DrumBeat: September 10, 2006

[Update by Leanan on 09/10/06 at 9:15 AM EDT]

Stormy world of energy has a clear forecaster

Houston engineer develops reputation for accuracy over the long haul

Houston was rocking and rolling in 1980, with oil at $40 a barrel and some people in the industry predicting it would soar to $100.

One of the few dissenting voices, Henry Groppe Jr., forecasted that by 1985 oil would fall to $15.

"This guy's a nut," Houston energy analyst Matt Simmons recalled an oil executive telling him then. "He ought to be locked up in a straitjacket."

[Update by Leanan on 09/10/06 at 9:35 AM EDT]

Oil Projects Idle as Supply of Gear, Staff Runs Dry

A global shortage of drilling equipment has stalled production in Colombia. Delays of more than a year are common.

Falling oil price niggle OPEC ministers

The last days of oil

Innovation and flexible work practices will decide how much oil comes out of the North Sea.

Australia: Tank low and running on fumes

MSM scare stories

Chevron's spectacular find is very good energy and geopolitical news. It also supports the optimists who believe we will never run out of oil. Most MSM reports, of course, looked for the lead lining, pointing out that Chevron's find wasn't that big, won't reduce the price of gasoline or even come on line for several years.

Oil price drop spurs optimism

Oil find unlikely to bring back cheap gasoline

While validating the big discovery may bolster the view of the oil-supply optimists, even they don't predict a return to the days of cheap gasoline in a world where demand is growing so strongly.

That includes Peter Jackson, co-author of a recent Cambridge Energy Research Associates report that predicts worldwide oil production capacity could grow as much as 25 percent in the next decade.

He isn't letting his belief in plentiful future oil supplies change his auto purchase plans.

"The next time I change my car, I will get one that's double the fuel-efficiency," he said.

Secret to cheap petrol is coal

Russia seeks to tap nuke energy despite its vast oil, gas reserves

Russia on Friday outlined plans to build dozens of nuclear reactors over the next two decades to help meet its growing power demand. Sergei Kiriyenko, head of Russia’s atomic energy agency, confirmed Moscow’s commitment to nuclear, saying it wanted to keep it at the heart of the country’s energy mix, despite Russia’s vast oil and gas reserves.

UAE Islamic bank plans futures for Dubai energy bourse listing

Ukraine Diverts Gas Away From Russia

No Gas Mains for Gazprom

Kommersant has learned that Gazprom has promised Ukraine to keep gas prices at $95 per thousand cubic meters until the end of the year. In return, the gas giant is demanding a share in the country's assets and a return to the question of control over its main gas pipelines. Russia's position is so harsh that Ukraine has apparently joined the global ranks of Gazprom's foes.

Oil drilling along our coast matter of time

The most important day in our history may have come and gone and we didn't even notice: Peak Oil Day.

Peak oil writer calls for healthcare Hirsch report

Expanded Grain Based Biofuel Production Causes Concern Among Livestock Feeders

A massive expansion of North America’s ability to produce biofuel, including biodiesel and ethanol, is expected to dramatically increase the demand for crops which have traditionally been used in the manufacture of human food and livestock feed.
Good article on Henry Groppe:

He was reportedly at the recent Houston Peak Oil conference, but I didn't get a chance to meet him.

His comment about Bush's Iraq war destabilizing that area, and mucking up the oil production, for many years I think is right on target.
His comment that it takes more energy to produce ethanol than it returns is completely off target. When so called experts say things like this, I stop reading. How can I trust him on the things I don't know when he is wrong about the things I do know?
You show up once in a blue moon to say basically nothing. We had a great discussion about ethanol without you. Piss off.
You show up all the time and say even less. Get a life.
hit a nerve?
Wot? That's all you got? You need a breather?
I love Keithster. Please don't scare him away. I rely on his stock recommendations: I short sell anything he likes. Pacific Ethanol was a great one.
Maybe we shouldn't get hung up over whether ethanol is slightly energy positive or slightly energy negative.  The big picture is it's not a significant ratio greater than one, say 5:1 or 10:1.  It's a diversion from other energy production/consumption paths which might be much more benficial to society at large.  Maybe we should say to ourselves about ehtanol as replacement for gasoline, "Hey this isn't very productive.  Let's look for a better way."  And this better way might well be more about consuming much less energy through conservation and reorganizing our society than finding a gasoline replacement.
For sure.  We get so wrapped up in discussing decimal points we forget to drop it and move on.  PO is here no matter where the decimal point is.  Ethanol is a failure even if it is slightly positive.  Better to take that energy and put it to some use where you get real returns.  Heck, instead of making Ethanol, use that fossil fuel energy to make fiberglass insulation to stuff into every house and building.  That has to give an EROEI of 100 to 1, I would think!  Instead of building nuclear reactors we could install solar hot water heaters on every house.  They would produce results as soon as they were installed and are not radioactive at the end of their life.  No terrorist wants a solar water heater!  TODers, please consider installing solar thermal heaters if you don't already have one.  They qualify for tax rebates this year.

Instead of building coal plants we could build nuclear reactors.

And put solar hot water on the houses.


I agree with your point of view, but I think ethanol is an energy production/consumption path that is beneficial to society at large. I can't post now though, evidently I have to wait till the next blue moon.
That's a dodge.
Ethanol is only going to be beneficial if it is done on a minimal scale.  You would get far more energy out of the corn if you just burned it to heat a home.  Ethanol production just concentrates the energy in the corn plant into an energy dense liquid fuel, but because of effiency losses at each step of the process, there is far less available energy at the end.  There are situations where this loss would be acceptable because of a need for an energy dense fuel (life flight helicopters for example).  But the environmental costs of growing so much grain, the food vs. fuel problem, etc. make it really hard to justify its use to just to continue the easy motoring lifestyle.  
Question then to you:

If we use all our tillable land for ethanol crops then how can
ADM continue to be 'The supermarket to the world.'?  or whatever inane slogan of theirs they once used with flying ears of corn or whatever , as a 'proud' sponsor of PBS.

If we have then cut off most grain exports to the rest of the world, causing panic, economic chaos there, rapid rises in the cost of basic foodstuffs, loss of aquifer storage levels, yada...yada,.....

...then tell me how YOU would ascertain the real cost of ethanol production? I would like to know the answer.

Right now many ethanol plants are being built as well as biodiesel , very close to my part of the country. In fact two are starting groundbreaking very soon and most if not all of our grains will be shunted to them instead of the barges and railroad cars.

What then? Peak Food I suppose.

airdale -- Note the lack of graphs. This is something that can be graphed, IMO. You just have to drive the farming countryside and look out the window. Maybe the bootheel of Missouri would give one a big wakeup call. Watch out for the irrigators.

I think ADM is thinking out a replacement slogan, something like 'QuickieMart to the World' (or what's left of it)
Typo. I meant to say 'this is something that CAN'T be graphed'

meaning that there is an enormous number of variables IMO.

This is crops vs pumping something out of the ground.

When the soil is abused and lost? Well just look at what is happening in those 3rd world countries we don't like to think or talk about. Overgrazed,forests gone, bad weather as a result and ..well all the rest..and then comes starvation and slow death.  

Reynolds - I couldn't agree more. I tired to make this point a couple times already. Regards, HKT.
Once again, I need to point out that it is sloppy at best to say "ethanol" when you are referring to "corn based ethanol".

I have repeatedly posted studies showing that sugar cane based ethanol has energy returns of 1:8.5 or more.

While you are talking about conservation, tropical countries are doing ethanol. I am sure they will find it more usefuul that the 500 thousandth post discussing conservation without the slightest suggestion of how it might be done.

Jack, do you really have no idea of how to conserve energy?

Here are just a few suggestions (keep in mind that the average German lives at least at the same standard of living as a US citizen while only consuming half the energy):

  • Get rid of your too large, too strong car.

  • Drive only if you really need to. Walk all distances up to 1.5 miles and bike all distances up to 10 miles, weather permitting. Use public transport as much as possible. Lobby for better public transport with your local administration. Car pool with your freinds and neighbours.

  • Throw out all incandescent bulbs, put in fluorescents or LED lights. Switch off lights if you're not in a room.

  • Insulate your house properly (not with fiber glass, that's a bad idea, better use styrofoam, rock wool or cellulosic insulation or something like that). A friend of mine is currently building a so-called "passive house". With 40 centimeters styrofoam insulation and very airthight triple-glazed windows and doors, it only needs a little wood oven to cover the 10 coldest days of the year. Otherwise, it has almost no external energy input except for the electricity for the (heat-retaining) ventilation and sunlight, of course. Because this house design does not need an oil or gas boiler, it is only marginally more expensive than an energy-waster.
This type of house is no rocket science, by the way. It is made with regular, common parts and engineering. Please note that here in Germany's federal country of Brandenburg, winters get as cold as 15-20 centigrades - below zero.

  • Encourage your power provider to invest in combined-heat-and-power plants and heat distribution networks, as they are by far the most efficient way to generate heat (as a by-product of electricity generation). Again, proven technology, see Denmark and Germany, where this is widely used.

  • Turn down the thermostat to 18-20 centigrades. If you don't have thermostats on your radiators, get some, to get rid of the 'too cold' - 'too hot' - 'too cold' cycle. If you think 20 centigrades is too cold, buy a sweater or two. Running around your house in a t-shirt in the middle of winter is no necessity.

  • Put solar thermal modules on your roof and a 1000 liter storage tank in your basement. Again, the technology is no rocket science, but saves a lot of energy (and money) for heating water. Larger systems can even support space heating in spring and autumn.

  • Buy energy-efficient appliances. For instance, complying to the European A++ efficiency standard lets a fridge use only a tiny fraction of the electricity your curent model uses.

  • Buy only devices without a stand-by mode or with one that draws less than 0.5W. Attach your old stand-by devices to a properly switchable mains connector - and use it!

  • Buy food from your local farmers market - minimizing road transport.

  • Stop flying around the world for minor reasons. Flying is about the most damaging human transport that exists. Use the train. (If there is no train in your area, why the f*ck did you let them dismantle it? America got big from using trains!)

My family adopted some of these measure and could easily save 30% of our electricity and gas bills without any noticeable decrease in convenience and without going to any extremes. If we can, you can, too.

All this tells me that there is no excuse for complacency - you can change the world today with available, proven technology.



OK, look, no offense, Davidyson. It's just that your post while informative and energetic, is also a perfect example of what I consider a fundamental "disconnect" that occurs here all the time. You are responding to Jack. Jack talks the talk and walks the walk. He understands. The greater reality which is I think something he also understands - is that these things aren't happening. "There is no excuse for complacency." Really? Well I guess then somebody deserves a spanking.

Stop fighting. Don't you realize we are all on the same side?

Don't tell him to get rid of his SUV. He probably doesn't even drive.

Thanks for your detailed post. Actually, I am aware of most these methods and use some. As Oil CEO rightly guessed I don't even drive.

My original comment was not meant to disparage conservation or to imply that we can't get by with less. In fact I am sure that we can.

However, it is easy to just say conservation is the solution, but what does it mean? Are you just asking people to voluntarily use less? If so, I think the gains, while real, are limited. Making the changes you discuss above is good, of course. But is it a public policy?

I think that the only mechanism for creating conservation at a level that would make a difference is price. In this regard, I see call for carbon taxes, gasoline taxes and other penalties/incentives as much more meaningful. I see your changes as way that people will react to economic signals.

Trying to solve our upcoming energy/climate crisises with a hollow call for conservation is like trying to stop a crime wave by asking people to be honest.

Your're both right.

Sorry for the sermon.

My favourite policy is a cap-and-trade system.

We estimate how much CO2 we can safely afford before ultimate climate desaster sets in or how much fossil energy we think we want to use in general, divide it by the number of people in the world and - hey presto - here we have the amount of fossil energy every citizen of the world can use. Those who use more, must pay those who use less to acquire the right to use this much fossil energy.

(Obviously, implementing this with the producers of fossil energy would make more sense - less individuals, more control.)

Taxes don't work properly, because if people shift their spending priorities from yet another box of chocolate-frosted sugar bombs to continue driving, the state will earn a lot of money, but the consumption will not go down significantly. You can't enforce a capped limit using taxes.



Points well taken. I disagree with your view on taxes. Let's discuss this some more. Cheers. Can't believe I got the driving thing right on Jack. There must be something to my intuition. God gave it to me. I'll let her be the the judge. Condi Rice is perty smart, too. Don't mind me being an arsehole - I'll blame that on God, as well. Until I find a better scapegoat.


New-clear? Nuculur. Nuclear? Knuckler? What? Just tell me if that stuff will explode.

Davidyson-  Thanks very much for your detailed list of things to do.  This is just to let you know that there are some  (not very many) people in the US who actually do all those things  out of concern for the people who will inhabit this planet in the near future.

Of course we are accused of being just holier-than-thou and a big bother to the people who just want to go along with the usual wasteful ways. Lots of my friends zip around the world on airplanes and get angry when I hint that might not be the best thing to do- so I really am a big bother.  Oh, well.

But every time I think about this problem I keep coming back to the same answer alluded to above- MAKE THE PRICE EQUAL THE FULL TRUE COST- to everything we do.

Of course I am thinking of the full cost to all of us and to the planet now and in the future.  How to do that should be the challenge for these times.

If the true cost is there, then every thing you suggest will become the right thing to do automatically. The desire to do good is certainly not a sufficient motivator- who knows, maybe even a wrong one.

And of course we should never forget the problem of just too many people.  How do we put the true cost of people on people?


Agreed 100%.

I applaud individual efforts at conservation, but do think it is not going to change the world without some external stimulous. I do see dwindling oil supplies as one source of price signals, but think we need more. If the price included the full cost, including externalities, conservation will, as you said, "become the right thing to do naturally".

Wimbi - thanks for your reply.
I am well aware that there are eco-aware people in the US - after all, I invented the Prius-spotting game when I stayed in San Jose early this year... ;-)

"The true full cost" - that's a complex concept, isn't it?
I have the following thoughts on that:

- Yes, in an ideal world this should be the only and universal measure.


  • Cost from which perspective? My life has almost infinite value to me (I would only trade it for the life of my family), but someone else might be prepared killing me for a handful of dollars. (Or, less direct and more common, someone might accept people starving in, say, Bangladesh as long as he/she can continue with the "western" lifestyle.)

  • There are even absolute infinite costs - like a fatal global warming or a global nuclear war.

  • There are so many ways to avoid the true costs:
  • Spatial shift of the cost: just ship the toxic waste to Ivory Coast, people here won't bother
  • Temporal shift of the cost: We create and bury the nulear waste/the CO2 today, we don't really care if future generations will have to watch over it virtually forever. Discounting future future profits also works as discounting future losses. So this encourages short-term thinking.
  • Socializing the cost: We take the profit from the deal, society as a whole can pay the price

  • Funnily, the true cost is already here. We can feel it every day. It just gets so dispersed that it flies under our radar most of the time. And we get used to it. Why complain if it feels like it's been that way as long as I can remember? How fast do you have to boil the frog so it notices it's in danger?

