July 27, a Northwest Airlines computer glitch delayed 562 flights.

...When American canceled his flight from Chicago O'Hare to Washington Reagan National Airport on July 20, a day when many flights were canceled, the airline told him it couldn't assure him another seat for four days.

"I was stunned," he says, "but some of the other passengers went completely ballistic."

Of course, this probably just means more people deciding to drive...

Chicago, Illinois  Washington, D.C.  598 miles (962 km)

962 km / TGV average speed about 300 km/h, about 3 1/4 hour, give it 3 1/2h.

Interstates could make for splendid railroad right of ways.  Unfortunately, many portions have curves that are too tight or elevation changes that occur too quickly.  Maybe those could be overcome with a moderate amount of conversion.
Leanan -

I used to do a fairly heavy amount of business travel during the 70s through the 90s, but no more. Thank God!

I hated it then, and probably wouldn't be able to tolerate it now, as these days my aggravation threshold is next to zero.  Between the bumping cited in the article excerpt, chronic delays,  and hours wasted being humiliated in security checks, I would have probably gone completely ballistic long ago and murdered someone.  

I cannot think of a single reason why one should believe that the US airlines industry has any future.

What is the point of having to spend 3 hours getting to an airport and going through screening, to take a flight that lasts a hour or two, and to then spend another hour or more just getting off the plane, out of the airport, and into a rental car?

This is one reason why the Supersonic Transport, in my view, never made any sense. Even if the actual flight time could be reduced to zero, traveling by air today would still be an incredibly tedious and time-consuming hassle.

A large fraction of business travel in unnecessary anyway. The airline industry is going to shrink big time.

Realistically is this going to change with high speed trains?

In almost all places you will need a rental car when you get to your destination, and surely high security will come after the inevitable train bombings, as in London, Madrid, and Mumbai.

mbkennel -

I didn't mention anything about high-speed trains; you did.

Homeland Security restrictions all over, regardless of the medium of travel,  are going to be an increasing hassle.

Let's face it:  travel is no longer fun. And it is only going to get worse.

When was traveling ever fun?  Back when people were walking the Oregon trail?  Or when trains first came into existence and had accident rates that were worse than modern airplanes ever were?  

Traveling has always sucked, although it does seem like it's even worse in this country than many others.  

Results vary.

I routinely arrive 1 hour to 1:15 before my flight (I fly Southwest) and end up wasting time at the gate.

In Portland I took the Max Light Rail line from the airport to within 1 block of my "inexpensive" hotel ($49 + tax).  And then took MAX to front door of the Portland Convention Center (about 30 minutes ride time; average wait ~6 minutes).

All in all an easy way cross-country.

China building 27-billion-dollar train line from Beijing to Shenzhen
Thu Aug 3, 2:43 AM ET

From the article:
"The commission said the new railway would be solely for passengers, leaving the old track to carry cargo."
Amazing! How long before the good old USA gets on track?

Rest of article below...

Greg in MO
BEIJING (AFP) - China is building a 27-billion-dollar train line from Beijing to the southern economic hub of Shenzhen and foreign investors will be invited to join the project, state press reported.

The new 2,300-kilometer (1,420-mile) railway will cut travel time between the capital and Shenzhen, which borders Hong Kong, from 24 hours to 10, the China Daily said, citing the National Development and Reform Commission.

The track will be designed to allow trains to travel at speeds of at least 200 kilometers an hour, more than twice as fast as the current line, it said.

Work on some sections of the railway has already begun and the entire project is expected to be completed by 2010.

The newspaper, citing government officials, said the entire project was expected to cost around 220 billion yuan (27.5 billion dollars), with foreign investment welcomed.

"We encourage investors from home and abroad and we think it will be a profitable railway," a railways ministry official surnamed Huang said in the report.

The total investment will be recovered within six years of services on the line starting, Huang said.

Construction of a section of the line between Wuhan, the capital of China's central Hubei province, and Guangzhou, the capital of southern Guangdong province in which Shenzhen also lies, began in 2004.

However the National Development and Reform Commission, the government's main economic planning body, only released the blueprint for the entire project on Wednesday, the China Daily said.

The commission said the new railway would be solely for passengers, leaving the old track to carry cargo.

The project is separate from another multi-billion-dollar railway to be built between Beijing and Shanghai, which is also expected to be completed by 2010 and be open to foreign investment.

The Beijing-Shanghai line is epected to cut travel time between China's two most important cities from around 13 hours to five, with the trains expected to reach speeds of 350 kilometers an hour.

The investment costs for that project have not been announced although reports have suggested as much as 25 billion dollars will be ploughed into it.

China announced last year an ambitious plan to spend 250 billion dollars by 2020 to renovate and expand the nation's rail network, one of the largest in the world.


Denver to Seattle (by road): 1332 miles.

Time by AMTRAK   (with long layover in Sacramento): 2 1/2 days.

Pretty sad.  One basically needs to be retired in this country to take the train any significant distance.  Letting our train system go to hell was virtually criminal.

Even if you're retired the train is hardly practical.  Our railway system is an absolute joke.  Rail should be made much more viable, at least for connecting fairly close cities.  There's no reason a train from L.A. to S.F. can't get there in a few short hours.  It would not only be more energy efficient than flying, but it would take more of the burden off of our airports which are quickly running into capacity constraints.  
Neat article on the "Gore/inconvenient truth" spoof on Youtube in the WSJ. http://online.wsj.com/article/SB115457177198425388-search.html?KEYWORDS=gore+penguin&COLLECTION= wsjie/6month
Thanks for the link. What is interesting is that the video looks unprofessional but is funny and makes 3 main points: Gore is boring, Gore is trying to brainwash us, the movie is boring. Not bad for 3 minutes! I'd say Exxon got their money's worth.
Let's pretend that Mother Nature watches advertisements. Let's pretend that Mother Nature is persuaded by the ads to change her rules ... and that Global Warming is therefore canceled.

We owe Exxon-Mobil and DCI much gratitude for their good works.

Hello TODers,

Brazil is planning for 84 dams on the tributaries of the Amazon.  They will do anything for electricity.


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

Wonder what the effect of evening out the water flow will be?
It is not immediately obvious for me why it would destroy the rainforest but it would utterly change ecosystems depending on regular flooding.
Hello Magnus Redin,

Agreed, the ecosystems are designed for flooding.  The lethal combo of clearing the rainforest for monoculture with the building of all these dams will seal the fate of Amazon-- called the Earth's lungs.

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