DrumBeat: September 14, 2006

[Update by Leanan on 09/14/06 at 9:16 AM EDT]

The Wall St. Journal weighs in on the recent Saudi pronouncements: Producers Move to Debunk Gloomy 'Peak Oil' Forecasts

Leading players in the petroleum industry, including Saudi Arabia and Exxon Mobil Corp., are aggressively arguing that plenty of crude oil remains for world consumption, in an effort to counter critics who contend crude output is about to plateau.

That argument, known as the peak-oil theory, has provided intellectual backing for the boom in crude prices and sowed doubts among some policy makers about crude's long-term reliability as an energy source. Such doubts, coupled with concern over sky-high prices, have added impetus to the search for oil substitutes--including in Washington, where President Bush this year declared the U.S. "addicted to oil" and sparked a boom in interest in ethanol.

Some in the industry now are keen to fight the threat posed by such fears.


From EtopiaMedia: Roscoe Bartlett wants the U.S. to move on peak oil


Tom Whipple on Hyping Jack No. 2.


Gulf gusher shows inaction of Congress

The oil industry calls them "elephants" — world-changing discoveries capable of supplying petroleum to consumers for decades. California's Chevron Corp., along with its partners, thinks it has found one in the deep waters of the Gulf of Mexico. If geologists are right, it's the largest U.S. discovery since Alaska's Prudhoe Bay 40 years ago.

Given the federal government's shameful failure to craft a responsible energy policy, the discovery is something of a triumph for U.S. consumers. For openers, it heaps more market reality upon the "peak oil" Chicken Littles who say the world is running out of petroleum, thus requiring fat taxpayer subsidies for alternative fuels to avert international chaos.


Byron King on Jack-2: There's a hole in the bottom of the sea


World has 10-year window to act on climate

A leading U.S. climate researcher said on Wednesday the world has a 10-year window of opportunity to take decisive action on global warming and avert a weather catastrophe.

NASA scientist James Hansen, widely considered the doyen of American climate researchers, said governments must adopt an alternative scenario to keep carbon dioxide emission growth in check and limit the increase in global temperatures to 1 degree Celsius (1.8 degrees Fahrenheit).


Climate Change Poses Disaster Scenario for Miners

LONDON - Flooded railway lines and storms destroying open-pit mines are among the challenges mining firms will face in the future as climate change grips the planet.


Big oil firms tell consumers: use less fuel


China to reduce reliance on oil imports by basing energy supply on coal


Amazonian tribe protests at oil pollution: Indigenous communities of the Peruvian Amazon are stepping up their campaign against oil companies.


U.K.: Mayor's 'cheap oil deal' slammed


Nigeria oil unions stage strike

A three-day strike by Nigerian oil workers has had some impact on production whilst queues are being reported at petrol stations.

Union officials say thousands of oil workers have obeyed the order to stay away from work protesting at insecurity in the oil-producing Niger Delta.


Nigeria oil shortfall expected to last about six months

Nigeria is losing about 872,000 barrels per day in oil production due to unrest and most of the shortfall is expected to last about six months, the west African country's oil minister has said.


New Zealand: the "Alternative Technologies for Living Association" is offering Knowledge to Survive for Households, Small Business

“Developing do-it-yourself knowledge and sharing tools may be essential survival elements for life in New Zealand if serious societal disruption occurs following a ‘dangerous climate change’ event or the ‘peak oil’ impact creates strife” said Mr Paul Bruce, President of the Alternative Technologies for Living Association (ATLA).
A little bit about consumerism:

In what seems like a bit of an over correction since singing the praises of condo flipping and second home buying last year, more stories such as this one about thrift and getting out of debt seem to be popping up in the nation's most popular personal finance magazine.

Speaking of a Money Magazine artilce, over at: The Mess That Greenspan Made

God, I hope so.  I was watching CNBC last night On The Money. They had some 'expert' on 'consumers'.  She must have said 'consumer' or some variant about 100 times in refering to us (people).  It was very depressing.  She was positing that dollar stores would have a resurgence now that gas was cheaper and people could drive to the store without spending their last dollar on gas.  Whoopee!  On the other hand, the 'high-end consumer' didn't seem to have been affected by the high gas prices and even notched up their consumption.  All this made her quite gleeful.  She proudly proclaimed that those that predicted that $3 gas might mean consumers wouldn't consume as much were not correct, and the consumers (us) weathered the (temporary) high gas prices quite well.
She was excited because people could now drive to the dollar store without spending their last dollar on gas?!  
I find that statement so sick and hilarious that I'm literally crying.
Well, her main point was for 'investors' to tell them what stocks to buy.  I think the absurdity of discussing the affordability choice of buring middle-eastern oil for motoring or buying some cheap chinese-made plastic items escaped her.  I mainly find it insulting and depressing that instead of valuing civic mindedness or some other virtue, we are now valued only as far as how much we can consume.  Her technical analysis was probably correct.  The dollar store chains genrally have little or no web presence so you have to actually go to the store to consume.  This was another point she made as to why mid and high end conumption was less affected - because you can now consume 24-7 with web-based shopping and have it delivered.
I urge you to read some of Joe's stuff.  He hits it perfectly I believe.

Welcome to Middle-Class Lockdown
Now shut up and buy something

http://www.joebageant.com/joe/2006/02/welcome_to_midd.html

John

I have to say that Bageant is one of my favorite writers on the web.  He's as colorful and entertaining as Kunstler in his own way, but writes with a lot more warmth and sympathy for humanity.
A propos little-noted but very thoughtful writers on the web, another person I have come to have a high regard for is John Michael Greer, at http://thearchdruidreport.blogspot.com/
His regular blogs on Peak Oil and the future destiny of society are moderate in tone, intellectually disciplined, and quite thoughtprovoking.  I highly recommend his stuff, even though I don't share his pagan religious convictions.  
He's the guy who came up with the theory of catabolic collapse.  Which is probably the most doomerish outcome I can imagine.

The sad thing is, I fear he is correct.

You should read some of his more recent posts, Leanan.  If his pessimism was perhaps extreme in the past, it has moderated somewhat lately.  For example, he now thinks that the collapse will be gradual and protracted (rather than sudden and abrupt), spanning many decades, and that this will leave room for those aware of the situation to implement productive measures for what he terms our "predicament."  I wouldn't say that he is without hope for the long-term future by any stretch of the imagination.
He has always thought that way.  That is what catabolic collapse means.

The reason I see that as the most doomerish outcome possible is that it means we do not change our ways.  Instead, we keep trying to do what we are doing, switching to ever poorer sources of energy.  Until all resources and capital are converted to waste, and we simply cannot continue.

The result is a crash to a lower population level and level of complexity than existed before the complex society arose or arrived, because the environment is so poor that it cannot support anything else.

The good news?  I probably won't have to worry about it, since it will take a hundred years or more.  :-/

This is exactly how I feel.  It would be so nice to live in an age of renaissance, even if it had to be preceeded by an abrupt shock.  But, I fear I may live in an age of slow, relentless descent.  
Another drawback of the slow, relentless collapse scenario is that it greatly facilitates denial on the part of Peak Oil-naysayers; an abrupt collapse would at least be strongly convincing.
Regarding the Archdruid Report, I thought his handle was sort of a joke like "Alpha Male Prophet of Doom", but now I see that he is seriously into that stuff.

But I think he's right — we'll have a slow collapse in which our greed and hunger will allow us to consume every frickin' blade of grass.

A rapid collapse and depopulation wouldn't be much fun for us, but would leave our descendants, and the planet, better off a century or two from now.

"our greed"

Many here at TOD argue over whether wars are due to:

  1. competition for resources, or
  2. conflict of ideologies (religions).

They don't consider the possibility that #1 and #2 are subsumed by:
3. empires of the elite bumping into each other.

Most of us are just pawns on a chessboard ruled by a short list of Kings. The Kings really don't care whether you suffer or not as you make the "ultimate sacrfice" for King and Country (but actually "Country" is redundant because it also means King as far as the King is concerned.)

Kings use religion as a means of controlling their pawns. In the USA the current religion is called The War on Terra. In other parts of the world the religion is called The War on Infidelism. All that is bullsh*t of course because the pawns are going to get a big fat zero in the end. It's all about the Kings and their greed, not about "our greed".

Bush did win his war on Iraq. He and his buddies got the oil they wanted, and the monies (oops, I mean "honorariums") that flow from it. The fact that so many pawns were sacrificed and continue to be sacrificed for the Noble's Cause is irrelevant. Who gives an eyebrow twinkle for the lower class "them"? They're doing as best as they can for themselves, Dearie --to requote Mamma Bushie's line about the refugees from Hurricane Katrina. Yeah right. "Our" greed.

Since I'm one of those involved in that discussion I want to respond to your characterization. I never said that wars were fought over ideology. I said they were fought over ideas. This distinction is large and important. For example, your conspiracy approach to "Kings" assumes that they stand in some outside neutral ground unimpacted by the culture around them. Such a notion is patent nonsense on the face of it. Essentially, you have adopted a "realist" notion of politics and assumed that there is a power kabal that works only by the rules of that realist notion.

While you might get some where arguing that a realist approach to politics should be adapted by some state or actor, that realism is the only motive is clearly not the case. "Kings" may use religion for all sorts of things, but it would be naive to think that the religious beliefs of these "kings" doesn't influence what they do.

I'm not sure why this "man behind the curtain" view of politics is so popular here (like the apparent belief by some that there's a group of shady characters who meet in a room somewhere and decide what the price of gas should be in order to get a certain member of their group elected), but, jeez, could we build a model of the world that isn't based on spy novel intrique levels of analysis? I may not agree with the materialist interpretations, but at least its an argument based on reason.

While I agree with the general drift of much of what you say, I will say that people do meet behind the curtains to set the stage for electoral victory.  In the case of gasoline prices, the players who screamed that Clinton was releasing oil for the SPR in order to manipulate oil/gasoline prices 6 years ago, are very aware of a) the political importance of gasoline prices, b) repetitive trends in seasonal market prices, and c) of ways to encourage the trend.

Do you honestly believe that persons capable of providing media 'friends' with the identity of intelligence agents are incapable of finding media 'friends' who would welcome talking points about a major oil "discovery", even when the discovery was 2 years old (Jack located the oil, Jack 2 brought some to the surface).  Do you believe them incapable of simultaneously playing to the zionist crowd, while softening their stance vis-a-vis Iran, in order to defuse the geo-political premium affecting the price of oil?
Do you believe them incapable of abandoning Al-Anbar and other areas of Iraq in order to concentrate on the flow of export oil (as well as on providing 'security' in the few tiny parts of Iraq where the media has any presence and from where U.S. electoral opinion might be influenced).

And so we could go on. These are the people who from plans devised in the dark, turned an honorable Secretary of State into a public fool. These are the chicken hawks who turned true patriots and heroes into shirkers and friends of terrorists.  These are the people who systematically work to keep opposition friendly voters from exercising their franchise.

Power is everything to them.  They do not want windfall profit taxes on oil corporations.  They do not want to lose power in KSA to an angry, cheated population. They do not want to pay the cost of confronting climate change. They will do what it takes to win, and in the US, they well know that the price of gasoline is about as significant an issue as any other. So they send out their emmissaries to decry peak oil, repetition and the baldness of the lie being key to its success.  They exaggerate the supply response. They know the herd is made up of cows, not cats.

They do meet behind closed doors and connive to lower the price of gasoline.  That's the nature of "making your own reality".

I just got back from renewing my license plate at the county courthouse.  In the atrium of the building were vendors with tables set up selling cheap jewelry and nicknacks. The funny thing is that one of them had a sign: "Shopping is Therapy".

Got to fill that void somehow...

excerpt of lyrics from the song "Egypt" by Tuxedomoon

When the going gets tough
The tough goes shopping
To buy something a little nothing
To fill up the hole in his heart
To buy something a little nothing
To fill up the hole in his heart

As an occassional consumer, I don't feel particularly triumphant about this latest "discovery", especially because I consider myself just a tad bit more multi dimensional than the MSM business press would consider me to be.

Even if it were true that Jack would actually make one wit of difference in the reality of peak oil, it is obviously too much to expect these one dimensional business publications to consider other issues besides whether or not we will have enough gas for our easy motoring, planet destroying life style.

It would be nice if they would refer to us as "citizens" once in a while.  But we're just baby birds to them.
Google hits for "consumer": 577,000,000.
Google hits for "citizen": 164,000,000.
Ratio about 3.5 to 1.
Sad...
the cult of consumption will consume their way to prosperity     buy   consume    marry and reproduce     do not question authority     move to the burbs   drive an suv    buy consume...........consume ................
Thank you very much for this post Odograph.  As REM said, This One Goes Out to the One(s) I Love.  

I never knew the meaning of Ostricism until I started "down sizing" my life 5 years ago.

http://money.cnn.com/magazines/moneymag/moneymag_archive/2006/08/01/8382230/index.htm

"The Edels' austerity exasperates some friends--a few colleagues think they're downright nuts--and it has at times strained their own relationship. And then there are the children:... "

I look forward to the day when we are in full swing back towards the Thrift end of the spectrum culturally, and away from this Gluttony end of the spectrum.  I love talking to elderly Survivors of the Great Depression - the only people who seem to understand the concept of Thrift and are capable of distinguishing between Needs and Wants.  They do Not turn hostile at the thought of Thriftful living and usually have GREAT stories to share that both uplift and prove practical.

I think its too much television isolating us from talkin to others and reading reasonable stuff. The founding fathers opf this country practiced thrift. Poor Richard (Ben Franklin) said a'penny saved is a penny earned." Thanks for being a good example!
too much television

Amen. Saltpeter for the mind (not all of it - lots of shades of grey, but man is that advertising stuff effective!).

And thank you oilmanbob, but I don't think I really qualify as a good example yet.  Maybe a good example of a slo-mo car wreck ;)

(and thank you to all editors, secretaries etc for not pointing out my mispelling of ostracism - I think the current posture of almost everyone I know so resembles the bird I confused the spelling... "head in sand, ass in air, pants down - hmmm," says Mutha Nature).

Oh, in Spain we have been educated by grandparents that went through a Civil War and a postwar blockade and attempt at autarky. You ate the whole plate and you turned the lights off when you exited the room.
I love it. It went from "Finish your plate or you'll go hungry!" to " Finish your plate, there are starving people in this world honey ;)."  

And now we stoop to multiple custom made menus for each little cherub when they balk at "what's for supper."  Multiple take outs, and so much ends up as worm food. But, as they say in poker - "The Worm will turn."  

It sounds like most of our First World grandparents have a lot in common with many 2nd and 3rd world peoples now.

And with our kids and grandkids.  

"Your fat king and your lean beggar is but variable service - two dishes, but to one table. That's the end."
The Elder's "bottom line" listing seems to be missing a few items.  No depreciation for their $30k of cars?  Where is the $6500 they pay in social security taxes?  Also, how can I get their income tax rate... I make only somewhat more than they do and pay more like $40,000 in federal, state, and local taxes.

What would be the effect if everyone in the USA were driving 25 y/o diesel cars and 2-stroke mopeds as well as heating with wood, pumping out 5 kids, and paying almost no taxes?

well i think those crafty politicians would tax the hell out of those diesel cars, wood and mopeds. With incentives and tax breaks to buy the newest and greatest vehicles. And they'd drop all tax breaks for having kids.

Seems like they always follow the money, cuz they are bought and paid for by the corporations.
Just my opinion!

http://news.yahoo.com/s/afp/20060913/ts_alt_afp/usattackseurope

WASHINGTON (AFP) - Former US secretary of state Henry Kissinger warned that Europe and the United States must unite to head off a "war of civilizations" arising from a nuclear-armed Middle East.

I find it interesting that our former US Sec is now leading the call to disarm Iranian nuclear ambitions.  I think he's got a preminiton, but it's a little fuzzy.  There will be war of the civilizations but I don't think it's going to be so much over Nukes.

Will be?  One might argue that it started when we installed the secular Shah.  Then we got called a great satan.  Then we got mad about that and backed Sadaam.  Then ....

Cycles of escalation.

(and ideas about breaking the cycle will be greatly appreciated)

Or perhaps its started when Richard gathered his knights together and decided to "liberate" Jerusalem.

This is an extremely old conflict and not one likely to be resolved by some politicians negotiating some agreement. Until neither side feels as though its very existence is threatened by the other, we are unlikely to see any progress. This is, as far as I'm concerned, the focal point of the problem - the western process of globalization has been so effective that it threatens to eliminate all other forms of social organization. This is not just a state v. state issue, but western forms of business, education, etc. are all supplanting the forms created by other cultures. The islamic world is experiencing it just as others are. The main difference is that the culture their is strong enough to provide ideas and institutions that "fight" back.

Wars are over natural resources. These are the start of the energy wars.  It's all about the oil.
Wars are over ideas. If I have tons of coconuts, but use them for nothing and you use them for everything, there is no conflict - have at 'em. Now, if I add on the notion that you can have 'em but you can't come onto my island, then we have a new source of conflict. Is that over resources? The coming wars are only about oil in the sense that its the cheap form of energy. What the coming wars are really about is the way a globalized society is to be organized (or if we ever really reach full global integration). If we did not have the sort of consumption/growth based society that we do in the west (with the US being the standard bearer) than there would not be any future wars - at least not over these issues.

