DrumBeat: September 21, 2006

[Update by Leanan on 09/21/06 at 9:16 AM EDT]

For Bush, cheaper gas is premium

When it comes to President Bush's approval rating — the number that measures his political health — one factor seems more powerful than any Oval Office address or legislative initiative.

It's the price of a gallon of gas.

Statisticians who have compared changes in gas prices and Bush's ratings through his presidency have found a steady relationship: As gas prices rise, his ratings fall. As gas prices fall, his ratings rise.

[Update by Leanan on 09/21/06 at 9:28 AM EDT]

BP and Exxon at odds over Gulf oil project

BP, the UK oil group, and ExxonMobil, its minority partner on the Thunder Horse deepsea oil project, have been at odds over how to respond to mounting problems with the Gulf of Mexico oilfield, the Financial Times has learned.

BP to process more heavy oil

OPEC May Link Oil Price Target to Production Costs

"We are looking at the current price regime within the context of our rising costs," [OPEC acting secretary general Mohammed] Barkindo told reporters at a conference in Riyadh, Saudi Arabia, today. "The issue of rising costs of funding production, whether offshore, onshore, upstream and downstream, have sky-rocketed in the past several years."

Global oil cos' spending soars but production, reserves growth lag

Global energy companies boosted their investments in the upstream business by 31 pct in 2005, but only to achieve a marginal growth in oil and gas production and reserves.

Bangladesh: Protest over power outage

At least 50 textile workers were injured as police charged baton to disperse them from the Palli Bidyut Samiti office premises at Choala in the town yesterday.

The textile workers were protesting irregular power supply to their factories.

Eyewitnesses said over 1000 agitated workers entered the Palli Bidyut Samiti-2 building at around 4:00pm and damaged documents and furniture. They set fire to 12 parked motorcycles of the Samiti, two transformers worth Tk 2.5 crore and the special circuit breaker in the control room. Ten policemen, including SI Rafique, were injured after being hit by brickbats thrown at them by the agitating workers.

Employees of the Bidyut Samiti took shelter on the top floor of the three-storied building to escape the public wrath during the attack.

Yukos loses its bankruptcy appeal

Nigerian spat threatens oil

An ongoing public feud between the Nigerian president and vice president is adding to concerns about the long-term reliability of oil exports in a country already embroiled in violence directed at the petroleum industry.

Rising Fuel Costs Tighten Air Force Belt

The growing cost of crude oil combined with increasing fuel demands of the war on terrorism are forcing Air Combat Command officials to brace for a budget crisis while looking for future fuel alternatives.

Economist Says Better Metals and Minerals Data Needed as Nation’s Import Dependency Grows

U.S. sees delay in big rise in alternative motor fuels

The Bush administration says the United States needs an extra 20 years to meet Congress' goal of having almost a third of U.S. motor fuel supply come from energy sources other than gasoline.

Tom Whipple - The Peak Oil Crisis: A Report to the Senate

Sea levels are rising faster than predicted, warns Antarctic Survey

Rises of this order will present a substantial threat of flooding, storm surge and even complete submersion of many of the world's populous low-lying areas,such as Bangladesh, the Nile Delta and even London.

But the new evidence, from a series of scientific papers published this year, indicates that this rate would be exceeded, said Professor Rapley, who runs the world's leading institute on Antarctic science - although he could not say what any new rate would be.

I'm never too sure about these "X to oil" things, but it would be nice if one worked out:

Gasification Process Key to Low Cost Diesel

If the investment cost ratioes up (which it never does) you'd be talking about $600,000,000 for a 16,000 gal/day output plant.  Diesel better be about $10/gal for that to work out.
It may not seem so nice when climate change really kicks in.
I guess it depends on how they do this accounting:

"There is little waste, up to 85 percent of the feed material becomes usable liquid fuel at the other end."

If that's on a carbon basis, that's pretty good.

FT process similar in concept to ours.
Again, what controls the price of oil? The issue has not been settled!

I would like to continue the debate on what determines oil prices> because I believe the issue has not been settled.

Robert Rapier and OilCEO, in their posts two days ago, said it is primarily supply and demand that sets the price of oil, Coilin and several others disagree. Coilin posted a link, which says that it is a combination of the NYMEX and the IPE prices that determine the price of oil. I cannot get the link to work today however.

Coilin pointed out that the amount of WTI and Brent crude actually traded is tiny, far less than 1 percent of all oil traded. And I would point out that the actual amount of trades on either the NYMEX or IPE that results in the actual delivery of any oil is also tiny. Probably also less than 1 percent of all trades actually ends with the delivery of any actual oil. That is, they are settled in cash, either before the close or at the close of the contract.

However, and this is very important, the actual number of contract barrels traded daily on the NYMEX alone, is approximately three times the number of barrels of oil actually traded around the world. For instance just yesterday approximately 251,000 futures contracts were traded. Over 62 percent of those contracts were for the near term October contract. Each contract was for 1,000 barrels of oil. That means that contracts for 251 million barrels of oil changed hands on the NYMEX yesterday, about three times the world volume of oil traded in the entire world. And that does not count the contracts traded on the IPE or the Tokyo exchanges.

I maintained, for several years, that NYMEX traders watch the spot price and other news around the world and try to follow, as near as they can that price. That is, if they see something that will make the price rise, they will andicipate a higher spot price in oil and move accordingly. However I am now having second thoughts. It seems that speculators and hedge funds do cause the price of oil to move. For instance the recent move from the high 70s to near 60$ was caused by speculators and hedge fund managers dumping contracts on the NYMEX.

What would have happened if they had not dumped their contracts? Would the spot price of oil dropped anyway. I don't really think so. It looks like that speculators, including hedge fund mangers that are also speculators, do control the price of oil.

Ron Patterson

Again, what controls the price of oil? The issue has not been settled!

It strikes me as something that will be endlessly dynamic.  Monday's answer is not Teusday's answer, etc.

'Again, what controls the price of oil?'

Um, just about everything you can imagine?

Or how about, the price of oil where? I imagine the price of oil leaking out of a Saudi pipeline in a desert is very different than the price of Alaskan oil leaking into the tundra, using a number of different scales to measure it.

Or how about, nothing controls the price? The operative term being 'control.'

'Again, what controls the price of oil?'
Um, just about everything you can imagine?

Wrong! I can imagine thousands of things that have no affect on the price of oil. The question is whether supply and demand or speculators and hedge fund managers control the price of oil. Pay attention!

Or how about, the price of oil where? I imagine the price of oil leaking out of a Saudi pipeline in a desert is very different than the price of Alaskan oil leaking into the tundra, using a number of different scales to measure it.

Are you taking up space on this list by just trying to be funny? Any damn fool knows we are not talking about oil spilled in the snow or sand. If you have some intelligence to add to this discussion please do so and stop posting nonsense.

The price of oil, all over the world moves together. If WTI spot price goes up, contracted oil from Saudi Arabia goes up as well. Check out world spot prices as compared to contract prices here.

Ron Patterson

Darwinian: It depends whether you are talking short-term or long-term. In the short-term, speculation is extremely important, in the long-term, not very important. As an example, if speculation drove the price down too far eventually shortages of product would occur. Your desire for the price of crude to closely track supply and demand is understandable yet uninformed. Anything you can speculate on is in the same position. Often companies with strong growing earnings and solid balance sheets will see their share prices languish, sometimes so much so that they become takeover targets. Other companies (like most dot coms)get speculated upward based on baloney then blow up.      
Boy, 'any damn fool' gets quite a reaction.

As for price being influenced by anything you can imagine - prices are set by human beings. As a matter of fact, price itself is something that is imagined, looked at in the sense that price is a human construct, agreed to by those engaged in the transaction. For example, the money I use to pay for things every day does not say anything about the United States - and the price is not in dollars anyways. The fact that you imagine a factor to have nothing to do with price has absolutely nothing to do with two other people thinking it does - and if they are the ones buying and selling, your not being able to imagine what is influencing them is meaningless. To give a hint - look at how the Soviet Union used oil as a political tool.

As for the example of oil leaking - a bit obscure, but I decided to leave the explanation out. In Saudi Arabia, the infrastructure in place has been fairly simple to build and expand, and in that sense a barrel of oil in Saudi Arabia tends to have a production 'price' value which seems to be either in the penny or very low dollar range. On the other hand, the oil being produced in Alaska has extensive costs associated with it. In other words, what is the 'price' of a barrel of oil being leaked in the desert compared to the tundra? For the oil producer, that difference is measurable in terms of cost, as compared to price. This was a poorly done reference to the idea that the cost of producing oil keeps going up (in terms of infrastructure, for example), regardless of the price. Oil may be fungible, but the cost of production has a certain influence on how much the oil is worth, regardless of price.

Price is not an illusion, far from it, but price is not physical reality either. And I didn't even begin to touch upon EROEI - is it possible to even have a price for something which could be seen as negative - if it takes 5 units of X to produce 4 units of X, is price relevant? At some point, price capitulates in the face of reality - if you can imagine that. For example, how much does a passenger pigeon egg currently cost, or is price just a foolish perspective in terms of passenger pigeon eggs, from someone being anything but funny?

On the price of oil, inventories have in the past played a role.  Traders look at the numbers and then in a few minutes the price moves.

On inventories, the following points make the number not very meaningful:

  1. Now (9/06) the only reason US oil inventories are up are because of draw downs in the US SPR that haven't been replaced.  
  2. As Days Forward Cover, current US inventories (minus SPR withdrawls is at the low range.
  3. Minimum US crude oil stocks for proper functioning of the system according to Matt Simmons are between 280 and 300M barrels - now we are "awash" with crude with 325M barrels, that only 1 to 3 days of supply before problems.
  4.  Almost all countries in the world except the US (because we've drawn down and not replaced our SPR) have lower than average oil stocks in 2006.

  5. Drawdown in US SPR
http://www2.spr.doe.gov/DIR/SilverStream/Pages/pgDailyInventoryReportViewDOE_new.html  Strategic Petroleum Reserve Net movement of 13.4M total from Sept 05 through Oct 06.  Net US SPR drawdown of 11M barrels, net OECD donation of 2.4M barrels.  No new fillings of US SPR ordered since Sept 05 and for foreseeable future.

  1. Days cover (from 1999 but recent info not available: http://tonto.eia.doe.gov/oog/info/twip/twiparch/050323/twipprint.html)  

  2. Matt Simmons on "minimum level" of inventories http://www.simmonsco-intl.com/files/060997.pdf

  3. Data for European and Asian Oil Stocks http://omrpublic.iea.org/stocks/ct_cr_ov.pdf#search=%22oil%20stocks%20iea%202006%22

Very good info.  Thanks.

Buckler, this is wonderful info, it really helped my understanding of the actual state of crude oil stocks. It really shows how the main stream media manipulates the news and how crude oil stocks are really much lower than they represent. Thank you, even if it just reinforced my paranoid suspicions with facts!
You're welcome.  I hope this clears up to some degree the apparent and repeated "contradiction" that we are awash with oil in inventories, so how can we be short of crude.  The reality is there is no contradiction -- curde oil inventories -- when adjusted for SPR withdrawls -- are very low.  

Actually it is easy to get this idea -- the latest EIA weekly oil report released 9/20/06 begins with the title "How Low Can it Go?" and relies on both "technical" chart data (it is stated that the decline represents "the second-largest uninterrupted decline in the history of the survey (dating back to August 1990") and then also uses inventories as a reason why oil prices are dropping.  A chart is very conspicuous that shows higher than average crude oil inventories (of course no mention of world oil inventories and the fact that we've withdrawn from the SPR).  No other reasons are given for the price decline. see: http://tonto.eia.doe.gov/oog/info/twip/twip.asp

Actually correct that, the EIA says there are some "seasonal" factors to the decline of gasoline in addition to technical and inventory.
Actually correct that, the EIA says there are some "seasonal" factors to the decline of gasoline in addition to technical and inventory.
Actually correct that, the EIA says there are some "seasonal" factors to the decline of gasoline in addition to technical and inventory.
Ron ..

As near as I can figure it .. all the dynamic
forces in the market place are played out on
a daily basis and reflected in the then current
spot contract price .. All the industry players dealing
in the actual physical commodity price their "deals"
at some differential to that  spot price ..

Triff ..

Speculators and hedge fund managers ARE supply and demand. If they bet on the wrong "correct" prices, they pay for it in the long run.

(Not necessarily quickly, though. I believe there's a big correction coming up, from the fact that the market has ignored that oil is finite and immensely hard to replace, but this underpricing has been going on for decades.)

In yesterday's DrumBeat you asked:

"Why does the NYMEX and the spot price for WTIC close at exactly the same price for 17 of the 20 trading days in each month? That just don't make any damn sense."

I posted a late reply, which I'll re-post here:

This (pdf) document by the Federal Reserve Bank of Cleveland answers your question:

"When most major U.S. newspapers
report the spot price of oil, they are
referring to the one-month NYMEX
futures price. A NYMEX crude oil
future is a contract for 1,000 barrels of
domestic light, sweet crude oil. To be
included in the contract, the oil must
meet specifications on sulfur content
and density. Because WTI meets these
standards, it is often traded in NYMEX
contracts. Therefore, the one-month
NYMEX crude oil futures price and
WTI spot price are nearly identical. An
exception to this is at the end of the
month, when the NYMEX futures contract
expires three days before the WTI
spot contract."

There is something in the above I don't really understand: is the 'spot' WTI actually a one-month contract? If not, how come it has an expiry date?

Coilin, thanks for posting this. However it still leaves a lot of questions unanswered. Like when the NYMEX and the WTI spot price closes at exactly the same point, do the people selling the oil in Cushing, Oklohoma peg their price to the WTI price to the NYMEX price or does the NYMEX peg the closing price to the price of the last trade in Cushing?
(WTI is really WTIC, or West Texas Intermediate in Cushing, Oklohoma.)

No, WTIC is not a one month contract, it is oil traded. Refineries actually West Texas Intermediate out of the Cushing, Oklohoma hub. It is actually oil, not a contract.

Ron Patterson

Typo I actually meant to say "Refineries actually buy West Texas Intermediate out of the Cushing Oklohoma hub. It is actual oil, not a traded futures contract.

Ron Patterson

Yes, I realise that the WTI is actual oil being sold, but the quote I posted says:
"An exception to this is at the end of the
month, when the NYMEX futures contract
expires three days before the WTI
spot contract."

So what does this mean? I understand what the NYMEX futures contract expiring means, but what does the WTI spot contract expiring mean if it is not also some sort of a one-month contract? What is an expiry date for a spot contract?

You ask whether NYMEX pegs to Cushing or the other way around. I agree that this is never made sufficiently clear, but my understanding is that Cushing pegs to NYMEX.

In support of this, I would point out that before the WTI there was the ANS reference price, and that due to oil depletion, there was often no actual physical oil delivered, and yet the futures trading continued nonetheless. This sounds absurd, but to me it shows that the futures trading at NYMEX does not need Cushing to determine prices.

Coilin, this has to be a misprint or some other misunderstanding. The price diversion is with the new NYMEX contract. The very first three days of a new NYMEX contract is always out of whack with the WTIC spot price. After that it the two always close at exactly the same price.

Oil of course is contracted out of the Cushing hub, just as oil is contracted by the tanker load out of Saudi Arabia. But it is not a monthly contract and has no monthly expiration date. Buyers contract for so many thousand barrels from the Cushing hub, or from Venezuela or from wherever.