  • How do you make people care for the future if they don't even understand the value of the money in their hand - "it's just debt, I will pay it off eventually. But now, I will buy that nice new toy I have seen being advertised"

  • Even finding out what the true cost is will never happen. But there is fairly sound evidence about how much CO2 we can yet pump into the athmosphere. There is a fairly good estimate of how much fossil energy is left. Everybody but a racist will admit that all people should basically have the same right to use this planet's fossil energy resources (maybe adjusted by differences in birth rates?). So I think cap-and-trade is our only hope, to at least come close to the real value of fossil energy, at least.

What do you think?



How fast do you have to boil the frog so it notices it's in danger?

Not that much, frogs are smarter than humans (as far as GW is of concern).
But as they say, "if there's no way out, then the frog's fate is a foregone conclusion."

Okay then,

could someone pleae boil a frog with strong exponential heating water and see if it would still find a way out?



Davidyson and Jack.  It is good to be able to talk with people like you.

Maybe one of those prius counts was my son, who lives is San Jose.

Yes, of course the true cost is hard to get at, that's why I suggested it is a challenge for our times.  But, as Amory Lovins likes to say, the external cost is hard to count, but that is no excuse to assign to it the only value we know for certain is wrong -zero.

Even an approximation is better than that one certainly wrong answer.  And if we (the whole of us) admit true costing as an ideal, then we can get together and start work toward getting a better value for it.

After all, we wouldn't want all those economists to just sit around doing worse than nothing, would we?

I am thinking about cost as related to-entropy generation, as some sort of starting point, but that's because I work on heat engines.

I totally agree and can't really add anything. :-)

Best regards,


I am all for a universal carbon tax.  Start at $10/tonne (c. $2.80 per tonne of CO2) and ratchet it up to $100/tonne over 10 years.  Nations that don't play ball, don't get access to our markets.

An alternative is a full 'cap and trade' system, where we set the global carbon output to what it is now, and require permit buying on the open market.  Then we ratchet the number of permits issued down (from 7 bn tpa now, to say 4 bn tpa in 20 years).


  • UK gas prices are twice US gas prices (97p/litre-- 97p is about USD 1.70).  We still drive too much, and 1/12 cars sold is a SUV-class vehicle (1 in 8 in London: I guess the snowdrifts are pretty high here in winter ;-).  Even here, petrol is only c. 20% of the lifetime ownership cost of a vehicle (in order: depreciation, insurance, maintenance, petrol, road tax).  Even charging £10 per day to drive into the core of London, lots of people do it.

  • our home electricity and gas prices are about twice yours, I believe.  I am paying 11p per KWHR for electricity, so nearly 20 cents US.

Whatever the price of electricity, I cannot see Americans turning off their air conditioners.

So I conclude taxation, in and of itself, probably isn't enough.  Or else the taxes will have to be so very high, that massive evasion will be the main problem.

I totally agree with your sketch of a cap-and-trade system.

That's the beauty of the cap-and-trade system on producer level: you "just" manage a couple of hundred fossil energy producers and they pass on the cost to the consumers.

Very little evasion possible, no matter what the prices turn out to be. You can't hide a VLCC or build stealth pipelines or secretly run an open-pit coal mine of any serious dimensions...

So the only question is: how do we get TPTB to agree on an install and enforce such a system?



Ahh but there are over 1000 airlines in the world... a simple example of how many polluters there are.

You can tax fossil fuel producing companies, I suppose, but even there, both buyer and seller have an incentive to cheat (to pay lower taxes/ buy fewer permits).   Also you have given the system the incentive to be energy efficient, but not necessarily carbon efficient-- no tax incentive for sequestration or abatement, once you have paid for the carbon (either by permit or by taxation).

So collection and monitoring and corruption will be a big problem.

It's one reason why I think energy standards legislation is going to have to be a huge part of any drive to reduce CO2: you're going to have to choke off demand at the final point of sale.


- American trains aren't worth a damn.  Except around a few major cities (NYC in particular) trains don't get you where you need to go

The only low energy long distance transport system in the US is Greyhound buses.  And then when you get to the terminus, you are often miles from where you need to go, often in a very frightening part of town.   It's little surprise Greyhound has been broke so often.

- Americans mostly cannot afford to live close to where they work.  And if they did, they would regret it: ever seen downtown Detroit?  Or considered the public (not private) schools in upper Manhattan?

Americans live in suburbs because it is rational to do so.  Most suburbs don't have facilities for bicycling, walking to shops, etc.

- diesel cars (40% more fuel efficient) are essentially unavailable (a couple of VW models).  In 2009, there should be universal low sulphur diesel fuel, and the makers should be introducing new models.  But 3 years to wait.

Hybrids only generate reasonable fuel economy savings if a lot of your driving is stop-start, low speed.  US hybrids do not have a 'battery only' feature.

There are things one can do.  For example a European (front loader) washing machine uses 1/3rd as much water as a US machine (top loader) and less energy.  New airconditioners are 40% more efficient than old ones (the SEER rating).  Ground source heat pumps have a payback of less than 10 years, even with the 50' drill into the bedrock (see below re airconditioning).

It's also worth noting the extremes of the American climate.  Anywhere east of the Mississippi, you are probably going to need air conditioning: not because it is hot in summer, but because it is humid.  I've been in Syria and Egypt in 40 degree heat, and they are not as hot as New York or Washington on a July day.

Pretending Americans are going to quickly become virtuous Europeans is nonsensical.  They won't.  And we in Europe are disastersville: Germany is building new coal plants, UK pioneered low cost airlines (and no one wants a windmill built in their line of site)-- may Brits commute weekly from France or Spain by airline.

Let's also not forget Germany is the land where there was nearly a citizen's revolt at the proposal that the autobahns have speed limits.  The traffic on the Ruhr has to be seen to be believed.  And of course the Continental European partners in the CO2 trading scheme have been cheating (by issuing too many permits to their industrial users) causing the CO2 price to crash.

The California government may be about to take the most radical steps towards tackling global warming of any government, anywhere, (except possibly Iceland).

Let's hope they succeed.

Valuethinker - now we are talking. :-)

Yes, America has a fairly disadvantageous position to start from. Of course re-forming US society in peak oil times will be very difficult -  that's why many peak oilers foresee very turbulent times for the US.

And I am the last to say that Europe is the holy grail of virtue. There are a lot of things going wrong here. You give a couple of excellent examples, I could extend the list almost infinitly.

Still, there are at least some achievements and why not learn from the best practices of all the places in the world? (I just happen to live in Germany, so I know more about it than, say, about Russian or Zimbabwan eco-achievements.)

Re. California - well, their governor comes from Austria, Europe and continues down his predecessor's ecological path despite the Bushists' otherwise anti-ecology behaviour.
European legacy or just adapting to the Californian electorate's realities? ;-)



I think Schwarzenneger has pretty much foregone his Austrian roots except perhaps there is that Austrian love of mountains.

I think political expedience is a more genuine factor. A desire to differentiate himself from other Republican politicians.  Also perhaps the influence of Maria Shriver, his wife and memmber of a prominent Democratic family.

Russia is doing nothing on global warming.  Heck, Russia is one of the few countries that probably welcomes it (if not the droughts...).  

Zimbabwe has just about the planet's worst government.  I remember recently there was a charity collecting money to get female sanitary products into Zimbabwe, because distribution had collapsed in the hyperinflation.  So I would say they have other fish to fry ;-).

On Europe, Matthew Simmons is arch.  We have more public transport, but on the other hand there is no spare capacity for freight on the rail system-- completely dependent on long distance trucking to make the economies work.

Maybe 30 years ago one could have imagined North America making due with less liquid fuelled transport-- in those days, there were still (some) sidewalks, places to cycle to, 1 or at most 2 cars per family.  There were shopping malls not 'Big Box' stores.  Edge Cities was just a concept.  Not now.  About all that can be achieved is more telecommuting, and more efficient vehicles.

I remain a cautious sceptic on Peak Oil (there will be PO, but it might be 2025, rather than 2006)-- oil will be available at a price, even if it is $100 or $150/bl, the economy will adjust.

The problem is the leading alternative oil supplies (tar sands, shale, coal to oil, some forms of ethanol) produce even more CO2 than conventional oil production and consumption.

I am a believer that global warming is now and that something has to be done very quickly, if we are to avoid the more catastrophic consequences (the milder ones are inevitable).

Hey, Valuethinker,

I used Russia and Zimbabwe as just some (as I thought) obviously superbad examples. I should have added a smiley!

On substitutes:
Ottmar Edenhofer, chief economist of the renowned Potsdam Institute for Climate Impact Research (www.pik-potsdam.de), says that current price levels are very bad for GW - they encourage substitution with these "easy but dirty" energy carriers that you mentioned.

He says that if peak oil actually happens, that would be a good thing for GW, as prices would go so high that the cost of renewables could be considered marginal.

But he agrees that markets probably won't anticipate the problem (and the need for transition) in time and therefore also advocates a global CO2 cap-and-trade system to place appropriate incentives.




Sorry to miss your humour ;-).

Peak Oil is not good for Global Warming.  Because the first thing that will happen is economies will burn more coal.

You see it already.  Canadian tar sands produces 4-5X the greenhouse gases of conventional oil production.  Yet tar sands production is scheduled to rise 5-fold, with an investment of up to $200bn to achieve it over the next 15 years.  That to produce an additional 4m b/d.

Even if we pay more attention to conservation and alternative energy in a Peak Oil scenario (I'll reiterate: I am a cautious sceptic on immediate PO-- 2025 is more likely than 2005-- what is true is that economic theory predicts that the price of an exhaustible resource rises over time, and this will happen, so by the time we hit Hubbert's Peak, oil is more likely to be $150/bl than $50/bl) the effect of more coal and other 'dirty' solutions, will offset the positive benefits.

Global Warming is the real crisis.  PO is likely a sideshow (an important sideshow, but a sideshow).

Great post, Davidyson.

The way I look at it, people (like us) who do those things "pilot" them for the rest of society and show what's possible.  When prices get high (and it looks like natural price increase is all we are going to get, without taxes), then people will know what to do.  They've heard it.  That family down the street already did it.

Actually, if are happy with lower energy choices, and don't act like a bunch of hair-shirt masochists, we might gain some early influence.

Thanks for the flowers.

It seems we're on the same ticket on this one... ;-)



Without a doubt, conservation and efficiency are cheaper and environmentally preferable to building new energy supplies.  But, as this chart illustrates, it's very hard for the average person to get at the greatest sources of waste.  We can reduce our individual consumption, but we all rely on an infrastructure that has enormous amounts of waste built into it: nearly 70% of the energy inputs to the electric power sector are wasted; likewise we lose 80% of the inputs into transportation.
nearly 70% of the energy inputs to the electric power sector are wasted

This is why I am a strong advocate of Combined Heat an Power with district heating. It has a "thermodynamic" efficiency of a couple of hundred percent: you loose like 5% electricity but you can use like 20% of the original energy to heat homes. So much better than releasing the "waste" heat into the athmosphere or into rivers and the sea.

it's very hard for the average person to get at the greatest sources of waste

This is also why I am an advocate for "CO2 source" CO2 capping and trading. This would create the economic pressure at the root of the problem. This pressure would be passed on downstream via prices.

In any case, several people here have pointed it out, it's the wasteful "infinite growth" system that's breaking our necks energy- and climate-wise, no matter what cosmetics we apply at the surface. If we were a 1-billion-people steady state world economy, we could probably all (the ethical key question: who would be "all"?) live under pretty luxurious conditions without spoiling the planet.



westexas -- I found the article to be encouraging.

Groppe seems like Matt Simmons and others who have done well within "the system" but who have also managed to maintain some kind of intellectual integrity and wisdom.

I am fascinated by Groppe's enthusiasm for preventative medicine as well as by his clarity of thought regarding energy matters.  (My own MD recommends Dr. Dean Ornish's books on a heart-healthy diet and lifestyle.  Not that I've followed the advice as well as I ought to, heh, heh.)

Groppe seems to have intellectual integrity combined with creativity and a certain amount of wisdom and even optimism -- I'm encouraged to find that in an eighty-year-old person who studies energy issues.

Groppe may be right, a wordwide Depression could bring the price of oil quite low. Imagine collapsed economies, most people walking or biking because they can't afford even 50 cent gas, etc.
But thats not real prices i.e in a recession/depression the value of money actually increases dramatically thats one reason why those with money actually do quite well during these periods till/when/if the economy restarts and starts to grow agian. The Middle Ages could be considered a almost 500 year depression. So 20 a barrel oil would probably translate to 200 barrel in todays dollars. I'm sure it will drop in price but depletion will ensure that any attempt to restart the economy will hit a brick wall.
Suggest everyone read the post by Dick Lawrence who just posted a little while ago. He is the person organizing the ASPO-USA Conference and explains the aims and some of the finances involved with the conference. He and several others are on the hook personally for the money if the Conference doesn't break even. I didn't realize until today the registration includes 4 meals + snacks and he explains why the organizers felt it necessary to include food. It amounts to over $70.00 per person.
Re:  My "Export Land" Model

Top 15 oil exporters to the US in June, 2006:
http://www.eia.doe.gov/pub/oil_gas/petroleum/data_publications/company_level_imports/current/import. html

What I find interesting is that, with some minor exceptions, virtually every one of these countries is showing flat to lower production since December.

Jeff, 2 questions:

1/ Assuming the 40% year-over-year decline in Cantarell, what would that mean for total Mexico exports (and production)?
And how will that in turn impact the US, which is their biggest client? How many barrels will go MIA?

2/ Maybe not so much your expertise, I'll pose it anyway: When I see Russia getting into nuclear, I can't help wondering how large their oil/gas reserves are. They may contend that they go nuke despite their vast reserves, market liberization, no less, but is that the whole story?
50 new plants in 25 years, construction costs of $100's of billions in what is still a poor country, would it be a big surprise if they have a lot less reserves than they claim? What do we know?
(Note: it's unlikely any new reactor will be online prior to 2020, that's the time-frame we're looking at)

I think your question contains the answer in here:
it's unlikely any new reactor will be online prior to 2020

What about Russia looking beyond 2020 when it considers that even its vast (mostly NG) reserves won't be sufficient? Remember that Russia is a key energy exporter and it has all the incentative to remain such. Same motivation as Iran.