To say that "Wars are over natural resources. These are the start of the energy wars.  It's all about the oil." is to accept that the current organization of society in the west is the only possible one. It accepts the values of the current society in the west.

We organize our societies in certain ways, global or otherwise, in order to have the best possible access to resources. Ideas and forms of organization are merely the means to an end.

No, wars are always over natural resources.

Provided or course you accept the notion that women are natural resources.

You have, my friend, put the cart before the horse. There could not possibly be any primordial condition that would allow us to organize our societies in any particular way. Societal construction is always additive and reactive. In the best of circumstances it can also be anticipatory, but that does not change the additive and reactive portions.

The greek preoccupation with war over women would seem to be some romanticized longing for older tribal customs in where women were "stolen" from a competing tribe. This rarely was connected with real violence, but a highly stylized way of bringing wives into the tribe from a different gene pool. Often the women were privy to the "kidnapping" prior to the event and were specifically targeted due to relations with a particular man. Remember, too, that in many of these cultures (talking prehistory Mediterranean and Europe) the further back you go, the more likely that they were matriarchal in organization (patrilocal in residence) and that these "kidnappings" would be organized before hand.

I'm too lazy to go dig it up right now, but I've heard that bride-napping has made a comeback in central Asia since the collapse of the S.U.

Wait a minute, you turn it all around. it's your cart and your horse, mr. short term memory, you started out about ideas and organizations, when I was perfectly happy just to feed and f..k.
And if I'm hungry and/or I ain't getting laid, I'm going to come and f..king take yours, if she's not too ugly. I'll organize after I'm done. Or not.
Okay, buddy, now you've had it. Once I get done burning your fields, I'm gonna turn your whole family into slaves. The sons go to the galleys. The daughters to the farm. We'll just have to see about your wife. And you're going to have to watch it all!

On the up - you are correct in that I should have been more clear - the additive and reaction comment should have made it explicit that they were additive and reactive to the social organization that already exists.

Ideology is not nearly so simple.  All societies grow to the greatest extent they can.  Usually, that means a dynamic equilibrium, like a Lotka-Volterra cycle.  In some special cases, that can mean overshoot.  There may be lots of different ways of organizing a complex society, but anyone who would overlook or even restrain their use of fossil fuels while they're still cheap and abundant would be overlooking the quickest, cheapest means of gaining an edge on competitors--and in so doing, ensure their own conquest by said competitors.

In other words, ideology is also subject to natural selection, and I'm not sure how much choice we really have in the matter because of that.  The organization of our society, in its broadest sense, may well be the only possible one right now, because anything else would be less able to resist it--militarily, economically, or culturally.

Once the resources that ideology is based on cease to be cheap and plentiful, of course, that all changes, and ideologies that were once self-defeating become ascendant, while the ideologies that were once ascendant become self-defeating.  To put it another way: you're ahead of your time.  There will be a time for ideology like that, but it's not yet.  Right now, it's frustrating, because ultimately, your ideology is undercut by the day-to-day reality of the current situation.

So, I think the fairer way to put it is that wars are fought for resources, and that ideology is largely a function of resources.

I'm not talking about ideology, but I'll skip over that. You say:

"All societies grow to the greatest extent they can."

I might agree with you if you swap the word civilizations for the word societies. (But even then you'd have to explain the Chinese, at a minimum.) You essentially grant this when you talk about "complex societies" But it is important to recognize that there are other forms of social organization.

However, having accepted that civilization (read complexity, if you like) is the only possibility, the rest of your argument doesn't so much enlighten us about social development as it demonstrates the logic of those societies.

Could the west be any other kind of society than it is? Your conclusion is correct, but is merely a tautology. The real question, and you do identify this, has to do with the ability of a militaristic expansive society to impose its will on others. Given such a society, what determines its ability to expand globally? You would argue that it is resources, if I read you correctly. I would suggest that it has more to do with the internal organization of that particular society. Husserl makes an excellent argument for this in his essay "On Geometry" in which he looks at the cultural foundations of the type of math that we have developed.

So, while you may think that wars are resource based, consider that you may think that only because of the particular society that you are a member of, it values resource accumulation, has vested its identity in a materialist view of the world, and built an economic system based on extraction of wealth from those resources.

And just for an add on, consider that "successful" globalized society and the possibility that its very success might contain the seeds of its own destruction. Where will the "replacement" societies come from? Unless that society is completely totalizing, those replacements will come from submerged cultural threads. Where do those threads reside while the dominant society maintains its position?

No, my use of the term "societies" was quite precise.  Foragers expand to the greatest extent they can.  Usually, that means a dynamic equilibrium with their ecology.  The influx of human foragers into the Americas, for example, exacerbated several ailing species into extinction as they exploited their resources and expanded their complexty as much as they could, until they eventually achieved such a dynamic equilibrium.  The fact that all societies expand to the greatest extent possible does not mean that all societies always grow all the time.  China could only grow slowly, because of the nature of the cultivation it relied on, but it still expanded: the China of the warring states period was significantly smaller than the China we see later.

A society's urge to expand as much as possible is simply an extension of the organism's drive to procreate as much as possible, and like that urge, so, too, are societies hemmed in by competition and resources, resulting in an ecological equilibrium.  That equilibrium can be shattered if a society gains some means to arbitrarily increase its own energy throughput, and thus, complexity--like agriculture, or fossil fuels--leading to exponential, unchecked growth, and ultimately, overshoot.  But this is no more an inevitable result of societies' drive to expand as much as possible, any more than the drive of organisms to reproduce as much as possible must always lead to overshoot.  Such cases represent a breakdown of the normal limits to growth that keep such disasters from occurring.

oh, I should have picked that up - your an adherent to that bio-politics -------.  Okay, have a nice day.
Was the Civil War over natural resources?
Absolutely!  The North had moved on to an industrial economy, wherein slavery was a detriment.  The South still had an agrarian economy dependent on slavery.  It was very much about resources.
Wait a minute - you agree it was about resources and then go on to say that it was because one side was an industrial economy, the other a slavery based economy. So which was it, about resources, or about how the economy was organized?
It's resources.  Why was it that the South had an agrarian economy, and the North an industrial one?  Because they had different resources.
Care to explain what those resources were that caused one to be one way, one to be the other?
The North were developing textile coal and steel industries due to the abundance of coal, and iron in those regions.  While the South had fertile grounds and longer growing seasons which permitted a better capability to grow cash crops such as tobacco and cotton along with a variety of food stuffs.  The North's textile industry was supplied primarily from the south's cotton crop... that is any portion not sold off to Britain's textile industry.

The anomaly is that the mines and factories actually required a fair amount of labor to operate also, though one could argue they required more skilled labor than simple slave harvesters.  Still given the riskiness of mining and even in forging steel in those days, its a wonder that slave labor didn't take hold in the North also.  Certainly after the Civil War, cheap Chinese Labor was used to help build the railroads and work the silver and gold mines all over the southwest.

I think this is mostly true, but there is a percentage of feedback in how the South developed due to its past customs.  In other words, by the 1800s the South had become so dependent on slavery as a way of organizing society that it couldn't conceive of any other way to do things no matter how much resources or technology changed.  Thus the South would impose slavery on any Western territory that it colonized, whether it was a particularly profitable use of the resources there, because the idea of slavery had to be defended at all costs.  I've heard a black history teacher talking about attempts by slaveholders by the 1850s to build plantation autarky, trying to teach slaves to operate simple machine tools to create a new source of income for the owners.  Industrialized slavery sounds absurd, until you consider the Nazis.  In both societies, the racist ideology made it necessary to attempt to apply slavery as the solution to every economic challenge.  

After the War, the South was legally forced to advance to a tenant farmer economy not so different than what most civilized agrarian societies have suffered, but it had no intention to let blacks be sharecroppers before the War.  So politics do alter the list of acceptable solutions.

Hmmm. I wasn't aware that Massachusetts was such a big coal producer. And I guess all those farms through out upstate New York didn't produce much. Wonder why they kept farming them.

Okay, I'll be serious now. But I think you see where I'm going. This idea that a society is shaped by the resources is simplistic at best. Do resources have an impact on the society? Of course. But if they shaped them, then everytime you saw (your example) coal and iron in the same general area then you would wind up with an industrial society. Certainly you don't want to say such a thing.

One of those peculiar things I came across when studying these sorts of issues was a general agreement among early modern era writers that climate impacted temperment in a peoples. Thus, those in the south were generally considered more emotional, less organized. Those in the north staid and over efficient, and those of us in the central regions had the balance just right. The funny part was that I found this in numerous places. When an Italian wrote it the southerners  were north africans, the northerners were the french, and the italians were just right. But when the french wrote this, they were naturally the middle, the italians hot and the germans cold. And of course when a german wrote this it was the french in the south and the scandinavians in the north.

I'm not saying you were making this same mistake. Just cautioning that simple explanations of societal difference may be tempting - their initial explanatory power seducing - but not neccessarily very satisfactory once you start looking a little more closely.

I wasn't so much defending Jason's statement as much as answering your questions about which resources were available where and what industries developed.

I've contended before that resources(or the desire for them) are a key ingredient in most wars.  Certainly there are exceptions, and of course most wars are composed of a myriad of reasons, resources and ideology just being part of it.  In our current timeline, why have we bother with places like Kosovo, Iraq, and Afganistan, but not places like Rwanda, or Congo?  They all have ideological reasons as to why we should go in and use force, but only those deemed to have strategic and resource importance were pursued.  So obviously ideology alone is not enough either.

I think its too simplistic to say one single reason is the cause for a war.  Usually its one single reason that lights the matchbox full of the other reasons.

As for the different paths of the North and South, I do think resources and their immediate availabilty impacted their paths.  The North with its access to coal, Iron and other metals in Pennsylvania and Ohio, combined with the large ports such as New York gave them a lot of push into the direction of an industrial society.  I think the reason the south didn't see this same push was at least partly from a lack of those resources.  The other thing to keep in mind about the north from societal perspective is that their population congregrated to the cities much sooner than the south, and as result lead them to an Urban verus Rural lifestyle.

But your point about the Northern farms is an interesting one.  I think the question to ask is not the why behind the broad difference in direction that each society took but rather why did the parts of the society that had commonality not adopt even more of the same measures... i.e. why did Northern farms give up slavery more easily, or vise versa?

There's an old joke about using Irishmen to tend the boiler (a dangerous job), because slaves were too valuable to risk.

The north had a lot of immigrants, who were cheaper to employ than slaves. Indeed, many slaves in the northern states were freed before slavery was abolished there.  Not because northerners are morally superior to southerners, but because it was in their economic interest to free their slaves.

If you own a slave, you are responsible for him his entire life.  You have to give him food, shelter, and clothing, even if he's too sick, ill, or injured to work.  

A cheap immigrant laborer, OTOH, needn't be paid if he's too sick to work.  When he gets too old to do hard labor, you can fire him and hire a new, younger fellow.  

It was industrialization that led to the end of slavery.  Slavery was already fading throughout the hemisphere by the time the Civil War was fought, and by the turn of the century, it had ended throughout the Americas.  In some cases, due to violent uprising.  In others, due to the peaceable passing of a law.  In our case, through a civil war.  But even if we hadn't fought the Civil War - slavery was doomed.

New Orleans has a small Celtic cross on Lake Pontchartrain as a monument to the thousands of Irish who died digging the Basin Canal.

When filled in, Basin Street was the cradle of Jazz.

The north had Mills.  Fast running Hydro power.  It was the power(hydro) that made the mills possible.  The south by and large had slow moving rivers. No mills.

Like Oil, Hydro(water wheels) Mills drove what ever you attached to it.

That's why they had factories.  South the oil was slave labor.

Agriculture in XIX North - in hands of smaller family organized social units, poor rocky soils from glacial action, four season climate with short growing season.  No wonder they emigrated whenever, whevever agricultural or other oppportunity presented itself.

Agriculture in XIX South - the northern tier of the whole export-oriented tropical slave labor plantation system of lowland tropical America, English speaking rather than Spanish, French or Portuguese.  Momentum from long history.  More benign climate, longer growing season.  Close ties to British textile industry.  Early southern planter class directed the founding of the country.  See Eric Wolf text I mentioned a few days ago abt. Chap. 10 I think.  

IMHO what constitutes "resources" always simultaneously objectively present but also acted upon economically as refracted through existing or latent cultural frameworks and made possible by existing or possible social relationships.

Oil in the Persian Gulf was there for millenia, Bedouin herders even knew about it via oil seeps.  But not utilized (didn't become a "resource" to be organized around and potentially fought over) until economic and resulting social and cultural possibilities were established and could activate/motivate people.  Those relationships have a history which matters, it's not just reducible to the objective presence of useful kinds of matter and energy.    

http://www.lewrockwell.com/wilson/wilson20.html

Check out this article for a interesting take on the Civil War in the US.

The resource in that matter was slaves.
Sure it was - extremely cheap energy.  In that case, human labor.
When you dig further, slavery may have been at the root of it but it took the election of Lincoln without the majority of the entire South for the South to realize they had no power in the federal gov't.  The North could make decisions without the South's help due to majority status.  That is what ultimately sealed destiny....
The man who actively and deliberately set the stage for that war of civilizations, who single-handedly made Nobel prizes an obsolete laughing-stock issue by being awarded one, is wheeled out of his daily abode, an lavishly custom-adapted bathroom, one of his sexy Nicaraguan no-pension-plan 18-year old personal aids wipes the multiple layers of drool of his face, and he gets to spout and spit some more of that unparalleled wisdom in the general direction of a microphone, no, no camera's please, only to be pushed right back in that john, where, at age 124, he is not expected to ever emerge from again.

There is a silver lining in here somewhere.

what the hell are you talking about ?
War criminal/Nobel Laurate Henry Kissinger, indisputably the planner of the
9/11/1973 (coup in Chile) and GW Bush's first choice to head the commission investigating the events of 9/11/2001.

Among other things Kissinger is famous for using the old German term "useless eaters" to refer to the american underclass.  He is also author of the notorious NSS Memorandum 200 to President Ford advocating using food (embargoes) as a weapon against the third world.

Europe and the United States must unite to head off a war of civilizations?!  You mean, unite against the other non-western civilizations?  Doesn't anyone see the irony of that statement?
Read the article.  No, he is Not saying the US and Europe should unite against non-western civilizations.  He is specifically talking about radical Islam and Iran.

Iran started this "war of civilizations" 26 years ago with their Revolutionary Guard and continues the war to this day with iit's financial and military support of terror groups, it's educational indoctrination of Hatred of Infidels (non-muslims), and it's frequent open calls for "wiping Israel off the map".  

This war is brought to you by Peak Oil, Radical Islam and a Nuclear Iran.  

Iran started this "war of civilizations" 26 years ago...

No it didn't.

The 1979 Iranian revolution ousted Shah Reza Pahlavi, put in place in a violent 1953 coup by the CIA against the democratically elected government that wanted to nationalize its oil industry. The Shah was kept afloat by the Savak, a secret police force that put to shame all of Stalin and Hitler's brutality combined.

Workd War I was fought over the territory, as was WW II. OIL.

And it all goes back long before that.

Damn Imperialism....we can't escape history.  When won't we forget that?
If there is any lesson to be learned from ABC's recent "docudrama", it is that partisans will trace any problem back as far as the administration of the opposing party and stop history at that point.
If you're going to cast those old aspersions, get the details better. What triggered the coup was the prospect of Mossadekh granting the Soviet Union access to Iran's warm water Indian Ocean ports.

And that would have made a hot World War Three a lot more likely. Hence the willingness of Donovan's WW2 veteran agents to fight dirty to prevent that from happening.

"And that would have made a hot World War Three a lot more likely."

Who says?

Anyone who ever looked at the predicament of the Soviet Navy. The Baltic Fleet was hemmed in by Denmark. The Black Sea Fleet hemmed in by Turkey, Italy, and Gibraltar. The Arctic Fleet checked by the Norwegian coast, and the Pacific Fleet on the wrong side of a mighty long railroad, easily taken out.

Meaning as soon as the Cold War turned hot, the Soviet Navy would be beaten in days, which gave the Soviets good cause to keep it cold. Mossadekh could have made things much more amenable to war by giving the Soviets access to the Indian Ocean. And this he wanted to do in 1951, when Stalin was in charge. Frikkin' Stalin!

  1. So the Iranians are evil because they elected Mossadegh and dared to be upset that we overthrew him?  Is our cause so exalted and sacred that we get to rape others and then expect them to be grateful?

  2. What the hell right do we have to demand that all the "mud races" adopt our system of government/economics if we get to break its rules whenever we feel like it?  

  3. Gee, it was sure a good thing we invented the A-bomb so as to make any future great-power war so dangerous that we have moral carte blanche to enslave all the non-great-powers instead to prevent them from going over to the other side and making that war "more likely".  Guess that's why 60 years after inventing the A-bomb, we now have military bases in 120 countries.
  1. Maybe not evil, but certainly stupid. Bringing the world to the brink of World War 3 is bad, mmkay?