I repeat, the spot price for WTIC has no monthly expiration date. The price changes daily and it is always quoted as the spot price.

Ron Patterson

I think this quote answers my question: Bnymex%2Bwti%2Bexpires&hl=en&ct=clnk&cd=13&client=opera

"Unlike petroleum products and crude oil delivered
by tanker, the term "spot" in a pipeline delivery system (such as used for West Texas Intermediate, the crude oil traded on NYMEX) refers to one month forward, the soonest it is possible to deliver. For example, the spot price for WTI in June refers to July delivery (until June 25, when the July pipeline delivery schedule is drawn up; afterwards, it refers to August delivery). The nearby futures price in June also refers to July (until June 22, when the July contract expires; afterwards it refers to August)."

Reuters price update
On Wednesday, the expiring front-month U.S. contract touched a low of $59.80 before settling at $60.46, its lowest settlement since March 20, and around $18 below the U.S. record of $78.40 hit in July.

The price fall is the sharpest in 15 years and has increased expectations the Organization of the Petroleum Exporting Countries might act to curb supplies although opinion is divided on the price level that would trigger an output cut.

Over the long term, oil prices reflect supply & demand. What we are witnessing now has little to do with fundamentals. The dumping going on currently is suspicious because 1) mostly psychology (no bad news) and speculation of various kinds is fueling it and 2) we are 7 weeks out from an election. Stephen Leeb has written about the group think in the markets.

Nothing has changed in the fundamentals or the geopolitics since early August. The "price fall is the sharpest in 15 years", so all bets are off.

Let's go back to May, shall we? Washington Post:

Iran has followed President Mahmoud Ahmadinejad's recent letter to President Bush with explicit requests for direct talks on its nuclear program, according to U.S. officials, Iranian analysts and foreign diplomats.

The eagerness for talks demonstrates a profound change in Iran's political orthodoxy, emphatically erasing a taboo against contact with Washington that has both defined and confined Tehran's public foreign policy for more than a quarter-century, they said.

Now, the present. Washington Post Again:
European efforts to get Iran and the United States around the same negotiating table are at an advanced yet sensitive stage, with a small number of remaining differences to be tackled this week when world leaders gather at the United Nations, according to several American, Iranian and European officials involved.

President Bush plans to make Iran a centerpiece of his speech Tuesday before the U.N. General Assembly, explaining to the annual meeting of presidents and prime ministers why he regards the Tehran government as a grave threat yet is willing to support negotiations to ease those concerns.

Now, all of a sudden, Bush is "Mr. Reasonable" -- where was he in May? See Leanan's chart at the very top of this page on the relationship between gas prices and Bush's popularity.

I'll wait until November before I take oil prices seriously again.

What is amazing is that if somehow Bush or someone working for Bush can affect oil prices like this, it SHOULD be the biggest scandal we have ever seen.

But where is the discussion / investigation about this?

Gold prices were manipulated for years (fact, not opinion)and nobody cares. IMHO, I think it is difficult for Americans to accept that the USA is moving closer to a South American/Mexican system (where these types of things are commonplace) rather than a European model.  
I find it interesting to step outside the box and actually realize what you just said.  It's profoundly true and utterly sad.

Oh and about the gold thing, I've known about this for awhile.  My spring semester last year I took some gata.org printouts and we discussed this for about 20 minutes.  He swore up and down it isn't really happening since there is no hard data from the sources doing dumping and such.  He basically just defended the status quo without and ammo.  I've got this guy again this semester.  The first day of class he made it clear he remembered me.  I took my first test Tues and I await my results.  It seemed uber simple and short which usually is good for me.

"He basically just defended the status quo without and ammo. "

After reading that...
In my head I am watching the classic Monty Python skit.

I Came here for an argument,
No You didn't,

Yes I did....

This is not an argument, you are merely taking the opposite side.

No I'm Not,
Yes you are......

Sounds like CROSSFIRE

sad sad sad sad...

Gold in some ways is fundamentally different from oil or gas. Gold is never used up, and the majority of it is the vaults of central banks. Any country with large deposits of it could, at any time, sell some or all of it for any of a number of reasons, severely depressing prices. Also, any hedge fund could attempt to corner the market and send the price spiking higher.

in contrast, when "produced," oil and gas are used up, and stockpiles are not very impressive. At this point it appears nobody has the ability to lower the price for any length of time; though a number of countries (and financial entities) have the ability to cause prices to skyrocket.

I've read of dumping of gold on the exchanges in Europe b/c of some kind of deadline approaching for unloading the gold.  This is why gold has been hammered the last two weeks or so.  
I've tried to get the discussion going but perhaps people here take this kind of manipulation for granted. However, one must consider the convergence of many factors, in addition to Bush's pre-election strategy. The big hedge funds, pension funds etc. are playing a role too.
After long shying away from oil, natural gas, metals and other raw materials, investors of all stripes -- hedge funds, pension plans, endowments and individual investors -- have become enamored with commodity investing. These investors, including short-term speculators, have become key in various markets, sometimes driving prices more than industrial customers who buy the materials to make things or sell services.

How these Johnny-come-lately investors react now "will have an effect on users, commercial producers, as well as investors," says Howard Simons, a strategist at Chicago-based Bianco Research. "The flood of money that's come in is out of scale to anything in the past, and most were just speculators."...

Some investors entered these markets because they saw a long-term undersupply of a range of commodities, including oil, as economic growth in China and India increased demand. But others were less interested in such fundamentals and shifted in simply because commodities prices had gone up in recent years, hoping to catch the next wave. Low interest rates made it possible for hedge funds to borrow at attractive rates and invest in almost anything....

Now there are signs that some of that "hot" money is exiting the market.

This all takes us back to whether oil prices were in a bubble. In fact, there is no convincing evidence for a speculative bubble in oil prices--which have and will continue to reflect the fundamentals over the longer term. There is always some speculation in the markets but this is the sharpest decline in oil prices in 15 years. Commodities like oil & natural gas are still a good bet over the long term. Why the big sell-off right now?

It couldn't have come at a better time for the Republican party. I've got to ask, as we should all ask -- what's going on here? Again, I say it -- the fundamentals have not changed.

And how many in the Republican party are players in the hedge fund world?  That's what stinks here.
Speaking of hedge funds, Daily Kos has a good post about the Amaranth meltdown. Amaranth lost half its assets over the past couple months, and the list of big institutional investors who took a big loss is rather sobering; pension funds, mutual funds, etc.

It looks like some very serious money has poured into commodities, jacking up the price; and after taking a soaking they are pulling out.

Oil prices are going down far less than gold, apparently. But the hedge fund manipulation has clearly distorted all commodity prices.

I'll repost a comment here that I posted in that Kos topic:

How to lower the price of gas at the pump

My tin foil hat sparked and smoked when I saw that futures contract volume for crude oil shot up as prices went down:

Suppose that somebody was simply creating futures out of thin air and dumping them on the market, causing the law of supply and demand to reduce prices. Ridiculous? What if your crooked political party is tanking in the polls and you want to give them a shot in the arm by causing lower gasoline prices.

If futures are cheaper, spot prices go down too.

But you just can't create crude oil futures out of thin air... futures are regulated by the Feds. They're regulated by the Commodity Futures Trading Commission. But what if you installed a Neocon True Believer to head up that commission?

Introducing Chairman Reuben Jeffery III.

Jeffery was nominated by President Bush on May 17, 2005, and confirmed by the Senate on June 30, 2005. Mr. Jeffery was most recently the Special Assistant to the President and Senior Director for International Economic Affairs at the National Security Council. He was previously the Representative and Executive Director of the Coalition Provisional Authority Office (CPA) at the Pentagon, after having served as an advisor to Ambassador Bremer in Iraq.

Heckuva job, Reuben! But wait -- he did have actual experience on Wall Street and wouldn't Goldman Sachs make a super duper double secret agent for the crude oil-futures dumpage?

Mr. Jeffery spent eighteen years working for Goldman, Sachs & Co. where he was managing partner of Goldman Sachs in Paris (1997-2001) and of the firm’s European Financial Institutions Group (1992-1997) based in London.

So, while this is tin-foil hat conspiracy theory supreme, it is possibile to control gasoline prices if you can control the supply of derivatives. Amaranth? Natural gas prices tanking is simply an unintended consequence. Not everybody understands that crude oil, natural gas, coal and ethanol prices are much more connected than they used to be. Oil goes down, natural gas goes down and so do all energy commodities.

That is a lot to swallow as all probable, less so as possible.
"Motive and opportunity"...that's all that's required in the courtroom.
No it isn't.  
Well...that's what the lawyers always say.
That's what the flashy TV lawyers say.  Evidence is also key to winning any sort of case, and in the in some cases enough evidence is needed in order to get past grand juries to get to the real trial.
Ya...evidence...that's the tricky part isn't it.

OK, I'll have to see if Patrick Fitzgerald is still busy with that Plame thing and then ask him to get on it.

Ok, a grand jury indicts on "probable cause" to believe a crime is comitted.  The prosecutor controls the grand jury, hence the saying,"a prosecutor can indict a ham sandwich" should he or she choose.  A grand jury typically gets whatever the prosecutor wants to tell them about the case.  
Trading volume looks alittle "odd", as compared to the rest of the year.  The invisible hand at work?
The reason the volume looks to increase so much is that graphs refers to the current months contract, which no one trade much in the winter or spring but now is current so more volume - that explains most but not all of the volume increase. A better chart would be to look at volume of all front month contracts and compare it to that.
Actually, for all intents and purposes, you can create a futures contract out of thin air. All you are doing is promising to deliver a certain amount of oil at a certain future date. To create the futures contract all you need is someone willing to buy it. Most such contracts are created without the intent to actually hold it through completion of the contract, but to  sell the contract itself. Of course, if you get stuck with the contract at its close, your going to have to come up with the oil, somehow - and that's how some investors loose their shirt - have to sell at a loss to someone who can cover the oil and make a profit in doing so.

Okay - this sounds suspicious even to me. But its what I recollect as the explanation of how such futures markets work.

Any experts in futures contract creation?

Yes, all futures contracts are created out of thin air. If I decide to open a long contract on October oil at the same time you decide to open a short contract on October oil, the two of us create a new contract out of thin air.

Contracts likewise disappear into thin air, with money's exchanged of course. If I close my contract with $1,000 profit at the same time you close your contract at a $1,000 loss, the brokerage house debits your account $1,000 and credits my account $1,000 and the contract simply disappears.

Thousands of contracts are created daily and thousands of contracts disappear daily. And they are created out of thin air and disappear into thin air.

Ron Patterson

Something I forgot to mention, for all the conspiracy theorists out there. You cannot manipulate the market by opeaning futures contracts, long or short. That is unless you have enough money to corner the market.

If you think someone was manupliating the market, driving the price of oil down by selling futures contracts, then they will literally lose billions trying to do that. They sold oil at $75 now they are obliged to buy that oil back at $62 or whatever the price is when the contract expires. They lose $13,000 per contract. It would take tens of thousands of contracts to move the market even a dollar or so. So any fool who tries to move the market with futures contracts had better be a multi-billionaire, and be prepared to lose it.

Ron Patterson

Wait, Wait, Wait, I screwed all that up. That is what I get for typing a reply without first thinking about it. No, if you drove the price down by selling, you would profit, not lose.

Hell, what a great ides. Now all I need is a few billion to make a few more billion.

Ron Patterson

Hmmmm....who has billions available to them to play this game.  

It's just a shame hedge funds are not regulated by the SEC, but you know, I think we can trust them to do what's right for everyone...don't you?

Hell, what a great idea. Now all I need is a few billion to make a few more billion.

That was precisely the sales pitch Hunter used on Amaranth <ggg>


Hi everyone, I'm new to TOD.  Making my first comment  

Darwinian, I'm sorry it's not that easy, your billionaire will not make the kind of money that you think he will.  Let's take a look at this senario closely, because I think misunderstanding of the futures market is where alot of conspiracy ideas arise.

First off, you can't just sell a boat load of commodity contracts in an instant at a desired price.  In fact, this works with anything stocks, oil futures, marbles, ice cream (it will melt before you can get enough people to eat it :) ).  Let's take a look at what actually happens to the billionaire who tries to make money by 'controlling' the market.  

Just because someone puts alot of contracts up for sell on the market for $75, doesn't mean he'll sell them all.  He'll sell a few until the $75-buyers are all 'used up'.  Then the price is sure to drop.  If all of these sell orders are limit orders then the rest of his orders will go unfilled, because they are too far above market price.  That is, until maybe the market rises again, some more $75 buyers arise, and some of his orders get filled.  Only thing is, he hasn't really caused a drop in the price, he's just kept it at a certain level (for now).

But, let's say he enters these orders as market orders.  Well, then he could sell alot more of his contracts, and yes drive the price down.  Only thing is with each contract he sells, the price he gets is progressively lower, which is no good for him.

Regardless, in both instances, this billionaire has accumulated a lot of 'sell' contracts and has two options - either closeout the contracts before they expire or he can wait for them to expire, taking on the obligation to physcially provide the oil that he has sold.

In the first case, 'Billionaire Bob' tries to profit by closing out his sell contracts.  But, wait he has so many!  Remember, this guy has sold HUGE amounts of oil, enough to cause the market to tank.  Just to close them out before the due date, he's buying any sell contract he can, but the price keeps rising, because again he is affecting the market, but this time in the opposite direction.  I imagine that when he is done with his buying spree to close out all his contracts the price will have gone back up somewhere close to where he started selling, pending no large changes in the fundamentals.

In the second case Bob decides to take his contracts to the expiration date.  Oh boy, he better be ready to pony up huge amounts of light sweet crude on the delivery date, because he is now obligated to do so.  If he doesn't have it all, he's going to have to purchase from someone on the spot market, because he's in a pinch.  I see the sharks circling...

Even is this guy does have has some oil reserves somewhere to provide the oil he sold on the market, whether he makes money depends on at what price he bought the reserves, which is not guaranteed to be lower.  Plus, he's got storage fees and not to mention tying up all that capital.

Colemaj1, I know very well that you cannot sell anything at the "desired" price unless your desired price is the market price. And I do know how the market works in spite of my lapses sometimes. I well remember the Hunt brothers tryig to corner the silver market and loseing their a fortune, several times over.

But one might, if one had billions in margin money, sell enough countracts on the market, "at the market price", to drive the price down. Then one just might buy those contracts back at a lower price if one's timing is right.

I know very well that closing a contract in one direction has the exact opposite effect that opeaning it in the other direction does, all things being equal. But all things are not always equal. Early in a new contract month, for the close in contract, volume is always much less than in the last hours of the life of the contract. Therefore the sale of one contract, or many contracts, does not cause the same movement as many contracts in a much thinner market.

There is another strategy. First buy puts. Then sell the contracts, drive the price down, then close out your puts for a handsom profit. Then when the price is still low, buy calls, one call for every short contract you have. Then close out your short contracts driving the price back up, exactly like you said it would. Then close out your calls for a handsome profit.

With the above stratgey you would make nothing on your futures contracts but you would make a fortune with your puts and calls. Tell me why it would not work. Provided you had had the necessary margin money to margin thousands of contracts.