Perhaps the Russians are taking Groppe's advice
To avoid a global crisis, Groppe thinks that Americans should use the next 10 years, a time in which production output is expected to peak, to transition into new energy-usage habits. "We must rely more on nuclear power and alternative energy supplies and use all energy more efficiently," he said.
Fairly poor coutries like Russia, China, India, Iran etc. do not have the privelige of fooling around and investing in expensive and ineffective technologies. For the same reason they also lack enviromental groups pushing them in that direction. If they want to survive and compete with the West, they have just one option - pragmatism, and that's exactly what their choice is. After removing all the ideologicaly motivated noise, Groppe's advice remains the most pragmatic direction for the situation we are collectively headed to.
(1)  Cantarell Crash = Big problems.  

80% of Mexico's exports go to the US.  IMO, by about 2010 or so, Mexico will vitually have ceased to be a net oil exporter.  We are going to have to bid the price of oil up to keep it coming.  One problem, among many, is the very long distances that the replacement oil, assuming that we can outbid other importers, has to travel, versus the very short distance from Cantarell to the US.  I have been beating the Cantarell and Ghawar drums for some time.  The math is relentless.  The remaining oil reserves in the two largest producing fields in the world, at one time accounting for 10% of crude + condensate production, are in rapidly thinning oil columns between expanding water legs and expanding gas caps.  In both fields, from this point forward, they can have higher recoveries or higher short term production, but not both.  

(2)  I started my "Export Land" work with a January, 2006 post on TOD, asking if Putin has no clothes, i.e., I questioned (based on Khebab's HL work) the remaining Russian oil reserves.  

Based on the HL method, Russia oil reerves--or at least their currently producing basins--may be as much at 85% depleted.  Since 1984, Russia's cumulative production has been, through 2005, exactly what the HL model predicted it would be (using only production data through 1984 to generate the model).  Russia--just like the US--clearly has some new production coming on line.  The question is whether it will be enough to offset the sharp decline in production from the older fields.  IMO, I expect to see a resumption in falling Russian production by year end.  

1/ Your decline numbers, for both production and exports, would seem to imply big problems way before 2010. Like next year.
2/ What about their gas?
Unlike Saudi Arabia, every part of Russia has not been explored for oil.  So most of eastern Siberia and the Arctic shelf is a question mark.  Your estimates are right for the old producing regions such as western Siberia.
Russia has been 'high-grading' for the past 6 or 8 years and, although 'every part' of Russia most certainly has not (and never will) been explored for oil, there has been exploration in Eastern Siberia. Here's an interesting piece by an oil geologist who seems to have some in-depth knowledge of the Russian oil industry. In the part about Eastern Siberia note the reference to 'non-anticlinal traps.' Probably someone like plucky underdog could give a better explanation than I could of what this means (beyond 'very hard to get and very expensive to get').


Bottom line at this point seems to be that chances of new discoveries of huge and easy to get oil in Russia are very slim.

Nice find ET  The plot thickens.
'non-anticlinal traps.'

This refers to stratigraphic type traps.  Structural (anticlinal) type traps are easier to find.   For example, the Ghawar Field was found because surface mapping of the structure, and via shallow core drilling to map the shallow horizons on top of the field.  A stratigraphic trap with no obvious strutural manifestation is harder to find.  


What do you think about this?

"At the same time, Saudi Arabia must cut its output down to around 8.5 million barrels a day to prevent prices from falling too far, he said."


Strange to any one else here?  I'm a newbie, so maybe someone can help me out on why I might be wrong.  If production needs to go down to prevent oil price collapse, why does Saudi have to shoulder all of the cuts in production.  If we need 500,000 less production wouldn't splitting the loss in production and therefore $$ be shared equally among the OPEC nations?  Anybody here have a reason why only Saudi's should take these cuts?

Re:  "If production needs to go down to prevent oil price collapse, why does Saudi have to shoulder all of the cuts in production."

Saudi Arabia was the successor swing producer to Texas, after Texas peaked.  I say "was," because IMO Saudi oil production is dropping because of depletion, and not as a result of voluntary cutbacks,  but that is the multi-trillion dollar question.

I have several articles on the Energy Bulletin that go into the Hubbert Linearization (HL) method, using Khebab's work.  If you go to the EB, search under authors for Jeffrey Brown.  I would recommend the Lower 48 and Texas as a Model for the World and Saudi Arabia article.  


Thanks.  I've been following this stuff for about 8 months now and I've read your articles.  I really like your analysis and I find it compelling but I still have questions.  I tend to agree with you, especially about exports dropping off faster than production, and so far (only a short time) the EIA data is supportive with Saudi and World Production of crude + condesate down since December 2005.  

I guess where I get we are post Peak doubts (for crude oil) is whether this is demand based or supply based.  If Saudi drops to 8.5 million barrels in the future AND we see a recession developing in U.S. how will we know that the drop in production isn't based on cutbacks to support price in recession or geological decline?  

See, if you are right, and OPEC production has peaked couldn't that fact be hidden for maybe a long time by a recession?  On the other hand, couldn't OPEC production drop simply because they purposefully decided to cut back production in light of a recession (as they are suggesting in the newswires now that they might do?)

My question is:  What do you believe will be the "smoking gun" needed to catch the Saudi's on their production decline?  I have seen a lot of excellent circumstantial evidence presented on this site that the Saudi's are full of it, but I wonder what you think will be the best proof that the Saudi's are truly in trouble?  

Re: Patently Oil

As others have pointed out, the "smoking gun" is probably the fact that we have seen falling oil production in Saudi Arabia, against rising oil prices.  Historically, the Saudis ramped up production when prices rose.

Fundamentally, the only reason we won't have $1,000 oil (absent hyper-inflation) is that people can't afford it.  IMO, oil prices will be set by a series of auctions for falling production.   As more and more countries can't afford to buy oil and/or as we enter a recession/depression, demand will fall.  But IMO, we won't see a rebound in supply, which is why I constantly recommend changing your lifestyle now.  

If I am wrong, you will have a lower stress way of life, less (or no) debt and more money in the bank.  

... but in the very short term, reducing Saudi production has coincided with an easing of the price of oil.

It is plausible that the Saudis are fine-tuning their output to support a price range they are comfortable with.

But I agree, and I'm working on the lifestyle.

Yeh, oil has taken a bit of a hit lately, but we are still in the general area of unprecendented historical highs.  I would think if Saudi wasn't in depletion or "rest" mode, they would be increasing production, not decreasing it.

We've been here before wherein Saudi cut production, not because of price but because they needed to rest their fields in an attempt to slow down depletion.

Of course, one never knows for sure because of the lack of transparency.  

Why  is Kuwait willing to entertain the idea that they should start thinking about stretching out their produciton over the long term so that they can have a long term source of income while Saudi refuses to acknowledge that perhaps it is time to conserve some of their oil so that they can have a long term source of income?  My guess is that Saudi can't face the fact that they are rapidly losing their status as the big dog and can't bear to tell their rapidly growing and poorer population that not only is the party over but it's been over for a long time. Also, admission of peak oil will just accelerate efforts to come up with alternatives.

Peak oil doesn't mean the end of the party in the KSA.  Quite the opposite; sustained high prices which no producer can break mean a huge flood of income for quite some time.

The end of the party comes when alternatives destroy enough oil demand to bring prices down again.  Because the whole world has frittered away 3 decades we should have been using to engineer our way out of this, this is likely to take a while.

Very different demographic projections.

There are something like 500k Kuwaitis (plus over a million people who are essentially 'guest workers' who can be slung out at any time, as the Palestinians were after the First Gulf War).  They don't have a huge birth rate.

The country has over $200bn of external investments locked up in property and stocks all across the world.  Enough to support every Kuwaiti for the foreseeable future.  The extra price 'pop' right now, is money they have to recycle into investments (a lot going into Dubai: after 9-11 showed the US was not afraid to freeze assets, a lot of Arab money has been reinvested in countries they feel safer in).

Saudi has one of the world's fastest growing populations, it has trebled since the mid 1970s.  They have a huge wave of young people just entering the labour market.  Even menial jobs are now taken by Saudis.

GDP/head in Saudi Arabia has fallen from c. $20k in the 1970s to $8k now.  This is a country on a downward slope.

The Saudis need oil revenue.  That 3 billion barrels a year is more than 80% of their export revenues.

Read Daniel Yergin's 'The Prize'.

The Saudis are always the OPEC swing producer, since the 70s.  Only they have enough cash, and enough surplus capacity, to swing up and down.

Since they don't want to encourage conservation or energy alternatives, they are also the 'price dove' amongst OPEC nations.

What is interesting this time is the price spike has been about demand, not supply (no big political crisis in this rise in price).  And the Saudis seem to have lost control of the ability to moderate the price rise.

Historically, once the price of oil got to $50, the Saudis would have opened the taps and brought the price back down.

This time, perhaps because of financial speculation and political jitters, markets have kept the price up.

Hello Westexas,

I am no expert, but you may find these PEMEX presentations to be useful for your ongoing export depletion analysis. You may want to bookmark this first link for easy referral.

This above website is in english and has audio and PDFs with easily understandable graphics and numerical #s.  The latest [28 page pdf] of June 30th not only shows the production decrease on page 6, but on page 8 shows a 20% decrease in overall drilling activity with most drilling to be infield workovers, not exploration.

What I found interesting is that there is no formal discussion of Mexican Peakoil and Cantarell's decline in this PDF [perhaps too controversial?].  IF I was a professional outside corporate auditor--I would require this discussion be included to shield the auditors from lawsuits for failing to fully disclose future-looking energy extraction and resulting financial conditions.

On page 9 of same pdf, the Bermudez oilfield project is mostly secondary and tertiary workovers too.  Makes one wonder how quickly Mexico's other oilfields are going to rollover their respective peaks.  No mention of a corrosion prevention program either-- therefore we have no idea if PEMEX will start springing leaks like BP's Prudhoe.

Since PEMEX is basically a huge, bloated bureaucratic arm of the Govt, I imagine everything is poorly run and maintained, but I could be wrong.

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

One thing everyone keeps overlooking is that when PEMEX can no longer ship oil, Mexico can no longer pay its' debts. Mexico's foreign loans are secured, in effect or in fact, by liens on Cantarell. >>Financial crises, emigration, civil unrest?
Hello OldHippie,

Good point!  Something for us to keep in mind.

The elite topdogs are probably waiting for PEMEX to declare Mexican postPeak bankruptcy so that a quick re-privatization by the IOCs, China, Mexican elites, and participating hedge funds can be done for mere pennies on the dollar [cutting out any beneficial hope for the average Mexican], then we can possibly expect SuperNafta to be quietly, but suddenly approved by the three countries' ruling parties.  Time will tell, but plans are moving ahead for huge SuperNafta Mexican shipping ports with China investing billion$$$$$.  Afterall, China elites have to do something with their huge piles of dollar reserves.  I don't agree with this author, Jerome Corsi, in regards to his ignorant stance on the abiotic origins of oil, but this appears to be a fairly well researched article.

Consider the infinite growth & profit paradigm in this excerpt:
The argument is that in opening the U.S. to cheap Chinese goods, we are leading a worldwide "race to the bottom," in which "the only priority is cost effective production, at the expense of workers, resources and sustainability." The result is that the international capitalists owning companies such as Wal-Mart earn additional billions, while U.S. manufacturing continues to out-source an increasing number of jobs and poor countries such as Mexico are only pulled deeper into poverty.

When I was laid off from INTEL, my outsourced job went to Mexico first for Nafta benefits, then quickly moved to China in the next outsourcing move.  Even Mexicans cannot yet work as cheap as the Chinese on the bottom rung of the economic ladder.  The Great American Middle Class cannot expect to evade this economic trend either-- Westexas's HELP strategy is good advice.

Recall my postings on the detritus-fueled humanimal ecosystem whereby a nearly infinite level of economic strata will arise prePeak.  But like in any ecosystem: very, very few of us can be the postPeak keystone predators-- most of us will be economic prey somewhere in the decline of the labor foodchain.  Such is life.

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

The Russians are leading the world in new railroad electrification.  The Trans-Siberian was finished in 2002 and the rail line to Murmansk, the Artic Ocean port, was completed last Christmas Eve.  More scheduled to be electrified.

As discussed here earlier, electrification of a railroad trades 2.5 to 3 BTUs of diesel for 1 BTU of electricity, and expands the rail lines capacity (faster acceleration & braking, trains can be run closer together).

Another aspect on energy security for the Russians.

Best Hopes,



Do you know of an "import land" model?  Well, that's probably not the best term to use, but basically I'm wondering if you could point me to a monthly or an annual report on global oil inventory (by major region preferably).  Haven't been able to find such a beast on my own so far (haven't looked too hard either).  

Seems to me that a likely indicator of demand beginning to outstrip supply will be a decline in global inventory stocks.  As we near either the final oil production peak or an interim peak, I would expect that oil production might still be slowly rising but global inventories are falling.  

Commodities traders & N. American media seem to pay attention only to US oil inventories, but since the US "only" consumes 25% of world production I would think a better measure would be global inventories.



Not speaking for Westexas but here is a post from Planner a couple of days ago:

Total US petroleum supplies currently are above the five-year historical range. Crude oil prices are falling. Time to breathe a sigh of relief?
Not so fast, says the investment firm Raymond James in their weekly energy "Stat of the Week" (warning, PDF file).

Raymond James points out:

Total petroleum supplies are still below 10-year highs

When looking at days of supply (i.e. considering growing total petroleum supplies with respect to growing petroleum demand), the US is in the lower half of the 10-year range

The US appears to be unique in its recent petroleum builds. OECD countries have only posted a small increase in total petroleum supplies.

Total petroleum days of supply for OECD countries is near a 10-year low.

Raymond James concludes that the oil market "will remain tight over the next several years and beyond".
(Note that I have no affiliation with Raymond James whatsoever. I just find their weekly Energy newsletters to be an interesting perspective)

So that's what OECD countries stocks are looking like.  I'm suspecting poorer countries stocks to be looking a bit worse.  Don't be misled by the high oil stocks hype.  Oil stocks always get bigger each year because demand grows each year.  Pay attention to days of forward cover--this is the true indicator on how well the current stocks can meet the current demand.  We have improved, but we are far from having stocks runneth over.

Thanks for the info, Patently Oil.  I would agree that days of forward cover is a better measure of adequacy of inventory.  Makes sense too that the inventories of poorer countries should be the first to fall upon being outbid by richer nations.  Still looking to find some kind of global totals .....


If that's true, why is there plenty of oil around, as per OPEC?  Surely world demand continues to grow.  Why are so many independent oil analysts projecting lower prices over the next few years if exporters production is flat to lower for the past 8 months?
If you've been watching, oil analysts have been consistently predicting lower prices since  2000. They thought oil in the 20's was high. They clearly know nothing - at least over this decade.