  2. Did I say that? I said Iran's leader at the time brought the world closer to a catastrophic war just 6 years after the last one ended. I also said that Bill Donovan's men at the time were hardened WW2 veterans who were willing to almost anything to prevent a repeat of what they went through.

  3. Geopolitics is hard. Let's go shopping.

"put in place in a violent 1953 coup by the CIA against the democratically elected government "

Right.

here's a book on it.

"All the Shah's Men,(An American Coup and the Roots of Middle East Terror.)

It deals with a 1953 coup in Iran that put the Shah in power.

As Harry Truman said:  
"There is nothing new in the world except the history you do not know."

You folks heard of Karma I believe.

<Snippet from an interview with author>

In 1953, Iran had a democratic government. This is a very jarring thing for us to realize now because we are not used to seeing the word "Iran" and the word "democracy" in the same sentence. The fact is, however, that Iran was developing a long, rocky but democratic path in the early 1950s. For reasons which my book explains in great detail, the United States decided, in the summer of 1953, to go in and overthrow that democratic government. The result of that coup was that the Shah was placed back on his throne. He ruled for 25 years in an increasingly brutal and repressive fashion. His tyranny resulted in an explosion of revolution in 1979 the event that we call the Islamic revolution. That brought to power a group of fanatically anti-Western clerics who turned Iran into a center for anti-Americanism and, in particular, anti-American terrorism.

The Islamic regime in Iran also inspired religious fanatics in many other countries, including those who went on to form the Taliban in Afghanistan and give refuge to terrorists who went on to attack the United States. The anger against the United States that flooded out of Iran following the 1979 revolution has its roots in the American role in crushing Iranian democracy in 1953. Therefore, I think it's not an exaggeration to say that you can draw a line from the American sponsorship of the 1953 coup in Iran, through the Shah's repressive regime, to the Islamic revolution of 1979 and the spread of militant religious fundamentalism that produced waves of anti-Western terrorism.

http://www.buzzflash.com/interviews/03/07/29_kinzer.html
<snip>

If America could know the Ironic sickening Truth about how we collectively got into " The dark alley, in a bad section of town, with a guy with a gun"  that the current and previous Admins have gotten us into.

WE overthrew a DEMOCRATIC GOVERMENT in Iran, and set up a DICTATOR.

Bush wants us to establish DEMOCRACY in the middle east.

Bush wants us to establish DEMOCRACY in the middle east.

"Democracy" is just another word for nothing left to vote for.

A two party system is barely one-choice better than a one-party system, and that's only if you are gullible enough to believe you actually have a choice. ("They" are not all that worried about who you vote for, just as long as the voting machines produce a rightward count. The bottom lie lies in the vote count.)

Bush will use whatever words his masters call upon him to use for the purpose of misunder-confusinating de American people. (Example: "The security of the civilized world depends on victory in the war on terror, and that depends on victory in Iraq." Doh-- wasn't this the same guy that said we will never have a clear cut victory in the war or terra, that it will be a long slog that goes on forever? My confusinated brain swims in the no spin zone already. But heck, as MacBeth said-- fair is fair.)

Dell is notorious for only caring about the bottom line.  I've heard WalMart is their role model.  Interesting then that they have an energy efficient products page
BTW, Energy Star makes a big difference on PCs.  Look for it in your next purchase ;-)
Corporation cannot be good or evil.  Of course they only care about the line, they are investment vehicles, nothing more nothing less.  If you expect corporations to craft energy policy, worry about global warming, or care about peak oil, your hopes are misplaced.  It's not their concern, it shouldn't be their concern.

The only entity that can plan for those issues is your government.  ...and I wish that was more comforting.  : )

Seriously, are you kidding?  It might come as a shock to you to find out that corporations can lobby the government to craft energy and global warming policies that are favorable to themselves and not to the rest of us poor suckers.  In so doing they are clearly taking a moral position and can be evaluated accordingly.
They are not taking a moral position, they are taking an ecomomic position.  Maximize profits, that's their raison d'etre.  Corporations don't have souls or consciousness.  They are not capable of taking a moral decision any more than your calculator is.
They are willingly taking an amoral position, to me it is similar to an evil one.
When an apple falls out of a tree and hits you on the head, is that amoral or evil?

Is you want corporations to act differently, it needs to be legislated.  It is counterproductive to think of them as entities that can make good or bad decisions.  Citizens can do that, governments can do that, corporations cannot.

gov't = corporations = media (= corporations = gov't, etc.)
Tobacco

This hearing put a human face on the tobacco industry for the first time. When the CEOs swore under oath that smoking was not addictive and did not cause any disease, it became clear to the American people that they were lying.

Does anyone really expect any large publicly owned company to behave in any manner except that which would enhance the profit for the shareholders. Gad! How naive can one get?

Ron Patterson

Of course in the 21st century you're absolutely correct. Any misty memories of quaint stuff like ethics, civics, honor, decency? Once corporations even had to go get charters and obey laws and all sorts of stuff. That day won't return.
Suppose the government decides to raise taxes on corporations for a moral purpose, provide health care for poor children, say.  The "souless" corporation could say "must maximize profits" and be content to maximize profits given the new rules, but the board of directors, or CEO or whoever--those with souls--will decide to fight to kill the tax increase.  The corporation does not just try to maximize profits given the rules, they try to influence the rules themselves, and that is getting involved in a moral way--they have taken the position that their interests are more important than other's interests.  Besides, maximizing self-interest, i.e., egoism, is a moral position anyway, claiming that whatever maximizes profit is the good and ought to be persued.  Claiming that corporations are non-moral because they are egoists is ridiculous.
"Fascism should more properly be called corporatism,
since it is the merger of state and corporate power."
- attributed to Benito Mussolini
The corporation does not just try to maximize profits given the rules, they try to influence the rules themselves...

Absolutely.  And that is the greatest flaw in our present form of government.  If the citizens of a nation want Democracy, they cannot allow their moral influence to be subverted by corporate influence.

The solution is not to hope that somehow corporations will gain the capability to act like citizens, the solution is to remove corporations from the process and return it to the human beings.

Bingo!!!  Wake up, America!!
Very astutely and beautifully articulated. Thank you.

- sgage

Governments can NOT -independently- plan for global warming, peak oil etc. At least not in our western political systems. They owe their positions to industry.

They can say they do it, fund research, draft plans, support Kyoto. They will come out with strong language that seems to "fight" corporations, if that is deemed appropriate. To know if it is, they use pollsters.

But all these things do not constitute de facto planning or preparation. They are propagated and publicized with only one goal in mind: win time, blow smoke, draw out the issues.

In due time, compromises between business and governments will be announced, after "long and hard", very long especially, negotiations. Business will then be presented as being willing to act, but constrained by bottom lines (can't risk losing jobs...), while politicians looks busy defending their voters.

It is then made clear that for industries to act on the measures agreed on, will take a loooong time, and since such measures are prohibitively expensive, they will necessitate massive public funding, tax breaks etc.

The public now pays for its clean air. But that still does by no means guarantee that the air will be cleaner. People will feel they have achieved some benefit, however, and business will have added large chunks of cash to its bottom line.

The scripts were written long ago.

Here's a question:

Are we living in the early stages of corporate feudalism?

It would help if I knew more about how feudal nobility arose.  I've heard two stories, both of which could have Peak Oil parallels:

  1. When the western Roman Empire was crumbling, the big slaveowners began to shut their estates off from the outside world, converting their slaves into tenant farmers and relying on their own henchmen for security.  I have not heard whether those fatcats actually tried to accelerate the hollowing out of the imperial government to become independent of it.

  2. After the Empire crumbled, barbarian hordes did what they usually do to defenseless farmers, but some of the horde-leaders decided they wanted to settle down, so they offered their swords as protection rackets to the farmers, gaining ever more economic advantage over them until they practically ruled them.  Then came the fancy names.

We don't seem to have gotten as far as either of these scenarios yet.  But if (1) is what actually happened, then the relationship between the big slaveowners and the dying government is important.  Were services being privatized?  Were toll booths being set up on the magnificent system of roads?  Were tax policies being rigged by lobbyists to polarize wealth?  The Roman system was interesting because there was no barrier between the government, military and economic leadership - a successful Roman would be expected to be a general, politician, and slaveowner in his career.  Now it seems that with the attempt by Rumsfeld to introduce mercenaries from creepy right-wing businesses into Iraq and New Orleans that we truly have a corporate ruling class that can play all three functions.  We have private armies working for a government supported by the owners of those armies, who also are involved in politics.  If the government becomes increasingly paralyzed, those owners might still have those armies.
I've also seen the same explanations. I don't want to suggest that I have any superior explanation, but I can offer a criticism of these two that I have read. They are explanatory for Gaul, Italy and parts of southern europe where the Romans had extensive farm holdings, but they don't account for the parallel rise of fuedalism in the germanic states, scandinavia, poland, and the celtic areas where roman control was not as complete and/or not based on agriculture (what is the name of the estate system in Gaul - I hate losing words like that).
Hello Testudo,

If a corporation was not staffed by humans, you might have a valid point.  But as this link makes explicit, those humans inside businesses make profound moral choices all the time to justify MPP and infinite growth.

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

"Corporations don't have souls or consciousness.  They are not capable of taking a moral decision any more than your calculator is."

That's complete baloney.  

No corporation has HAL 9000 as CEO, humans make every single decision.

Human responsibility and morality does not evaporate wearing a suit and a "LLC".

"maximize profits, their reason for existence"....

Yes indeed, the laundering of human selfishness and greed into socially acceptable justification is an eternal practice.

You must be kidding!!!  Corporations almost single-handedly set our so-called energy and global warming policies.   Who else do you think does it?  The voters?  Hah.
That's the point.  We have allowed corporations to have a voice in running our goverment.  They have been given the right to act like citizens, to finance candidates, and to lobby.  Whatever influence they have dilutes the influence of real live citizens.  And corporations will not, can not, make moral decisions like human beings do.

We have turned our government over to investment vehicles whose only concern is to increase their profit.  There is nothing wrong with corporations.  There IS something profoundly irresponsible in the way we have turned our government over to them.

Corporations have all the rights of people with none of the responsibilities. (If you don't believe me, look it up.)

We have a name for the type of person who behaves as do most corporations: sociopaths. These type of people are locked up forthwith as soon as they are identified, for obvious reasons. (e.g., Scott Peterson)

But when a corporation acts this way, it is rewarded. Hello? That's not a moral stance? Oh yes it is, and not a good one at that.

Calling corporations sociopaths distorts the issue, and is factually incorrect.

Corporations and/or the people who run them are by law required to maximize profits. They can limit global warming, but only if it is profitable. A CEO who decides to effect policies that benefit society, but hurts shareholders's value, can't only be fired, he can be prosecuted.

A sociopath acts a certain way because (s)he is incapable (for whatever reason) of obeying society's rules. Corporations do the opposite: society not only allows them to do what they do, society obliges them to do it.

There's doubt whether coerporations were ever actually given the rights of an individual, but society acts as if they were. The one big difference between the individual and the corporation is that the latter doesn't die, and can, no, make that must, go on plundering the system.

"Corporations and/or the people who run them are by law required to maximize profits."

Care to point out this law? I think you have been misinformed if you believe that this is in government statutes somewhere. Now, if you say its an economic law, or social expectation or somewhat, that would lead you back to the morality question.

Actually, I think that there was a supreme court case that determined that corporations are legally required to maximize profits for their shareholders.
Then a reference, case name, would be in order.
Dodge v. Ford Motor Company, 204 Mich. 459, 170 N.W. 668. (Mich. 1919) see Wikipedia article.
The Court held that a business corporation is organized primarily for the profit of the stockholders. The discretion of the directors is to be exercised in the choice of means to attain that end, and does not extend to the reduction of profits or the nondistribution of profits among stockholders in order to benefit the public, making the profits of the stockholders incidental thereto.
I've wondered about this lately since the CEO of Whole Foods has stated that his goals are to produce food in a way that is not environmentally harmful, and to serve his customers with quality goods.  His view is that if people want to invest in his company given this business model, then so be it, but it's not a way to "maximize profits."  I wonder if he is afoul of the law in so acting.
That is called PR, which is done to maximize profits.  
Enlightening discussion, thanks.
His customer base would insist on these values. Therefore, anything less would clearly reduce his profits. He is, in fact, maximizing profits based on this business model.  Once he got out of this particular niche, he would be subject  to head on competition with the Safeways of the world, in which case he would lose.

However, he will have to further differentiate his product because WalMart is getting into the organic foods business in a big way and will be able to undercut Whole Foods. Whole Foods may survive,however, in that it has that Yuppie factor that WalMart lacks.

Well, Ben and Jerry sold out to Unilever.

Paradox : is it still an ethical business? They seem to be still doing the same stuff, helping lots of disadvantaged people etc. Why is the gigantic amoral Unilever corporation running this little niche business this way?

Sort of makes the icecream taste funny.

Southwest Airlines co_founder, retired CEO and current Chairman (and best airline exec in history) Herb Kelleher has stated that their priorities are:

  1. employees
  2. customers
  3. shareholders

On 9/12/01 Herb said that SW would sell a/c before laying off one employee.  Every other US airline laid off 25% to 50% of their employees and SW gained market share.

The #3 priority people did extraordinarily well until about 8 years ago.  Still better than other airlines, but not the great returns from the first 27 years.

Something wrong with your link - but to the point. Read the decision carefully. It does not say that a corporation is legally bound to maximize profit. It ruled that the Directors could not take steps that would amount to "spoilation of the company's assets." In essence, it says that the stock holders as owners have the right to determine how a company is run. Granted that the assumption that this was a profit oriented country helped minority shareholders win the case. But, the  lasting interpretation of this case is to say that corporation directors and managers are directly responsible to there shareholders.
A sociopath acts a certain way because (s)he is incapable (for whatever reason) of obeying society's rules. Corporations do the opposite: society not only allows them to do what they do, society obliges them to do it.

Actually, that is incorrect. They are incapable of feeling things like remorse or empathy, but they obey the rules once they understand the consequences of their actions. If they are sure to be punished and that punishment is severe enough, they will engage in the behavior. They won't kill and rape because it is wrong, they won't kill and rape because they believe they will be caught and thus go to jail or be executed.

Corporations act the exact same way. Corporations lie, cheat, steal, and sometimes kill (Ford Pinto anybody) when they believe the benefits outweigh the costs. They are soulless, amoral, profit-maximizing machines that would as soon sell you poisoned food or bad medicine as make sure your car has seat belts.

Furthermore, since corporations are rewarded for sociopathic behavior, it is quite likely the winnowing out process in corporate boardrooms means most of America's high-ranking executives are, in fact, sociopaths.

Furthermore, since corporations are rewarded for sociopathic behavior, it is quite likely the winnowing out process in corporate boardrooms means most of America's high-ranking executives are, in fact, sociopaths.

I came to this same realization a few months ago when discussing my advancement opportunities with my boss.  She basically told me I could go really far but to step up to the exectuvie suite I had better be prepared to sacrifice my morals.  Now I know I'm going to start my own business.

The 1976? movie "Network" might be good to watch again.  

Near the end the executives coldly decide to murder someone because their ratings are low.  They have no choice.

All the decent old farts who used to run the place have been replaced by amoral corporate types.  

2004 movie "The Corporation" is entertaining.
I think this is especially salient:
Furthermore, since corporations are rewarded for sociopathic behavior, it is quite likely the winnowing out process in corporate boardrooms means most of America's high-ranking executives are, in fact, sociopaths.

I have seen several studies and articles by psychologists and sociologists that come to the same conclusion. The problem is, there isn't any hard data to prove it. Probably because top executives are unwilling to submit to psych tests to see whether or not they're nuts.

Actually, it's quite likely the top positions in ANY organization are filled with sociopaths.
You describe a sociopath by telling a story of how their behavior can be contained, so they don't act like sociopaths. That makes it hard to recognize them, which makes the entire point futile. I want a real sociopath, not some compromising sissy.

Society requires corporations to behave the way they do, maximize rape.
It requires sociopaths, as per your story, to de the opposite.
Sociopaths go to prison for rape, CEO's go to prison for refusing to rape.

And that's what I am trying to show: that though there may be superficial similarities, the motivation is the exact opposite.

Whether employees are sociopaths is beside the point. Sure, it might be inviting to be obliged to act the way you are inclined to do anyway.

But it's probably much more dangerous that the corporate structure induces perfectly normal people to commit to rape and violence.

And that takes us into 1930's-40's Germany.

And that's what I am trying to show: that though there may be superficial similarities, the motivation is the exact opposite.

Well, what's going on is that they are the same. Differences in behavior are due to the different constraints and signals they receive from society.

"Corporations and/or the people who run them are by law required to maximize profits. "

Profits when? This quarter? This year? This 5-year-plan? Not very clear.

How do you know when "profits" were "maximized"? How far does a corporation have to go, seeking to maximize profit, to the detriment of society and its own long-term interests? A bit open-ended, it seems to me. Who decides? How would this litigated I wonder...