Of course the SEC may have a thing or two to say about such a stratgey, but other than that....;-)

Ron Patterson

Ron - buying an at the money put (say $70 strike price when oil is $70) is the equivalent of shorting 1/2 of that position, and buying a call at the money is equal to buying 1/2 that position - if someone bought a billion dollars of puts, the locals would have to short 500 million of notional to hedge, hence driving the price down anyways. Buying puts and calls, if done in size, will move the market in and of itself.
Nate, this is simply not correct. A put or call is for one contract, not one half a contract. Puts and calls are priced according to the amount of in or out of the money they are and the time premium they have left.

Puts and calls cannot move the money unless traders see a huge amount of calls or puts and suspect that someone knows something they don't. But there is no way possible, unless that happens, that puts or calls can move the market. Traders usually totally ignore the amount of options traded.

A put or call that expires out of the money expires worthless. A put or call that expires in the money is worth exactly the amount it is in the money. Buyers of options take no risk other than the price of the option. Sellers of options take a tremendous risk. If one sells a put or call and the market moves against them they are required to buy back the put or call at the market price. If the put or call is deep in the money and you sold it when it was out of the money, it could cost you a lot of money.

I once traded heavily in futures and options. I am well familiar with how they work.

Ron Patterson

Ron my friend,

An at the market option has a delta of .5, which means it will move in price 1/2 as much as the underlying. As soon as someone buys or sells options, the marketmaker(unless they are adjusting their own delta or gamma) has to hedge this new exposure, which they do by buying or selling the underlying (in this case) for 1/2 the size. I assure you, options trades, in many markets, move the market considerably. Its all about the delta. The point here being that anyone with enough capital could dramatically move energy markets (or any other markets) just by buying options and no futures at all.

Shit Nate, if you trade options then you know better than that. At the money options lose time premium even if the underlying futures contract does nothing. However if the option moves into the money, then the option gain in value is exactly equal to the amount it is in the money plus time premium, but minus time premium it has lost due to the passage of time. If an option moves further out of the money then the option loses time premium plus losses due to moving further out of the money.

There is no formula that can tell you how much an out of the money an option will lose or gain as the underlying contract moves toward it or further away from it. It all depends on the volatility  of the contract. A high volatility option will carry a much higher time premium than one with much less volatility. But an in the money option is an entirely different thing. An in the money option carries a premium exactly equal to the amount it is in the money plus any time premium.

Suppose you buy a $70 put when the price is exactly $70. Suppose you paid $2.50 for that put. Then the option has no intristic (in the money) value, only time premium. Suppose the contract moves to $60 where it expires. You would get exactly $10 for that option when the seller must buy it back. You make $7.50. That would be the $10 the option moved in the money minus the time premium of $2.50 it had when you bought it.

That is exactly how it works Nate.

Ron Patterson

I don't mean to confuse peopel not familiar with the traders lingo but the option price would be multiplied by the size of the contract. For stocks it would be 100, but for oil it would be 1,000 because one futures contract is for 1,000 barrels.

If you bought a put for $2.50 then it would cost you $2,500. And if it expired $10 in the money then you would collect $10,000 and have a profit $7,500 after you substracted the amount you paid for the option.

An options buyer can lose only the amount he/she pays for the option. But a seller risks the total amount the underlying stock or contract can move against him.

Ron Patterson

In another life I wrote my masters thesis at University of Chicago on options pricing -believe me, there do exist formulas for determining how much an option will go up or down in price based on the movement of the underlying. Fisher Black and Myron Scholes made millions consulting hedge funds on this very concept.

But we are getting far afield. Im not disagreeing with your explanation of intrinsic value or time premium. The main issue I am trying to make clear is not what you or I get when we buy an option as an investment or speculative position, but what happens to the MARKET. (Since youve admitted in this thread that speculators DO impact the energy markets (and HOW recently...;))

The locals in the energy pits at NYMEX do occasionally keep decent size overnight positions for various reasons but most brokers try and go home flat, or as close to flat as possible. If someone comes to buy 10000 crude oil contracts at $70, the local or group of locals who sold those contracts has to buy them back somewhere to hedge, (hopefully lower) - they wont just stay short the 10,000 contracts they just sold to someone! Now, if someone comes in and buys 20,000 contracts worth of $70 strike price call options, this trade has the IDENTICAL impact on market prices, as the local will have to hedge out the mathematical exposure of those calls he just shorted (whose delta makes them worth precisely 10,000 long contracts IN MARKET EXPOSURE).  Traders are constantly monitoring their delta (how sensitive their position is to a move in the underlying) and their gamma( how sensitive their delta is)

Im not talking gain or loss, profit or margin here - just the fact that the options markets can and do move the price of the underlying. As I stated previously, an at the money option purchase will impact the market 1/2 as much as a futures purchase.

Traders are constantly monitoring their delta (how sensitive their position is to a move in the underlying) and their gamma( how sensitive their delta is)

Yeah, apparently not at Amaranth, though.

In my opinion ( and I alluded to it here, this is the first of many examples where the leverage in the financial world will spill over into the physical realm of the energy world. The Amaranth story is really amazing. They lost more money than Long Term Capital did in the treasury blow-up _ I think that was like $4 billion - and boy did that get the government involved.

Supposedly, Citadel and some other large hedge funds have purchased the remaining assets so the selling pressure on NG (for that reason) might abate for a while.  Interestingly, their bet wasnt directly long or short but they had spread trades on - were long dec 06 through Mar 07 and short other contracts, which explains why the calendar spread volatility in NG futures has been crazy of late.

Yeah, it is an amazing story. It's unbelievable how much money was lost. Apparently, this has been going on since the spring.  According to one energy analyst on Bloomberg yesterday, they should have known going back a few months that this would happen. I'll try to look him up.He claimed to be an NG expert and suggested that if Amaranth had subscribed to his newsletter, this would never have happened.

The story is still (amazingly) under the radar, since it seems no laws have been broken. Stay away from hedge funds.

What's even better is that several very, very big players like Morgan Stanley appear to have been caught in this mess.

Alright, go collect some mushrooms, Bigfoot :)

Hedge funds are not controlled by the SEC, correct?
Hedge funds are not controlled by the SEC, correct?

Incorrect The SEC controlls ALL trades and licenses all brokers. All publically traded equities are authorized by the SEC. All futures and options trades are authorized and monitored by the SEC. The SEC is there to prevent fraud, and in spite of what some conspiracy theorists think, they do a damn good job of it.

If I ran a hedge fund and tried to buy puts or calls, then move the market by buying or shorting massive amounts of futures contracts, the SEC would be on me like ugly on a monkey.

Ron Patterson

Hedge funds are not required to register with the SEC, which means that they are subject to very few regulatory controls. In December 2004, the SEC passed a new rule that required hedge funds to register as investment advisors starting on February 1, 2006. This rule was thrown out by the Federal Appeals Court for the District of Columbia in June 2006; the court said the rule was arbitrary because it exempted hedge funds with fewer than 15 clients. The SEC is reconsidering its position now.

Although hedge funds are exempt from SEC regulation, they are still subject to criminal laws, and the SEC has prosecuted a number of hedge fund managers for fraud, misstating fund returns, or stealing from hedge fund customers.


Hedging Your Bets: A Heads Up on Hedge Funds and Funds of Hedge Funds

REGULATION IN BRIEF: Hedge Fund Regulation

SEC re-evaluates hedge fund regulation

Goldstein v. SEC (warning: PDF file)

And lets see...who is the Chairman of the SEC?  Why it's Christopher Cox (appointed by Bush 6/2/05).


Naaa...I guess I'm just a looney conspiracy theorist.  Bush would never practice cronyism, would he?

And the following gives me a lot of confidence in him...

During his tenure he also served as Chairman of the Committee on Homeland Security; Chairman of the Select Committee on U.S. National Security; Chairman of the Select Committee on Homeland Security (the predecessor to the permanent House Committee);

Calorie individual traders are not required to register with the SEC. That does not give them a right to commit secureties fraud however and hedge funds do not have that right either.

Simply because someone is not registered with the SEC does not mean they are not subject to the rules and regulations laid down by the SEC. If you trade an SEC regulated contract or stock, then you must obey the rules. All exchanges are regulated by the SEC. There are some over the counter, (under the counter is a better description), derivitives that can be traded without SEC regulations. However there is no listing of these derivitives and one cannot move any market by trading them. All other trades are monitored and controlled by the SEC.

I am going to bed now but will reply to any objections tomorrow.

Ron Patterson


I don't think we're in disagreement but in my previous post I justed wanted to point out that hedge funds are not required to register with the SEC and that this means they are subject to very few regulatory controls. I was more or less quoting directly from the SEC's own web site (http://www.sec.gov/answers/hedge.htm):

Unlike mutual funds, however, hedge funds are not required to register with the SEC. This means that hedge funds are subject to very few regulatory controls. ... Historically, most hedge fund managers have not been required to register with the SEC and therefore have not been subject to regular SEC oversight.

There seems to be a subtle distinction, which I admit I don't fully understand, between "hedge funds" and "hedge fund managers" or "hedge fund advisors." However, according to the SEC web site, neither hedge funds nor hedge fund managers/advisors are required to register with the SEC.

I also pointed out that hedge funds must still obey criminal laws, including fraud, misstatement of returns, stealing from customers, etc. I believe this is what you are driving at when you say they are subject to the rules and regulations laid down by the SEC. Indeed, the SEC has prosecuted hedge fund managers for criminal behavior. Quoting again from the SEC web site:

The SEC can take action against a hedge fund that defrauds investors, and we have brought a number of fraud cases involving hedge funds. Commonly in these cases, hedge fund advisers misrepresented their experience and the fund's track record. Other cases were classic "Ponzi schemes," where early investors were paid off to make the scheme look legitimate. In some of the cases we have brought, the hedge funds sent phony account statements to investors to camouflage the fact that their money had been stolen.

But if you are implying that because hedge funds must follow the rules that they are the same as, for example, mutual funds, that is not correct. The differences are primarily, but not exclusively, in the levels of disclosure required from registered investment vehicles versus hedge funds. Here is what the SEC web site has to say:

Hedge fund investors do not receive all of the federal and state law protections that commonly apply to most registered investments. For example, you won't get the same level of disclosures from a hedge fund that you'll get from registered investments. Without the disclosures that the securities laws require for most registered investments, it can be quite difficult to verify representations you may receive from a hedge fund. You should also be aware that, while the SEC may conduct examinations of any hedge fund manager that is registered as an investment adviser under the Investment Advisers Act, the SEC and other securities regulators generally have limited ability to check routinely on hedge fund activities.

The most interesting discussion of this is actually from the  D.C. Circuit Court of Appeals case (Goldstein v. SEC - PDF file). They point out that even the definition of a hedge fund is notoriously difficult to pin down:

"Hedge funds" are notoriously difficult to define. The term appears nowhere in the federal securities laws, and even industry participants do not agree upon a single definition. ... The term is commonly used as a catchall for "any pooled investment vehicle that is privately organized, administered by professional investment managers, and not widely available to the public."

Hedge funds may be defined more precisely by reference to what they are not. The Investment Company Act of 1940, directs the Commission to regulate any issuer of securities that "is or holds itself out as being engaged
primarily . . . in the business of investing, reinvesting, or trading in securities." Although this definition nominally describes hedge funds, most are exempt from the Investment Company Act's coverage because they have one hundred or fewer beneficial owners and do not offer their
securities to the public, or because their investors are all "qualified" high net-worth individuals or institutions. Investment vehicles that remain private and available only to highly sophisticated investors have historically been understood not to present the same dangers to public markets as more widely available investment companies, like mutual funds.

Exemption from regulation under the Investment Company Act allows hedge funds to engage in very different investing behavior than their mutual fund counterparts. While mutual funds, for example, must register with the Commission and disclose their investment positions and financial condition, hedge funds typically remain secretive about their positions and strategies, even to their own investors. The Investment Company Act  places significant restrictions on the types of transactions registered investment companies may undertake. Such companies are, for example, foreclosed from trading on margin or engaging in short sales, and must secure shareholder approval to take on significant debt or invest in certain types of assets, such as real estate or commodities. These transactions are all  core elements of most hedge funds' trading strategies.

The Goldstein v. SEC case writeup goes on and on about what constitutes a hedge fund. If you're interested and have the time, it's a good read.

Sorry about writing such a long post for such a narrow topic.

So what happened with Amaranth?  Did the SEC miss something here?
The mandate of the SEC does not extend to ensuring that investors do not lose money.
I think this may lead to more regulation of hedge funds.  

Though the FinancialSense.com folks don't seem to think Amaranth is too worrisome.  Something about them not being as highly leveraged as LTCM.


Do you know where it is?  I printed out the article and lost it, but started reading it and got one page in.  I have been looking for it but can't find it.  Can anyone tell me where this article is?  I really want to read how they are justifying LTCM as worse, although the nominal value are different.  What is a 4 Billion loss in 1996 today?

Going to http://minneapolisfed.org/Research/data/us/calc/
I get it's =$5162523900.57, so this would be about equal or slightly worse.  This is purely based on nominal value, but I understand LTCM was leveraged much higher and didnt have the ability to meet margin calls, whereas there is $3B left of Amaranth.  Also Amaranth was big into future spreads which actually spreads the financial waves throughout the system.  Don't forget in options someone wins at the others expense!

I was reading this article.  Dunno if it's the one you're looking for.
No, the one I speak of isn't this.  It was WAY more detailed with discussions on how leveraged LTCM was and compare that directly to Amaranth.  I'm starting to agree.  The problem with LTCM was so much leverage and the forced unwinding of so many positions.  If you figure there are even more hedge funds now, it will take an ever larger failure to unwind things the way LTCM did.  So you can imagine the crash that is coming will be spectacular in size and scope.  We should all be preparing.
the main difference is amaranth had publicly traded (granted marginable) securities whereas merriwether and crew had mostly off blance sheet derivatives
So you can imagine the crash that is coming will be spectacular in size and scope.  We should all be preparing.

I think you are on very solid ground in suggesting that the proliferation of non-transparent hedge funds and derivatives contracts introcduces a level of risk into the financial system that is difficult to measure.

However, in saying there will be a massive crash as a result is wandering off into the land of surmise and speculation. Didn't they teach you about probability and forecasting in thise finance courses?

Everyone is looking at markets and market forces.  Haven't the oil companies been making record profits?  Do they set the price of oil that they sell?  Do they need (possible) military intevention with all these countries nationalizing thier oil production and taking over oil field production?  Who are thier friends in power?

IMHO there is some major arm twisting going on to lower gas prices for the election.  It just makes sense- there is no other obvious reason that I see.

When thing are muddy looking "follow the yellow brick road"...(money)....


The fact that we are moving into the Winter Season with a cheaper blend of Gasoline wouldn't have ANYTHING to do with cheaper gas prices.

Or maybe the fact that we are coming off Summer Drive Time Season, and the demand for gasoline is waning, certainly that wouldn't have ANYTHING to do with lower prices.

Or perhaps the fact that at this point in time, the fires around the world like Lebanon have quieted down so the risk premium on oil has dropped a bit.

No...  I think you are right.  Those sooper sekret shadow government people are manipulating the market to keep Republicans in office.  No possible chance that maybe just maybe natural market forces and seasonal swings could be responsible for lower gas prices, pretty much like they've done for most seasons before this one.  Or gasps could it be that maybe the Republicans are doing something right and transitioning us off a interest rate fueled economy to see if maybe the economy could chug along on its own.