Plenty of oil is relative. There isn't plenty in terms of stocks going forward, but there is no shortage yet either. However, there is also no longer the cushion of just 2-3 yrs ago of several million surplus capacity in OPEC. It is largely from this cushion (plus Russia's surge, which has now slowed and perhaps stopped or even reversed) that oil has come in recent years. That cushion is no longer there, and as noted elsewhere, the big fields are just now entering assertive decline.


People were asking for a plateau graph yesterday. Stuart ain't around so I'll throw this out. Mine's better anyway. If you click on image, you'll get some killer post-peak fiction.

This is last month's graph. I haven't updated yet. But the new one will look exactly the same.

I think we're up 300,000 barrels or something.

Note that the EIA shows world crude + condensate to be up by about 50,000 bpd May to June, but down by about 930,000 bpd December to June.  IMO, the declines in Saudi and Mexican production will really show up in the second half of the year.  Of course, the declines in the net oil exports from these countries will be much sharper.
Totally agree. I'll be calling you one of these days so we can talk about this.
Damn!  So that's what Don's been upto!  Some more reading for this afternoon.

BTW, they're interviewing Paul Roberts ("The End of Oil") on NPR as I write this.  Not surprisingly, Mr. Roberts isn't impressed by the discovery in the GOM.

Paul Roberts! Wow! Blast from the past.

What show is it? Thank God NPR archives everything.

Paul Roberts' book is like THE classic. I pimp Simmons and others here, but Roberts is really top notch. That's a great frickin book. I gotta give that a fourth look. Thanks, KJ.

Not a bad interview.  He managed for talk for a few minutes without mentioning Peak Oil, however.  God forbid.  He did point out that focusing on supply is like playing "whack the mole"; you knock down one supply problem only to have another one pop up somewhere else.

What he said we should be concentrating on is demand, which we have a great deal of control over.  He isn't hearing most people describe this oil discovery as meaning that all of our supply problems are over, but on the other hand, people don't seem to be taking the price problems seriously yet.  This would mean things like ditching the long commute or buying a much more efficient car.  He does see an understanding in businesses that things are going to have to change.  The interview aired at around 10:30am on weekend edition.

"Audio for today's show will be available at approx. 1:00 p.m. ET"


Re: What he said we should be concentrating on is demand, which we have a great deal of control over

If only that were true....

Re: Don's Story,

Not Bad!  I spent a few hours when I should have been working reading it.  I'm a little surprised that - oh wait, I suppose I shouldn't spoil the plot.  I'll just say that I'm not sure I buy that someone could shoot a .45 that fast and still be accurate, and I don't think the magnetic field bit made any difference.  

Highly recommended reading.  I'm definitely looking forward to sequels!

Thanks OilCEO for the graphs.

I miss Stuart's graphs. His analytical sense combined with an ability to synthesize a broad range of information are what got me hooked on TOD.

I keep his essay "Why Peak Oil is Probably Now" next to the picture of my wife and two kids.


As an above poster mentions, we get so caught up in decimal places. Many of us need the big picture.

Are you still claiming that you are Lee Raymond? What did you do with the $400 million?

I've donated most of it to a foundation which provides prosthetics to victims of land-mines in the third world. A certain portion went to enhance several water and sewage projects around the globe. And I think I spent the rest with Kofi Annan on overpriced wine in Dubai and Thailand. I'm not sure. I'm waiting for the credit-card bill to come.
Stuart, where are you, man?  Can't you see that we all miss you??!!
I have to say this graph doesnt necessarily say much if you look at it historically. There was a plateau from 98 to 2000 and a dip in 2001 - 2003(US economic slowdown.)

I think many people are personally defensive on predictions they made, which may or may not prove true. However, if no immediate peak we do a great disservice keep trying to hammer home that things have already peaked, because if we dont peak for another 5, 10, or 20 years, we still need to be taking action as fast as possible, a false peak will only slow action down and we've already wasted 30 years.

While it is true that we have seen declines before and previous plateaus, we have never seen those during periods of rapidly rising prices. It is a different animal.
In France, it's official, use of cars has dropped in 2005 : -1.5%... For the first time in 30 years.

(in french).

That probably saves something like 100 kbpd, I guess... And certainly more in 2006 !

That's what happens when you burn 'em.
Burning cars is sooo last year. And the police haven't killed any kids this year so far.
And road accidents are well down, -40% in July compared with July 2005. Tarffic spped is dropping partly to conserve fuel and partly because the police are lots of installing cameras.
BTW Total-ELF oil have large exploration and developments contracts with Iran. They are continuing normally. They also had big contrscts with Iraq that were terminated illegally by the occupation authorities
I would bet it is the speed cameras, and real enforcement of speeding, that has done it.

France has discovered that driving too fast is not a civil right.

The other factor is the weakness of the French economy.  I have a number of professional friends in France: everyone is worried about their jobs, and the growth that is coming through is not making anyone confident.

Anybody worried about tomorrow? As in 5th anniversary of 9/11. I usually take the train on Mondays. But I think I will drive this time.
I think law enforcement is fully concentrated on what might happen ... but no, I'm not worried.  The incremental change the terrorism risk makes in our death odds for tomorrow are negligible.

I'm one of those people who thinks we should rationally be more worried about traffic deaths.

Aw, C'mon. You totally ruined my thread with this rationality stuff. Me and Substrate were discussing car accidents the other day. How come you didn't join us then?

Now you want to try to ruin the FEAR?

(You know I love you Odo, and, yes, I totally agree)

Double sorry.  I missed the car discussion ... but, I went mountain biking yesterday.  That should probably be outlawed too.

... I'll go watch CNN for a while, that will set me right.

I hope you scanned the bike for liquid explosives, first. You can never be too sure these days. Make sure you put tin foil over your head before watching TV. And always consult me about what shows to watch. Fox has some hot new anchors.

Over and Out,
Big Brother

Nope; I'm driving the Mall Rat down to Berkeley tonight, and will spend the night at my Mom's, on the Peninsula. So I'll get to cross the Richmond-San Rafael, the Bay, and the Golden Gate  Bridges all more or less on the anniversary.
 No big deal. More danger from earthquakes, and I worry more  about PO & GW than shakers. Been thru them B4.
I've been to Berkeley once and SF in general a couple of times. I love that area. Last time it was just for a few hours on my way to Seattle. I always love riding the bus. I will never forget my last bus ride in SF.

It was totally cool. I felt the love. Can't say that about Boston. Unless you are doing the Harvard to Kenmore route everyday, it ain't friendly. It's not bad, it just ain't Disneyland.

But whatever. I guess everything's local. Totally love your posts on the Dead. Kept me out of the Cold Rain and Snow. Peace, Brother.

I may be missing something, but I haven't noticed that AQ is really that inclined to do things on anniversaries or to choose significant dates to do things. It seems more random to me.

Of course, there are only 365 days in a year, so given enough events, it won't be hard to make some correlation to some past event that happened on that same calendar day.

March 11th Madrid bombings was exactly 2 years and a half after September 11th of 2001. In April 2006 the official investigation finished. According to this investigation the responsibles were a group of muslims inspired by al-Qaeda.
The Madrid train bombings were exactly 911 days after 911, but last Thursday was 911 days since the Madrid bombings, and fortunately nothing happened.

Some people also point to the fact that 77 was the number of the plane which crashed into the Pentagon (or didn't according to some conspiracy theories), and the London tube bombings which occurred on 7 July 2005 are being called 7/7.

Islamic calendar = 360 days.  Why should he honor an infidel calendar?
Actually ~354 days... so, for example, Ramadan typically moves "forward" each year by 11 days on the western calendar.


No.  The war in Iraq successfully ended terrorism.  The terrorists are all on the run.
Three theories from an amateur observer - please shoot down where applicable.

Oil prices are falling due to supply and demand factors, and the unwinding of the fear premium.

Oil prices are falling because Bush has arranged with his friends in KSA and elsewhere to release such stocks as they may have held in storage to push down prices before the US election.

Oil prices are falling because KSA and other Gulf states anticipate (or possibly have foreknowledge of) a Bush strike on Iran, which they have to assume would likely lead to a closure of the Straits for at least a time, and they are selling off such stocks as they have in storage while they know they can still ship them.

I think all inventories were filled as much as possible in advance of hurricanes, May or so, and now with no hurricanes the oil buyers are not buying the high dollar oil because they don't need it yet because of the high inventories ... IMVHO
IMO 3 is even more unlikely than 2. Oil producers do not have any significant quantities of oil in storage, and if they anticipated a closure of the Strait of Homuz I would expect them to display different behavior then trying to earn a few extra bucks.

My bet is on 1, but I also think that it could be influenced by the this administration, which with the help of the media can manipulate the market to some extent.

"Three theories from an amateur observer - please shoot down where applicable."

We have seen two oil price uptrends this year. Both corresponded to periods of declining total US petroleum imports, relative to December, 2005.  

IMO, absent a major and sudden disruption in oil production and/or a massive recession/depression in the short term, oil prices are going to look like a Sine wave, with an upward bias.  

Each uptrend will correspond to declining net oil exports as an auction takes place, where the available net exports are allocated to the high bidders--and low bidders are forced to conserve.  We will probably then tend to see an oil price decline as demand (among the high bidders) is met and as some degree of conservation sets in, because of higher oil prices.  And then net oil exports drop again, setting off another bidding cycle.

The wild card is a recession/depression.  

We are certainly seeing strong deflationary headwinds as the debt bubble begins to deflate--and as consumers and busineses try to unload highly leveraged assets.   In "Normal" times this process would lead to much lower energy prices, as demand fell and as supplies increased.  This time, IMO, we are only going to see a demand response.  The supply response will be falling oil production.  Therefore, one of the "benefits" of deflation, lower energy prices, won't be a factor this time--absent an immediate and massive recession/depression.

The wild card is a recession/depression.

Another wild card involves military action. In the ME, if Iran is attacked by either the US or Israel, the prices will skyrocket overnight. Another potential conflict that many aren't paying attention to is the high level of tension between Georgia and Russia.

Consider another premise quite commonly held by economists is that price fluctuations tend to be very severe as we get close to constraining a resource.
Four - oil prices are falling because the FEDs are dumping some of their TRILLION $ future contracts at a loss.
Do you have evidence for this? Why are they doing this?
I refer you to the work of Michael Bolser (www.interventionalanalysis.com.) If you email me privately I will be happy to discuss this with you.  
Why post wild claims here then refuse to discuss them? If you can't back it up, why post?
I am merely drawing your attention to alternative theories of what is going on. If you are interested - follow it up.


I was really intrigued until I got this statement from  Michael Bolser
I'd like to remind your listeners that there is a Strategic Petroleum Reserve of about 57 or 58 days worth of above ground storage and we're also just a few weeks away from a presidential election. We had a popular presidential debate last night. I would ask your listeners to ask themselves the following question with regard to why we have $50 oil, " If you were President and you had just a few weeks to go before a Presidential election, would you leave oil in the Strategic Petroleum Reserve and let it run to $60 or even higher, just as the election is happening or would you use your Presidential authority to sell every single barrel you could to get the price of oil off the headlines?"  
The idea that the SPR would be used would require them to somehow sneak it on the market and that's dubious.
There may not be enough oil left in the Strategic Petroleum Reserve, enough salable oil, to get the price down. This is one of my comments in the past month, that it is my opinion that the SPR is already effectively drained.
That statement really killed it for me.  He's just babbling now.
FEDs? Do you mean the federal government? If you do then this is pure bullshit. The government does not trade futures. No government agency is authorized to trade futures.

Why do uninformed people post such pure bullshit as this?

Ron Patterson

The FEDS trade the market every day openly through it's REPO and POMO actions by releasing money to the primary dealer banks (Goldman, JP Morgan, etc) to either buy stock futures or support the treasury market. This is not speculation - this is fact. Is it so farfetched to then believe that they do the same thing in the commodity markets?
From the FED website:


Monetary policy can be implemented through outright purchases or sales of securities, which permanently changes the size of the Federal Reserve's System Open Market Account (SOMA) portfolio.


You must get off this kick that government insiders and private bankers would ever manipulate the markets.

This is a democracy, damn it, and we have only free markets here!

They told me this on Fox News.

There's an election coming. I bought gas for $2.59 on Friday. I am now in a good mood thinking how grandfatherly and generally sweet is the aura about Dick Cheney.
What's really interesting about the Houston Chronicle article is that this (the Henry Groppe story) is just one of two presenting the Peak Oil perspective, the other being the one summarised as "Oil Find Unlikely To Bring Cheap Gasoline". The Chronicle is part of the Hearst newspapers, and is unremittingly conservative, although not 100% Neocon. Their coverage of the Bushes is comparable to the British press with the Royal Family.
  What these articles show is the wave of Cornucopian Hoo-Rah has broken against the rocks of reality. The home-town press of Chevron and the exploration departments of the Majors doesn't seem to endorse their point of view.
Remember that the movers and shakers in Houston traditionally liked the price of gasoline to be high.  America thinks of the mid-1970s as one of the low spots in our history, but old-time Houstonians think of it as the golden age.  Maybe the Chron is more biased towards the elites than the commuters.
  super390 ,I don't doubt that the Houston Chronicle is predudiced towards elites, they are a Hearst newspaper.I grew up in Houston and think its a terrible shame that ourmedia has been concentrated in a few foreign (to Harris County) media companies. As well as the rest of the US. At least blogs are free!
It is sad that the Houston Chronicle can't use its employees to report or investigate for the commomn good of the readers. Most every article is copied from Rueters, AP, or from another newspaper like the Washington Post. As the 4th largest city in the US, the Chronicle could do better. Hell, even the Dallas Morning News does better coverage of news, including oil and gas!
Someone else may have posted this on a previous Drum Beat and I missed it.  Sorry if this is a dup.

The October, 2006 issue of Comsumer Reports has a 5 page article on ehtanol.  The cover shows a quasi-gas pump with the title The Ethanol Myth.

The article covers the basics and I highly recommend it although TODers will disagree with parts of it.  It is reasonably balanced.  One factoid of interest is that their fuel milage tests showed E85 gave 27% lower fuel economy compared to the E10 they used for the gasoline portion of the test.  I would have found it interesting if they had also tested against straight, no E, gas.

 Have you used, or investigated, glacial dust?
  1. It was hard to get it into the tank.
  2. Car didn't really run all that well on it.
  3. The fuel pump started making horrible noises after a while.

Could you be a little more specific.



I was unaware of this glacial product.  We added granite dust (to get higher levels of trace elements) when we first made our beds years ago.  Interestingly, we are planning on adding another shot of granite dust next spring (I'll have to consider the glacial stuff - it'll depend upon price).

The reason I want to do this again is that I really want the soil in top condition given my view of the future.  BTW, I am absolutely convinced that adding carbon via charcoal is something ever gardener/grower should be doing.  We had the best plant growth ever until the wild pigs got in. I'll continue adding charcoal from our wood heater forever.