A strict interpretation of that law could imply that corporations are not possibly capable of actually implementing strategies that serve their own long-term best interest, if those strategies would dent profits this quarter.

And what we need right now, as much as anything else, is to find a way to come to some kind of a long-term view.

It is way high time that corporations were put in their place, which certainly does not include imagining them to be legal "persons". And their money is not "speech" (wrt campaign donations).

It just might too late though.

- sgage

Corporations do the opposite: society not only allows them to do what they do, society obliges them to do it.

So where does Enron fit into this viewpoint?  Allowed to do what they did, or not allowed?

  I am in agreement about basic irresponsibility, but the problem is with sheilding the owners and managers of corporations from responsibility and liability for the actions of the corporations. They're even fairly invisible.
  It takes a criminal action that hurts the interests of the cheif owners of corporations to draw prosecution. Enron is a great example-if Enron had paid its creditors there would have been no prosecution for the accounting irregularities, even if they cheated the workers. Look at Ford as a great example, or the immense profits from cheating illegal immigrants by employers who don't pay social secutity on wetbacks .
Rent or buy this and watch it over the weekend.

One of the BEST satires on Corporations.

The Company in the movie is 'Inc. Incorporated'
They make everything from Nuclear power plants to heart pace makers.

Some GREAT quotes and one-liners.

REALLLLLLY Funny.

Head Office.

http://www.bestprices.com/cgi-bin/vlink/026359298424.html

Look who was in it.

Danny DeVito , Eddie Albert , Rick Moranis , Jane Seymour , Judge Reinhold , Michael ODonoghue

Distributor Notes It's a big business battle for the top when a Senator's son and the chairman's daughter decide to take on the twisted, back-stabbing world of corporate decision making. Ruthless, merciless - and sometimes clothe-less - it's every man or woman for themselves in the fight to make it all the way up the corporate ladder to the HEAD OFFICE.

It can't be legislated, not anymore. 150 years ago a human construct like incorporation wouldn't have human rights. Alas now, corporations rule; it's normal!

"In the 1886 Supreme Court Case, Santa Clara County vs. Southern Pacific Railroad Co., the railroad challenged the county's claim of unpaid taxes by arguing that it was being forced to pay an unfairly high amount and therefore had been deprived of equal protection as per the 14th Amendment. In its brief to the Court the railroad was effectively defining itself legally as a person and the Court seems to have accepted that corporations were "persons" under the 14th Amendment granting them certain constitutional rights, though the decision may not have said so in those exact words. Some critics of the Santa Clara decision suggest that language asserting the "personhood" of corporations is found only in the preface to the published opinion, written by a court reporter.

Regardless of the origins of the concept, case law has been consistently on the side of corporate protections under the equal protection clause. And case law has extended that protection to other parts of the Constitution and federal laws, including the Bill or Rights and Section 1983 of the US code which allows for civil action for deprivation of rights. For example, in 1978 the Supreme Court ruled in First National Bank of Boston v. Bellotti that corporations have a First Amendment "right" to influence ballot initiatives and other political campaigns." Corporate Rights

"So how did it come that Court Reporter J.C. Bancroft Davis wrote that corporations are persons in his headnotes? And why have a hundred years of American - and, now, worldwide - law been based on them?
Here are the main theories that have been advanced regarding what happened:" The Deciding Moment

Right, exactly, thanks, that's what I was referring to when I said earlier:

There's doubt whether coerporations were ever actually given the rights of an individual, but society acts as if they were.
Talking about the power of corperations and CEO's our great leader, CEO in Chief, is appointing Lee Raymond, yes that Lee Raymond, to head up a committee to investigate peak oil.
http://www.dailykos.com/storyonly/2006/9/14/14134/8627

The commission is full of oil types and "economists"

Want to bet that our favorite economist will be aboard.
Also see:
http://www.blueclimate.com/

"The National Petroleum Council (NPC), an oil and gas industry group, was requested to undertake this work by the Energy Department."

I probably should have said notorious for seeking upstream price reductions, cost cutting, and so on, on the WalMart model.  Bottom line without social agenda.

Companies sometimes convince themselves that a 'social conscience' improves the bottom line.  Sometimes I think that's true.  Sometimes I think it is just that people in control choose to assume it does.  Either way works, from the external perspective.

Given the federal government's shameful failure to craft a responsible energy policy, the discovery is something of a triumph for U.S. consumers.

Or consumers could stop acting like such children and do the responsible thing without a paternal government being required to step in to keep them from hurting themselves.  A five year old will eat candy until they're going to throw up if a parent lets them.  Most of us grow up and no longer engage in candy eating binges but the average consumer seems to have only moved on to more expensive and less edible items.

It appears that we're not going to get our parental guidance and are going to have to learn to grow up by getting sick and throwing up all over the economy, environment, and our futures instead.

Amen. You said it brother!
Or consumers could stop acting like such children...

Well, male consumers could of course stop acting like evolutionary success stories, but it's unlikely.

Diamonds are still a girl's best friend. Male consumers who don't move on to more expensive and less edible items aren't going to cut any ice with the female sex.

Those little pets -- how they like big baguettes.

Wimmin -- all their fault, innit?

"Wimmin -- all their fault, innit?"

Well....Yes ..and it involved a serpent and a tree. Non, mon ami?

or at least half of it(fault)..and maybe a tad more.

Do you have an agenda hidden in there?

Ya see Adam was formed from the ground(humus-human) and Tetragramatton breathed the spirit of life into his nostrils.Yet He just 'fabricated' wimmen(from man) and did not do the breath thingy. Alas the downfall and hence high Peak Oil cometh.Forget the helpmeet thing..they blew that away looong ago.  

 

Perhaps one of the most eye opening experiences was doing a case study on DeBeers during grad school.  I felt like a total victim of the diamond propaganda onslaught when learning how they drove the diamond stake deep into the American psyche while totally restraining the supply.  My better half is still suffering as if she wants the flash she gets it in the form of CZ.
One of the silver linings in this deluge of anti "peak oiler" denials, is that at least we know they have heard the basic message.

Until this, I wondered if anyone was hearing. Now we know.

THey know, they are officially in denial, the first stage of Elizabeth Kubler Ross' 7 stages.

I predict that within decades of peak oil, people will begin to adjust to the new realities!

The Five Stages, by Elizabeth Kubler-Ross

1, Denial
2, Anger
3, Bargaining
4, Depression and
5  Acceptance

It appears we're moving from denial to anger (much of it directed at us at the moment, apparently).

What do you folks think?
It seems like a long way from #5, doesn't it?

I'd say the majority is somewhere between denial and anger, though with ol' Jack I think there was a step back towards denial.  But...a journey of 5 steps must begin with step one...it's on the map.
Here's an interesting story:

Copper Thieves Wreak Havoc Across Communities
http://www.npr.org/templates/story/story.php?storyId=6073433

I was in Columbus Ohio recently and took a ride with my uncle who is a Columbus cop that Saturday.  He was telling me it was a slow day for a Saturday, but on one of the calls he responded to, he went to assist another cop who had caught a man who was stealing metal from the railyard located behind a scrap metal yard.  The scrap metal place was packed by the way.  Must of been close to 50 trucks and cars lined up outside and on either side of the road.  My uncle said that there was no way to prove it, but he wagered most of those folks had probably stolen the metal they were selling.

My uncle was explaining to me that in recent weeks, they've had a rash of robberies involving metal.  Multiple forclosed homes condemned because they were found flooded after vandals had stripped the place of all the copper wiring, and piping.

Another story he told me was of a guy they caught who was stealing manhole covers.  When they finally caught the guy, they found his station wagon near dragging to the ground because he had loaded up a couple dozen manhole covers in the back.

Another story was of a guy who had apparently known enough about powerlines to go up and detach a powerline meant to hold voltage for an Industrial complex.  Was going to sell it for the copper.

Another story was of a guy who left his tools after being chased from a warehouse.  He had already made himself a nice pile of copper wiring and piping when the warehouse worker showed up and called the cops.

I expect to see more and more "scrap" metal burglaries as the price of metals stays or goes higher.

The first time I ever saw copper stolen for the scrap value was in 1988 in the Fourth Ward in Houston, now gentrified to be Midtown. Its not a new phenomenon and prompted a wonderful observation by a friend of mine:"a junkie is like a cockroach, its not what he eats that everyone hates, but rather what he shits on and walks over"
No it's not a new phenomenon at all - stealing valuable anything to sell on a black market is as old as the Oldest Profession.

It's just that this phenomenon is getting worse and will continue to get worse.  Just like slavery and other unsavory ways of getting something for nothing (or, from "someone else" for next to nothing).  

The era of Paper Assets is ending and the era of Tangible Assets is ascending.  Metals and fuels today... maybe "Garden Raids" tomorrow for the profoundly "Local Police Blotter" columns?

Yup.  What's changed is that scrap metal is now so valuable it's worth stealing.  
I love the stories about copper thieves stripping entire roofs off churches and completely gutting as-yet-unfinished luxury homes.
That puts back my confidence in the small entrepreneur.
Scrap metal and food - even Cheese Factories get robbed...

http://hosted.ap.org/dynamic/stories/W/WI_CHEESY_THEFT_WIOL-?SITE=WIFON&SECTION=HOME&TEMPLAT E=DEFAULT

I tell ya, we Firsties should be looking at Somalia and saying, "There but for the grace of godz (or maybe Nature) go Us."  

The Crimes fit the Times I guess (similar pattern in the 70's and 30's etc ???). Crime Waves by type probably follow the Waves of prosperity and disparity or whatever...  

Next comes cows being drawn and quartered in farmer's fields by pickup trucks full of desperate fathers maybe?  Not everywhere all of the time of course, but probably much closer to Home for most of us than we realize I thinksk.

Look out 3rd World, here we come.

I've noticed that the lightpoles around the city have access doors on them with "PLASTIC DOOR" in big letters.  I use to wonder why they would put such a notice since it takes away from the aesthetics for the pole.  Now I think it's probably to keep metal theives from trying to steal the access door that they think is a thick slab of metal.  I don't know if there is much wiring that can be easily stolen after accessing the inside of the pole.  I'm sure it's in there somewhere.
How about entire ones?\

"11-25) 04:00 PDT Baltimore -- Given that they stand some 30 feet tall, their disappearance is attracting a good deal of attention here -- even as their final destination remains a mystery.

Thieves are sawing down aluminum light poles. Some 130 have vanished from Baltimore's streets in the last several weeks, authorities say, presumably sold for scrap metal."
Light poles vanishing

If you've ever read the book "The Corner" by David Simon, it details the life of the drug addicts and dealers in West Baltimore including the tradition of junkies scrounging metal for cash.  It was written in '96 or so and made it sound like whole neighborhoods had already been stripped of every available piece of metal that could be sold.  I guess the next likely target would be the lightpoles.  
I've noticed that the lightpoles around the city have access doors on them with "PLASTIC DOOR" in big letters.  I use to wonder why they would put such a notice since it takes away from the aesthetics for the pole.  Now I think it's probably to keep metal theives from trying to steal the access door that they think is a thick slab of metal.

Nah, it's to tell people what access door they should open when looking for plastic!

Re:  Producers Move to Debunk Gloomy 'Peak Oil' Forecasts

IMO, the Saudi announcement (that we have only used 18% of our oil reserves worldwide) is a continuation of the same "Iron Triangle" pattern.  IMO, the Saudis are afraid of a military takeover.  

I suspect that the new story that the Saudis will come out with soon is that they are cutting back on their production in order to maximize their long term recovery from existiing fields, but this is just temporary decline in production, while they bring on new oil fields and drill new developmental wells.  In any case, what are you worried about?  We have only used 18% of our oil.  

I think you hit the nail on the head.  The royal family knows they have a tenuous balance of power that they barely hold on to.  Destabilizing the income flow is not in their best interests, to the end.
Except this -- the oil fields are hot-wired to blow if there is a move against the royal family.

I doubt that.  I'm aware of the "story".
Those 10,000 princes work on those "wires" personally, uh?  I'd bet the poor locals and foreign workers who actually work those things will not blow them up when the princes are run out of town.
Which is exactly why they will tell us how much there is right up until the last drop, so both scenarios are bad for them.  Wouldnt you want to enjoy the lap of luxury as long as you could too?  It's just too bad it comes at the cost of so many people.

If the Saudis admitted their oil fields were peaking and in irreversible decline, they'd be executed in a fundamentalist revolution.

That's why they don't.  Worries about alternative energy in the consuming nations are second order.

At an OPEC seminar yesterday, Mr. Jum'ah of Aramco said the world had produced only about one trillion barrels, or about 18%, of the earth's producible potential of 5.7 trillion barrels of oil. "That fact alone should discredit the argument that peak oil is imminent, and put our minds at ease concerning future petroleum supplies," he said. The remaining 4.7 trillion barrels should be enough to last more than 140 years at current output rates, he said.
OK, I've stopped laughing. 5.7 trillion barrels of oil. "His [Ju'mah's] talk followed similar remarks by a senior Exxon executive this week. Spokesmen for Exxon and Aramco said they aren't coordinating their remarks." Why do they need to conspire when their agreement is complete?

Here's what I said about Cornucopians:

An excellent review of Cornucopian thinking is available in Perilous Optimism. Outside of thinking, what's going on? Kurt Cobb has an insightful view of the social role of the optimist.
It's much easier to tell people what they want to hear than to tell them what they need to hear. This is the first and most important advantage a cornucopian thinker has when arguing before any audience. No one really wants to hear that the future may be filled with turbulent change and personal insecurity.
Cobb's observation is obvious and correct.
They've been giving us a tough time lately and I've been feeling a little edgy. However, my mind is at ease now, how about yours, Jeffrey? Are you feeling better now?

Interesting to see that the big PO investigation will be headed up by Lee Raymond.  Fine choice!  I'm sure he'll give us the straight story!  (yikes!)
"However, my mind is at ease now, how about yours, Jeffrey? Are you feeling better now?"

I keep thinking back to Michael Lynch's counter-argument to the HL method (on the PBS Peak Oil debate).  He pointed to the UK as an example of HL not working.  Of course, the data set was just immature, and the overall North Sea shows a perfect linear progression.  

But you know the cornucopians are in trouble when they use the example of a country whose production is crashing to refute the Peak Oil argument.

I think the UK would make an almost perfect HL linerization were it not for the Piper accident disrupting production for several years. When you have artificial constrants on oil production it naturally disrupts the HL linerization, especially when the disruption is such a large percentage of overall production.

Ron Patterson

>OK, I've stopped laughing. 5.7 trillion barrels of oil. "His [Ju'mah's] talk followed similar remarks by a senior Exxon executive this week. Spokesmen for Exxon and Aramco said they aren't coordinating their remarks." Why do they need to conspire when their agreement is complete?

If non conventional oil is included there is alot more than 2 Trillion BBls. The problem that the recovery of all this oil has a negative EROI. All that really matters is the approximate 2 TB of conventional oil.


Stuff like this 18% figure reminds me of the Dow 36,000 book that came out during the stock market bubble -- just obscene, in-your-face illogical "optimism" that carries the rank odor of deceit.

I'm guessing they include all the shale in Western US, the whole of the tar sands region in Alberta, all of the tar in Oronoco belt, wildly generous estimates for deep sea (along the lines of those who think there are lots of elephants waiting to be discovered at the bottom Andaman Sea) and offshore, hundreds of billions of barrels in Arctic... and maybe even some rosy notions of light sweet Antarctic crude?

.... the Saudis are afraid of a military takeover.

Nice scenario: incite domestic revolt, push some guns into the hands of disgruntled youth (60% population under 24?!), blame Iran for that, and when push comes to shove, send in the US army to rescue the "rightful" rulers in the name of justice, freedom and energy security. (wanted to type "democracy", couldn't fit it in)

... this is just temporary decline in production, while they bring on new oil fields and drill new developmental wells.

A while back, the Saudi's cited huge increases in non-OPEC supply in 2007 as the reason to cut back on production. They never explained why they can't compete with that other oil.

Frantic drilling happens in all declining regions.

http://www.telegraaf.nl/buitenland/49974461/IAEA:_Amerikaans_overheidsrapport_over_Iran_vol_fouten.h tml

It say AP has laid its' hand on a letter from the IAEA debunking a report of the House of Representatives on Irans' nuke capabilities.

Main subject: the report says Iran has enriched uranium with which nuclear arms can be produced; the IAEA challenges this.

The article ends noting that the US has tried in vain to prevent El Baradei from maintaining his position as IAEA head, because his criticism on the US regarding Iraqs' WMD

Couldn't find any other news reports on this in English, but it may surface later.

The BBC story:

'US Iran report branded dishonest'

http://news.bbc.co.uk/1/hi/world/middle_east/5346524.stm

And Amnesty Int'l says Hezballoh is guilty of war crimes.

I see this pair of news items as great for the world. Both war mongers get their hands slapped hard.

http://news.bostonherald.com/columnists/view.bg?articleid=157514

>>.... the Saudis are afraid of a military takeover

No, The Saudis are afraid of a revolt that kicks out the ruling family. For the most part the US is an ally of the ruling family.