Don't get me wrong, I'm not a fan of the Republicans lately, due to a number of reasons including lack of fiscal responsibility, immigration, and their handling of the War in Iraq, but the sheer blind hatred and demonization on these forums is almost made for TV comedy.

I think people give too much credit to the amount of power these politicians wield.  To accomplish some of the things mentioned in this thread, Republicans would not only have to be doing all this, secretly and keeping it from the Democrats(who have their own resources for keeping tabs on things) who could expose this information for gain for themselves, but the Replublicans would also have to count on cooperation from a myriad of national corporations, and interests, as well as foreign governments, interests and corporations.  The problem with conspiracy theories, is that in order to pull them off you have to tell a whole hell of a lot of people, and then count on all those whole hell of a lot of people to not say anything.

Now given human nature, what are the chances that out of dozens, probably hundreds involved to accomplish this that not a single one doesn't get drunk and say something they shouldn't.  Or that one of the individuals who were trusted now decides the time is right to make a move to further themselves.  Or even that an aid to one of these people picks up on something they shouldn't have and reports it.

Sorry but the probability of this all being a conspiracy is in my opinion slim to none.  Too much control is needed, control which I just don't think is feasible to attain by any one faction of power.  In order to accomplish this, multiple factions of power would have to all be working together with FULL TRUST in each other(something fairly rare in politics), which means most likely the Democrats would be in bed with the Republicans, which means they would be going in KNOWING that they will lose the elections this year, and frankly if that is the case, then why the hell are people stumping for the Democrats.

Sorry but there is a reason why conspiracy theorists on this scale are called crackpots.  They have no appreciation of the amount of social and game theory mechanics which would need to be manipulated in order to come out with a winning scenario on this scale.

Capslock: Don't know if it is accurate, but a nice conspiracy theory none the less.You can also do the same thing if you have access to the billions of dollars of US taxpayer money that somehow vanishes every year (for details read anything by Catherine Fitts).
You're misinterpreting that chart. Futures contracts always look like that, with little volume at first and heavy volume towards the end.

That's because that is a chart for oil to be delivered in a specific month - maybe October. Contracts exist for every month. Back in January, the October contract existed but not many people were trading in it. As the year went by and October approached, it gradually acquired more interest. Then in the past month, with October the nearest month for which contract trading is possible, trading volume is heavy. That's all you're seeing in that chart.

Capslock (or is it slapcock??)... this would be only a short term issue if it is true. Ultimately they would have to deliver the oil to the futures buyer which means buying the physical oil or buy back the contract. Either way in the medium term you would have to see an equal amount of buying in the market.
this administration is a never ending scandal   the american people, the cult of consumerism ,forgets the last one as quick as  the next one comes along  we ( the american people ) have become consumers of scandal i think it is time to re read  1984
But wait. It gets worse...

Bush and co. blowing hot and cold on Iran : he had a lot of people convinced that military action was coming soon. One way or another, it was almost certainly related to the US electoral timetable. If manipulation of the oil price was the chosen mechanism, it has succeeded masterfully. May would have been way too soon to talk down the oil price.

Now I get to thinking : what about that war in Lebanon? The Bushistas push the rather naive, militarily inexperienced Israeli government into a foolish war. Which pushed up the oil price still further, but was never going to last very long...

The higher the gas price, the bigger the electoral bounce when it comes back down. Smells like vintage Rove.

The Israelies are neither naive nor militarily inexperienced, and further, not politicially inexperienced. They have both Parties hornswoggled into supporting their military and their policy of aggression against the Palestinians.I suspect that most of the Mideast conflict could be chilled by stopping the flow of money to both sides from the US. That means stopping foreign oil imports and stopping foreign governments from lobbying Congress and selling Bonds in the US markets

Now that ought to stir up a hornets nest! But it's true nonetheless.

Robert Rapier and OilCEO, in their posts two days ago, said it is primarily supply and demand that sets the price of oil, Coilin and several others disagree.

Ron, my comments are mainly on the price of gasoline. The primary factor, although not the only factor, that affects the price of gasoline is supply/demand. We do not add up production costs, tack on a profit, and come to a price. We watch the price, our competitor's prices, and our inventories. If our inventories are falling and we can't keep up with our production, we raise prices. If our competitors are in the same boat, prices rise across the board. If not, some of our customers go over to the competitors, which draws their inventories down and allows ours to recover. Or, we keep our prices steady and run out of product, or start allocating to our customers.

In summary, we don't look to the NYMEX at all when making day to day pricing decisions. We do use it as a predictor of what prices will do, because what happens on the NYMEX will usually show up on the street, after a time delay. But if gasoline on the NYMEX, today, spiked up by $1/gal, and then back down by $1/gal in a couple of days, it probably wouldn't affect our pricing decisions at all.

this is funny, but seems true. where did you get that?
It was in our local paper on the editorial page yesterday morning.
Contrary to popular opinion oil has never been much of a market, from the beginning it has been controlled by monopoly and oligopoly. In the 30's in the US, the government worked with the big oil companies, as it did with many large companies, to create a steady as opposed to volatile supply and price, and basically began helping big oil destroy the independents.(For a great history of this process see Lawrence Goodwyn's  Texas Oil, American Dreams)

With a promise of steady supply and prices, the Feds basically let big oil run the show and it worked well enough until US peak and the unavoidable importance of foreign oil. Volatility reentered the oil system in 70's and 80's and now once again today. Oil is now an essential commodity controlled by a few large actors who can at times work together or not. The old Big Oil companies have lost much of their power and are on the way to being valued purely as distribution companies.

The recent volatility has been a mixture of supply and demand, market manipulation by large actors, and arbitrage -- the present structure of oil trading makes it particularly attractive to arbitrage.  So, its a mixture of things that sets the price of oil today, but the one thing it's not is the mythical markets of your Econ 101 class.

Volume of futures trading, in a sense irrelevant for trying to gauge impact on cash price oil as roll-overs are responsible for the bulk of volumes. Hence by far more important to look at open interest, currently 1.21m contracts, and in particular the changes. So a decline of say 100k in open interest, one can assess as having a selling impact similar to slightly more than one day in oil supply.
I just worked up the following as a short essay for my blog (to be posted shortly), but didn't feel it was long enough for a TOD story. So, I submit it as a Drumbeat entry.

There are certain alternative energy technologies that I believe will play an enormous impact in our future. Heading that list is solar energy, followed by wind power, biomass gasification, and possibly cellulosic ethanol. Most alternative energy sources that I think have a real chance to make an impact involve electricity generation. Therefore, in order to really impact the transportation sector, we need to move toward electrifying more of our transportation options.

I was recently asked what kind of cars we would be driving 100 years from now. Without hesitating for a second, I replied "Electric cars." A key reason we aren't driving them now is that the range and convenience is not what we are accustomed to with internal combustion cars. Therefore, not only are the alternative energy sources themselves important, but the key to making them viable for personal transportation is developing energy storage devices that improve the range. Wind power is great, but we have to develop better ways of storing the power for when the wind doesn't blow.

So, I was very pleased this morning to read the following story at CNN.com:

Gentlemen, stop your engines

It describes an innovative approach to energy storage, and one that could potentially "could blow away the combustion engine." Some excerpts from the article:

Forget hybrids and hydrogen-powered vehicles. EEStor, a stealth company in Cedar Park, Texas, is working on an "energy storage" device that could finally give the internal combustion engine a run for its money -- and begin saving us from our oil addiction. "To call it a battery discredits it," says Ian Clifford, the CEO of Toronto-based electric car company Feel Good Cars, which plans to incorporate EEStor's technology in vehicles by 2008.

EEStor's device is not technically a battery because no chemicals are involved. In fact, it contains no hazardous materials whatsoever. Yet it acts like a battery in that it stores electricity. If it works as it's supposed to, it will charge up in five minutes and provide enough energy to drive 500 miles on about $9 worth of electricity. At today's gas prices, covering that distance can cost $60 or more; the EEStor device would power a car for the equivalent of about 45 cents a gallon.

Of course the key there is "if it works as it's supposed to." A patent has been issued, so it's got some credibility. During my recent conversations with Vinod Khosla, one thing we agreed upon was that energy storage devices have great potential for revolutionizing the world. He indicated that he is invested in this area. In fact, the article says that his firm, Kleiner Perkins Caufield & Byers, is backing the technology. Here's hoping they are right about this one.

"begin saving us from our oil addiction"

What oil addiction?  It seems quite apparent that the addiction is to motorized individual transport units (mitu, pronounced meetoo).

'Not an Oil Addiction'

Not when you look at all the things we depend on petroleum for.  Cars and SUV's make an easy target, and are, in fact, a fine example of our Oil overconsumption.. but I also hear all these 'Anti Happy-motoring' complaints as the most obvious social critique available... being easily annoyed by our neighbors or our own daily trudge to work.. and smacking each other around, often involving some class implications, in either direction. Rich-callous-Bashing, Poor-idiots-bashing.

But it is the oil that grows and carries our food, builds an unsustainable road system, makes tons of chemicals, containers, etc..  It reaches far into every corner of our activities, and when it withdraws, the cadillac-commute will not be the only casualty.

We're also addicted to fresh fruits all winter, to having lights and power all night, to having flights available and callers waiting for your order.  Spare parts that get shipped overnight from anywhere to anywhere for anything you own, and an apparently unlimited number of offers for credit lines to buy it with.  

Truly a house of cards, with a couple cars out front..

It's almost certainly based on a supercapacitor, so why are they so tight-lipped about it?
Because the devil is in the details, and once patented, those details will turn into immense wealth for whomever holds the patent... if it works as expected.
Robert, I certainly hope the new electrical storage technology is real and economicially viable too. If it works it will possibly be the salvation of the environment and the economies of the world.
   Texas and the Great Plains, and the Great American Desert are full of unused wind power sites. Energy storage is a problem that can be solved by recycling the water used in hydroelectric. Or, we could use the extra electric for doing work not crucial that can be done intermittently-my thought is desalinization of brines in subsurface formations. The areas most prospective for wind power and solar power are short of fresh water, and the main cost in reverse osmosis is pumping water, which is easily stored.
Not much available about and nothing by EEStor Inc.  

Perhaps they are being careful and appropriately hopeful -- but the technology is apparently based on capacitor storage, and if it is a breakthrough, it is in the realm of improved materials and process, not new science.  

Not that that's bad -- they are not promising perpetual motion, or anything. ******
http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&a mp;cid=1156716608555&call_pageid=968350072197&col=969048863851

EEStor Inc. in Cedar Park, Texas, doesn't call its technology a battery -- patent documents refer to it as an ultracapacitor-based electrical energy storage system (EESU) that is ideal for electric vehicle propulsion, electricity grid applications and mobile devices, such as laptops and MP3 players.

Based on past investor presentations, the company claims its technology will increase the run time of a laptop or music player four-fold compared to lithium-ion batteries. It will recharge in minutes and can be charged and discharged almost infinitely without degradation.

It's also based on non-toxic, inert materials such as barium titanate powder.

"None of the EESU materials will explode when being recharged or impacted," the company says in patent documents, adding that the technology "does not have any material that is explosive, corrosive or hazardous."

Since The Star first wrote about EEStor in early March, the blogosphere has been buzzing with speculation about how this technology could change the world or, according to the sceptics, how the company is a scam.

EEStor continues to operate in "stealth" and has yet to put up a Web site. Investors, including high-profile venture capital firm Kleiner Perkins Caufield & Byers, remain equally secretive. But behind the scenes materials and production testing is ongoing and a big announcement is expected this year.

Khosla was not specific about which storage technology he was investing in, but he described as "high risk, high reward." I wonder if this is it.
Speaking of Khosla, it might indeed be wise for him to diversify:

U.S. sees delay in big rise in alternative motor fuels

Ethanol production growth can't even keep up with increases in new cars and vehicle mileage, Khosla or not. The DOE only came with the report after a judge ordered them to. Otherwise we'd still be in the dark. In a country so focused on ethanol, it's quite a government statement.

By 2030, we'll be so deep in a crisis, all bets are off as to how much fuel of any kind will be needed at all. Or new cars.

Congress passed energy legislation in 1992 mandating that 30 percent of the fuel used to run U.S. cars and trucks by 2010 come from ethanol, natural gas, hydrogen, electricity or other replacement fuels.

The Energy Department said that goal won't be met, as replacement fuels now supply only 2.5 percent of total motor fuel used, and is proposing to extend the deadline to 2030.

"The amount of replacement fuel used, as a percent of total motor fuel consumed, has essentially been flat for the past decade despite an increase in use of alternative and replacement motor fuels," the DOE said in a notice published on Tuesday in the Federal Register.

"This is because the growth in replacement fuels has been matched by the growth in petroleum motor fuels," the department said. "Expanding production of replacement fuels much beyond 3 percent (of total supply) by 2010 is unlikely."

In order to meet the goal for 2010, when U.S. motor fuel demand is forecast to average more than 12 million barrels a day, the department said replacement fuels would have to total over 3.7 million barrels a day.
However, current U.S. production capacity for ethanol, which is the most prevalent replacement fuel, is only about 313,000 barrels a day...

New ethanol plants are coming online, but output would have to soar to 60 billion gallons a year by 2010 to replace 30 percent of petroleum-based motor fuel supplies, the DOE said.


Do us a favor and post the total $ amount allocated by the US fed government for alternative fuel projects vs. DOD spending.

I see no link to the article.
And where would you suggest I find that?
I am at work with limited time. Can you give a quick summary of the point?
Sure thing.

Federal funding allocated for DOD programs (irrespectuve of commitments to Afghanistan/Iraq) is vastly diproportionate to that of alternative fuel development.

As such, if the US government really intended to commit to making alternative fuel a reality of x percentage on x timeframe as Congress has instructed, then the assistance allocated -either direct or indirect- to research, development and execution, would be substantially more.

I touched on the subject of priorities many times i.e. if the government really wanted to secure a modicum of domestic energy security (let alone independence) than it wouldn't be doing such a half-assed job.


There's no inherent reason why the federal government has to be responsible for everything. Private industry has considerable incentive to develop alternative fuels and engines. If and when oil production begins to fall, anyone with a good alternative could become the GM of the 21st century.

OTOH there's not a great deal of incentive for private companies to go off and attack countries all over the world in the hopes that it will make Americans safer. Not a lot of profit in that.

Traditionally, the government is supposed to be there to do the things that private industry can't, like national defense, or universal welfare. Developing alternative fuels is not inherently a government function. Granted, in this day and age government does a lot more than the minimum, so maybe you could complain that they're spending money on the space program or some other extraneous function. But national defense is a pretty core governmental responsibility, probably the most fundamental thing it does.

As far as the DOD allocation goes, it's disproportional to pretty much anything in the federal budget, isn't it?  No surprise, that, of course..  'Security through global Insecurity'.. that's our motto!

But Halfin, I do think it's in our national interest to use government to pull ourselves through such a massive sea-change in how we get through the day as regards energy-policy or alternative directions.  It is simply a form of leadership (hopefully inspired through us all, as represented by our members of congress) to incline us towards the place we need to go as a society. I don't see business, which is naturally more self-interested than Societally Motivated to initiate such movement.  They'll go towards it if there's a financial reward, but that's why there's so much junk food out there.  It earns great profits, but isn't really what we need, is it?