  The US Department of Agriculture Soil Conservation Service analises soil for free. Check with your County Agricultural Agent.
so what does adding charchol look like?
pulling out half spent fuel, chipping, spreading and then turning?
Add no more than 10% ash and charcoal to an elevated container of compost and earth worms. Keep moist and collect the 'coffee' that drips from it, then dilute in a watering can. It even smells nice.
I just bought four 50lb bags of cheap charcoal briquets.  Make sure you buy the cheap ones without any starter fluid in them.  I first tried to crush the briquets by hand between a rock and a paver, and then got some brains and just put them in a bucket to soak in water.  In a week, most of them had broken down and turned into charcoal mud.  The others were easy to crush by hand.

My general rule for adding soil supplements is to go slow and make it a multi-year process.  So I added about a quarter bag per 4x4' plot.  I dug two of the plots deep this year and mixed the charcoal in layers with good dirt, compost/manure, our compost, and sulfur.  I say good dirt because our B horizon is glacial till gravel.  I haul that away for other uses.  We top-dressed the other plots with the charcoal slurry and compost/manure and mixed the surface a bit.

I tried taking coals out of the stove, and it was a real pain.  It was hard to get decently small grains.  We decided this year to just burn the wood to ash. I think in the longer run we'll end up collecting charcoal from the stove.  BTW, be careful using the ashes.  They're alkaline, so you might end up with higher pH than you'd like.

We had a pretty good year and peppers did great in one of those deep plots.  I don't know how much of that was due to charcoal.

FWIW, the natural "lump" charcoal is pretty cheap at local Mexican markets.  (It burns hot and is just the thing for carne asada.)  I found the quality a little uneven for my barbecue though.  I think right now I'm burning some hardwood lump from Trader Joe's that's very good .. something like $5 for 8lb?  Something like that.

(I guess the trick for gardening would be to be to find someone who will deliver a yard, or a half ton, or something.  Is that what Todd did?)

"The reason I want to do this again is that I really want the soil in top condition "

  That's my thinking. I figure I will get a bag just to have.
 I've been putting wood ashes in compost since I was about 11 years old. That's the way my grandfather showed me how to make it.

Great article. I love the SUV with a single passenger in the graphic, Consumer Reports is in touch with Amurrika.
As I understand it, vehicles that are capable of running on E85 are allowed to pretend they run half the time on E85 when considering the EPA fuel economy standared.  i.e.:  a truck that scores 10 MPG on gasoline gets to pretend that on a 20 mile trip it uses 1 gallon of gasoline and one gallon of E85 for a total gasoline conumption of 1 + 1*0.15 = 1.15 gallons of gasoline.  That yields an EPA economy figure of 17.4 MPG.

CAFE "average" is calculated assuming each vehicle in the fleet drives the same distance.  So, if you have a 10 MPG vehicle and a 30 MPG vehicle both traving 30 miles, the "average" mileage is 60 miles / (1+3 gallons) = 15 MPG.  However, if the 10 MPG vehicle is counted as 17.4 MPG, you get a figure of 60 / (1+1.72) = 22 MPG.  If you instead converted the 30 MPG vehicle, you would get 60 / (0.575+3) = 16.8 MPG.  Thus, low-mileage E85 vehicles help the CAFE average more than high-mileage ones, which explains why GM and Ford are putting most of their ethanol effort into their trucks.

A manufacturer isn't allowed to boost their EPA score by more than 2 MPG total.  (There was even recent talk of raising this figure.)  Even limted at 2 MPG this means that a 20 MPG score is boosted by 10%, causing 10% more fuel to be wasted.  Can ethanol make up for that 10% waste?  Even assuming that no fossil fules are used in making ethanol and assuming vehicles get the same mileage on E85, the USA  can't produce enough ethanol to cover the 10% additional consumption caused by the 2 MPG loophole.  Perhaps in the future a tehnological breakthrough will enable huge ethanol production;  at that time (if it ever happens, 10 years from now), consumers could just pay $250 to $500 to convert an existing vehicle.

Someone named Peter Beutel told CNBC we will see $0.99 to $1.35 in the future (on right hand side middle of page):



He is right. US to start selling gas by the litre in 2008 to take the psychological pain out.
Yes, I've heard rumours that the big oil companies are figuring out a way to give gasoline away for free!

"Gasoline too cheap to meter" will be the new global reality, and "Self Serve" will once again give the feeling that one is saving money.  Some stations will take down the "self service" signs and put up signs that declare "Free Gas - Help Yourself!"

No no, we'll have nuclear reactors in our cars, that will power them. They'll be the size of a typewriter. Some people haven't been reading their Popular Mechanics from the 1950s hehe. Pay special attention to the issues with "flying wing" type aircraft on the covers, being flown with the computer power of a pilot & co-pilot, in spiffy hats. Those have the most accurate predictions!
Didn't I see that guy last as a legal analyst on the Jon Benet case? I wonder where MSNBC drags these guys up. They all have a bad sports coat and look a little peculiar. And, they always take an extreme, unsupported position based in fantasy-sort of like poltergeist experts or alien abduction victims. I doubt he can even read at an 8th grade level.
   There have been several posts during the last few days refuting the Cornucopians. The man problem is that Chevron/Devon/Statoil did not announce a 15 billion barrel oil find. They said that their second appraisal well had discovered a field and that they had 300 million barrels of proved reserves that drill stem tested at 6,000 barrels a day, and that a trend which is a couple of hundred miles long might hold between 3 billion and 15 billion barrels.. Remember that CNBC is selling a lot of car commercials, and read WestTexas's post and my post in yesterday's thread, and Dave Cohen's tomorrow.
Beutel's assumption seems to be that one can find oil anywhere at the right price.

He states that "you can probably find oil in your back yard, you would just have to dig really deep" at a price of $70/barrel.

(Note, he actually said "dig really deep" rather than "drill really deep" - what's that about?)

Why does anyone put this kind of garbage out there?  It seems to me designed to muddy the waters, or else to stir up controversy where there ought to be no controversy, based on false premises.

The article reminds me of the people who still put out the idea that global warming is controversial.

A gold detector?
  That's pretty funny, digging a hole in the front yard loking for gold. I once did something kind of similar, though. I got so aggravated at the high natural gas prices in 1982 that I went down to Cambe well log library and pulled some logs to see if there was any chance of gas in my back yard in the Heights in Houston. Looked like a bald wildcat as there hadn't been any wells within a couple of miles, but I did figure out a couple of pretty good miocene, frio and yegua plays in that part of town based on surface geology and production on the fault trend.
  There is probably a couple of billion barrels under the city of Houston, stranded by the growth of the city.  I have always thought that someday prices and energy security might make the deals drillable at some point, maybe in 10 years or so But if landmen think working in Tarrant County(Ft Woth) is bad, Houston would be worse. But still, the lease onthe DFW Airport sold for $10,000.00 an acre a couple of months ago, so maybe a good prospect is now worth the money...
Gold can run in pockets and veins, and this is sure a gold-bearing area. So, I can imagine this happening. But the guy forgot to research how many of the old gold hunters died in unsupported holes.
See where Herbert Hoover used to live in the gold mines.
They say he was unsentimental and probably wouldn't mind if his house went through the crusher.
I've got my copy of "De Re Metallica" - translated from the Latin by a Herbert Hoover and his wife, in 1912.  They don't make presidents like that anymore.  I like it more for it's 1550's woodcuts and have never really read it all the way through.  Pretty amazing to see a stamping mill on page 248.  We tend to think such machines are modern.

A bunch of images are here:


one of my favorites:


6.0 earthquake in the gulf, is this the beginning of the end for New Orleans?
The big slide? (Joke)


Are any oil rigs affected by this?

I've not heard of earthquakes affecting GOM production before -- has this been a problem that anyone can recall?

An interesting aspect of deep water wells...what happens if a sizable earthquake happens nearby?

The quake was in the deepest part of the gulf, far from any rigs, and no this is the first quake I have known of in the GOM.
I come briefly out of retirement to make an obvious statement for the cause of the GOM quake...Jack and Jack #2!!
I've been waiting all afternoon for some one to blame it on Jack.
Some people here have stated that the Big Oil Find (Jack 2) in the GOM will likely be more gas than oil. Now, natural gas is a useful thing, but I'm wondering - would there be any way to transport all that natural gas to shore? I don't think you could build a gas pipeline in 7000 feet of water. Turning it into LNG wouldn't be easy on an offshore drilling platform, I would imagine. I'm not an engineer, but I'd be very interested if the engineers among us would comment on this technical issue.

Thanks in advance.

I'm wondering about that issue, as well.  I heard comments about how they would load the oil directly onto tankers because a sea floor pipeline would be too difficult and/or expensive to build.  I also heard the "it's mostly gas" thing, but without anyone connecting the dots and explaining how the hell the gas is transported to a useful location.

One of the first things economists learn is that "a widget here isn't the same thing as a widget there."  Jack2 is really good example of why that's such an important concept.

  Its going to be tough  and extremely expensive. The wells will have to be produced from a floating platform which will have to have stabalisers and navigation like a drill dhip. The well heads will probably be at depth and radio controlled. Robots and subs with waldos will have to do the work. No doubt it will be fantasticially expensive. There is no reason why they couldn't have gas compressors to liquify the as, and floating LNG storage. But all this equipment will cost a couple of bundles and may not be profitable until oil reaches 3 Yurgins ($100/bbl).
There is no reason why they couldn't have gas compressors to liquify the as, and floating LNG storage.

Oilmanbob, you do not liquify natural gas by compressing it. You liquify gas by cooling it to the temperature at which the gas condenses into a liquid. This is done is done with what is called cooling trains. Each section in the train drops the temperature until it reaches -161C. The LNG then must be stored at -160C. A boiloff vent allows the temperature to stay that low.

In my opinion it would be totally impractical to build a cooling train on an offshore platform. They take enermous amounts of electricity to run and storage would be extremely difficult. Imagine building such huge insulated storage tanks on an offshore platform.

Ron Patterson

You could just power the chillers by burning some of the gas in a gas turbine, or use a thermoacoustic Stirling-cycle chiller.

The bigger problem would probably be purifying the natural gas of contaminants which would freeze and block the liquefaction system.

I think an LNG train could be built into a supertanker size hull.  Connect to production platform on one side, LNG tanker on the other.  Use NG to generate electricity on board.  Use sea as heat sink.  Perhaps not largest LNG plant, but productive.  Transfer to nearby LNG port.

Uncouple and steam away when bad weather threatens.

If the 'gas' is leaving the seabed at [x]000's of p.s.i. and has cooled to sea temperature by the time it has surfaced, surely most of the refrigeration work has been done? Just chill it a bit further, then drop the pressure to 1 atm. Down goes the temp.
There are lots of ways to stabilize a platform in that water depth without dynamic positioning (DP).

  • Tension-leg platform - like a big inverted pendulum. It moves around a bit, but so what?

  • Moored dual-pontoon or shipshape platform - like BP is using for Thunder Horse.

  • Compliant semi-bouyant structures like SPAR platforms

Subsea wellheads are operated hydraulically or electrically - you need a fair amount of power to turn valves that size. Hydraulic is by far the most common. (Electrons don't like water). Radio waves don't go through conducting media like seawater.

If it's oil, then the export would be either pipeline or offshore loading. I don't think there are any offshore loading systems in the GoM yet, but they are very commin elsewhere - especially in Norway, the most pollution-conscious of countries. Sea states in the North Sea are far harsher than the GOM.

If it's gas, then export has to be by pipeline. Sure, it's deep, but I don't see any reason why existing pipelay technology shouldn't scale to that depth.

Not an engineer (yet), but I'll comment anyway.

It's not the depth per se, as the industry is continually pushing the envelope for how deep they can go.

On Subsea equipment, I believe FMC Subsea is the market leader. They recently built a facility for ExxonMobil at 4,650 ft depth http://www.fmctechnologies.com/Subsea/Projects/NorthAmerica/ExxonMobilDiana.aspx
It's hard to find specifics on water depths, but this announcement suggests they intend to install systems at up to 3,000m (9,900 ft) of depth sometime in the future.

On the Jack field there are two possible options for development:
1 Subsea to shore
2 FPSO (Floating Production Storage and Offloading)

Subsea to shore would be something akin to the Ormen Lange field presently under development in the Norwegian Sea. This is at 3,300 ft. Ormen Lange is a gas/condensate field, which requires injection of antifreeze into the gas pipelines to prevent the formation of hydrates. Oil/gas production would also require this, in addition to another chemical to prevent the oil from forming wax and systems for subsea separation

I won't go into the FPSO option other than to mention that the Norwegian engineering firm Aker Kvaerner has proposed building floating LNG production facilities.
They are already building floating LNG regasification facilities.
If I understand Aker Kvaerners floating LNG production concept, the facility will move from one field to another and drain them. This would require rather aggressive exploitation of the fields in question, in order to drain them quickly enough.

This Reuters article about the North Sea Buzzard field coming online later this year is about a week old, but I don't think it has been posted here before.

In recent years, UK oil production has been falling by about 200,000 bpd each year and UK gas production has been falling by about 10% a year, and according to the article 'Output from the Buzzard field is expected to peak at 210,000 barrels per day (bpd) of crude and 30 million cubic feet per day of natural gas', so I would have thought that that would mean that UK oil production would be roughly stable next year.

Not at all! The article has this marvellous news: the industry group the UK Offshore Operators Association are predicting that 'UK output would rise 300,000 barrels of oil equivalent per day (boepd) in 2007 to 3.3 million boepd.'

Since there is no explanation as to why all the other fields are suddenly going to stop depleting, I suppose we should interpret the UKOOA's prediciton in the spirit of Monty Python:

Some things in life are bad
They can really make you mad
Other things just make you swear and curse.
When you're chewing on life's gristle
Don't grumble, give a whistle
And this'll help things turn out for the best...

And...always look on the bright side of life...
Always look on the light side of life...

If life seems jolly rotten
There's something you've forgotten
And that's to laugh and smile and dance and sing.
When you're feeling in the dumps
Don't be silly chumps
Just purse your lips and whistle - that's the thing.

And...always look on the bright side of life...
Always look on the light side of life...

For life is quite absurd
And death's the final word
You must always face the curtain with a bow.
Forget about your sin - give the audience a grin
Enjoy it - it's your last chance anyhow.

So always look on the bright side of death
Just before you draw your terminal breath

Life's a piece of shit
When you look at it
Life's a laugh and death's a joke, it's true.
You'll see it's all a show
Keep 'em laughing as you go
Just remember that the last laugh is on you.