"... And when push comes to shove, send in the US army to rescue the "rightful" rulers in the name of justice, freedom and energy security."

Which US Army would that be? The one that is already over-stretched and can't quite seem to muster the manpower to pacify Iraq?

The US does not have infinite military power. It was unnecessary and stupid for us to demonstrate and emphasize that fact before the world by engaging in the historically disastrous adventure in Iraq.

Besides, aren't we going to be busy in Iran one of these days?

- sgage

Say hello to compulsory service.
Even in WWI and II, when people were a lot more active, the army rejected about half of all draftees for one reason or another. What do you think those numbers will be in this age of rampant obesity, chronic illnesses, and those who have never done anything more taxing than play a video game?

(And there's always Don't Ask Don't Tell -even most stragiht men who are adverse to war wouldn't be adverse to playing gay to keep out of the military!)

Show up for the medical wearing panty hose and eye make up might be a good start.
Which US Army would that be? The one that is already over-stretched and can't quite seem to muster the manpower to pacify Iraq?

The one that will be welcoming the destitute bankrupt unemployed masses in the next few years.

The idea that the army is in Iraq to pacify it is, as I've said before, far too easily taken for granted.

"The one that will be welcoming the destitute bankrupt unemployed masses in the next few years."

Not a bad point, actually.

"The idea that the army is in Iraq to pacify it is, as I've said before, far too easily taken for granted."

Please don't imagine that that's why I think they're there, as such. But how do you produce and ship oil if you can't stop people from blowing up your pipelines all the time?

- sgage

.... how do you produce and ship oil if you can't stop people from blowing up your pipelines all the time?

Now you assume that there is an intent to produce and even ship the oil, and, though you don't say it, you likely mean ASAP.

Alternatively, you could assume that a possible war over resources will be fought in the region where these resources are. Now if you're responsible for strategy, one of the first things you figure out is that to do battle, you need ... resources.

See it as a stepping stone concept. You take one piece, the easiest, Iraq. That provides your forces with the energy to take on the other pieces.

How else could it possibly work? It looks quite brilliant perhaps at first, but there is no other way to do it, you arrive at this scheme automatically.

Last thing you want to do is start producing right away, or god-forbid transporting the oil. You need it right there, but not right now. Just make sure you have the capacity in place to produce what you need, when you need it.

As for the unrest in the region: diversion is an old tactic: divide and rule. And are you better off when all is quiet, and your people start clamoring for your troops to come home?

Of course, this is mere hypothesis, and I am drnking like a sponge.

Yes, I thought I detected a departure from reality.
Hello Sgage,

From the CIA factbook on [Saudi Arabia: https://www.cia.gov/cia/publications/factbook/geos/sa.html]

------------------------------------
desertification; depletion of underground water resources; the lack of perennial rivers or permanent water bodies has prompted the development of extensive seawater desalination facilities; coastal pollution from oil spills
--------------------------------------

I am sure the exact volumes and spiderweb layout of this potable water system is highly classified information, even relative to KSA's oil production.  A few bombing runs to take out this infrastructure required for life itself will quickly extinguish the vast majority of these desert inhabitants within a week.  This will truly be a sad event when the resource wars reaches this level of ruthlessness, but recall my postings on Sri Lanka: they are fighting to the death over a water sluicegate.

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

Westexas,

I fear the Saudis may, after all, have more oil than you or Matt Simmons believe they have. Why? Because according to some experts oil production costs in SA are actually getting lower.

Here is what Roger Stern has to say in an article on the hazards of oil-driven wealth transfer to the Middle East:

If oil were scarce, the cost to recover it should rise over time. The opposite has occurred. Since 1970, real Saudi recovery cost has declined from $3.86_b [...] to an ``all-inclusive'' $1.50_b (1999$).

One dollar fifty per barrel? This sounds pretty unbelievable to me, but there you are. The peer-reviewed article, titled Oil market power and United States national security is to be found here.

Thanks for the article link.  I'll be interested to see if any more informed people (than I) have some disputes with this.  If everything was static except for technology, I might expect this to happen, but then there is still the question of production rate.  

If this is true it makes so many things make even less sense than they do already.  What is the extraction cost of the new Jack project?  

Well, look who his "peers" are--check the first few references. Do the names Adelman, Yergin, Lynch, et. al. ring a bell?
I did see that.  I can debunk it based on the credibility of the sources, but I thought maybe there were some other factual flaws that the wise people in this forum could provide.  Maybe its not worth their time?
"One dollar fifty per barrel?"

I have serious doubts about the number, but I would point you back to the HL method and the historical analogue, Texas.  

As predicted by the HL method and the Texas model (and as Matt Simmons warned) Saudi Arabia's oil production is down since 2005.  

Saudi Arabia now, just like Texas in the Seventies, is massively gearing up its drilling program.  After increasing the number of producing wells over a 10 year period, Texas oil production fell by about 30%.  

On the analogy with the Texas decline, one point consistently raised by the "Abundant ME Oil" club is that the ME is vastly underexplored and/or underdeveloped. The above article states:
Similarly, of 80 Saudi reservoirs, only 23
are in production (30).
Now, reference 30 doesn't really speak to this at all, and is more of a news commentaty than anything with reliable data. What does he mean by that?

Was (or were there claims thereof) that Texas was underexplored in the early 70s?

And if there are dozens of fields in KSA just waiting to be tapped at $1.50/barrel, why are they paying the big bucks to look offshore?

Re:  Texas as a model for Saudi Arabia
"And if there are dozens of fields in KSA just waiting to be tapped at $1.50/barrel, why are they paying the big bucks to look offshore?"

Note the vast differences between the US Lower 48 and the North Sea.  Onshore, some big fields, lots of small fields in the Lower 48.  Offshore, primarily big fields (because of the costs) in the North Sea.

However, both regions peaked at the same point based on the HL method--right around 50% of Qt.  

My assertion is that after decades of production, the HL method gives us a good estimate of future cumulative production for a region.  And as predicted by the HL method and the historical analogue, Saudi oil production is falling.

I've got to take issue with the idea that hubbert linearization tells us anything about the future of KSA production.  The Sauds have been playing the role of swing producer for many years.  Their production was almost constant through the 90s and was by most accounts artificially constrained.  Their production profile has no similarity to a bell curve yet by doing some mathematical massage (Hubbert Linearization) we are supposed to be able to perceive a bell curve?  No way.

In my opinion if you see a straight line when you linearize the saudi production it indicates a problem with the linearization procedure not with saudi production.      

Re:  Nero

If you haven't seen the following article, you might want to read it:

http://www.energybulletin.net/16459.html

Rather than burdening everyone with this same discussion for about the 20th time, if you have any other questions, you can e-mail me at westexas@aol.com.

The Saudis are bringing two "last resort" fields back into production.  Manifa has excessive levels of vanadium, which poisons those expensive platinum catalysts and another with large amounts of H2S gas,  It leaked in the 1980s, killed some people and forced the evac of a town.  Shut down then, now reopened.  NOT POPULAR
Copelch wrote:

I fear the Saudis may, after all, have more oil than you or Matt Simmons believe they have. Why? Because according to some experts oil production costs in SA are actually getting lower.

Of course it is. The lions share of new saudi oil is coming from more wells, and more gosps, drilled and built over old fields. They already know where the oil is so there is no need for all the expense that goes with finding and testing new fields. They are simply sucking harder on already depleted fields.

Ron Patterson

FYI, the WSJ story is on page A2 and is now the top http://www.wsj.com online story.

Going forward, I think Bhushan Bahree is going to be an important MSM chronicler of global oil production. He is not shirking from writing about peak oil, he seems fair, and his editors seem to be giving him relatively prominent space for his not-infrequent stories. I wish the NYT had a similar reporter - Jeff Gerth comes to mind, but I don't see too may oil-related articles from him. My post in yesterday's open thread gives Mr. Bahree's and his co-author's e-mail addresses.

An interesting observation that I have made is that every time the WSJ does a PO related story it is on page A2.  I guess when it makes the front page we'll have reached a new level.
Saudis to build multi-billion dollar electrified fence to keep Iraqi terrorists out

The WSJ carried this story this week, talking about the growth of terrorist cells in failed and failing states--Afghanistan, Lebanon and Iraq.  

Things are not turning out quite like the Neocons planned.  

We should look into buying one of those.
Except for the ready availability of food, I can't see a hell of a lot of difference between a gated community empire with invasion of privacy and a concentration camp. The Great Wall of China never kept invader's out, look at the Mongols, aka the Manchus. But I bet it made a heck of a lot of money for cronies of the Emperor!
I heard a very interesting interview with Samual Bodman (Energy Secretary) by Rusty Humphrey ( a conservative talk show host.) Sam was on the party line on a couple of issues. Ethanol is great, the government is doing great things to help, were going to develop more nucular etc.( I'd say nuclear but that wouldn't be the party line) But what struck me was a much more realistic approach to some other issues. For instance he stated, emphatically, that the world is now, for the first time, in a situation where the oil producers can not keep up with demand, and therefore swing producers no longer control the price. Quite an observation for a beuracrat. He also downplayed, significantly, the Jack 2 situation stating that it was a very deep find, a long way from shore, and there was a lot more to learn about the overall play, before we attached total numbers to it. He also felt that it would be the silicon valley entrepenuers who develop the alternative energy systems, electric cars, cheap PV, etc. and not the existing large oil or car companies. He was really excited about the levels of funding going into energy research from venture capital companies, as opposed to the big establishment. He intimated that prices would stay high and that these companies were sinking money in now because they knew it. Some of it literally shocked me for it could have come off this blog.

"it would be the silicon valley entrepenuers who develop the alternative energy systems, electric cars, cheap PV, etc. and not the existing large oil or car companies."

I agree; a different mindset.   This is why I in CA will be voting for prop 87, even though it is being marketed somewhat deceptively.  It is an oil tax to support research, and I think that's a good thing.  The main advantage is that it takes money away from people who have less of the right mindset and gives it to people who do.

I see these mid-size companies making modules of the key technology for hybrid cars.  The automakers will end up being like Dell Computer.   Dell innovates nothing inside the box: Microsoft and Intel and nVidia do 99% of the had work.  Dell is the customer service and assembling.

Maybe eventually the notion of 'branding' in cars (Chevy versus Ford versus Honda) might go away, and people will talk about how many kilowatts or gigajoules their storage has.

If it weren't for crash test standards you might even have a significant "white box" individual auto-production industry.

http://www.bloomberg.com/apps/news?pid=20601085&sid=acXHIayehuLU&refer=europe

Holy Crap!  The deputy leader of the Russian Central bank was assassinated!  And I thought all that oil money had everything working out just rosey!

``There are people in Russia who do not want the transparent, law-abiding and rational system he was creating,'' said Richard Hainsworth, chief executive officer of RusRating, an independent bank rating company in Moscow. ``His reforms have pushed up the price of black money, of giving bribes.''
You out there SAT?
I'm way out there...way,way, out there.
Will the "peak oil" Chicken Littles who say the world is running out of petroleum please make themselves known?

No one?

How surprising!

Exatly!

Those Chicken Littles are all crazy because we are demonstatebly not out of oil.  It's just that we can't produce it any faster than we are today.  : )

FWIW, that article was originally an editorial in the conservative San Diego Union-Tribune, back on Sept. 7th.
Producers Move to Debunk Gloomy 'Peak Oil' Forecasts?  They've got the title wrong.  If you read Mr. Jum'ah's quotes, he is actually saying the opposite.  

Take this :
In an interview, Mr. Jum'ah said the Saudis "don't mind the development of alternatives to oil," because growing energy demand means the world needs supplemental energy sources.

Aramco is saying that oil alone cannot meet the world's energy needs and we need to develop alternatives!  If we cannot get enough oil, and we looking everywhere, then we are close to peak.

He also said that oil can be produced at today's rates for 100 years.  The important part of that satement is not the 100 years part, it is the rate part.  Saudi Arabia is close to peaking and they know this.  About a year ago they predicted that they could increase their production to 15 mbpd and hold that indefinately.  Whether they can actually get to 15 is questionable, but the important thing is that they are saying that they will get to some level in the next couple of years and explicitly stated that they will never go higher.  That is called peaking!  And even if they do get to 15, it only provides a couple of years of economic growth at current rates.

Saudi Arabia has come out and essentially said "We can carry the world's energy growth on our backs for maybe 5 more years, and then you are on your own".  

I don't see the debunking part, it is quite the opposite.

Why does Lee Raymond being in charge of this big DOE requested report by the National Petroleum Council on the Peak Oil production/demand situation give me no confidence that the debate on Peak Oil will get a fair play?
Yes, it completely blows my mind that he's in charge.  I wonder what Roscoe Bartlett thinks about it since he was the principle driving force to get the DOE to do this investigation.
Its always good to put in charge the guy that knows the answer.
I was feeling the same way.
Because their lips are moving?
I have a question about the Arctic.  Many people keep pointing to the Arctic and deepwater as the remaining unexplored possible oil provinces.  I think we can see that deepwater will produce more oil, but so far it doesn't seem likely that we'll find another few Ghawars and save all of those dying SUVs that way.  But what about the Arctic?

From what I've read, to have an oil reservoir, you need source rocks and some kind of trap.  To have source rocks, you need ancient plant matter pushed down to the oil producing window for an appropriate amount of time.  To have the plant matter, you either have to have had a shallow tropical sea for algae or an area that produced land plants that were quickly buried.  

I went to the Paleomap project and looked up maps of previous eras to see whether the arctic fit these bills.  It looks like the modern arctic region has pretty much always been under water, and you have to go back to the Devonian to find a time when it was a tropical, shallow sea.  Are we likely to find much in the way of oil there?

I've been wondering the same thing.  Are there likely to be any supergiants in the Arctic or Antarctic or is this just wishful thinking?   Are there any solid reasons to think one way or the other?
There's a hundred bajillion gigabarrels of abiotic oil just waiting out there for our SUV's!  It's all the environmentalist pansies that won't let the globe warm so they can be gotten to that are to blame!

/end sarcasm

I recently drove through North Texas.  Between Wheeler and Canadian I saw a large number of natural gas drill rigs and new drill site preparations.  The spacing was on the order of 1/4 to 1/2 mile.

Can somebody shed more information about this field and why the wells have to be spaced so close together?

Johnny, its impossible to tell whether a drilling rig is looking for oil or natural gas just by looking at it. A person can only tell by looking at the production tanks, and sometime not even then. If the oil wells are on pipeline the tanks may be a long way from the wells and look like gas wells if they are flowing and not pumping.
  Oil wells are commonly drilled on a 40 acre spacing, which is 16 per square mile and natural gas wells on a spacing pattern of either 160 acres, 320 acres or 640 acres, with the spacing variable on depth. This is because of the Railroad Commission rules, which are designed to prevent "economic waste". The rules can vary from field to field, and can be altered through a special hearing process. Lots of fields discovered before 1936 are either exempt from these rules or have tighter spacing because shallow wells have less pressure commonly and can't drive the oil or gas into the well casing (pipe).
  This is probably more than you wanted to know. I'm not very familiar with the Anadarko basin, I'm currently working in the Permian Basin but the vast majority of my experience is Texas Gulf Coastal Plain. But, the is a hot Woodford-Barnett Shale play in that part of the world, similar to the stuff being drilled in the Fort Worth area. The wells are drilled there on an 80 acre spacing, with horizontal legs of up to a mile. Since the wells make a turn going down the hole turn 90 degrees over 5,000 ft or more before entering the producing formation, its impossible to tell where the wells are bottom holed or the direction of the borehole by visual observation. But, if you are curious about a particular lease, the operator has a plan filed with the State with a location plat. These are available in the District office or the headquarters in Austin, and also probably on line at the RRC website.
Japanese Stocks Gain as Oil Price Points to Economic Growth

"If oil fell much below the current level it would be a sign of a weakening global economy," said Seiichiro Iwasawa, a strategist at Nomura Securities Co. in Tokyo. "At the current price it softens people's concerns about inflation in the U.S."

Crude oil tumbled 19 percent from an intra-day record of $78.40 a barrel on July 14, to $63.50 during trading yesterday.

So, now stock markets go up because oil stops going down.

Coming soon: oil rockets up to $100, slides back toward $80, and then $80 will be the new "healthy" price. OPEC will discuss "production cutbacks" to keep it above the new benchmark.

In defence of OPEC, construction costs are soaring due to energy price increases and the cost of raw materials.

So projects like building islands and constuction sites larger than your average planet, thereby adding an extra 867,000 miles of coastline will cost a bit more, so they will continually need to re-benchmark. Alright maybe one heavy crude refinery thrown in there for good measure. (maybe make it 10 of them!)

Marco.

This is a good sign of EROEI deteriorating. More and more of the "value" of the energy must be used to produce the same amount of energy. Production is flat, new project costs are rising. EROEI must be falling.
WOW!!!!
New record for natural gas in storage - pretty soon they are going to have to quit drilling before they run out of room to store any more.
Predictions for another mild winter with the El Ninio.
.....Can't ..........quite.......touch...............$63.00.........hmppphhhhhhh.........push....dang..........
Who picked $63 and &83 anyway?

Someone here sets the oil price dont they? Come on admit it.