In the meantime, the money that this government does spend on defense doesn't really look like it will accomplish it's goal either.. does it?  Fundamental, as in fundamentally flawed..  the best defense at this point might be in using that money to get a massive solar industry up and running..  and making sure we are building real relationships in the Middle East, getting people fed and educated..  imagine.

Bob Fiske

"You may say I'm a dreamer, but I'm not the only one."

- that's why there's so much junk food out there.  It earns great profits, but isn't really what we need, is it?

Hold the phone brother - you have this one flipped.  The reason we have so much junk food is not because of private industry.  It's because people in America choose to eat unhealthy and choose not to teach their kids to eat healthy.  Business will provide what people demand.  

I think the answer lies in between.  People have always wanted tasty food that wasn't exactly healthy, but in the interests of extending shelf life and lowering costs, the food industry has made such food even worse.

My wife and I recently watched Drs. Roizen and Oz appearing again on Oprah (a hazard of working at home :-)).  They wrote 'You: The Owner's Manual.' Roizen listed five quick no-nos:

Sugar, Enriched Flour, High Fructose Corn Syrup, Animal Fat, Hydrogenated Oils/Trans Fat

Sugar has been with us a long while. Enriched flour lets you bake fluffier, but has lost most of its nutritive value, so they must enrich it. HFCS just seems to be a cheaper sweetener than sugar, but dampens the leptins that tell you you're full.

Animal Fat has also been with us a long while.  Roizen says they hydrogenate good oils to increase shelf life, but hydrogenated oils become more rigid, like bad oils and fat.

It is tedious trying to find foods without any of these ingredients.  We just walk the aisles putting stuff back.

You might try subscribing to Nutrition Action Newsletter, put out by the Center for Science in the Public Interest.  They give you the straight scoop on what's in the food and the industries' attempts to con you into eating crap. Also, The Omnivore's Dilemma has some great stuff on our industrial food system.
Thanks for the lead. I also looked at the Healthy Chef Alex site, by Morgan Spurlock's girlfriend from Supersize Me, but my wife didn't take to it.


I read the first few chapters of The Omnivore's Dilemma, but decided to go back and finish Collapse first.

Do you have a Trader Joe's?  They seem to make pretty good choices, so I can be lazier as a shop.

(I think manufactured foods, with transformed chemicals like the trans-fats are the worst.  Everything else in moderation, and of course excercise to keep the body burning its fuel.)

A good mountain bike ride today made a big plate of chips and quacamole "replenishment" and not excess.

No, there are some good farm stands between here and MD, though, so I stop and buy fresh fruit and veggies.

My exercise yesterday was stocking a ton of pellets into my basement. I was going to get all three tons now, but our dealer no longer delivers.  He says that gasoline prices are too high. So we borrowed a truck, the dealer forklifted a pallet on the bed, and we set off.

Big mistake from a physics standpoint, as a ton of pellets will continue forward when you tap the brake. We pulled over, I spread the bags throughout the bed, continued home, carried them into my yard, and then had my stepson hand them down as I carefully piled them under the staircase.

The dealer was telling my wife that he now gets suspicious when anyone orders more than four tons. He was buying pellets on EBay, found himself high bidder and realized he had sold those same pellets to the EBay seller.

So speculation is driving up the cost of wood pellets.

I don't think I do have it flipped,

the choosing and the teaching of Americans towards their food choices are spoonfed through a massive system of psych-propaganda that has as much to do with the purchases of just unbelievable quantities of junk and poison as the ideal of 'let the market decide'..  like oil, these behaviors are manipulated by the industry to preclude healthier choices, and they become both Habitual and Truly ADDICTIVE, both psychologically and chemically.. (Sugar, Caffiene, Niccotiene (it's not just for breakfast anymore))

How can you choose to teach your kids to eat healthy when you can still recite the contents of a BigMac faster than the four, basic complete protien groups?  (I don't even know if it's four myself.. back to the Diet for a Small Planet)..

'Two All-beef patties, Special Sauce, Lettuce, Pickles, Cheese (food product), Onions on a Sesame Seed Bun!'

Still got it!

- Obey your thirst

.. adding to this, of course is the continual manipulation of the marketplace to undermine or simply remove the options from the shelves, like the buyup and dismantling of the Trolley Systems, in order to force the public to move towards autos.
Halfin you're missing the point.

The US government has stated (if not legislated) that x amount of fuel must be of alternative origin by x date.

Said agenda has nothing to do with what the gov is or is not responsible for in relation to free-market principles - it simply is.  In other words, the government tasked itself and failed as evidenced by the recent DOE announcement that, "Sorry folks, but it looks as though we just weren't up to it".

So I ask you, "Did the feds even really try?  Was alternative fuel a true priority?"

I say no, for if they had, you would have seen more than (5) F-22s worth of money allocated to the task. (Matt had a good arty on this yesterday).

And as far as national defense is concerned -fuel- not planes, not tanks, not battleships; fuel is the most critical component of a nation's military - the greatest strategic asset, the holiest of holies in all warfare past and present.

I guess you may not understand supply and demand. When supplies are tight prices are higher. Ethanol is no different from any other fuel. His investment may do well.
Rather heavy bit of BS here.  Sure, a cap may have nothing in it that will explode all by itself-EXCEPT THE ENERGY IT STORES.  Everybody who has fooled around in a lab knows caps can and do explode with a big bang and splatter stuff all over.

So many kW-hrs/liter = so much bang if shorted.  Real simple.

One can hope its not like this battery claim

Portable Electronics Battery
A battery based on the high stability of a class of the negatively charged hydrino hydride ions may have an unprecedented high voltage with the advantages of much greater power and energy density. BlackLight has analytical data identifying extremely stable negative ions, the hydrino hydride ions, which can stabilize positively charged ions in highly charged states. The extraordinarily stable hydrino hydride ions may balance the charge of the positive ions without reacting with them and function as an electrochemical compound of an advanced battery. At least a 10-fold increase in performance relative to current battery technologies may eventually be possible using BlackLight Chemicals.


And a 'vintage' page from when the press was repeating claims about a device the size of a briefcase that could power a car for 1000 miles


Hopefully EEStor is less vaporous.

Someone asked me about Blacklight power a few days ago. I didn't know too much about it, but from the description it sounded a bit shady. I haven't had time to dig into it, but the way it was described to me is that hydrogen collapses to a fractional orbital state. Given that this conflicts with our understanding of quantum mechanics, I tend to be skeptical. But I am going to get around to digging into this.
Definitely shady, as Eric's post makes clear.  Their patents have been revoked.
Back when the patent process was going forward, they got all kinds of press about how wonderful it was all going to be.   Not a single author of the positive press (that I am aware of) has re-interviewed Mills (and Co.) has done another interview to ask "so... where's that battery"...as that was one of the only items they were giving a release date on.

When EEStor ships - great.   Till then, it is somewhere between the low cost mass produced stirling engine and hte perendev-type motors.

I have been following BLP for a very long time.

He has many investors and will not pre-release any data that would allow him and his investors to lose the 'game'.

Yet many have observed the results he claims to obtain and have stated that they do exist.

Since he eschews SQM(standard quantum mechanics) and instead believes that CQM(classic quantum mechnics) is the basis of understanding his 'orbitsphere' conception of the eletron in the hydrogen atom.

So far his math appears dubious but I suspect this is his desire.

Math and detractors mean absolutley zero IF he is able to show sucess with reducing the ground state of the hydrogen atom and releasing plasma and/or energy be it heat or whatever.

Only time will tell.

The reality of SQM is that 'there is no reality'. Read Shrodingers "Cat in the Box" explanation.

Even Einstein did not favor SQM. The whole question tends to revolve then bascially as to whether and electron is a wave or a particle. The accepted explanation being that it can be either.

It changes to a particle 'when it is observed by intelligence' but travels as a wave. Many experiments have been conducted pointing out the enormous disparity it then has with 'common sense'.

So I say then that 'we have no idea what reality is'.
It appears that electrons (and photons as well) can communicate across the universe immediately , thereby traveling faster than the speed of light. Impossible but yet the experiments seem to prove it.

Einstein called it 'spooky action at a distance'.

The study of the rapidly changing world of quantum mechanics is very fascinating and filled with many unexplainable effects.

So therefore why can't BLP and its concept be valid? It can IMO. The detractors are the die hard adherents of current thought and they fight against it hard , yet don't seem to disturb Mills in any event.

Note: Please don't try to argue the above since I added it without backgrounding it at all, just from memory. Go read the forum for yourself. It on Yahoo


So remind us again, why is he still on the grid?
"Remind me again" why I even take the time to post to this forum.

Oh...its because there are asshats who make the above type of remarks. Makes my day. Was there something serious I missed in your remarkable one-liner?

The detractors are the die hard adherents of current thought and they fight against it hard , yet don't seem to disturb Mills in any event.

Show me a working battery.   Show links to actual progress on a working battery.

Show me a current interview with Mills where he discusses progress on his battery.

And how do YOU know what disturbs Mills?

Take a look at the "Active Agent".  hydrino hydride

Hydrogen Hydroxide = H2O

Di-Hydrogen Oxide = H2O

If Calcium Hydride = CaH2

What the Hell is Hydrino Hydride?  

A made up name.

The Blacklight Power folk have actually made up their own physics:


But Mills, the guy who came up with the theory, is not even a physicist.  He's an MD, I believe.

Mills, the guy who came up with the theory, is not even a physicist.  

I'm not willing to dismiss the man based on that.  I am willing to point and ask "where is your product" however.

It has been debunked on PO.com a while ago, it's based on Star Trek physic.
The 'debunking' is showable by the lack of product and lack of press about the product.

If they were able to show progrss via product or more interviews about how this product will be the techno-solution.

Not to mention the US military 'needs' good high power solutions.   Such a need would be good for the bottom line.

And a 'vintage' page from when the press was repeating claims about a device the size of a briefcase that could power a car for 1000 miles.

Do you have a date for that archived page? I see "2002" as part of the link, and I am guessing that's it. If I write about BlackLight, I want to make a note of this.

EHydrinos combined with highly oxygenated matter would form the basis of batteries the size of a briefcase to drive your car 1000 miles at highway speeds on a single charge, without gasoline.

(Now, where is the US military grant money to get such batties into the hands of the troops?)

"I'll have demonstrated an entirely new form of energy production by the end of 2000," Mills responds.   (Yea...and the battery is where again?)

I've seen the 2007 date mentioned, but I can't track down the source document....

Friday November 4, 2005
According to Prof Maas, the first product built with Blacklight's technology, which will be available in as little as four years, will be a household heater.

And http://www.theregister.co.uk/2005/11/08/letters_0811/
how do you convert them back to plain old hydrogen atoms?

how do you convert them back to plain old hydrogen atoms?

That was the question I kept asking. The answer I kept getting is "the hydrino is the most stable state." So, I responded with "then why do hydrogen atoms exist?"

I read the Wikipedia article, and I see a big part of the problem. The jargon is difficult enough to follow, that it would be easy to run a scam like this, because very few people are going to be knowledgeable enough to rebut it. But sooner or later, if they promise a product and can't deliver, you know there is a problem.

That was the question I kept asking. The answer I kept getting is "the hydrino is the most stable state." So, I responded with "then why do hydrogen atoms exist?"

Exactly.  The Universe is wanting to be in a low energy state.    I have yet to see someone explain the joules of heat 'released' from the 'hydrino production' and I've yet to see the joules of heat absorbed when a hydrogen atom goes from 'hydrino' back to hydrogen.

Think of it.....global warming solved.   Hydrinos made in space to power all that space-stuff (mining, making stuff, destruction of toxic waste, general spacing out) shipped back to Earth where they absorb heat to become hydrogen, then reacted with O2 in the fuel cells to make water, the water shipped into space to make H2 then Hydrinos.

Might as well close down TOD becasue Oil is no longer needed!  

I have yet to see someone explain the joules of heat 'released' from the 'hydrino production' and I've yet to see the joules of heat absorbed when a hydrogen atom goes from 'hydrino' back to hydrogen.

Well as long as you are happy with an "explanation" rather than laboratory experiments and evidence, it is easy to remove your "I've never seen someone explain" problem. So here it goes:

The Universe as we know it is divided into the Core Beliefs Zone and the Reality Zone. Between the two zones there is a third, invisible zone known as the Forbidden Zone.

The Core Beliefs Zone keeps all thoughts carefully containerized within it.

Sometimes one sees a replication in the Reality Zone of imagery that first appears in the Core Beliefs Zone. Some scientists speculate that beliefs and wishes can tunnel through the Forbidden Zone and become actualized in the Reality Zone.

Observation of the hydrino has been well documented in the Beliefs Zone. Schrodinger's equation demonstrates that wishes can occasionally tunnel across the Magic-is-Forbidden Zone and reappear in the Reality Zone. Hence it is sound logic to expect the hydrino to make sporadic appearances in the Reality Zone with it releasing many joules of free energy as it does so. You need to only be quick enough to spot them. Are you?

Now, unless you lie, you can never say you "never" saw somone give you an explanation. :-)

I think it is U.S. Patent #7,033,406, issued April 25, 2006.

Electrical-energy-storage unit (EESU) utilizing ceramic and integrated-circuit technologies for replacement of electrochemical batteries

An electrical-energy-storage unit (EESU) has as a basis material a high-permittivity composition-modified barium titanate ceramic powder. This powder is double coated with the first coating being aluminum oxide and the second coating calcium magnesium aluminosilicate glass. The components of the EESU are manufactured with the use of classical ceramic fabrication techniques which include screen printing alternating multilayers of nickel electrodes and high-permittivitiy composition-modified barium titanate powder, sintering to a closed-pore porous body, followed by hot-isostatic pressing to a void-free body. The components are configured into a multilayer array with the use of a solder-bump technique as the enabling technology so as to provide a parallel configuration of components that has the capability to store electrical energy in the range of 52 kWh. The total weight of an EESU with this range of electrical energy storage is about 336 pounds.

IMO, most patents have little value. That is, there are very few fundamental breakthrough-type patents. Most fields of endeavor typically have just a handful of patents (at most) which revolutionize the field and set the stage for inter-firm competition. So I would not bet the farm on this patent just yet. That said, I agree with you and Vinod Khosla that energy storage is a huge area ripe for innovation.  If we had much better energy storage solutions, all of a sudden intermittent energy sources like wind and solar would become much more valuable.

IMO, most patents have little value. That is, there are very few fundamental breakthrough-type patents.

I agree. I have seen some real crap get patented. Most patents never turn into useful products. I think companies are quick to patent a lot of ideas "just in case."

For example, one of my patents is for a novel butanol unit. It is a decent step-change from the status quo, and I demonstrated the concept in a pilot plant. But it would be too costly to retrofit an existing unit, and nobody is building new units because the profit margins aren't very good. So, the patent may never be applied commercially. However, if my (former) company wanted to build a new butanol unit, they would no doubt use it.

U.S. Patent #7,033,406 = a capacitor with a ferroelectric dielectric composed of barium titanate (BaTiO3). Ferroelectrics have relatively high dielectric constants but many lose their capability above the Curie point. BaTiO3 has a Curie temperature of about 126 degrees Celcius (IIRC --Damn where did that come from?)
RR, some back of the envelope figures;

$9 of electricity @ $.17 KWh = 52 KWh stored.
to go 500 miles = ~ 10 miles/KWh

If the capacitor weighs 336 lbs, and stores 52 KWhs, it requires 6.5 lbs/Kwh.