And always look on the bright side of life...
Always look on the right side of life...
(Come on guys, cheer up!)
Always look on the bright side of life...
Always look on the bright side of life...
(Worse things happen at sea, you know.)
Always look on the bright side of life...
(I mean - what have you got to lose?)
(You know, you come from nothing - you're going back to nothing.
What have you lost? Nothing!)
Always look on the right side of life...

What I find odd is that there are a lot of commentators, mostly on the left, which seem to think that peak oil theory  is a conspiracy perpetrated by the oil companies. Yet, it is the oil companies who keep reassuring us that there is not a problem.

I consider myself on the left so this isn't a general indictment of the left, just some of those on the left.

Unfortunately, conspiracy theories of this nature are often a substitute from rigorous analysis of the facts at hand. It is much easier just to accuse people of making stuff up for their own benefit.  This does not mean that one should not consider the source andbe skeptical accordingly; it just means you still have to do the analysis.      

tstreet you are right, my friends here in the Bay Area seem to believe in this sort of thing, and tend to believe in abiotic oil in many cases too. Or it's the damn ay-rabs or something. I know this area is supposed to be a hotbed of Leftists but they seem to be pretty rare. If I looked around in bookstores and coffee shops I could find a fair number of "false leftists" who see themselves as Left as hell, because they consider that being the "good guy" but send their kids to private school, drive a huge SUV, have probably never even heard of The Nation magazine, send $10 a month to some kid in Nicaragua through some program and consider that their carte blanche to buy all the products of 3rd world slave labor they want! Oh, and and I think would melt like the old Wicked Witch of the West in the old-old Oz movie if they ever had to shake hands with an American working-class person.
The following article is slightly different in it's analysis                               http://www.sundayherald.com/57777   It talks of a minimum of 8% decline and a likely 17% decline in the North sea. The biggest problem in prognosticating seems to be using too much depletion data from old basins which were never agressively depleted by enhanced recovery and applying those depletion factors to the fields now going into decline after very aggressive secondary and tertiary recovery. I think the depletion treadmill is going to be a lot steeper than most estimates out there. Think Yibal not Spindletop.
   Actually, the cap rock at Spindletop had a very rapid decline. It was a small reservoir and had a huge number if wells drilled in it-the well density is over 1 per acre. It will still produce today, but the pressure is so low that it is hard to make more than 3 or 4 barrels a day.  
   But Spindletop is very shallow (about 1200') and I think it could be economicially re-drilled. The acreage is available ,too. I've been looking at the idea of trying to pick up some prospects in the area.
If you look at UK production decline somewhere here:


You'll see that all the big fields are way off peak and that current production is made up off the stacked tails of 100 or so fields.  So the UK decline will not have any big fields comming off peak, but more the relentless rise of water cut in mature fields.

WRT to UK production rising next year the big unknown is the impact of all that drilling that is going on.  Buzzard may halt the decline for one year, and frenzied drilling could perhaps lead to a growth blip.  The danger is that the ignorant may want to project the upward blip into the future.

I liked, "The oil that's there you'll get out faster. This will slow down the rate of decline." That's like saying I will double credit card spending, that will prevent me doing bust.
I might just write to UKOA and ask them to explain.
IOCs getting their nose under OPEC's tent:


Why isn't Russia going with wind? They could probably meet all their electricty demand and still export massive amounts.
Because they can do math?
In Ireland, without subsidy, a wind farm is price competitive with a Combined Cycle Gas Turbine.  Even without security of supply considerations, in Ireland, a wind power farm makes sense.

Now the ex Soviet economy doesn't price gas rationally-- Gazprom sells gas at concessionary rates to wasteful actitivies in Russia, rather than at high prices to consumers and power generators in the UK and Ireland (amongst others) and Japan.

So wind is a non-starter in Russia.  But, interestingly, in China where they have cheap coal, they are also building wind power and encouraging the domestic manufacture of wind turbines and equipment.  The Chinese think ahead like that.

This is politics.  The analogy is with US food policy, which is completely nuts ($120bn pa of direct subsidies pa, the average cotton farmer gets nearly $1m of subsidy).  This in the world's largest, most efficient producer of food.  Another good analogy is with the UK nuclear industry (£100bn of subsidies and counting).

So wind is a non-starter in Russia.
Seems to me a case of good old mercantilism ->Russia makes nuclear plants, but not wind turbines.

Some Norwegian environmental groups have proposed replacing the nuclear power plant on the Kola peninsula with wind power. The weakness of the plan: The utility that owns the nuclear plant also owns the transmission lines.
The prospects for storing the wind power aren't that great either: -> Most of Russia's hydropower potential is in the Asia part of the country.

However, it appears Russia is moving forward with wind power for remote areas without connection to the grid:

They could produce wind turbines quite easily.  Russians know a lot about electricity, even before the end of communism they had some of the best transmission and switchgear technology.

AFAIK they haven't built a nuclear plant since mid 80s.

And the RBMK graphite design which blew up at Chernobyl is technologically terminal.

A more important issue for Russia is that they have lots of gas, and lots of coal.  And of course, global warming is less of a direct threat to them than any inhabited country.

However, Russia burning cheap gas at home, rather than exporting it to China, Japan, Europe (and even US if they get the LNG terminals working) is economically a dumb move.

Since they are currently drowning in oil and gas revenues, and there are big political costs associated with raising domestic gas prices, I don't expect them to stop any time soon.

I am dubious about Siberian hydro potential, given the fact that there isn't that much rainfall (or snowfall) up there.  However I haven't investigated the situation.

The biggest unexploited hydro potential that I know of in the world is Hydro Quebec- James Bay.  Which would be about 10,000 MW if fully developed.  Eventually New England and New York will need that power, to replace the nuclear plants.

UES, the leading electricity supplier, is going to float on the London exchange, btw, with a huge capital spending programme.  I expect most of those plants will be combined cycle gas turbines.

Grand Inga has the potential for 44 GW.  Most of Africa.  Add a few more dams and all of Africa can be run off hydro at today's levels of consumption.
The Soviets built several quite large hydro projects in Siberia (one dam is built of permafrost, if it ever melts ...)

The Russians ship bauxite on the Trans-Siberian to smelt in inefficient Soviet smelters and then ship the Al out.  Only VERY cheap hydropower makes it work.

Groppe seems like a nice old guy, and I'm sure he's richer than me (and therefore smarter), but I wish the article had gone into more quantitative detail about his forecasting track record. For example, this doesn't seem too impressive...

Copied from http://www.oaoa.com/news/nw051404i.htm

Friday May 14 2004

The new era of $40 oil has begun, said Groppe... "We're in an era where slowly, over time, prices are going to have to rise from the low $30s to the mid-$40s over the next eight years to balance the available supply," Groppe said ... on Wednesday.

I hope none of his clients bet the farm on $45 puts on the strength of that prognosis (trying to sound like I understand options... do such things exist?)


Niami singing a different tune?  Can anyone really believe anything this guy has to say?

Two short years ago $40 was "too high":


Now prices around $67 a barrel might be too low:


What a crock.  There are only two explanations for this BS.  First, OPEC is declining in production and they want to make it look like the cuts are intentional and not depletion declines.  Second, OPEC isn't in decline and they are deliberately keeping oil prices high.  

no the real reason is demand is soaring, especially in India and China.

China has become the world's 3rd largest automobile market.  Just as an example of what is going on.

Please tell us what else is "going on."
I'd much rather hear your hypotheses.
I try to make my views visible. Stick around. Read everyday. Ask questions. And make sure to bust my balls. You may have to waterboard me on occasion. But you will always get my hypotheses.
Dylan Avery (Loose Change) and Davin Coburn (Popular Mechanics) are to appear on Democracy Now!, 8 AM, September 11th, 2006.  They repeat the show several times on Free Speech and Link and some public radio stations broadcast the audio of DN!.  You can also purchase a podcast.

I'm hoping Amy Goodman can make this an informative discussion rather than the sort of high school debate we usually see in the MSM, where each bozo dodges the other's questions while the moderator just keeps track of air time.

  KPFT.org, a Pacifica station will broadcast the show over the net at 8A.M. and 6P.M. and will archive the show for a week on their website. KPFT broadcasts in Houston at 90.1 and Galveston 89.5 and is a great progressive station
Also archived at:  http://www.democracynow.org/

Rick D.

I guess this is as good a place (and day) as any to bring this up.

Does anyone have any ideas about the future of warfare in light of Peak Oil, resource wars, and the rise of China as the Arsenal of Consumerism?

I think there's been a cycle in warfare between two models:

a. war as the sport of kings - the leaders of the great powers get together and agree on a set of rules to keep warfare a status-quo institution that won't endanger their mutual survival.  Result: tiny professional, even mercenary, armies joust at each other in ritualized ways - unless one of the great powers decides to conquer some "savages" (colonial) or fight "rebels" (internal) and the kid gloves come off.  The citizenry is insulated, merely paying taxes while the autocrats use war as a propaganda tool.

b. People's War - The system breaks down on ideology, ordinary people turn against status-quo institutions, and the professional armies get ambushed by popular uprisings, which then create republics that demand total war.  This also has internal and colonial variants.

The classic rise and fall of this cycle leads from the Treaty of Westphalia to the Napoleonic Wars.  Then there's a cycle from the Congress of Vienna to the World Wars.  The formation of the UN was the last attempt to formalize great-power war to keep it from destroying civilization, and now we're in the period where demagogic leaders of important states begin to cynically promote militarism as a replacement for real political participation.

As the sport of kings model decays, we should expect the real stakes of war to rise, for governments to wreck their credit ratings and raise taxes to the point of unrest, and a growing obsession by the typical autocrat with the use of mercenaries whom he might potentially need to slaughter his own citizens.

What I see as different and exciting this time is that America now relies on foreigners to produce all its consumer technology, while its military technology derives from a protected state socialist sector whose costs are out of control and whose efficacy has gone too long unchallenged.  In the decline of the last sport of kings cycle before WW1, inventors all over America and Europe created important civilian and military technologies interchangeably, and factories were equipped to manufacture both.  It was America's secret weapon, made manifest in WW2 when we mass-produced heavy bombers and aircraft carriers in factories that recently had made consumer goods.  That's all gone now, isn't it?

Throw in Peak Oil, and it gets too complicated for me to handle.

Here's some ideas to get you going:

Thousands of robot torpedoes dumped by the Chinese into the Pacific currents to disrupt West Coast shipping.

Tens of thousands of biodiesel P-51 Mustangs (1945 cost: $50,000) or Shturmoviks flown by kids brought up on video games to fight an invading American force protected by a few hundred F-16s.

Hundreds of thousands of V-1 buzz jet copies (1945 cost: $600) guided by GPS, carrying 2000+ lb fuel-air bombs to within 50 feet of targets.

Millions of balloons released into the jetstream, equipped with smart bombs.

Which of these represent the logical approach when factories are on short energy supplies?

I think the peasant conscript of the last cycle of People's Wars has been replaced by the $5/day factory worker.

Super390 -

You raise some very provocative points, even though some appear (to me at least) to be a bit of a stretch.

I think you are quite correct in that states want warfare to be controlled competition  just as a sporting event is conducted, under a certain set of rules and conventions. Trouble is: it rarely turns out to be the case, particularly in the modern world.

If we ever do get involved in a military conflict with China, don't expect China to go head to head with the powerful US military machine. No, the Chinese are firm believers in asymetrical warfare and so-called 'fourth-generation' warfare.

No doubt one of China's biggest military goals is to be able to defeat a US aircraft carrier battle group.  Given the advances in anti-ship cruise missiles, e.g., the lethal Russian Sunburn missile, it is my humble opinion that the aircraft carrier battle group is going to go the way of the battleship during the early 1940s. They are simply too big, too expensive, and too vulnerable to relatively low-cost weaponry.

I also understand that China is looking at ways to knock out US communications sattelites, which would certainly make sense from their perspective.

In general, offense always has the advantage over defense.  A defensive position has only so many degrees of freedom in which to defend; whereas the possibilities for offense are almost limitless. Canons vs forts; airplanes vs battleships, cruise missile vs carriers, etc.

There is also a definite value to 'junk' weaponry that should not be overlooked.  One  can use it to overwhelm your opponent's defenses. Take a possible future US/Iran conflict. Why couldn't Iran launch closely spaced waves of junk missiles at a carrier battle group just to use up its defenses, and then launch its good stuff? It would just take one or two cruise missile hits on the flight deck of an aircraft carrier to essential take it out of action.  Having a population with a high percentage of people willing to engage in suicide attacks further complicates the situation for the US.

 Iran could never defeat the US, but it could prevent the US from defeating it, and it could drop a really huge turd in the punchbowl that is called the Persian Gulf.  

In my view, if you want to visualize near-future warfare during the early part of the 21st Century, thinkof Star Wars and the Rebel Alliance vs the Emperor as the most likely model. There will be a lot of really nasty low-level conflicts with no clear winners or losers. However, stategically, this will result in a steady erosion of power on the part of the Big Guys.

I've heard/read? that taking out satellites is as easy as sending a couple of kegs of nails to the appropriate altitude and letting them go. I don't know if this low tech space junk approach would work but if it is that easy it's insane for our military to put so many eggs into one tech-no basket.

if memory serves I herd it on explorations with mikio cako (spelling not my strong point)

Sure, but doing that is not so easy.  

If you are able to do that and hit the right target, then you have the capability for producing an ICBM.   It is rocket science, after all, and is more technologically difficult than producing a nuclear weapon.   (Note: ICBM and orbit and accurate guidance is much harder than suborbital)

As far as I know, Japan is the only nation with orbital space capability which doesn't have a nuclear weapons program and that's because of their intentional desire, certainly not capability.    

Not so much Star Wars and the Rebel Alliance as some of the fighting against the British in the American Revolution

or Quantrill in the Kansas Territory against the Union.

the kind of war the Palestinians are now fighting with the Israelis is the model: up close and personal attacks by irregular forces against 'soft' targets-- read suicide bombers.

Add to that Hizbollah-- guerilla tactics but with advanced armour piercing weapons.  Or Kosovo, where NATO could not stop the Serbian forces on the ground.

It is a sample of what awaits a US attempt to destroy the Iranian nuclear capacity. The first few days will look great: lots of exciting direct hits by GPS bombs, special forces raids, etc.

Then months or years of Chinese Water Torture: sabotage and sniping and mines against ships, troops in Iraq and Afghanistan, and US and Western installations all over the world.

Whoa! Your IP musta got flagged on that one. But your analysis is flawed. I can recommend a few books if you want.
Martin Van Creveld of Jerusalem University comes to mind.

Also Jeffrey Record of the US Army War College.

the late USAF Col. John Boyd is the guru on all this.

OIL CEO I remember you discussing a link to field by field month by month production for Norway and UK. Can you direct me please?
Sorry, I thought I responded to this. I can't remember. There's a guy who posts from Norway with excellent charts once in a while. I keep meaning to link him to my site. I can't remember what his call-sign is. I believe I linked to it through him. I think it's Energy2000 or something. I did a search for his name but couldn't find it. I think it may be some Scandinavian variant of 'Energy.'