Marco.

Thought for the day :

The $64000 question is :

"How much do a thousand barrels of oil cost?"

You mean a seconds worth of world oil!
churchsign
CEO - I'm trying real hard to ignore Drumbeat to leave a few minutes each day for "real" research. Its 00:35 here in the east and I'm well into my second bottle - and then you go and post this picture from which so many questions flow.

So, are high oil prices a good or a bad thing?

And is there any correlation between religion and birth rate? Or are there other over riding socio-economic factors?

These are genuine questions to which I don't know the answer - and I imagine the answers will vary depending upon who you are.

This is NOT a real sign.  Go to the website www.churchsigngenerator.com and they will photoshop whatever you want.

Two styles to choose from.  The other is Trinity Church.

Hey, C'mon! Don't reveal the man behind the curtain. They had 5 styles the last time I checked. :) Thanks to odograph for that website, BTW. Very Useful.
For me, the eye-opener in today's news was the piece from the People's Daily :

According to Zhang, China's oil consumption was 317 million tons last year, down slightly from the previous year and its net imports of petroleum are 136 million tons, less than that of 2004.

The Chinese economy has maintained a growth of over 10 percent for three years running so it is normal for China to see a rise in its oil imports as well as its demand for energy, said Zhang.

But China has been trying to reduce its reliance on imports of petroleum which have been over 40 percent, he said.

i.e. they are maintaining 10% economic growth while keeping a lid on oil consumption (mostly by substituting coal, I guess).

  • Shows what you can do when you try...
  • Are others, among the big consumers, also levelling off their rate of import increase? I suspect India is into demand destruction mode, rather than voluntary or strategic reduction?
  • Lends plausibility to the demand-driven plateau of production, perhaps?

Sorry to be so cheerful!
"Sorry to be so cheerful!"

Note that, so far at least, we only seeing a demand response to higher oil prices, not a positive supply response.  

Note that, so far at least, we only seeing a demand response to higher oil prices, not a positive supply response.  

Right, a positive supply response would be something like drilling in deeper water than anyone's drilled before, preparing to develop in conditions tougher than anyone's tackled before, and finding up to 15 billion barrels of new oil in the Gulf of Mexico. Let us know if that starts happening, okay?

It will take far more than that. Just to say even we need to find 30Gb per year. 3Gb won't do.

There needs to be 100 Gb of discovery just to make the December 2005 peak estimate. If that does not show up, the decline will be even steeper.

What would break the HL would be finding another Ghawar or a few Prudhoe Bays. Until that happens, the math is saying we are peaking.

"Let us know if that starts happening, okay?"

As you know, I was talking about the fact that the world, and the top net oil exporters, are--as I predicted--showing lower oil production through the first half of 2006, versus late 2005.  

IMO, this is the pattern we will see going forward, a series of auctions for declining oil production--especially declining net oil exports--with the low bidders being forced to reduce their consumption.

The energy equivalent of the 3 Gb to 15 Gb in deep GOM recoverable reserves, if all the fields are developed, will equal 15 days to 75 days of world fossil fuel + nuclear energy consumption.

The problem is, amount produced will always equal amount consumed (within a percent or two). So you can't just look at that one quantity as a measure of supply or demand independently.

According to elementary economics, if demand falls and supply remains constant, amount consumed will fall and price will fall. If supply rises and demand remains constant, amount consumed will rise but price again will fall. If both things happen then amount consumed could rise, fall, or stay the same, depending on which effect is greater; but price should fall in any case.

That is the prediction of economics and what we are observing is consistent with that. We have evidence of increased efforts to boost supply (new drilling, more oil sands investment, increased tertiary recovery efforts, etc.); and evidence of moderating demand (drop in SUV sales, investment in ethanol, alternative energy, etc.). Consumption/production growth has leveled off (by some measures) and price is down from its peaks. This is exactly what we would expect to see in a world where there is both a demand and supply response to high oil prices.

"This is exactly what we would expect to see in a world where there is both a demand and supply response to high oil prices."

Then we have the case of Texas--a 1,000% increase in oil prices, which caused the biggest drilling boom in state history, which resulted in 14% more producing wells from 1972 to 1982, which resulted in about a 30% decline in production from 1972 to 1982.  

We saw a similar pattern in the total Lower 48.

Saudi Arabia, based on the HL method, is now where Texas was at in 1972, and Saudi (EIA) crude + condensate is down by 4.2% from 12/05 to 6/06.  

The world, based on the HL method, is now where the Lower 48 was at in 1970, and world crude + condensate is down by 1.25% from 12/05 to 6/06.  

As I predicted, production by the top oil exporters is falling at an annual rate of about 9.2% from, based on data from 12/05 to 6/06.

As I predicted, production by the top oil exporters is falling at an annual rate of about 9.2% from, based on data from 12/05 to 6/06.

You predicted that, huh? Well, I guess if you make enough predictions some will come true eventually. Even a stopped clock is right twice a day.

How about this one from April 5:

As I said last year, I expect that by the end of 2006 we will be in the teeth of a ferocious net oil export crisis.

Or another one that same day:

So, I expect to see $100 oil this year, but I don't think that it will stay there--in the short term.

Still stand by those predictions?

And what about that U.S. oil imports story you were going on and on and on about back then? Every day we heard how U.S. oil imports were falling and how this was a confirmation of your "net exports" theory. You wrote a whole article about it here:

http://graphoilogy.blogspot.com/2006/04/what-mainstream-media-is-not-telling.html

Following is an excerpt from a recent Reuters article on oil prices:

    "Oil prices have risen more than 20 percent since mid-February, despite sizable U.S. crude inventories, as geo-political fears compounded fundamental worries that refiners might struggle to make enough gasoline for the summer driving season."

Guess what also happened in mid-February? Total net US petroleum imports started falling.

But if we look at the data here:

http://tonto.eia.doe.gov/dnav/pet/hist/wcrrius2w.htm

we see that it's not true, it didn't start in mid-February. All through 2006 imports had been and have been lower than the previous year, until the past few weeks. Now they're higher than in 2005, my guess being because 2005 imports took a hit post Katrina due to damage to tanker offloading facilities and shipping lanes.

Stuart and others used to argue with you about this - they said it just reflected a transition to the U.S. importing more finished products and less raw crude, as overseas refining becomes a bigger part of the oil business. I don't know what conclusions you now draw from this effect, you seem to have stopped talking about it. But you sure couldn't shut up about it back then.

Anyway, the point is that it's easy to say "as I predicted" when you make so many predictions. I'd like to see you make a list of your predictions in some public place where you can't easily get rid of the bad ones - and yes, you should get credit for the good ones too. That would be a lot more credible than all these comments about how what you predicted is coming true, when you've also made a lot of predictions that don't look so good.

And now it is the Export Land Model. My prediction is that we won't be hearing much about that one in another six months or so.
Who can deny the export model? Most persian gulf countries subsidize gasoline and other energy, sometimes almost giveaway, in a bid to keep people happy and retain power.  And, most of these economies (certainly excluding iraq, but certainly including SA) are booming. So, they are logically increasing consumption faster than most of the rest of the world - who could doubt that? Of course, in cases where the economy and demand are small, it doesn't matter. But, Iran and SA both have substantial and growing populations, the latter with a lower population but some very good consumers.

Clearly exports will be squeezed if internal subsidies remain in place and production declines. Whether this is as important as Asian increased demand is another matter. Westtexas has done pretty good work, better than most, usefully comparing various regions with Texan history.  No need to trounce so hard on a little boast.

Here is what I said yesterday:

Certainly the export land model interesting as a concept and useful to a point. Buy isn't it just extrapolating to the ridiculous?

Saudi Arabia and many other producers have economies dominated by oil exports. If they use the oil, they eliminate their ability to import anything and eventually shut down the global economy.  

Sooner or later these countries will begin to see growing domestic demand - which is boosted by export generated income and subsidized prices - as a threat to their existence and will curtail it.

http://www.theoildrum.com/comments/2006/9/13/9140/74894/297#297

I agree with the identification of recent trends by the model and in your post. Clearly oil export revenues are filtering through to local populations, who in turn are consuming higher quantities of subsidized oil.

However, as I noted above, I don't think it is valid to just extrapolate this and call it predictive. In fact, it seems very clear to me that this situation will self correct at some point once the cost of diverting export markets to local consumption is great enough. The idea that these countries could not export oil and become self-sufficient or develop alternative export industries seems to me to be far fetched.

In the earlier thread SAT stated his belief that the diversion of oil to local consumption was based on diversification and growth of local economies. This is a legitimate and interesting point. I disagree however and instead think that extra cash floating around and cheap oil point to high consumption, and not to beneficial investment. In either case, this is a useful discussion that tests the Export Land Model theory.

There seems to be a feeling on TOD recently that questioning what others say is equal to insulting or "trouncing on" them. I disagree.

You are right that Westexas has done great work and that the Export Land Model is interesting and provocative. However, he has actively and frequently promoted it and I think it is fair game for anyone who does not agree. I don't acknowledge sacred cows or think anyone's ideas are beyond discussion. Neither do I expect to be above reproach if others disagree with my ideas - which happen a lot by the way.  

So, I have stated my reason why I do not think the ELM is predictive. You can agree with me or not. You are not going to get me to stop commenting on ideas I disagree with.

Iraq Production August 2006

I thought this would be a good place to post this. I'm testing out image. I've got two others and I'll comment on my data source if when I post this stuff if it comes up tomorrow. I'm not sure if anyone's still following this thread. I really wish these guys would initiate a second auto-thread right about now. I really don't have the energy to write a full post as I've been spending my time making this chart. Oh, Lordy, do I complain!

Anyway, what it shows me is that Iraq(The Most Screwed Up Country On The Planet)has managed to increase its production from zero to what it is now after a major disruption in 3.5 years. In the same time it has been gradually reducing consumption. Thereby increasing exports.

I'm using 4-month moving averages. I cut off May 2003-October2003 since it is just ramping up at the same time the insurgency was ramping up, so it didn't make much sense to include it. The real reason is that the data for the moving averages wasn't there.

I know there will be explanations, and I welcome them(I sure don't know what's going on). But realize that I can plot cell-phone usage and car registrations against this. And that Data might make you think twice.

More to come.

The graph looks great, but I'm wondering, what is your raw data? Do you have production and export figures, and you're subtracting these to deduce internal consumption? Or is consumption given explicitly in the data you have?
See the posts on Sept 15th Drumbeat. I subtracted exports from Production to get consumption. This is probably a bad idea with Iraq. I still have to crosscheck these numbers with other sources. I'm using Brookings Institution Iraq Index figures.
Is the right far right side of chart cut off?
Not for me with firefox
Fire Fox users can right click & View Image.
Now for you abused IE users, here's what that feels like:

  1. You see an image that is cut off on the right.
  2. You mosey yer mouse over the image and right click
  3. A menu magically appears with one option being View Image
  4. You pick that option and wallah, the whole image appears on your screen
  5. You click Back to return to where you were.

Yes, it is a hard way to live. But someboy's got to do it.
It's a long way to the top if you wanna Rock'n'Roll. Thanks. How come you didn't tell me that six months ago? Or was I just not listening?
I don't think it is valid to just extrapolate this and call it predictive. In fact, it seems very clear to me that this situation will self correct at some point once the cost of diverting export markets to local consumption is great enough.

Economically it makes no difference whether oil is sold for export (at market prices) or consumed locally, the wealth generated grows the economy and further increases local consumption of oil or oil-derived goods.

Saudi Arabia and many other producers have economies dominated by oil exports. If they use the oil, they eliminate their ability to import anything and eventually shut down the global economy.

Oil wealth results in a higher domestic standard of living, whether the products consumed are produced locally or abroad.  If Saudi Arabia lacks the industrial infrastructure then exports of oil to industrial regions will be balanced by imports of oil-based luxury goods. There is still less available for the rest of the world, and the less oil available to other economies, the greater the economic advantage (purchasing power) of the producer nations, and so the more wealth flows to them from other countries.  The global economy (ie former First World) will suffer, but they will be all right Jack.

Oil wealth results in a higher domestic standard of living

Where did you come up with this conclusion? Ever been to Sudan? How about Chad?

Standard of living? You meant for men, right? How many Iranian women have you asked?

It is agreed that internal consumption cannot squeeze out all exports, but the major persian gulf exporters are not close to this.

Imagine that SA today produces 9mmb/d and consumes 2, exporting 7mmb/d.  Then, imagine that by 2015 world production is down 22%, and that SA reduced production is average, so they produce 7mmb/d.  Then, say that by then their consumption is up to 3mmb/d, so their exports are down from 7 today to 4 in 2015.  Given the above, would you be surprised that the world price was up 3x the recent trend line of $75/b to 225/b in 2015?

Well, if you went for that, SA daily income would go from $525mm/d to 900mm/d.  THere would be little fiscal distress, and no interest in ending the subsidy because the subsidy helps maintain the status quo.

The question is, what is the fraction diverted to home use, and what is its growth vs. the world price growth?  Note that, in the seventies, the nominal price of oil went up 9x in ten years, and so far we have only gone up 3x the former OPEC price-supported floor of $25/b.

(Don't know their internal consumption, and recognize they don't actually receive numex sweet/light price. and, I assumed they get nothing from internal sales, I know they do get a little.)


Imagine that SA today produces 9mmb/d and consumes 2, exporting 7mmb/d.  Then, imagine that by 2015 world production is down 22%, and that SA reduced production is average, so they produce 7mmb/d.  Then, say that by then their consumption is up to 3mmb/d, so their exports are down from 7 today to 4 in 2015.  Given the above, would you be surprised that the world price was up 3x the recent trend line of $75/b to 225/b in 2015?

Actulllay I don't disagree with any of that. I have acknowledge to to some uncertain point in the future, the model can be informative.

My point from the beginning was that you can not just extrapolate all the way to zero exports, as Khebab's chart here does.

http://static.flickr.com/97/240076673_494160e1a0_o.png

The phenomena is to some dgeree self-correcting and at point beyond what you have described above, it has to moderate and maybe stop.

One a couple of other points above:

Westexas:  Oil producer subsidies are not new, they are relics of a past in which the tension between imports and exports did not exist. Indonesia and the UK did not willingly become net importers because they thiough it was h=just fine. The UK has an enormous economy of which oil is a relatively small part. Indonesia is the fourth largest country in the world and has a huge population in proportion to their reserves. They have started to remove subsidies once they strated to become import land (as I predict will happen elsewhere). Indonesia fields have also been poorly managed and exploration incomplete.

Other comment implies that it would be neutral to Saudi Arabia's ecomnomy off they subsidized oil and burned all of it at home or exported all of it. This may make sense in some economic model, but relality is very different. At some point they need to buy the things they use the fuel in: cars, plane, factories, refineries, etc.

Yes, not all exporters and former exporters are equal, and, when an exporter runs out of course subsidies will end, possibly along with politicians' careers. However, as prices rise, those expected to continue exporting substantial volumes, eg teh persian gulf countries, are likely to continue subsidies indefinitely... rulers are doubtless watching with interest what happens to other rulers when they end subsidies.  
Earlier Halfin sarcastically responded to a remark that we are seeing is a demand response, but not a supply response to price by writing:

"Right, a positive supply response would be something like drilling in deeper water than anyone's drilled before, preparing to develop in conditions tougher than anyone's tackled before, and finding up to 15 billion barrels of new oil in the Gulf of Mexico. Let us know if that starts happening, okay?"

Halfin,

Maybe in your obvious wisdom you can explain the history of the Jack 2 "discovery" as provided in this paper 'Emergence of the Lower Tertiary Wilcox Trend in the Deepwater Gulf of Mexico' which can be read here http://www.searchanddiscovery.net/documents/2005/meyer/index.htm

Hmmm.  A process of exploratory drilling that began in 1996 that by March 2001 was successfully advancing into the deepwater GOM.  

So is Jack 2 a positive supply response to an escalating price?  Quite the stretch, I'd say.  More accurately, it is part of an ongoing response of an industry facing its 'golden years' and the inevitably of death by reaching into the last frontier, a process that clearly began in the era of low oil prices.

But then, history is hardly the strong point of a discipline that has no concept of time's arrow.  And so Halfin's limited reasoning ability is quite understandable.

It is interesting in the paper, published in May 2005, to see the reference to a potential recovery of 3 billion to 15 billion barrels of oil.  So, Jack2, another step in a process already 10 years in the making brings up 6000 bpd and the same agents, who turned Cleland into Osama and Kerry into a cowardly fake, are now broadcasting a 15 billion barrel tank of oil, just waiting for the market to suck it to the surface.  And here's Halfin, doing his bit.

You post provides a useful rebuttal to Halfin's point. If Jack 2 started before the price rise, then it can't be caused by the price rise.

However, your slide into strange ad hominim attacks damages your argument.

What does this mean?

But then, history is hardly the strong point of a discipline that has no concept of time's arrow.  And so Halfin's limited reasoning ability is quite understandable.

And what does Halfin's point have to do with turning "Cleland into Osama"?

"As I said last year, I expect that by the end of 2006 we will be in the teeth of a ferocious net oil export crisis."