My eGO electric scooter can travel about 20 miles on a .5 KWh charge, or about 40 miles/KWh. The Scooter weighs about 120 lbs, and the batteries are about half the weight (say 50- 60 lbs? I'd have look that up.) They hold 1.5 Kwh, but since they are sealed lead acid batteries they should only be drawn down 35%, or .5Kwh. (that's another advantage of a capacitor!)

The lead acid batteries then weigh ~ 100 lbs per usable Kwh, as opposed to 6.5 lbs/KWh with a capacitor (if it works). Plus, supposedly unlimited charges (as opposed to 500 - 1000 or so on lead acid, if you don't over draw them)  

A vehicle would have to be very small, light and aerodynamic to get 10 m/kwh. But it would be a huge improvement over batteries!

Jim, where did the 10 miles per kwhr figure come from?  The figure I have seen is around 5.

For instance, Tesla gives 215 watt hours per mile, including all losses.

There is also the Finnish aluminium battery, but it looks like a scam to me. They have a web site where you can wire them your investment.
Back of the envelope:  

Driving 500mi takes about 8hrs.  Maybe you'd need to average 10hp for 8hrs.  I'm coming up with 215MJ of energy you'd need to store.

5min is roughly 100 times less than 8hrs, so you've got to get that energy into that storage device 100 times faster than you take it out.  With no losses, I'm coming up with a requirement to charge it at 717kW for 5min to put in 215MJ.  

So what voltage will this run at - maybe 300V?  That's 2.4kA for 5min?  I don't want to be around it.  

I apologize if my numbers are wrong, but I'm taking a quick break from boring paperwork and don't have much time.

The thing about gasoline/diesel is that you are not storing energy in anything when you fill up - you are just adding material with the energy already stored in it, which takes little energy or time.  I'm skeptical about any transportation scheme that requires storing such quantities of energy in real-time.

Something smells real fishy here:   According to one of the links givin.   They were able to get 54KW into the thing in just a few minutes.  Thats 250 amps @ 220 volts.  Depending on the voltage used for the thing, it's going to take one heck of big charger to put out that kind of power.  I'll have to see it before I'll believe it.
Here's the math.

52 KWh/15 minutes = 200KW/hour (200,000 watts)

200,000 w= i(220v)
i=909 amps.

Let's just round it up and say charging requires 1,000 (one thousand) amps.

WOW! (My mother in law just upgraded her large, feature laden house to a 200 amp circuit.) (the average household uses 20 KWh/day.)

This smells really fishy!

Lets' say you had a 50 amp, 220v circuit, and hooked up the car. That would be 11,000 watts/hour (a hellova big load!). And it would still take nearly 5 hours to recharge.

Since that would be unacceptable to many people, it is obvious that they lied by saying "15 minutes."

And if they lied about something as basic as this, then why wouldn't they lie about their basic premise? (i.e., having a capacitor that could handle such a load without danger)

Too bad it seems like BS. I would like to own one if it worked.


I should read more closely. It said FIVE minutes, not FIFTEEN.
Therefore, triple the amperage.

600 KW per hour!

3,000 amp fuses, coming up! what household can afford to be without one? Every house with it's own, dedicated high power line and transformer the size of a van!

(What absolute, unadulterated horseshit!)

Thanks to all who have been doing the calcs. This is a bit outside my expertise, so critical analyses by those who know more about this area are much appreciated. It helps put things a bit more in perspective.
no one is suggesting home charging in 15 minutes.  What they are saying is: it can accept high inputs from regenerative braking (unlike the NIMH batteries in Prii, which currently waste some energy); and fast charging could be done at public stations, probably through inductive charging.

At home you'd probably have a 220V circuit, with a 60 amp limit, for a roughly 12kw limit, so charging would take about 4 hours.

How long does it take to charge?  "About 7 seconds: the time to plug it in at night, and pull out the plug the next morning" - Burt Rutan, the aircraft designer who created the first privately funded manned space vehicle.

What are the natural steps in EV connector sizes?

Over here in Sweden I recon the euro standard 380-400V 16A three phase outlet to be about right. Most services can handle at least one such additional load, 2.5 mm2 wiering is cheap, it is not cumbersome in size and it roughly provides for the equivalent of one liter of gasolene per charging hour.

Ok for a plug-in hybrid or electrical scooter but probably not for an EV only wehicle.

That would give you 6 KW, which would allow about 30 miles of driving range per hour of charging.

The average US driver drives an average of about 30 miles per day, so would only need an hour per night.  If you had a 52 kwhr battery, you'd have about 250 miles of driving range, which you would replenish as you used it, but you would rarely use the full charge. A full charge would take about 8 hours.

Again, as long as the car's range is long enough for your daily needs, and the charging can take place overnight, it doesn't matter how long the charge takes.

Here's a link to the cool Dynasty electric cars. They are modest little NEVs, limited to 25 mph in 35 mph zones, max.

And, they get 5 miles/KWh.

Compare that to the supposed 10 miles/KWh claimed by EEStor, which supposedly "drive like a Ferrari" and will replace "300 horsepower brutes"

It would be cool if it works, but I'm skeptical.

I think the CNN article assumes 100 kwhrs, and 500 miles, or 5 miles/kwhr.

Unlike internal combution engines, electric motors get more efficient as they get larger, so I think it's possible that a substantially larger car could get the same "MPG".

That's one reason why Tesla is starting with a sports car, because a big electric motor has that kind of synergy.

sqrt(3) x 400V x 16A = 11 kW
sqrt(3) x 380V x 16A = 10,5 kW

A litre of petrol have about 10 kWh of chemical energy but the converion to mechanical energy is less efficient then DC-conversion, charging the battery, drawing on the battery, power converion for the electrical engine and losses in the electrical engine. But a litre per hour is a nice round number over here and I like having some margins in my statements.

3 phase, huh?  I haven't used it, so I didn't have an intuitive feel for it - sounds like it's in effect 3 lines, with an RMS (root mean square) adjustment because it's AC).

Would it be fair to say that a very efficient petrol vehicle would be expected to get about .04 liters per KM, or 25 KM/liter?

Tesla says that they use 134 watt hours per KM after accounting for all losses (conversion, etc), which suggests about 75 KM per 10 kwhr.

So, this level of power would appear to be equivalent to about 3 liters of petrol per hour.  You could add a margin, but you probably should do so on both sides of the comparison, so it would be a wash.

The reason for this result is that a petrol engine is typically only about 15% efficient, versus maybe 75-80% for a good  electric powertrain.

I looked into this 6 or 8 months ago. A couple of things of interest. Firstly, the reason they get so much capacity is because of the voltage the capacitor runs at (3000v). This is going to need some serious charger and safety protection. Secondly, the voltage of capacitors drops as they are discharged. This will require some fancy (read expensive and potentially heavy) electronics because most motors require constant voltage.
Robert .. ultracapacitors ..

MXWL = Maxwell Technologies

I agree with you on electric transport .. sometime
in the future, but it is a hugely disruptive
technology and the current oil/auto boys will
fight it tooth and nail every step of the way ..

Back in the mid 1990's Solectria Co had a regular
looking sedan that could get +250 miles on a single
charge .. Google "Solectria Sunrise" ..

Triff ..

Back in the mid 1990's Solectria Co had a regular
looking sedan that could get +250 miles on a single
charge .. Google "Solectria Sunrise" ..

I am looking into this. Do you remember what happened to it? That's a decent range, especially in the mid 90's.

As far as I know nothing happened to it.  Solectria makes them primarily for fleet customers.  I am pretty sure Solectria is still around, and you may be able to purchase a car from them if you want to.  The problem is the cost.  

You can also get a conversion for a Geo/Chevrolet Metro sedan version from Electro Auto (electroauto.com).  The reality is if you use NiMH or Li-Ion the range on electric cars is already acceptable.  It's not as high as an ICE, but still quite adequate for all around town driving.  

The big problem with electric cars right now is Lead Acid batteries weigh too much and don't hold enough charge.  In my opinion we don't need any major breakthroughs for electric cars to become viable, all we need is for Li-Ion batteries to come down in price.  

IIRC Robert did some research on termite guts and ethanol.  The story has been continuing I see:

Termites Could Eat into Oil's Bottom Line

... though perhaps he will not appreciate the adversarial tone of that headline ;-)

You are correct. Thanks for posting this. As I have indicated before, I wasn't too successful because I had a hard time keeping the microorganisms alive outside in a bioreactor. But I think you could find a great template organism for a bit of genetic tinkering inside a termite gut.
Robert, what about the humble cock-roach? Do they use the same set of enzymes to digest cellulose? Will not cleaning my kitchen save the world?*

* the last sentence is a joke, you humorless bastards! But the question is serious.

Cockroaches were one of the possibilities I considered at that time. I ultimately decided on termites because of their efficiency at digesting wood. I just couldn't think of anything else that can actually eat a house. But cockroaches certainly might work.

Our primary source of microorganisms for our bioreactors came from cow's stomachs. They are also very efficient cellulose digesters, but not as efficient as the termite.

   But considering American eating habits, cow stomachs would provide a lot more easily available enzymes. I just hope we are not looking at peak menudo or hotdogs!
Peak Menudo...damn, that's funny.
Please note that the sexy article on termite bioresearch was written by a VP from the company doing the research.
Re: Approval At the Pump

This surprised someone? I mean, its the exact same thing that happened to Carter. Economics and Politics both assume that people are rational. The thing is, they really aren't much of the time. We have these pesky little things called emotions that get in the way.

I read somewhere that 10% of voters voted on basic principles, 40% voted their pocketbooks, and the rest voted more or less at random (I like his looks; his wife is classy; I'm pissed off because of the drought, etc. etc.)
This isn't the first time something like this has been posted, and I still disagree with it.  If you look at the graph the correlation between Bush's approval rating and oil prices is weak.  Bush has been in a constant decline since after 9/11.  Oil prices have fluctuated a lot, and really are not reflected in Bush's approval on a constant basis.  
Soft market teaches flippers an ever-so-humble lesson

Investing in real estate looked so sexy. Like the tech-stock bubble that turned college kids and housewives into day traders, the real estate boom turned insurance brokers, doctors and bicycle mechanics into real estate flippers, who would buy and then quickly sell homes for easy profits.

Now those profits are shrinking fast. Nearly one in five flippers who sold from April to June actually lost money on the deal, the highest level in 2½ years, according to HomeSmartReports.com, which today will release a report on flipping activity in 147 metro areas.

I hear the old "flipper" theme song as I read that ;-)
Speculative "flipping" should have been taxed to a degree sufficient to make it unprofitable from the very beginning.  Since "flipping" helps raise prices artificially, it constitutes a form of wealth extraction from those who are forced to buy houses at these inflated prices so as actually to live in them.  I think one could make a strong case that "flipping" is thus a form of theft.  Certainly, it is a parasitic form of wealth creation.

Preventing "flipping" through taxation would also have had the salutary effect of making the current housing bubble much less severe than it actually is.

If it is not your primary residence I think the income is taxed as short term capital gains, which puts it about as steep as anything in the US.

As far as non-productive ... I know a guy that flipped one and made money, went into a second and is looking now for renters.  I suspect it's a renter's market out there.

The thing is, he and his wife walk into a place and see what adds value.  "Blow that wall out, put in a door there" kind of thing.  That's not something I can easily see myself, and maybe others can't either.

(This is only valuable because houses built 20-30 years ago were built for a different lifestyle:  small kitchens,  separate formal and informal dining areasm etc.  Now a modern, and higher value, house has the flowing kitchen -> informal eating -> family room.)

Read this one.

Confessions of an Ex-Mortgage Lender

"But ask Ted Janusz, who spent an interim period of his career learning the ins and outs of mortgage brokering as a loan officer in Columbus, Ohio, and he'll admit that what is really going on here is a game of subterfuge being played at the expense of borrowers with low credit ratings."

"The strategy of lenders, he learned, is to maintain an uneven playing field with their clients. "The average person only gets a mortgage every seven years. How can you become good at something you do every seven years, especially if you're dealing with somebody who knows all the ins and outs and is doing this several times a day?" he recently told BusinessWeek.com. "

I read this.  That statement you quoted is the same one where I read it and said WOAH. It made total sense to me.  Become friends with a really good mortgage officer, preferabbly the VP like my Step Dad did.  Worked out well for them I suppose.  

Sure, an inside connection can be helpful, but my friend got a "family referral" and still the guy was trying to screw him.  Extra .5% on the rate, and outrageous fees.

The best way to deal with mortgage brokers is to get 3-4 quotes from different lenders.  Get all the information up front.  (They are required by law to make a good faith estimate)  Play them off each other.

And remember - it's all negotiable.

"what is really going on here is a game of subterfuge being played at the expense of borrowers with low credit ratings."

Another key component is not holding the note, but passing it on to the fed or the Chinese in mortgage backed securities.

In the old days, when banks held the notes to maturity, they were not about to loan to someone who  might default.

In fact, I would say that the banking system may ultimately be in at least as much trouble as the borrowers. If a borrower is under water he can just walk. The bank holding the note cannot do the same. The bank has to dump it and take a loss. (though I suppose that might be considered also "just walking.")  

Current total obligation for Fannie Mae JUST for MBS's = $600BILLION.  Can't say anything about the quality of these though, just a really big number.
"modern and higher value house "   i think you are talking mcmansion there
Actually, the way it works out here is that the older homes are sitting on lots that the McMansions can only dream of.  But they have dated floorplans.  Funny that only a few people have figured out that it is easier to change the house than the size of your lot!
I think one could make a strong case that "flipping" is thus a form of theft.  Certainly, it is a parasitic form of wealth creation.
One can make a similar case for the entire mortgage system, or even the housing market in general, as it functions today.

The prices 'paid', and the mortgage payments made, have no connection to the value of the property, if it's assumed that value is related to the cost of building.

Total payments can easily be 3-4 times the selling price, and that price may already be many times the true building costs.

Add to that the fact that mortgages are the ultimate tool to create money out of hot thin air, and you're looking Ponzi straight in the face.

As Richebächer put it recently:

To get an idea of the actual extent of Ponzi finance, we make a simple calculation. Total outstanding debts in the United States amount to $41.8 trillion. Assuming an average interest rate of 5%, this implies an annual debt service of about $2 trillion. This compares with an increase in national income before taxes of $616 billion in 2005. Consumer incomes are even stagnant.

Under these conditions, the only question is the severity of the impending U.S. recession. In this respect, we are a great believer in the axiom of Austrian theory that every crisis is broadly proportionate to the size of the excesses and imbalances that have accumulated during the prior boom. Our basic assumption is that the American consumer is bankrupt when house prices fall 20 - 30%.

Needless to say, a 20-30% drop is nothing when it's been created out of nothing. It's not like anyone loses out on actual labor put in. If that were the case, you'd have a completely different discussion, no-one would build homes anymore.

"not like anyone loses out on actual labor put in."

I don't think you've been through many of these escalating neighborhoods.  Everything from bathrooms, kitchens, out to new stonework and plants (I hate the word "softscape").

And out here the typical flipper does the construction himself.

It just remains to be seen if the market will value his labor and investment.