I think the Norwegian Oil Ministry has some good stuff. (Jeez, I've been a lot of help, haven't I).

Remind me where you saw me discuss it and it might jar my memory.

Cry Wolf's going to help you with the UK. Or Stuart, if someone can find him.

Hello Super390,

Very interesting post to me--Thxs. Consider the latest on the Sri Lankan conflict--Buddists vs Hindus, which most of us think of as very peaceful religions.  Recall from my prior posts that this violence broke out over control of a mere water sluicegate-- the requirement for this basic fluid quickly trumps any religious tenets no matter how devout a person may be, and the classic Mad Max resource war breaks out.

The latest from Time Magazine is a bad sign, IMO.  I think many will postPeak justify their violent right to consumer resource excess as the will of their God and the power of their property rights vs truly understanding the Tragedy of the Commons and how detritus based lifestyles are unsustainable.

Consider that Venezuela's Hugo Chavez continuing socialism grab is no different than Capitalism's continuing profit grab if no plans for paradigm change are included in the respective parties formula.  Violence, as you have written about in your post, is the guaranteed result, as our long, sordid history confirms by even a brief look back.

IMO, my speculative posts on Foundation, Earthmarines, etc, are middle-of-the-road postPeak scenarios compared to many conflicts occurring NOW.  A gang-raped, then mutilated female child now dying of dehydration facedown in the dust of Darfur would gladly welcome a chance to hand-labor in my hypothetical Fields of Cascadia.

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


First, we need to get some basic underlying assumptions correct:

The military will NEVER (and by that I mean, out beyond 2100, by which time no assumption now will be useful) be short of energy.

The assumption that they will be is one of those assumptions based on "running OUT of oil."  

The "Peak Aware" say that this is not an assumption they make, that they know better, that peak simply means peaking of supply followed by a decline of still argued slope.

But almost ALL the scenarios I see by "peak" prognosticators indicate a picture of RUNNING OUT, absolutely out, to the last drop.  It is non-sensical.

Think of it this way:  The worst case case scenario by the ASPO shows the world producing as much oil out to 2050 as we did up to the year 1980, and we have already been below the 1980 number in the "big valley" of production through the early 1980's.  This is the chart used in the ASPO-USA flyer, and on the ASPO website, Colin Campbell's numbers.  (We already know that this chart is too dark a scenario, by the way, as it never shows world oil production making 85 mbd (million barrels a day) which we already have)

But, let's take that chart as a starting place.  This means world production, DARKEST SCENARIO by the peak aware themselves, as much oil production to 2050 as we had up to 1980.  

Do you believe that the military cannot be easily supported out of that amount of oil, if they go to emergency rationing on the civilian side?

Do you believe that the military cannot extract fuel from tar sand and or shale oil if they need it?  It may be uneconomical for the civilian side to allow aged suburbanites to drive down to the golf course on shale converted by nuclear power, but for the military?  Think back to the Manhatten project, Los Alamos, Oak Ridge.  The military will have all the fuel they need.

In closing, let me return to the ASPO graph, and Colin's own DARKEST SCENARIO numbers (as I said, already proven not valid).  To 2045 we see a level of oil production that is as high as 1995.

These images being created of people carrying their kids to school in the next couple of years in donkey carts, and eating grasshoppers for supper is so destroying the credibility of what is AN EXTREMELY SERIOUS ISSUE THAT MUST BE ACTED ON NOW  (consumption growth CAN be brought down to match depletion, and alternatives brought online, and without great suffering IF WE START NOW.  

Roger Conner  known to you as ThatsItImout

But almost ALL the scenarios I see by "peak" prognosticators indicate a picture of RUNNING OUT, absolutely out, to the last drop.  It is non-sensical.

Roger, funny but I have read no one who paint's such a picture. No One! Perhaps you would be kind enough to post some of these Peak Oil prognosticators posts where they indicate a picture of RUNNING OUT!

What I think Roger, is you wish to paint Peak Oilers as uninformed nuts so you post wild exaggerations like this.

Ron Patterson


Did you know enerrgy is so short, there are already people out there scavaging for wood?

"We are now just beginning to leave the period in which it's common practice for even the working class to throw a switch and enjoy heating and electricity from a power plant tens of miles away, mitigated by thousands of yards of well-maintained transmission cable, driven by the burning of cheap natural gas piped from Uzbekistan to the coast, liquefied at super-low temperatures, shipped in amazingly expensive LNG tankers, received in even more expensive (and well-guarded) LNG ports, and distributed through a vast domestic pipeline network to be burned as gas at the plant.  When the society can't manage all that, people leave the house and start looking for wood.  And as Mike Kane has found, they're already out there."

"The sight of a neighbor (who isn't poor) already wood scavenging before any real fuel crisis has arrived is not a promising indication of what is to come.

This may very well be my last winter in suburbia."


From The Wilderness Says...
FTW is now read by more than 20,000 subscribers in 40 countries including 40 members of the US Congress and professors at 30 universities around the world.


Of course, the bridge had already been built to the middle class with such remarks as:
"The #1 enemy to the world is the U.S. political and financial system," Mike stated with absolute certainty.

The attack on anyone supporting alternative energy has now grown rabid:
"Perhaps the greatest flaw in the Peak Oil movement's current operating paradigm is that, a part of the movement at least, instead of building lifeboats in the face of an immediate disaster, is delusionally focused on trying to build alternative-powered luxury liners that operate just like the paradigm we as a species need to be abandoning. Not only is this a futile effort, it may well be responsible for killing or destroying the lives of people who at least partially understand Peak Oil and who are trying to find the best courses of immediate action for themselves and their families."


Given that the renewable energy supporters are by implication, aiding the murder of millions, I thought you might like to see how it is to be done correctly.  "Small and Local", that always sounds warm and fuzzy...:-), I like it, having been raised in a small town.  But then a sentence that might be a bit more disconcerting comes up, "... gradually divorce their community from oil with the long-term goal of forming a neo-tribal village.

Despite having just essentially called the renewable supporters also supporters of killing innocents by misinformation, we now see, "Earthaven is entirely off the electric grid, relying on small-scale solar and micro-hydro renewable energy systems along with some propane. The community still relies on economic, food, and hydrocarbon grids, although they are taking steps everyday to become more self-sufficient..."98% of the energy we utilize on a construction site is solar, maybe even more,"  (!!!!!)
Yet, renewables are no alternative?  It only gets wackier from there, but do stop by and see the picture of the wood gas vehicle, it is...well, wacky, but I like that....

O.k., even though Ruppert is constantly linked and quoted, it is not fair to use him as the only example, and his radical anti U.S. Israel sentiments might be of some concern for many, so let's move on...

Perhaps we should move to a group with a longer history,
Community Solution  http://www.communitysolution.org/
and a group I have a bit more respect for...but, oh, what do I see in the top banner?

"What are we going to do as the oil runs out."  Wasn't that the impression that no one involved in the movement would EVER want to give?

But that could be a misprint, not something that you would see after that error on the banner...but wait....what's this?  On the problem page, we see,
"The Problem:  We're Almost Out Of Oil And Fossil Fuels"

On down the page, it only gets better....repeating Ruppert's attack on alternative energy
 So we run out of oil... our scientists and entrepreneurs will come up with a high tech solution, right?

So, we ran out of oil AGAIN!  This is getting to be a bit more than just a misprint.

But now we get "the game".  On the FAQ page of the site, the question is asked and answered,
Q: Does the arrival of Peak Oil mean we are running out of oil?
 A: No. It means we have extracted about half of the oil we ever will-about one trillion barrels out of a total two trillion barrels that the Earth has provided us. It also means we have extracted most of the easy-to-get-at stores of oil. It is a warning sign that oil extraction on a large scale cannot continue forever, and that society will have to get along with less oil in the near future.

Well that's a bit of a different story than we had been hearing in THE BIG BOLD BLACK LETTERS, isn't it?

This is the game that goes on and on, WE'RE RUNNING OUT, WE'RE RUNNING OUT.....but.......we never said we're running out....

I could go on for days finding this crap, but now I want to deal with you.

To repeat your words,
"Roger, funny but I have read no one who paint's such a picture. No One! Perhaps you would be kind enough to post some of these Peak Oil prognosticators posts where they indicate a picture of RUNNING OUT!

What I think Roger, is you wish to paint Peak Oilers as uninformed nuts so you post wild exaggerations like this."

Ron Patterson
Ron, first I appreciate your using your name, as I do, because it is rapidly becoming apparent to me that there are things being said on the internet, in blogs, in speeches, and in forums that are so devoid of responisibility and truth that unless someone is willing to take responsibility for his/her words, I will essentially ignore them.

Secondly, you essentially called me a liar and with ulterior motives.  This I take quite seriously and deeply resent.  I have already above given you multiple samples of support for what I said, both from an out in the wilderness radical, but for some reason well regarded in the peak movement, and from a group that is well respected by the peak movement (by me also) in this cause, a group with a long history, Community Solutions.

I can you well supplied with just this type of example, but I feel that for now I have already wasted too much time on this.

Before you accuse of lying or wild exaggerations, I will give you some much needed time to read the peak oil literature.

Roger Conner

In 2050, we have have the same amount of oil as in 1980, but one heck of a lot of people will be after it (and many of them will have more money than the US).
What about China? They have the largest armed forces in the world. They have the largest population in the world. China has 4 times more people than the USA. All they have to do is outbid the USA on oil deals.

They don't need to even fight the american soldier, they are funded by our $$$ at walmart and all the other widgets they sell back to us. Computer parts, electronic goods, including  IPODS, Most every thing the americans buy is made in China, including the American Military Uniforms. including BDU's (battle dress uniforms).

So all they have to do is outbid the USA on Oil equipment, buy out an american oil company or two, secure a few more oil fields, like they tried to buy out an oil company about a year ago or so, with 19 billion cash offer!
Name of the company i forget. Congress stepped in and blocked it, but only because the american public cried out and said "Kings X".
If the people had been not paying attention, China would have pulled it off. Congress and Senate were asleep, and still are asleep. I sometimes wonder why we even have them.
its just a matter of time!

Actually, what Americans missed about that story was that the spurned Chinese immediately turned around and bought the main oil company in Kazakhstan for only a couple of billion.  There's a map of pipeline routes showing that China only needs to complete a couple of pipeline links in Kazakhstan to have a complete route from China to the Caspian, which in turn borders many oil producers.

I think Cheney's conspiracy was based on the assumption that the US Navy could always hold China's oil supply lines hostage and thus that we could get away with permanent fiscal irresponsibility.  Thanks to our fantastic bungling, the interior of Eurasia is being converted into a new energy matrix that the Chinese trade minister recently called an "unlimited Silk Road".  If it becomes the new industrial heartland of Asia, then China will have the honor of having created far more good jobs for poor Moslems than the US ever has (except through our heroin consumption).  It is also far inland, so as American bases are driven out of the region by the members of the Shanghai Cooperation Organization, it will be hard to control using the threat of US carrier strikes.

However, energy supplies play a large role in all this.  That's why I want to make sure that I'm taking account all Peak Oil effects on this development before I can say what its military potential is.  Yes, we will always have enough oil for our 10,000 tanks, but if the same amount of oil powers unknown future weapons more effectively, like, say, one million Hezbollah-style infantry, then our forces' supply lines will be the death of us.

In 1790, the monarchical armies of Europe still moved slowly on campaign, from one seige to another, burdened by great supply lines of horse-drawn wagons that kept the officers in comfort and the soldiers in relative comfort.  When those armies attempted to overthrow the French Revolution, the revolutionaries drafted a great mob that it couldn't supply properly.  So the new soldiers simply carried everything they could on their persons, and no longer had to stick to the roads.  They then could attack the kings' armies in transit, which was against the old rules.  The army of starving men could defeat and live off of the well-equipped army.  Napoleon formalized this highly-mobile warfare and defeated all the kings on the continent.  You can see why I worry about our operations in Iraq and Afghanistan.

Most every thing the americans buy is made in China, including the American Military Uniforms. including BDU's (battle dress uniforms).

Amusing, is there a Strategic Reserve of BDUs ?
Otherwise going to war with China will mean going to war in underwear, and may be less, the underwear is likely from China too...  

P.S. More seriously, I believe that current global dependencies are more intricate than everyone thinks and if serious trouble begins there will be a few interesting "surprises".


But these scenarios are already being lived out in places like Zimbabwe.

And indeed Russia at the beginning of the 1990s.

Standards of living fall as well as rise.

You don't need global collapse for the societal system to begin to show very serious stresses.  Just some bad policy responses: be it printing money (Germany 1924), outrageous borrowing (Argentina just about any time), financial panic (1929, 1998 etc.), land confiscation (Zimbabwe) etc.

If the price of gasoline in the US doubled, then a lot of Americans would be in seriously bad shape.  It's not, generally, possible to live, shop and commute to work in the US right now without a car (at least for I would guess 80% of families) given the distances and the way things are spread out.  There are certainly no societal backup systems (Russia had public transport, people had long experience of smallholdings to raise fruit and vegetables, etc.).

Thousands of robot torpedoes dumped by the Chinese into the Pacific currents to disrupt West Coast shipping.

You mean the ships carrying their factory's products?   Or are you considering a Japan vs China scenario.    How do the torpedoes get their power?

Tens of thousands of biodiesel P-51 Mustangs (1945 cost: $50,000) or Shturmoviks flown by kids brought up on video games to fight an invading American force protected by a few hundred F-16s.

you mean 22's and 35's?

Result: 10,000 shot down nuevo P-51's and dead videogamers;  2 or 3 downed F-35's due to friendly fire and mechanical problems.   But most wouldn't be able to get off the ground (you can't launch 10,000 at a time) and their airfields would be pocketed by cluster weapons.

Hundreds of thousands of V-1 buzz jet copies (1945 cost: $600) guided by GPS, carrying 2000+ lb fuel-air bombs to within 50 feet of targets.

V-1 buzz bombs had range of 150 miles.   And if they had any guidance they wouldn't be $600 then, but it's true that cruise missiles can be dangerous.  Cruise missiles on the other hand are small jet aircraft with attendant complexity, especially if you want to guide them.  This is about a million dollars, and requires a reasonably high tech aircraft factory.  And if they are not high-tech stealthy, which requires some substantial military-specific technology, they are toast against any modern defense aircraft.   You can defend against cruise missiles because they fly the speed of aircraft.   You can't defend against ICBM warheads because they re-enter from the top of the atmosphere to detonation in three to five seconds.  

The reality is that in any sort of remote-controlled "robotic" combat, which includes modern air warfare, highest technology utterly dominates the next level of tech.