From 12/05 to 6/06, the EIA crude + condensate data show that net oil exports by the top 10 net oil exporters (based on estimated consumption) are declining at annual rate of about 9.2%.  

"So, I expect to see $100 oil this year, but I don't think that it will stay there--in the short term."

Granted, I may have guessed too high.  My point was that the production downturn, in the short term, would not be enoough to cause permanently higher--$100 range--oil prices.  

As I discussed earlier, I did not start expressing concern about net oil exports because of US import numbers.  My concern was based on the HL analysis.  The point I was making was the anomaly of lower US oil imports and higher oil prices.  I suggested that the higher oil prices were primarily due to importers having to bid the price up, because of declining net oil export capacity worldwide. And I submit that the EIA's reported production decline by the top 10 net oil exporters support that premise.

For a number of reasons, oil prices are going to be all over the place, but IMO higher oil production will not be among those reasons.

Saudi Arabia is vastly more exposed to its largest field, Ghawar (more than 50% of production last year), than Texas was to its largest oil field, East Texas (about 7% at peak).  

Look at the number of "coincidences."  SA starts declining as predicted by the HL method and Texas model.  Heinberg reports a decline in Ghawar production when Ghawar gets close to where Yibal (same reservoir, same drilling practices) started crashing.  SA starts importing fuel oil, and we get reports of a shortage of natural gas. Finally, SA, just like Texas, starts a frantic drilling program (all the while saying that they are cutting back on production "voluntarily").

Again, the reason the HL method works is that we find the big fields first.  And I don't know how much more clearly I can say this--the big fields are almost certainly all declining.  

I posted an expanded comment on the 9/15 thread.
In basic economic theory supply and demand are separated and - by definition - always in equals each other. If i could forget the definition for a second, i'd say natural demand (as opposed to demand beeing there because of high frequent marketing) often succeed supply, especially in goods like energy. Supply/demand equilibrium can be an eufemism for poor people suffering.

Another interesting feature of economics is that supply and demand are two different equations, while the reality is one equation so to speak - people normally don't have "demand" for something which theres no supply, and they choose between whats available.

I don't want to start a debate on economics, but i'd like to make a short remark on your apperant confidence on the predictive power of economics.

It's useful to scout for behaveoristics among those one suppose are informed, which is what you hope to achive when studying the market. But thats not "economics". In fact, those who the sheeps follow, the sheppards, don't make their decisions based on economic theory, but on information relevant to the subject, i.e. contemporary culture and politics, (geo)physics, particulate corporate info et cetera.

Bottom line is that economics per se don't have predictive elements in it. It's a horrible science, only good for regressive explanations. Yes, there are things like incentives and price-dependency will to buy a good, but hose mechanisms are common knowledge and not something Adam Smith discovered.

Beeing a physics student who suffered through some ECON's, i've concluded that sociology and arithmetics are more important for understanding the future economy that economics.

But Halfin, thanks for well informed and thoughful posts. You are one of the many who make this a great site.
-

Sorry for the ... misspellings, english is not my native language, but i know many people take great pain of reading texts with lots of typos and grammatical errors - someone mentioned earlier a spellchecker one can integrate with the web browser, could someone please be so kind and repeat the name of the app to install? Thanks.

Small point....the Econ you & I are being taught is equilibrium theory economics.  There is non equilibirum theory econ but it's usually taken only in grad studies b/c it's not near as nice and easy to understand as a system in equilibrium.  You've got to realize you build knowledge and to understand macro concepts you've got to start somewhere.  Now if you can create a better model, then do it and prove why it's better.

Non quilibirum econ is much more dynamic and attempts at understanding larger systems as they are made of the smaller micro environments.  Austrian economics shuns neoclassical equilbirum theory and instead focuses on the reality that markets are dynamic and ever changing.  

We're just sipping the wrong Kool Aid, that's all.  In your heart you realized it was wrong, and even though I am majoring in this I know it's wrong.  I felt it was wrong and started questioning even more all the while getting answers that are hardly informative, rather a means to ignore me.  I don't have to create anything the way I see it.  I only need to understand the failings of the system and set my self up to profit from it.

In basic economic theory supply and demand are separated and - by definition - always in equals each other.

That's not quite true. Supply and demand are functions of price, not fixed quantities. They are shown as curves on a supply-demand graph:

Where they cross is the "market clearing price", and at that point the quantity demanded equals the quantity supplied. That I think is what you are remembering above, but it is not quite as you said it. It's not something that is true "by definition" and in fact in some situations the curves may not cross within the available physical parameters and there may be no market clearing price.

If i could forget the definition for a second, i'd say natural demand (as opposed to demand beeing there because of high frequent marketing) often succeed supply, especially in goods like energy.

I think you mean "exceeds" supply, that is, you are saying that "natural" demand often is greater than supply. Again, you are neglecting the fact that demand and supply are both functions of price. If price were $100/bbl or $1000/bbl then wouldn't you think that demand would be very low and would be less than supply at that price?

Supply/demand equilibrium can be an eufemism for poor people suffering.

Poor people do suffer, and that is unfortunate, but supply/demand equilibrium is only a small part of a much larger picture. There are poor people in both market and non-market economies, and throughout history long before today's capitalist system came into existence. Even one J. Christ in 0 A.D. said, "For the poor always ye have with you".

Tate423,

Now if you can create a better model, then do it and prove why it's better.

Good point, will do if i can come up with something, which i doubt. Modelling the economy is a difficult, because it involves predicting behavour. I did a graduate game theory course, which is supposed to give insight in rational (or partly irrational) behavour, but it didn't impress me very much. I would be better off reading some high quality litterature written by individuals with insight and knowledge. But to be fair, the ECON's did provide me some useful structures/games which i think is useful, and accumulating a diverse knowledge base is useful in it self.

Halfin,

Where they cross is the "market clearing price", and at that point the quantity demanded equals the quantity supplied. That I think is what you are remembering above, but it is not quite as you said it. It's not something that is true "by definition" and in fact in some situations the curves may not cross within the available physical parameters and there may be no market clearing price.

Ok. I stand corrected. I don't really know what kind of situations you're refering to, but suspect it has something to to with constrained functions.

I think you mean "exceeds" supply, that is, you are saying that "natural" demand often is greater than supply. Again, you are neglecting the fact that demand and supply are both functions of price.

Thank you, "exceeds" was the correct word. I shouldn't used an unappropiate term like "natural", it's not matematical defined or commonly used. And of course i know both supply and demand formally often are functions of price, but my point was perhaps a bit out of the current paradigm. In some cases i belive demand is poorly modeled as function of price, even when utiliting price elasticy. But i dont have a better model, and certainly not a mathematical one.

And again, as you suggest, supply and demand are viewed as two different equations, while i think in reality they are one equation so to speak. But never mind, it's merely an academic point, not really related to anything useful for TOD.

For those interested in economics i recommend a wiki article about socionomics. Not that i belive in socionomics, but i think the article is useful reading - it's a correct paradigm to some limited extent, as so many others.

Efforts to increase supply does not affect price, only increased supply works. So, Saudi increasing the number of rigs by 150% shows greater effort, but less production is likely to be pretty scary and increase price, better talk about nobody wanting the oil anyway.  A deep find in the gom is rather problematic given that they have ruled out a pipeline... they report 6000 boe production, not actual barrels from this ultra deep hole, so presumably mostly gas.  How will they get this to market without a pipeline? There will be many a slip 'twixt this cup and the lip, even if the cup size is really significant ...  

Actually, my understanding is that the majors are mostly not funding new exploration even though prices are at a record.  xom is booking boe reserves in qatar's gas field in an effort to convince investors their oil reserves are not declining...  Majors find a better return in buying each other and even their own stock.  Good indication of what they think there is out there to find.

ANd, some of the supply last year is from drilling into reserves; per eia oecd stocks down one day of cover yoy, my guess around 60mmb.  So, if they stop draining reserves, demand must rise, and if they are to refill (oecd reserves are at a ten-year low even though consumption is at a ten-year high), then demand will be higher yet.

Slower SUV sales does not affect price, only reduced gasoline consumption would. And, even if fewer suv's are sold today, actual changes in consumption is a bit in the future. Of course, carpooling and other changes in behavour would immediately reduce consumption, but there is no sign of this, US gasoline consumption up around 1-2% yoy...

JK - the Chevron press release clearly stated 6000 bpd crude oil production, and following Daves post the other day, Bubba indicated that this was an extended well test over a period of weeks.

As for KSA - for somethng like 30 years they have been the world's swing producer.  So I think it is premature to correlate falling Saudi production with their peak - but to be sure I don't know. Need to focus on the big pictue - Jack is not part of the big picture but KSA certainly is. If they are past peak now and production craters then a new ball game is in place.

But another equally plausible scenario is that they are building new capacity and will pull a rabbit out of the hat - that will be brought on line when the demand is there - and they will be seen as heros throughout the Arab world and America.

Until 2012 that is...

My bad, I guess... would have sworn I saw boe.

Dunno if producing more oil for the west and the SA princes would make them heroes in the arab world, but no doubt we would forget who was in the planes on 9/11.

SA is clearly trying now, I doubt production will crater with all the new rigs out there and on the way, but whether they can increase is another story. Critical for them to be seen as trying hard to avoid america remembering.

Pretty amazing that the focus of arab miiitants is on iraq, they could do much more damage to the west and the US by hitting oil production/shipping throughout the persian gulf.  Warships are pretty hardened, oil tankers not.  How tough can it be to ram a loaded fishing boat into a tanker?  Maybe our being there is, as the admin says, distracting them.  So we can withdraw when?

Here's a thought... if W is to attack Iran, when would it happen? Would he get more votes if it happened before the election, or less? What would he do if he is convinced this is his only chance to hold both houses?

JK - on 9/11 I knew the world would change - and I think its changing way faster than any of us realise.  On that day I decided to sell my business and to travel less.  Not been to the States since, but I've been to Canada once and continental Europe several times a year.

So what you say surprises me a bit - the hard anti-Saudi sentiment (forgive me if I read you wrong).

Maggie went to War in the Falklands - and won an election!

As for floating bombs and Hormuz?..... caboooom

The attack on Abqaiq went virtually unreported in the UK.

Tony Blair is done for over here - don't think he'll last a year - the World order will change.  The succession here will not work out as planned.

I posted some stuff over on the Adevertising Thread - got drawn by Don in Colorado who seems to have fallen into a ravine.  What i said was that the recent fall in gas prices was an opportunity to raise tax on gas.  That wasn't very popular.

I hope to be in Boston next month.

CW

It cracks me up that the Brits were complaining of Tony Blair before the elections, and yet they voted him back in anyway. WHY?
I don't follow British Politics as much anymore. But exactly who do the people of Britain have in mind to be PM?
And why do they think that person will do better?

I am sure this is touchy amongst the Brits, but I am not trying to push anyones' buttons. Just trying to understand.

Thanks

The problem we had was the lack of a viable alternative to Tony who is now done for, more because the Socialist Party he leads has had enough than because the people have had enough.

Gordon Brown our Chancelor (finance minister for 11 odd years) is our "PM elect".  The Prime Minister is elected by the parliamentary Labour Party - so when power changes hands a handful of 200 odd socialists elect the new leader.  There will almost certainly be a challenge to Brown - and given his support for Blair over Iraq - I think the challengers will win.

One of the biggest anomalies of modern politics has been the alliance between Bush and Blair.  Blair, who is supposed to be a socialist is viewed by many as being just slightly to the left of Thatcher - but he leads a party that has deep rooted socialist values - so the anomaly is the allianace bewteen the Labour Party and the US Republicans - that is cemented by Blair - who is now a dead duck.

America (not necessarily Americans) has become deeply unpopular over here (i.e. Europe).  You wonder why we re-elected Blair - we we are totally mistified as to why you guys re-elected W.

The political situation here is made more complicated by constitutional issues.  Under Blair, Scotland that makes up <10% of the UK got its own parliament and we run all our own affairs apart from Foreign Policy and Energy.  I won't bore with with all the details - but we have an election in May that may transform the political landscape.  Oh, and did I mention that Brown is a Scott.

The only way I can rationalise Blair's involvement in Iraq is that someone showed him a plot of peak oil.  The UK has been an oil exporter fo 15 or so years but turned importer again last year.  So we are out there in the market trying to secure oil supplies like everyone else - and we need to secure more every year as production declines.  France was in Iraq dimplomatically pre-war and the UK is there now, post war.

The UK leadership will be determined over Iraq - and so things will change.

Does any of this matter for the USA?  I don't think so.

Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time.

I was looking for another Churchill quote but this one will have to do.

Thank you for the summary. I see what you mean.

Several years ago, there was protests in the streets over something, can't recall what it was. ( i thought it was about the cost of something, a commodity maybe? coming into the UK) and as I recall Tony Blair threatened to use the military force to bring it in. Do you recall that?

When 9/11 hit I thought we would respond, and the invasion of afghanistan seemed exactly appropriate. Pity interest in the original target so soon dissipated.  You were more prescient than me...  I had no idea the then unpopular president would move us so far into fascism.  

THe House of Saud will do and has done anything to stay in power, not least making peace with the Wahadi sect and its version of truth. The form of religion they have allowed to flourish is extremely virulent, similar to what is preached in northern pakistan/eastern afghanistan. Only when the fruits of this policy struck home did they make changes; 9/11 meant nothing to them. Pakistan, too, is trying to make changes, encouraged, of course, by the failed attack on Mushareff.

The sentiments I expressed are not exactly mine, but they are certainly what many here think about Saudis.  It helps that more recent attacks have come from other nationals. My own view is closer that I blame saudi rulers for allowing so much anti-western sentiments to be spread so openly for decades, even as I realize that right now the arab rulers are far more friendly towards the US/Brits than the arab street.

Israeli actions, and US support for whatever they choose to do, has long been destroying the relationship between the US and the Arab world, which was warm in many places, including Libya, Tunisia and Jordan, where I grew up.  However, I think the spread of globalism/sexual advertising/porno, and other western values, not least women equality but including unlimited freedoms, including, for example, the freedom to print something insulting to many, is seen as something even worse, an irrisistable assault on their traditionally polite, resperctful culture, certainly among the educated classes that were the source of the bombers. Even so, the invasion of Iraq might have eventually been seen as acceptable had we not made such atrocious decisions immediately after the invasion, such as sacking the police and military, and allowing looting. Who can say they were worse off under Saddam? There could be a working democracy today that would indeed be pressuring the surrounding arab and persian dictatorships. Too late.

I blame saudi rulers for allowing so much anti-western sentiments to be spread so openly for decades

I'm not sure that is the root cause of the problem.

However, I think the spread of globalism/sexual advertising/porno, and other western values, not least women equality but including unlimited freedoms, including, for example, the freedom to print something insulting to many, is seen as something even worse, an irrisistable assault on their traditionally polite, resperctful culture, certainly among the educated classes that were the source of the bombers.

I think a big clash of cutrures and values may be part of the problem.

Who won The Crusades anyway?

The Black Death, I think.
Ah, bird flue to the rescue.  My wife told me the other day about a new theory that the Black Death was not Plague.

It's 10:30 here CEO!!! And you're posting away about pdfs, Brent keeps popping off 63, I'm trying to kick the habit of buying on the peaks and selling in the troughs - and its time to walk my dogs.

The theory's been around for years. That it was actually two diseases that coincided. Bubonic plague and anthrax poisoning. Did I get it right? Or do we have a new theory? I work at night. I don't have dogs. And the Hilton sisters are out of town for the weekend.
Ah the Hilton sisters.  It was a new viral theory - wife is away in Amsterdam - but I'll ask her when she gets back.
Amsterdam, whoa! I would have followed her.

I don't know if you've seen the news. "Fresh-bagged Spinach." That's what I said - Spinach. It's the beginning of the end. You never see it coming. Spinach. Jesus, I can't believe I'm one of the lucky ones. I like Spinach, too. I just haven't had any in awhile. All that time I was trying to stay away from asparagus. Wait...come to think of it, what about that Indian restaurant on my birthday? Dammit! I love that Chicken Vindaloo...


Muslims won all the Crusades.

The first one was their offensive one against Eastern Christendom (and zoroastrians in persia) and was successful.

The next ones were attacks back by the West, and only succeeded at re-conquering a tiny fraction of what the Eastern Christians had lost, and only temporarily.

All right, I'll let you know when I see the 15 billion barrels. Don't bother to stay up waiting, though.
I posted this in June:

"Tertzakian (author of A Thousand Barrels a Day) calculated "Oil Dependency Factors" for leading economies. India and China topped the list at 94 and 90 respectively with the US at 45. Japan, Germany, Russia, Italy, and UK were all less than zero. Based on BP data for 2004-2005 for consumption and World Bank GDP 2004 / IMF GDP 2005 "estimate" India and US were less than zero and China was approaching zero. This is of course one year of change and may or may not be sustainable. Tertzakian has a chart for the US of the relationship between GDP and Oil Consumption (p. 105) that is remarkable in showing the response of the US economy to the spike in oil prices in 1979. It would be interesting to look at such a chart updated for 2005 for all the leading economies."

Basically the same observation you had.