I have never known anyone who "flipped" a house who
did nothing to it but put it back on the market at a higher
price. They all worked their butts off making them
attractive and modern enough to warrant a higher
market price. House flipping is a speculative venture
that requires a lot of skill and knowledge; quite
often learned the hard way (loss of harded earned
money). A lot of older properties would have been
lost to the wrecking ball if "flippers" did not exist.
You don't like the idea of someone making a profit and
would like to see the government take the "profit"
instead, huh? Is this out of jealousy or do you
honestly think the government can do a better job
with the money?
Horsepuckey.  Lots of flippers bought new houses and just sat around waiting for the price to go up.
Yup.  They're mentioned in the article.  They put down deposits on homes that have not yet been built, assuming they can sell for a large profit by they have to close on it.
Horsepuckey right back at you. The term "lots" doesn't tell us a damned thing. As I stated below, I am not aware of any hard data that shows that flippers are or ever were a significant factor in housing prices nationwide. If you have access to such hard data I would appreciate seeing it. Until then, your opinion is worse than useless, because not only is it just an opinion, it is an opinion without any merit behind it.
What is a new homebuilder? Is he a "flipper"
too? Do you think he should "have a limit on
how much profit" he makes? Maybe he should have
to wait six months after finishing before he
can sell it in case some "excess profits" might be
made by a purchaser.
 If anybody should be taxed it should be
those idiots that produced that g*d d***n t.v. show
about how even hairdressers could flip houses and
make riches with no effort. Tax the morons that
watched that show weekly while your at it.
No offense meant to hairdressers otherwise.
In 2006, the USA is a financial economy first and foremost. If speculation and "flipping" is theft, then almost every successful person in the country is a thief.
"...almost every successful person in the country is a thief."

Hmmm, kind of makes you think - doesn't it? Have we developed an economic system that reserves its highest rewards for those who display anti-social behaviors?

Legendary NFL coach Vince Lombardi said it best-"If you're not cheating, you're not trying". That guy and P.T. Barnum are the true fathers of America.
Anyone know who said, "it's only illegal if you get caught?"
That's a line from an old Tower of Power tune, the same group that did There's Only So Much Oil In The Ground.
My best friends dad used to tell me that all the time.  I never knew where it came from but it's true.
 Its time for a resurgence of Karl Marx! Property is theft!
  Seriously, the flipping is based on folks seeing houses as an investment, not a consumeable item and thinking that their judgement about real values is more accurate than that of the market at large, both of which are debatable.
  I bought a house in Galveston, Texas and closed at the first of June. Its 3 bedroom, 1 bath, I can see the Gulf from my bedroom window and sleeping porch and I paid $79,500.00. My real expenses including utilities, taxes and insurance amount to $800-$900 a month, what I would have to pay for a 1 bedroom new apartment in the Houston Metropolitan Area. Needless to say, the neighborhood is marginal and the house needs a lot of remodeling. But, I didn't buy it as an investment. I live there, and I'd like to retire there. Its a consumable to me, and a possible inheritance for my son.
  About two months before I bought my home a couple bought a house across the street to fix up and flip. They paid $50,000 for a two bedroom and have dumped about $40,000 in fixing it up, they have it listed for $129,000.00 and have not sold the property. I assume they borrowed most of the money and have had zero return on investment while remodeling, and probably can't rent the joint for enough money to pay the notes and expenses, and they can't live in it unless they suddenly develop psychic powers of bilocation. They are probably stuck for at least a couple of years, and if they weren't such unpleasant chumps I'd probably feel sorry for them.
  This speculative fever has been fanned by the cognescenti who actually do make money. Real estate brokers and mortgage brokers get huge commissions, banks get interest on money that they have magicially created out of deposits.      
  Oil and gas investors are just as short sighted. I personally like shallow tertiary development oil prospects, but most folks seem to like natural gas deals. I see all the LNG import facilities being built and suspect the Majors are planning to flood the market with cheap gas just as they have with cheap oil for the last 50 years. I believe the experts that hang out here that worldwide oil production is at a plateau and will decrease soon while demand grows exponentially. But, who really knows? Maybe the new capacitors discussed above will actually kick us all in the teeth. Life is uncertain. Anybody who thinks they have a complete answer and can predict the future is delusional, and I will keep on working.
Just because Marx said it doesn't mean it isn't true.
"Property is theft"  Actually it was Proudhon, a French anarchist who coined the phrase.  

Don't deny the man his intellectual property rights!

I don't understand why you need real estate or morgage brokers to buy or sell houses.

The real estate agents make huge commisions just to type in the house specs in a database and open the doors when needed. Why not just put the info into the database and open the doors yourself? This would cost next to nothing.

As far as morgage broker, I don't understand what service the provide. Couldn't you just get a morgage from your local bank whithout any middlemen?

Realtors are kept in business b/c they pay a listing service, namely the MLS, to maintain a database of properties that is the largest in the country.  Only realtors can list with this service and it's like cops looking out for each other.  The strength of all realtors make this database a desirable tool.  Now as more and more people begin to try other ways to sell without a realtor and are successful the strength of the home owners become greater until realtors counter by lowering fees. Now you can go on a realtor's website and view what is in the MLS directory, but to buy or sell you'll still need the realtor.
I wouldn't necessarily argued with that.
 My apologies to Proudhoun and the Paris Commune. But, Marx was a great thinker, all modern economists are still trying to refute his analyses of Capitalism. His psychology lacks quite a bit, though. And his ideas are just as misrepresented as those of Jesus.
  And the same for the old Anarchists. If it weren't for the prevalence of sociopaths in the world, I'd be totaly happy with everyone doing their own thing.
"Speculative "flipping" should have been taxed to a degree sufficient to make it unprofitable from the very beginning.  Since "flipping" helps raise prices artificially, it constitutes a form of wealth extraction from those who are forced to buy houses at these inflated prices so as actually to live in them.  I think one could make a strong case that "flipping" is thus a form of theft.  Certainly, it is a parasitic form of wealth creation.

Preventing "flipping" through taxation would also have had the salutary effect of making the current housing bubble much less severe than it actually is."

I disagree with the above on so many points that it is hard to know where to begin.

First off, most flippers are taking a house that would not sell, investing in the house in various ways to make it more attractive, then reselling. How is this driving up prices artificially? The house wouldn't sell in the past at the final price obtained. The flipper had to invest to get the house to the level where it would obtain the final price, sometimes to the tune of tens of thousands of dollars.

Further, if you don't want to pay that much, buy one of these "pre-flip" houses and fix it up yourself. You'll end up paying close to the same, minus a small percentage that went to the flipper (which is the convenience of not having to organize all the contractors yourself).

Flippers cannot sell far above the price of actual owners who are also selling so they cannot drive prices above where the demand already was anyway unless they can control so large a percentage of the market that everyone else has to play by their rules. I have seen no evidence that this is the case at all.

Flipping has zilch to do with the current housing bubble, which is entirely driven by artificial liquidity created by the Fed to offset the economic downturn post 9/11. What the Fed is trying to do now is arrange a "soft landing" from that liquidity infusion and then see if the world's economy can stagger forward on its own from there. I am not sure it can because of debt levels, particularly in the US but elsewhere too, but flipping houses had almost zero relevance that I can see to actual house prices.

I would think most of us can agree that buying property, fixing it up and reselling at a profit is not a bad thing, but I'm sure there could be some argument about how much that would make home prices in general (say, in the neighboorhood) go up. I would assume a rising tide lifts all boats.

However, in hot housing markets, there are many people that bought houses or condos just to sit on for a few months, or until it was actually built, and then sell it at a profit. There are many condos that have been flipped several times and aren't even built yet. I think this is what gets some a little angry about the whole notion of something for nothing. Investors would bid out regular homeowners since there were so few homes and so many buyers. However, it looks like this sure money scheme is not so hot anymore.

I agree that access to large amounts of money is what made it all possible.

Once it was tulip bulbs.

Same old problem.

As much as I think some flippers added value, there is no doubt that the tulip market was work as well.  Greasing the rails, or greasing the skids, depending on how things work out.
Oil Production Drops Despite High Prices

A salient point:

the average price of all oil grades was about $27/barrel higher than the average during 2004, global liquid hydrocarbons production declined more than 100,000 barrels/day (b/d) compared to the first half of 2005, according to U.S. Department of Energy/Energy Information Administration (US DOE/EIA) data.

8.99:1 — Ratio of US Halloween Budget vs Bush budget for renewable enegry research.

$5,000,000,000 : Amount Americans are expected to spend in 2006 on Halloween candy, decorations, and costumes. Washington Times

$556,000,000 : Funding in Bush's 2007 budget for Plug-in electric vehicles, Geothermal, Hydro power, Wind, Hydrogen, and Biomass research. Boston Globe

Strong argument for a smooth transition, isn't it?
So instead of UNICEF, the kids can trick-or-treat for alternative energy.  Great!

Halloween is the free market in practice.

Federally funded research is the government interfering with the free market.

By the way, I wish the numbers were reversed.

Rick DeZeeuw

Federally funded research is the government interfering with the free market.

So when the feds spend billions on weapons systems that don't work, is that socialism too?

That specific variety is usually called National Socialism.

I belive in the Free Market too, It's just that I've never seen one. ^_^;

"Now this year in 2006, we're going to spend about $320 billion to buy imported oil. That's 3.2 times what we were spending three years ago. We feel that the average refiner price will be about $60 a barrel, not $28 and some change. And in contrast to the $49 billion we were spending in the Persian Gulf to defend oil supplies, that figure is now $132.7 billion. And when you add everything together and take the economic consequences into account... that $304 billion in 2003 will increase in 2006 to $825.1 billion. That's almost twice as much as much as we're going to spend on national defense this year. It adds the equivalent of $8.35 to a gallon of gasoline when we look at the price that was posted yesterday (April 14, 2006), that means at the pump -- if you were paying the full cost -- it would be $11.06 per gallon, meaning that it would cost you about $220 to fill up a sedan and about $325 to fill up an SUV."
The Hidden Cost of Our Oil Dependence EV World
I guess my intent was not clear enough when I said that I wish the numbers were reversed...and maybe I should have put the "government interfering with the free market" in quotes to imply that I was not actually saying that.

I personally feel that the government needs to be more involved, not less.  The government is supposed to be "for the people" and the free market is "for the executives and stock holders".

Rick DeZeeuw

On that note... if the government mandates x on the free market, then should not the govt also appropriate a corresponding amount of funding or assistance (direct/indirect) to ensure x is obtainable?
One proposal from way back was for the fed to put out bids to create market demand. The military has a lot of diesel generators at remote locations; if they converted all of them to renewables, that would increase demand and decrease the cost, etc etc.

Now, of course, there seems to be sufficient demand for PV and wind (if it doesn't get blocked by NIMBY).

My concern is if there is an emergency (Iranian war, etc.), that waiting lines for all alternatives will be backed up for years.

Don't forget all the money spend on gas driving the kids around. We used to walk,lots more fun and vandalism.
This is a flawed article.  There is an apparent correlation between oil prices and bush's approval rating, and there is a backlash among consumers if gasoline prices skyrocket, but the other factors that affected oil prices also affected bush's popularity.

Bush's approval rating is not dependent on oil prices.  Oil prices are one factor.  The title and graphic imply that it is the only one.  Had he handled the Katrina/Rita disasters with any competence at all, oil prices would not have risen so much, and if he had shown this competence, his approval ratings would not have fallen as much due to them.

Poor article, but interesting observation.

It is a poor article, but, perhaps the average person has some commodities that he/she/not sure gay person reguards when judging inflation and economic security. In other words, the possible value of their home equity makes folks feel rich, even though they couldn't sell the slum-sweet-slum and buy a new place while having their out of pocket expenses decrease. Or the $2.00/gallon gasoline price now seems inexpensive and like the consumer has more money, even though its double the price since when the Neocons destroyed our republic.
  Supply/demand models don't reflect this psycological  factor.
Did you read the article?  They mention the terrorism boggyman, the war in Iraq, and Hurricane Katrina as other factors.  

The article states

one factor seems more powerful than any Oval Office address or legislative initiative.

It's the price of a gallon of gas.

A statistical analysis by Doug Henwood, editor of the liberal newsletter Left Business Observer, found that an "uncanny" 78% of the movement in Bush's ratings could be correlated with changes in gas prices.

This is actually pretty precisely written for a MSM article.  They state a correlation which makes people assume causation.  

You say:

Bush's approval rating is not dependent on oil prices.

Really?  Not at all dependent?  Do you have any evidence of this?  

Maybe that strong correlation is just random chance - but I'm wondering at the level of naiveté that it takes to assume this.  The problem is in the assumption that just because we cannot see the mechanism (or indeed that there is a single mechanism) that somehow there isn't any manipulation.  Bull.  Do you really think that people with power and influence need to be told what to do in their own self interest?  Do you think such people don't know how to take advantage of whatever opportunities arise?  

Face it people, this battle for control of the public perception is lost.  Reality will continue on undisturbed, and production will keep declining (in the general trend).  But the people will not face it, and the opportunities to do anything useful will be squandered.  

That 78% correlation is exactly why you won't see any significant increase in the gas tax...  Political Hari Kari.  The oft used argument for offsetting via a credit against your payroll or income taxes won't work either as most retirees, and or students, don't pay much of either. Plus we all know the truth on letting the government get its hand on your cash. So how do they get credit. The only positives is that it would get some tax revenue off the illegals and the underground economy. Other reasons I prefer consumption based taxes over taxing income
Oh by the way on the Real Estate bubble and flippers don't forget to give Mr. Clinton some credit for that too as he pushed the whole drop in taxation on real estate which definately supported the huge increase in 2nd and 3rd homes which are out their sucking up lots of resources be they utilities, raw materials, or capital. Kunstlers greatest waste to the power of 2.
"The oft used argument for offsetting via a credit against your payroll or income taxes won't work either as most retirees, and or students, don't pay much of either."

I agree.  The right way to do it is to take 100% of the gas tax revenue, divide by the number of drivers licenses, and send that amount of money to each person holding a driver's license.  That way there is no arguement that every person that pays the tax is getting his fair share back.

It could also be done based upon every registered vehicle, but that might (make that would) encourage people to buy up and register 8 junkers in order to get a bigger tax rebate.

The right way to do it is to take 100% of the gas tax revenue, divide by the number of drivers licenses, and send that amount of money to each person holding a driver's license.

Which means those who do the right thing and don't drive get punished.

Though I suppose they could all get licenses anyway, just to get the credit.

The disabled who can't qualify for licenses will then be irate...

Which means those who do the right thing and don't drive get punished.
Singling out gasoline is a silly concept, but total energy use per capita is not.
Want to spend it on gas? Fine. Might get chilly at home, but that's a choice.

Problem is, the process doesn't work in reverse. Taking things away from people is a political dead end, which will therefore never be tried. Until there is no more.

In the short term, you can propose exchanging one form of BTU for another, and that's what we see happen. And people will believe it's possible for at least as long as you're in office. After that, it's someone else's worry. The system works for everyone, just not for long.

I ranted about the whole tax and rebate/tax credit thing a day ago so I'm not going to do it again.

Here's Todd's plan:  Set high energy efficiency standards for everything from vehicles to TVs.  The purchase price is increased by the percentage that the item falls below the standard by the same percentage.  For example, if the item is 10% lower than the standard, the purchaser would pay 10% more.  The funds collected wold be used for both amelioration (whatever that might mean), research and buy-downs for items that exceed the energy standard.  For example, if the item exceeds the standard, the purchaser would only pay 90% of the price the balance being "bought-down".  The standards would be evaluated yearly.