Imagine the best chess player you ever met in your life and who ever went to your high school or university.   Chances are extremely high that Garry Kasparov could crush him.  A grand master can spank somebody rated just a few notches below him 99 times out of 100.  Kasparov could spank the typical grandmaster 99 times out of 100.

Then again, the highest air technology can't do squat against somebody planting a bomb in a mailbox and blowing it up against the occupier's patrol.

Point by point:

My assumption is that the neocons intend to coerce China in the future by attempting some absurd naval blockade.  Of course that would be ruinous for both China and the US, but the neocons have "no regard for human life", as we used to say about the Chinese.  Therefore, the inferior Orientals will cave in first.  I believe our whole Navy is a disaster waiting to happen, more pompous and oblivious than it was in 1941.

As for propulsion, the US already has an ingenious plan.  I recently saw a short piece in Popular Mechanics or Popular Science (I can only tell them apart because one is 100% pro-war and the other is 50% pro-war, like our political parties) about a torpedo-shaped drone being developed by one of our many oceanographic institutes for "research".  It moves forward by using a combination of planes, ballast and compressed air.  First it goes down by sucking in water and diving.  Then when it reaches a great depth it expels the water using compressed air, and climbs.  But each act moves it forward too, with little expenditure of energy or noise, until it reaches shipping lanes.  As soon as I saw it I knew it had DARPA written all over it.  The problem is, this technology is so remarkably simple that it can be duplicated by the countries that now make everything we buy.  We're like Germany in 1939 - we can make a few of the fanciest weapons, but we can't make millions of the second-fanciest ones.

As for air forces, our Air Force (and its Israeli clone) is full of liars.  They've lied about the effectiveness of smart bombs.  They've completely failed to provide the kind of ground support that a war of occupation requires (and probably can't exist).  The F-22 and F-35 are so expensive that production has already been cut way back - during wartime!  I strongly suspect there will never be more than a couple hundred F-22s, spread thinly among the 120 countries where we have bases (!).  And the F-15s and F-16s largely failed to find Iraq's SCUD launching trucks in 1991, and Hezbollah's Katyusha launching trucks in 2006.  High-tech air forces are becoming increasingly irrelevant to the point of war - the ordinary foot soldier.  He was better served in Vietnam by 1945-era prop planes than jets.

Why can't 10,000 prop planes be launched at a time?  How many attack planes did the Soviets launch during the Battle of Kursk?  With modern STOL wing technology, why can't they operate off short stretches of dirt road, using fuel from ordinary gas stations?  

Finally, be afraid of Mr. Missile.  GPS guidance is dirt cheap, and the Chinese make the chips.  I've been working on this one for a long time.  The V-1 was a flawed weapon because it was developed too quickly.  There are hobbyists working on better pulsejets, and non-pulsing jets with no moving parts like the late Mr. Gluhareff.  All we're really talking about is a GPS autopilot that can get to within 50 feet of a fixed target, using known terrain data to fly low.  It won't cost a million.  Foamcore and wood construction will increase the payload fraction and reduce signature.  It does no good to fly 1500 mph if you're shooting down a small target 40 feet off the ground.  You have to come in behind it and use cannon just like British Spitfires, which kept them away from other missions, or use a $50,000 SAM made in a US factory that can't find enough educated workers to expand.  America used to have gun-based anti-aircraft systems that would have been the best counter, but they disappeared from the Army arsenal until the problem in Iraq led to the adaptation of the Navy's Phalanx system, which supposedly has been installed in the Green Zone.

While I agree that roadside bombs have been fantastically successful, they are very sophisticated (with cell-phone triggers) compared with what the colonial peoples had to work with in 1946 against the white empires.  Everything progresses technologically.  I just saw an alarmist article by a pro-Pentagon website about China and Russia flooding the market with cheap thermobaric warheads.  These are simply the "fuel-air" bombs which America used in Vietnam & Iraq scaled down enough to carry on an RPG-7 grenade launcher, one of the most viral weapons in the world.  In fact, I'd first heard about one of these grenades years ago, being promoted by Egypt's arms industry.  The article claimed that the long concussion caused by these bombs in enclosed places could actually do more damage to men wearing body armor than without armor, which scares the hell out of the Pentagon.

Cheap consumer-based tech wielded by poor men defending their own homes against Fox News-addled suburban rednecks kept in uniform by giant bonuses and stop-loss tricks.  One side using technology to hold down casualites for political pollsters, the other using it to take as many of the invader with them as possible.  Tell me how many targets our wondrous military can destroy before it is overwhelmed, and I think there is a way that many targets can be manufactured if we invade even one or two more countries.  Hitler's troops had a 15 to 1 kill ratio.

Hey, I really like this. I think there are some problems in your analysis. But your numbers are pretty good. I think it is well done.

It was a fun read. I hope you don't mind if I reprint parts of this is more recent threads. I'd like to discuss this with you. I'll take a non-response as a yes.

German troops had a 15-1 kill ratio? Interesting. How was that figured? German troops in both WWI and WWII were clearly superior(on average) when you look at the numbers. But I've never seen the ratio that high. Always more like 2-1 or 3-2.

Still wind is probably abundantly plentiful in Russia. It's cost competitive with nuclear, clean, renewable and so much safer as to make nuclear unreasonable. They could definitely meet all their own demands. Export shouldn't be a problem.
But gas is highly subsidised (and coal as well, probably, if you dig into labour rates, freight rates, etc.).

The Russian economy is still anything but 'free market'.

This may have already been posted, but James D. Hamilton at Econbrowser wrote a good story a couple of days ago on the Chevron discovery:

Big Oil takes on a Big Job

While we worry about the oil situation, and how much might be produced  in 2030, the climate scientists seem to be putting our ever more dire warnings. James Lovelock is now saying "This time we have pushed the earth too far".

"Our global furnace is out of control. By 2020, 2025, you will be able to sail a sailboat to the North Pole. The Amazon will become a desert, and the forests of Siberia will burn and release more methane and plagues will return."

"Within the next decade or two, Lovelock forecasts, Gaia will hike her thermostat by at least 10 degrees."

"Maybe 200 million people will migrate close to the Arctic and survive this."

The current global warming articles cited at EB are truly scary. If things are anywhere nearly as bad Lovelock and some of the others are saying, peak oil is the least of our problems.

Hello Gail the Actuary,

Good post! I read those earlier.  My being a Dieoff.com student of Jay Hanson's Thermo-Gene Collision --Us humans will probably endeavor mightily to stupidly MPP-make all these bad trends synchronize for maximum decline impact.  It is what we do best!  :(

MPP:The Maximum Power Principle states that all open systems (Bernard cells, ecosystems, people, societies, etc.) evolve to degrade as much energy as possible while allowing for the continued existence of the larger systems they are part of. [[1]]

"The Easter Islanders, aware that they were almost completely isolated from the rest of the world, must surely have realized that their very existence depended on the limited resources of a small island. After all, it was small enough for them to walk round the entire island in a day or so and see for themselves what was happening to the forests. Yet they were unable to devise a system that allowed them to find the right balance with their environment."
-- Clive Ponting

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

"The Easter Islanders..."

For what it's worth, recent research demonstrates that Easter Island was settled in 1200AD rather than 800AD, that it never had a population crash (pre-Europeans), that it had significant forest cover even when the Europeans came, and that the loss of forest cover was primarily due to the large population of Polynesian rats (which the settlers had brought with them) eating the palm seeds.

In general, Easter Island is far from the "societal collapse" poster boy it's painted as.

I'd want to hear the peer review before I hung my hat on one article.  
I'd want to hear the peer review before I hung my hat on one article.

Then by all means go check out the published papers on which the linked article appears to be based -- you'll find the bibliography at the bottom of the link.  For example, one of the author's papers is:

Hunt, T. L., and C. P. Lipo. 2006. Late colonization of Easter Island. Science  311:1603-1606.

Personally, I'm willing to trust that the editors and peer reviewers of "Science" have done a reasonable job, but I applaud you for wanting to check for yourself.

Note though that that is also an environmentally motivated collapse, brought about by human action (even indavertently).

There are a number of other examples of humans failing to adapt to changed environmental conditions: Greenland, Babylon etc.

And a number of very recent political crises (Haiti, Rwanda etc.) that appear to have environmental roots.

I ran across MPP in the 2nd Edition of Howard Odum's "Energy Basis For Man and Nature", as the 3rd energy principle (after conservation and entropy).  His statements regarding MPP:
The system that gets the most energy and uses it most effectively survives in competition with other systems.

Those systems that survive in the competition among alternative choices are those that develop more power inflow and use it to meet the needs of survival.

In the context of the current fossil fuel energy paradigm this has disturbing implications, along the lines of Richard Heinberg's Last Man Standing hypothesis.
To all TODers who replied,

Thxs for the new link & other info--I learned a great deal!

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


This is essentially what Al Gore said in recent interviews, that Peak Oil is a secondary problem because even if we can find/develop energy, if it releases carbon we can't use it.

The recent Chevron find, if followed by other deep sea finds, while helping ease the energy fear would only increase the carbon release fear.

Likewise, coal to liquid and tar sand are, if you accept the dire warnings on global warning, essentially suicidal, even if they were to work on an energy return basis.

This wuold mean that the biggest research effort in the world should now be going to carbon sequestering, since without any of these sources, the danger becomes poverty and starvation, not due to lack of fuel, but due to climate change. flood, storm, and desertification.

In the end, we have to accept either one of the two possibilities:
(a) Climate Change is that big of a threat, meaning we should/MUST be throwing our research into speeding up carbon sequestering, nuclear, and fusion nuclear.  I know the "ride the bike" and plow with oxen crowd" will be on the conservation argument, and of course, that goes without saying, that we must reduce comsumption.  But it will have to be done as seamlessly and transparently as possible, or the political/social kickback will be enormous and all will be lost.

(b)Climate Change is not that big of a threat, in which case we can continue developing fossil fuel as cleanly as possible, while trying to keep consumption down and diversify among the various forms of fossil fuel and renewables, and try to transition to cleaner grid based transportation.

There is a problem, however, well, actually two big ones:  1.  This is a world problem.  Despite the belief  by many that the U.S. is the most horrendous nation of all history, per amount of kilowatts produced we actually are pretty clean, much more so than historically.  It is in the growth/development stage of coal and rapid expansion that greenhouse gas release growth goes up fastest.  2.  If we accept that we are talking on changes of almost geological time to repair  (one mention was "a thousand years" for the earth to right  itself from our damage, then the die is cast on climate change, and the will to make the sacrifices and spend the money and effort needed to fix a problem that wouldn't be fixed for a thousand years no matter what we did dries up.  Who is going to spend money and risk starvation now for a generation a thousand years away?  This is why I have said that we really need a better way to sell conservation and consumption reduction....this logic of "If we don't act now, we lose, but if we act now....we lose..." is not going to engender great support....most folks will say fvck it then, let's party....

Roger Conner  known to you as ThatsItImout

This is why every new "find" is not a cause for celebration. Find it, dig it, drill it all later when we have figured out how to responsibly use it. I'd say dieoff is mandatory, but then I guess that would be kind of a hard sell, wouldn't it, in a Presidential political campaign, for example.  

If Lovelock is right, I guess I'd have to say we are FBAR and the party on advocates probably have the correct take on things.

The conundrum seems to be. Given enough time to fix the problem, we become complacent. Not given enough time, we are even more complacent. Either way, better start putting together those sails for the North pole.

Lovelock is definitely on the extreme end of the rhetoric.  And his latest book is a vague nostrum about the merits of nuclear power, a lot of hand waving.  In fact, he thinks the battle is already lost.

James Hansen is better.  Much better.  Incisive and in some ways just as alarming.  See for ex his pieces in the New York Review of Books.




www.realclimate.org has some of the latest findings.

In terms of books:

'The Weather Makers' by Tim Flannery is a good simple summary of what we know about global climate science

'Field Notes from a Catastrophe' by Elizabeth Kolbert is an evocative work on global warming

Eugene Linden also has a book on the subject which has been well reviewed.

Good God.  2020 is only 14 years from now.  I might even still be alive by then. Right.  Regardless of when peak oil comes, we should be talking about eliminating its use and all other fossil fuels. And I can't even convince my daughter how truly rediculous it is to have children.  She's having at least one more so that her existing child will have company.  Yeh, she will have company to share the pain as the planet crashes and burns.  Drive on, Macduff!!!

Ensco is a mid size oil driller. I found it interesting it brought up peak oil in its presentation. Good nite.

$65 Dollars Monday morning. Yikes. How could it be?


Natural gas price is just as wild, could we break down into the four dollar range coming up on autumn? (!!)

Earier in the string, Westexas pointed out that production had been flat from the major oil producing nations....gee, I wonder why?  If I were them, I would be throttling back hard and fast to avoid a potential trainwreck....they well remember the '80's and it almost destroyed them....as for us, we should be refilling the strategic petro reserve, and taking out contracts on this price till the cows come home, if the price collapses it destroys the conservation/alternative efforts that were just starting to gain a little respect...

Roger Conner  known to you as ThatsItImout

"He had a terrible game; I took advantage," Federer said. "From then on, I didn't look back. I started to feel better, play more freely, and in the end, I played unbelievable."

How to sound modest when you speak the tennis truth? A tight match can unravel so quickly against Federer when he starts whipping through his forehands on his terms, and the rest of the final read like a postscript as Federer swept through the first five games of the final set.

"It's a feeling that you start to know where he's going to serve," Federer said. "You start to know you're not going to miss the forehand winner, to know that he can't attack you. It's more those things that go on inside your head, and you know exactly what shot to hit when you serve. Those are very rare moments in sport, and I'm lucky to have them once in a while."

Mr. Taniwal, a former sociology professor at Kabul University who went into exile in Australia during the Taliban's rule, returned to join Mr. Karzai's administration in 2002, serving as governor of Khost Province, as minister of mines and industry, and for the past year as governor of Paktia Province. An elder of his Tanai tribe, he was the type of man Mr. Karzai was trying to place in senior posts around the country, replacing the warlords and mujahedeen commanders with educated men who could promote education and the rule of law.

"Mr. Taniwal was a patriot, a man of both action and academic achievements," Mr. Karzai said in a statement condemning the attack. "The enemies of Afghanistan are trying to kill those people who are working for the peace and prosperity of Afghanistan. The enemies of Afghanistan must understand that we have millions of people like Mr. Taniwal who will continue to serve this great nation."

The word about the coming energy crisis seems to be spreading to some unlikely places. The Register (IT & Tech Based) has done an article on it along with a fourm - The Register - Canal dreaming: solving the energy crisis.

The Sunday Times is anouncing yet more energy price increases next month - that should should get publics attention!

"get Public's Attention." I hope so. But it won't. Keep trying. One of these days.