Anyone of you analytical types interested in updating Tertzakian's chart for 2005?

If Cry Wolf is out there, this is one of the analyses I've been looking into for you. I'd highly recommend Tertzakian's book if you don't already have it.
I got the book - read the first few chapters when on holiday - murdering fish.  So how do I make time to read TOD - write for TOD - and read books?

I think, when I'm in the shower - usually about 30 minutes with energy running down the drain - and when walking my dogs - at least 1 hour a day.

One of the best books I've read recently is called "Brave New World" published by GaveKal Research.  They don't mention peak oil - but its an ace read.

In the 70's-80's the US cut its oil use significantly, in part by the one-time shift away from using some oil for generating electricity.  Perhaps China is doing the same, upping the coal-fired generation (isn't it about one new large power plant per week?) and thus their industries use their diesel-powered backup generators less.  Once they finish that transition, but keep buying cars, their oil demand will rise again, even faster than the sea level will rise.
This is a very important point and bears watching. Perhaps also for Indian and elsewhere.

At the same time, I believe we are watching a concerted and well-timed effort to shift the mood of market speculators.

Funny, that the WSJ story claims to 'debunk' PO by stating there are widespread oil reserves throughout the world, but then does not go on to explain when these expected new oil discoveries will come on line.

I wonder if the WSJ or anyone else can 'debunk' the crash in Cantarell's production.  Now even Mexico's Energy Secretary admits that several billion barrels remaining in the Cantarell field will never be recovered:

"Mexican Energy Expert Comments on 'Dramatic' Oil Situation, Warns Supply Ending
Commentary by Energy Industry Expert David Shields: "Petroleum Errors"

It's official:  the country's oil situation is "dramatic."  The exploitation of the oilfields must be streamlined as soon as possible, since many decisions have been wrong, and non-technical in nature, for decades.  Oil revenue has been squandered, and Mexican Petroleum (Pemex) is a primary exporter and a value-added importer that leaves the wealth in other countries.

Energy Secretary Fernando Canales said all of this and more at a recent conference of oil engineers.  Canales called on the engineers to "rethink the exploitation of the national oil resources," produce in a more streamlined way, and maximize the recovery of hydrocarbons on-site.

For the first time, a high-ranking official publicly admitted that Pemex is exploiting the oilfields in an irrational way.  The expression "maximize the recovery on-site" is something that oil engineers understand very well.  It means using the best practices of the industry to obtain the highest recovery of oil and gas in the shortest time.  It is, therefore, the antithesis of the overexploitation that leaves large volumes of oil inaccessible in the subsoil.  And the engineers know that Pemex's poor exploitation practices have left several billion barrels irrecoverable in the subsoil, at Cantarell and other oilfields, in recent decades.

In Mexico, the official discourse is changing, too.  According to Canales, Pemex is facing the dramatic consequences of 17 years of underinvestment, of decisions "of a non-technical nature," and of the "reckless milking of a single, gigantic oilfield."  Pemex must "find new ways to finance exploitation or end up collapsing financially and operationally until it turns Mexico into an oil importing country, as Mexico already is for natural gas.""

http://www.reforma.com/

Based on Khebab's HL work, Mexico is just past the 50% of Qt mark, so an overall decline is to be expected, led by the crash at Cantarell.
Story here  http://hour.ca/news/news.aspx?iIDArticle=10325
about how Canada is going to import LNG from Russia to keep the oil sands going.  Right on schedule as we all here knew Canada was going to have to make this move.  What I don't get is what Russia is up to.  Sure they will make lots of money, but if they played their cards right they could have every business in the world relocating to Russia in order to have cheap and plentiful energy.
Thanks for keeping me from more shameful acts of more shameless self-promotion.

I think Putin's no.1 priority in this deal is access to US markets. He's doing well in that respect in Europe, certainly since he made sure Algeria will not compete with him. The US still has Trinidad and Qatar as alternatives, and no terminal capacity.

Canada looks like a good first step. As I wrote, one of the terminals is signed up for Gazprom gas, and the other, through the sale of Gaz de France, is up for grabs. That would give Vladimir large stake of the northeastern US market.

Russia is not China when it comes to low wages, and they really don't want American companies on their territory. They'll gladly come here, though.

Gulf gusher shows inaction of Congress

    The oil industry calls them "elephants" -- world-changing discoveries capable of supplying petroleum to consumers for decades. California's Chevron Corp., along with its partners, thinks it has found one in the deep waters of the Gulf of Mexico. If geologists are right, it's the largest U.S. discovery since Alaska's Prudhoe Bay 40 years ago.
-------------
What an idiot...pushing a couple of buttons on a calculator could have saved this guy from writing this trash...when did three years become decades?  He mentions CAFE and the vast majority of oil reserves in not-particularly-friendly country, but he's a world of confliction wanting to drill in ANWR.

He says this:
And so, Washington bunglers gave Americans neither safe supplies nor greater efficiency. This logic of increasing supply vs. reducing demand is deeply flawed. The nation needs both -- more North American oil and aggressive energy conservation.

which is fine, but then turns right out and then loses it again:
Chevron thinks its gulf field could hold 15 billion barrels, boosting the nation's reserves by a whopping 50 percent. Thank goodness that, while Washington fiddled, somebody was drilling for oil.

  Just because a guy can write doesn't mean he can write and think at the same time, and he probably has trouble being flatulent and walking at the same time too.
Actually, I'm especially good at that.
From Kuaittimes.net

Oil experts estimate Kuwait's oil reserves at around 50 billion barrels, a disputed figure as Kuwait claims 99 billion barrels. At a current pumping capacity of 2.5million barrel a day, Kuwait's oil fields would dry up in about 55 years from now. In terms of state lifetime, this is not much time.

Doing the math, the 55 year figure is using the "oil experts" estimate of 50 billion barrels. So it seems that the local media in Kuwait, and perhaps the general public, have come to accept the 50 billion barrel figure as the correct figure for Kuwaiti Reserves.

The article is all about energy awareness and developing alternative forms of energy before Kuwait runs out of oil.

Ron Patterson

This seems to become a creepings surprise, somehow predicted but only step by step confirmed. This would be a loss of around 50 GB, easy to produce oil. On the other hand a region is celebrated  in every media, which is very, very deep below the sea and even deeper under rock.

It is just a matter of perspective and how to place news. What sounds better respectively worse, the USA are doubling their oil reserves or Kuwait has to half its official reserves?

This news, even if offically confirmed, will never become a main topic in the msm.

What a nice world of information!

15 + -50 = nothin' to see here folks, but look over there...great deals on SUVs!
Okay, crude oil hit 63.00 today according to:

http://quotes.ino.com/exchanges/?r=NYMEX_CL

so I can now repost my comment from Tuesday and not be answered by quibbles:

An interesting milestone was hit today.

Back on July 29, Prof. Goose posted a poll:

Oil Price Poll Redux

In your opinion, in the next two months, oil prices (CLU/V6) will...
    reach $63/bbl before they reach $83/bbl           2%
    remain in a trading range from $63 to $83/bbl     49%
    reach $83/bbl before they reach $63/bbl           47%

And today it happened. Oil hit a low of 63.00 (and then closed up a bit). Therefore oil did, within the two month time period, reach $63/bbl before it reached $83/bbl, exactly what the poll asked about.

Congratulations to the 2% of The Oil Drum readers who got this right! (I'm not one of them...)

But let's think about this a little. What does it mean when 98% of the readership here gets this question wrong? Those who have followed my writings will know that a persistent theme is the tremendous uncertainty of the future, and what a mistake it is to be overconfident in our predictions about what will happen.

Many TOD readers have very strong views about what they think will happen in the future, and show tremendous confidence that their vision will be correct. But the events of the last two months, events which were considered so unlikely that only 2% of poll takers predicted them, should reminds us of how surprises are always lurking out of sight.

The truth is, we don't know what will happen with oil supply for the next few years, and we don't know what will happen with demand. Supply might falter if Ghawar and other major fields fail, or maybe they'll hang on and new production will come on strong as some forecast. Demand may continue to grow rapidly with China competing with the West for oil, or a U.S. recession may slow growth for the entire world. We could see either a glut or a shortage of oil.

This is the true degree of uncertainty we face. I've also pointed to this excellent Econbrowser post where he shows that oil futures market option prices imply that the 95% confidence interval for oil prices in 2010 is $15 to $250! And there's still a 5% chance it will be outside that range. That is the uncertainty the market recognizes, and it fits very well with the style of analysis I just described.

Don't make the mistake of saying, well, it could well hit $250 but it could never hit $15. That's the same way people were thinking two months ago about $83 vs $63. People were 98% sure it wouldn't happen, and yet it did. There are many ways we could see $15 oil in a few years.

I'd encourage TOD readers to learn a lesson from recent surprising events and remember that only 2% of participants here got the answer right. It should be a lesson in humility for the rest of us and encourage us to be more cautious and less cocky in our blanket statements about the future.

Just to quibble with you a bit for fun.

Only 47% of the people are wrong so far.  The 2% who guessed 63 dollar oil are most certainly right, and the 49% who guessed the range between 63 and 83 are still technically right as of this time, at least until the market dips below that mark.  Glancing at the Oct 2006 number it looked like 63.00 was the Low, and therefore within the range of the 49% guess still.

But yes I understand the point you are trying to make about the variety of ways prices can be reached

I also wasn't in the winner's circle. But, If Cantarell's falling 50,000 b a month had been "in the news", and the declines in the US,UK, Norway, and KSA were "in the news",would the price be $63? Would the fact that the EIA's own report indicates a 100,000 b/d decline yoy as of June 30,2006 be "newsworthy" on a peak oil story or what should the price of oil be? When the news is controlled, anything can happen. I guess that what, in part, created my mistake was that I assumed we lived in a free country, with a free press, and a honest government. I am humbled  about by my obviously cocky assumptions and will be more cautious in the future.
Yes the price would still be $63.
Don't believe for one minute that the guys in trading pits haven't read the same stories - some of the stories have even been in the WSJ.
The oil they are trading for $63 is for delivery in the next few weeks or months - not five years from now.
Having actually worked in major Wall Street firm, within area where energy futures are traded, you are making a big assumption that traders actually read much of anything.  

Of course they have analysts that are quite knowledgable, and they do advise the traders.  But that doesn't always translate into a trading strategy.

It hit $63.10. Show me the data that said it hit $63.00 and i'll consume a clove of garlic tomorrow.
I found the data. As we speak I have had well over 2/3 of a clove of garlic in my pasta sauce.
What the hell does it matter exactly?  Using obvious abbreviations of price in a resource whose spot market price jumps all over the place...

Is any point of debate ending with "because oil is $63/barrel" invalidated by oil actually being $63.10/barrel?  Or, for that matter, $60, $65 or $70/barrel?

Calm thy pedantry.

Agreed. Also the swings are massive. So much volatility.
So $62 today, or what? I'm not seeing any news that would discount that possibility. Supposedly a rift between US and Europe on Hamas/Fatah coalition. Not going to cut it. I figure analysts and traders will look at the weekend to get some news they can use. In the meantime, trend is down, so go with the flow. Or is there something I'm missing?
Thats it. Correction is over. Traders will now buy huge volumes of future, and spot. This is a lovely price for them given recent (past 2 years) fluxuation. Guaranteed they will spot it (no pun intened) and have graphs showing clear corrections, even more detailed than my daily graph. The traders are saying to them selves -' I wonder if any of my trader "buddies" know that LOWER GOM goo insn't due onstream until next decade by which time we've seen cantarell and Ghawar crash.'

A few recent posts were laughing at the price responce due to the announcment in Lower GOM. But buyers and sellers are not resonding to the announcemnt - they are resonding to what they percieve other peoples responses will be. This is an important distinction. I have no doubt most know LOWER GOM will make little, if any difference. They have to pretend though

Marco.

Anybody know what time Dated Brent starts trading? Bloomberg is showing me -.65 to 61.22 at the same time Nymex is +.22 to 63.44.

You're on for $62. I'll give you 5 cents and make it 61.95(Nymex).

This just in.

Yemen Foils Oil Refinery Attack

Who thinks it was Al Qaeda?

It's dropping again. This is why i'm an engineer and not a trader! Disclaimer alert.
This is why I have to take advantage of shareholders to the tune of $400 million. Always remember - Quit while you're ahead. Yergin's quite a gambler, though.
they are resonding to what they percieve other peoples responses will be.

The classic, I'm thinking that your thinking that I'm thinking this, but then could you be thinking that I'm thinking that your thinking I'm thinking this also, and so I'll need to be thinking that your thinking....

And how do these people remain even somewhat sane?

How do you think? By having the exact same thoughts about you ;)
Actually as far as peak oil is concerned, nothing matters except crude production. We could have a depression that sends crude prices to below $15 dollars all the while production is falling.

We have Iran talking about no nuclear enrichment, we have no hurricanes so far this year and we have Jack 2 which every fool seems to think the world is about to be awash in oil. All this is driving the price down but according to the IEA oil production in August was down 400,000 barrels per day.

But congratulations to those who picked $63 before $83.

Now let's get another bet going. According to the EIA, crude + condensate average for the first six months was 73,546,000 barrels per day. The average for all of 2005 was 73,519,000 barrels per day. So as the end of June we were 27,000 barrels per day above last year's average. And this is even though the hurricanes took an average of 300,000 barrels per day off the 2005 average.

But who runs the polls here?

How many people think the 2006 average will be above the 2005 average?
How many people think the 2006 average will be below the 2005 average?

Remember this is crude + condensate according to the EIA. You can track it here.

At any rate, even if there is no poll, I will give you a monthly update as to which is ahead, 2005 or 2006.

Ron Patterson

I agree, Ron, I wish we would run more polls here. They are a great "reality check" and help us to remember what crazy ideas we had a few months ago. Otherwise it is all too easy to only remember when we were right and forget when we were wrong.

As far as 2006 vs 2005 production, don't forget that we saw a drop in 2005Q4 due to the hurricanes. Assuming there is no such factor in 2006, and given that 2006 is ahead of 2005 so far, I'd guess that 2006 will probably stay above 2005.

Another issue in terms of crude production is that you are also measuring crude consumption. So it can fall just as easily due to lack of demand as due to constraints on supply. So even if 2006 does end up being level with 2005 or a little less, it's not necessary a confirmation of Peak Oil theory. China has supposedly cut back on their oil imports (switching to coal?) and the U.S. economy shows signs of slowing down. Oil storage inventories are said to be rising in many parts of the world. All this could point to a demand-drive fall in consumption level rather than a supply-drive fall in production.

Good point - if no hurricanes in 05, then this year's production would clearly be under last year. I must say that my past description of production being flat since end 04 is pretty accurate.
First comment is that Chris looks too optimistic unless significant produciton is about to come on line. Of course, if he's right, then 06 production would continue higher than 05. I guess I will give him some cred and guess 06 will continue higher.

I also noticed US first half 06 down 7% yoy, mexico down 1%, russia up 5%. Pity SA not shown.

Westexas still looking good.

Good article by Tom Whipple on Jack 2. I'll bet he's been reading TOD.
Shock News from the BBC

TODers, not been on Drumbeat today.  Managed to catch the BBC 10 o'clock news though and here's their top 5 leading stories:

Climate Change  perma frost melting in Siberia - urgent action needed to stop people driving and flying as much (I think they also mentioned a new UK energy research institute to receive 1 billion GBS)

Norwich Union a big insurer over here - cutting jobs, a combination of internet taking over - a very good thing - and India taking over.

Darfur millions dying - George Clooney making a plea for help

Afganistan - NATO sending more troops (Polish this time) to be killed

Alcohol - apparently drinking more than two bottles of red wine a day is harmful

So what the hell is GBS?
I don't know. Maybe he meant GBP - £GB - Sterling - not be confused with Stirling - a nice town in the middle of Scotland.
Climate Change  perma frost melting in Siberia - urgent action needed to stop people driving and flying as much (I think they also mentioned a new UK energy research institute to receive 1 billion GBS)

not according to npr, they had allot of people on today that said we could just solve all our climate change problems by pumping sulfur/sulfur-dioxide into the air to cool the planet. they then went on to say that it would be harmless because volcano's spew the same stuff.
i was a little shocked because usually they are much better on science stuff then this.

Ah, another reason I don't listen to npr anymore (along with the sprawlmart ads).
Score one for the doomers:

"America is at its lowest level of apocalyptic preparedness since the early 1950s,"

"Our survey of households in seven U. S. regions demonstrated that few citizens have bothered to equip themselves with fireproof suits and extinguishers to deal with volcanic upheaval, solar flares, or the Lord's purifying flame," Malthusian Institute director James Olheiser said. "Almost no one is prepared for a sudden shift in the Earth's polarity or the eating of the Sun and moon by evil wolves Skol and Hati during Ragnarok."

http://www.theonion.com/content/node/52708

Chertoff added: "As for Armageddon borne out of God's heavenly wrath, I can say with assurance that this nation has never seen a presidential administration that has given more thought to this very scenario."
Apocalyptic Vulnerabilities

Excellent article, Jack. I just had to reprint the graphic. I think Texas is the best one. Thanks again.