Complex?  Maybe, but it seems pretty straight forward to me.  But buy-downs have been shown to work.  I got a California Energy Commission buy-down when I put in my PV system 6+ years ago.

Todd's Plan B is to have a competion every five years for the most energy efficient items.  The winner gets to monoplize the market but must license the technology to others.  The loosers pay the winner 8% (or whatever) of the winner's wholesale price if they wish to manufacture it.

"Todd's Plan B is to have a competion every five years for the most energy efficient items.  The winner gets to monoplize the market but must license the technology to others.  The loosers pay the winner 8% (or whatever) of the winner's wholesale price if they wish to manufacture it."

That might work at first, but I can see a situation where the monopoly power gets such a financial stranglehold as to destroy the competition and wind up quickly stagnating all R&D efforts.  Plus, why innovate when you can wait for someone else to?

"Which means those who do the right thing and don't drive get punished."

If you don't drive, you probably don't buy a lot of gas, which means you shouldn't be getting the gas tax back.

I really think that the license approach is by far the fairest approach to significantly increasing the gas tax, and ensures everyone who pays it will get at least part of their money back.  It is also the only option that would have a chance in hell of being agreeable to the american public.

If you don't drive, you probably don't buy a lot of gas, which means you shouldn't be getting the gas tax back.

But you'll still be paying for the increase in gas taxes, in everything else you buy.  

And it won't stop everyone who is physically able from just getting a license, so they are eligible for the rebate.  

For those reasons, I can't agree that your plan is the fairest or the most acceptable to the public.  

Really, when you're talking taxes, you're talking about screwing some people to benefit others.  All the different plans and such are just a question of who's getting screwed for whose benefit.  

I think my plan above is better than any plan I've seen.  It allows the "free market" to drive energy efficiency and, people have a choice while "bad choices" funds energy efficient choices.
I like your Plan A Todd, penalties on energy guzzlers.  We'd do that, if we had any guts at all.
I suspect an energy allotment, per person is the way to go.
I'm not sure how we track it. Every person over 18, is granted the ability to purchase a specific amount.  Energy you produce yourself is exempt. Polution controls are very tight. Pump enough co2 out there and we shoot you.

That creates a market for those who use very little to sell to the people who need more. I'm not specificaly talking about a dollar market, it might be a  vegtable,chicken, or beef market. You could spin some interesting ideas on how people manage their allotment. Groups coming together for the expanded use of their energy to create more ways of producing energy. Elites trying to accquire more for whatever reason. It gives my 80 year old parents some bargaining power, trade my allotment for health care etc.

It also limits population, if you want children, you have to have a way to support your energy usage. Your children have none until they are 18. Unless you produce it yourself.

It's a level playing floor for all, except those who reproduce more.

I suspect an energy allotment, per person is the way to go.
I'm not sure how we track it

It's all been done and written. Read for instance these files from Odum, or Hubbert (yes, that one).

There are many more examples, both from these two, and others. All that needs to be done is pick the best. It's hard to see how it could be done, but if it's not, people will start falling off the cliff in increasing numbers. That's how yeast deal with the issue.

All this talk is silly. Just tax the gas and put it into paying down the national debt. The resulting decrease in itnerest rates will benefit everyone in the country.
" the whole drop in taxation on real estate"

What drop in taxation on RE are you referring to?

Did I say "not at all dependent?" No. I complained that the headline and chart implied that it was dependent, whereas the price of oil, AND the dubya's approval are both dependent on other factors.  If you have two variables that are both dependent on other variables, they are going to appear dependent on each other.  This is false and misleading.
CNN is reporting that Richard Branson is committing $3 billion over 10 years to fight global warming.
Here's a link:

Branson pledges $3B to fight global warming

NEW YORK (Reuters) -- Billionaire British businessman Richard Branson Thursday committed $3 billion over the next 10 years to combating global warming.

"We are very pleased today to be making a commitment to invest 100 percent of all future proceeds to the Virgin Group from our transportation interest, both our trains and airline businesses, into tackling global warming," Branson told a news conference at the Clinton Global Initiative in New York.

All we need is some expected growth numbers from his airline interests, and realted emissions.
It's like the proverbial fire-fighter who sets fire to a building just so he can be the hero when putting it out.
What I find interesting is the link to the Clinton Global Initiative.  It's been all over the news lately.  Larry King last night had Bill Clinton as a guest - to promote the Clinton Global Initiative.  And then there's yesterday's news, about the Discovery Channel starting production on a peak oil/global warming mini-series...as part of the Clinton Global Initiative.

If we are to do anything about peak oil and global warming, this is the kind of firepower we need.

Peak Oil is not on the Initiative's agenda, at least not as Clinton put it when he was on the Daily Show the other day, and not on the site. Gore never mentioned it in his speech either.

It's the "Financing a clean energy future' syndrome, a tax write-off if you want to be cynical. By the by, who's on the advisory board but... Khosla. Nice to know what that clean energy will be.

And Branson merely uses money he makes polluting to clean up that same pollution. Running to stand still, or worse.

The Discovery Channel press release mentioned "peak oil" by name.

The CGI web site does so obliquely:

how to meet increasing energy needs while addressing climate change

Gore and Clinton are taking the "two birds with one stone" approach to PO.  By emphasizing happy-fluffy save the wold from GW by reducing oil consumption and switching to alternatives, they hope to mitigate peak oil without the sheeple ever being aware of it.  Clever ploy.  I hope it works, but I'm not very optimistic.
Your right it won't work!!

However the reason the 'Sheeple' will never know of peak oil, or ever think of it as more than a fringe freak show is that it will be deliberately hidden and blamed on everything from Hugo chaves nationalising it's oil to Iran being an axis of non-bushiteness and delibarately holding back the oil, to hurricanes, to terrorist attacks, to martians stealing our oil (which by the way only 47% of Americans, mainly the bush voters and some three toed lemurs will fall for).

All efforts will be made to hide the onset of peak oil. When the Hirch report was submitted by the military to congress, white house etc, do you think that no-one believed it? Bush's closest adviser on energy was well informed. All the current puppet president has to do is pretend that peak oil does not exist by means of disinformation and smile a lot.


All efforts will be made to hide the onset of peak oil.

Scary as it may seem, would not this be the rational ploy of governments if an extinction level asteroid were heading our way and there was nothing the governments could do to stop it? Why scare and panic the masses? Are they not better off going on happily with their blissful lives until the end comes and it then snatches away their lives swiftly and without warning?

This is a tough ethical and moral question. I don't have a good answer one way or the other. If you tell the masses, and they riot, then millions may suffer more pain than they had to. If you don't tell, then you are defrauding the masses and they can sue you for it afterwards (ha ha).

I sure as hell would be a lot less stressed had I not read a magazine article on Kunstler, checked out his book, googled "Peak Oil", etc. Ignorance is bliss.

Tom Anderson-Brown

Yeah, but would you have as much chance of surviving what's to come?
I'll take a chance of survival any day over blissful ignorance.
Too late, Tom...you took the red pill.  The Matrix is just a construct for you now.
I laugh at my self sometimes when people start asking me about PO, and I'm like, look you're like Neo taking the Red pill here.  DO you really wanna know?  By that time they're interest is so peaked, they sit back and listen.  They don't agree all the time, but they listen.
Peak oil isn't an asteroid. The pain we will feel in the future is directly (and inversely) proportional to the mitigation attempts we put into place ASAP (hopefully by 1979).

No mitigation, maximum pain.

Not if you're high enough in the elite to be shielded from the pain.

The same phenomenon is happening in Britain right now. The levels of street violence are rising and immiserating the whole country, but nobody in parliament is likely even to notice most of the time. So nothing's being done.

The new elite are everywhere.
Oh, yeah, that's gonna turn out well. Remember when the Three Stooges tried golf? Is that a bar-bell or a 36-Iron? Knuck, Knuck, Knuck.
On second thought, this is absolutely insane.

Everybody read this. 'Post of the Day.' Step Back scores.

How did we get to this point? It's not about the Chinese. Americans are ten times worse.

Yes, but the major difference would be the timescales involved. Peak oil would trigger economic recession before the general public were actually told why, if they are ever told. Therefore financial, econonimic and polital turmoil would ensue for years, then the truth might be told - so more chaos might be triggered. Slower chaos

Asteriods; I find a bit scarier!

Hey - that's UK government policy.
And news like "sea levels rising faster than expected" has been a consistent theme, seems like all the actual measurements of climate change are worse than the worst-case predictions from just a few years ago.  I'm all for the rising awareness created by the Gore/Clinton/Bransons in the world, but the happy-chirpy "we can solve this problem and not have to give up anything" notion they seem to imply strikes me as being unrealistic.
The fact of the matter is that we are going to see some form of carbon restrictions in this country soon.  The world is doing it, and we'll have to start doing something around here or they might think about slapping sanctions on US!  Our overconsumption of everything in this country doesn't go unnoticed out there, and their unhappiness with the USA has as much to do with our contributions to climate change, and other resource depletion, as our efforts to "bring democracy to the world".
I'm all for the rising awareness created by the Gore/Clinton/Bransons in the world, but the happy-chirpy "we can solve this problem and not have to give up anything" notion they seem to imply strikes me as being unrealistic.

Of course it is.  But politics is the art of the possible.  You just aren't going to get a lot of people on board unless you're "positive and uplifting."

The fact of the matter is that we are going to see some form of carbon restrictions in this country soon.

If so, it will probably via price.  

"The world is going to hell in a hand basket!"
"Global warming!"
"Peak Oil!"
"We're all going to die!"


"Vote for me!"


Laura Bush is doing something with them as well. Hmmmm...
New record for Nat Gas in storage. Pretty soon they are going to have stop drilling for it b4 they run out of room to store it?
Now we have a possible El Nino again which may mean another mild winter.
Just a thought: what if Simmons and his buddies have pulled off one of the biggest market manipulations in history?
Let's see.  Simmons has connections to the White House.
Bush has a direct line to God.  God has a lever pulling the weather making strings.

Yeah, wait a go Beechdriver.  You ought to be nominated for a Nobel prize for insight.

Wait, this is an honest question.  You've got to be able to step back and ask the questions even if there is only light evidence to support it.  I've always read that NG was years behind crude in terms of peak, so I always assumed NG is basically like electric generation where suply and demand must equal most of the time.  With NG there are ways to store it (albeit some not that great) and stocks have been all over the place in the deregulated markets of today.  Coincidence?
"Wait a go"?

Way to go, toilforoil.  Your attempt to insult someone has backfired.  How about a little respect for your fellow TOD posters.

Thanks for having an open mind.
Over the past year there have been an endless stream of talking heads (including Simmons) on CNBC and Fox business with all their dire predictions about Nat Gas going to the moon pricewise. I think it got to what: $15.00? Now we are below $5.00, the storage locations are overflowing, a few hedge funds have already admitted losing money - one of them to the tune of 5 BILLION dollars - which was also a sizeable percentage of San Diego's retirement fund. Methinks someone out there (who was short Nat Gas - and may have been talking up the market)  is now rolling in a boatload of money and laughing all the way to the bank.
Don't forget - in the last oil swoon (selloff) in the spring(?) it turned out T B Pickens was short oil - after talking about PO on CNBC & Fox.
Beechdriver: This is all part of the game. I am always amused when someone states what Rainwater or Pickens or Simmons is thinking and where they are putting their money (because they heard it on TV or read it somewhere). A huge part of the whole investing/speculating game is trying to figure out what part of what you read/hear is the truth and what part is a lie. I think this is why more than a few TOD posters advised Robert to be careful around Khosla.  
Simmons predicted that US natl gas had peaked at the start of the decade, and it had (in great constrast to CERA, Lynch, EIA, etc forecasts). You can see we are down considerably since 2001 for example and the trend is continuing. It don't think he's part of a conspiracy when his data projections come true. He has speculated about possible price outcomes of peaking, but always given certain circumstances. In this case, the warmest NA winter on record has created a great alteration in both oil and gas stockpiles, but hasn't really changed the underlying scenario.
NG is not an infinite commodity. You drill, distribute it and burn it. Then it is gone.

It is a matter of logic that in general, supplies will tighten and prices will go up, and users will gradually (or not so gradually) get squeezed out.

It is quite possible to have a glut now, and real shortages in one or three or eight years. It is also a virtual certainty that prices and supplies will fluctuate wildly.

Given how much is at stake (what do YOU heat your house with?), it is prudent to start mitigation efforts now. Because mitigation takes a lot of time. Decades.  

Bush opened the public lands of the west to NG drilling. The depletion rate of these new well fields is brutal. These small, scattered fields will soon be depleted, and where is the next batch of NG going to come from?

Do you really think supplies are infinite?

Im writing a post on this now - essentially supplies are tight and getting tighter - we had flat YoY production yet increased rig count 22%. However, demand has fallen off a cliff. There will come a day when supply declines outpace demand declines. Or the day will come when people figure out that supply declines will outpace demand declines - for now, its global warming trumps nat gas depletion.
I don't think you were replying to my post exactly. If you thought I was implying supplies are infinite, you misunderstood. I agree completely with your points. I was arguing against the idea that Simmons had manipulated the market, because his warning (rejected by all the big names at the time) on supply has in fact come true. Price is just down due to reduced demand.
Here's a pretty picture to go with Peakearl's table:

And here's another showing what we're doing with all that gas:

(Sorry, had to squash the X-axis to get the full range in.) These are from the EIA 2005 Annual Energy Review. Notice that the industrial use line is declining. I've read that that is partially fertilizer and chemical plants leaving North America for cheaper natural gas in the Middle East.

Many thanks for the graphs
Presenting and examining evidence and employing logic are respectful of people who want to have an intelligent discussion and be taken seriously.  Tossing out thoughtless insinuations and accusations hardly demonstrate respect of any kind.

Simmons deserves better and so do the rest of us.

Looks like you doom and gloomers will have to cancel your apocolypse:


Electric cars will take over.

Or maybe you Cornucopians will have to eat your words...again?
Did I sleep through another apocolypse?  Damn.
ah, so you were dreaming when you wrote that? ;-)
Don't feed the trolls.  He obviously didn't even bother to read the discussion of that article higher up in this very thread.
I apologize - bad habit - just in a mood today...
Give me a break.  All i'm trying to tell you people is that innovation will win in the end, and we will find solutions to the oil crisis.  I'm sorry you have such a desire and hope to wear a loin cloth and hunt rabbits.
Ah ha!  A chance to demonstrate that moderation is not the same as cornucopianism.

Yes, science and technology advance, but we do not always get all the advancments we hope for (cure for the common cold, USAF money spent designing flying saucers).

What makes you think we will get those specific breakthroughs that lead to lower energy prices in face of peak oil?

Is it as simple as a mistaken impression that we get everything we want?

Come on technology is a two edged sword, there will be innovations that allow more efficiency and other ones that suck up more energy. Technology isn't going to solve what is really from the start a resource allocation problem, politics attempts to solve this.

Personally I think we can all see what will really happen as oil as a resource depletes. It what happens now in the world, the rich will get it. Its kind of funny people say that we don't want universal healthcare in the US because it would lead to rationing of healthcare, but in reality that happens in another way, if your rich you can get it, if your poor your can't.

Now that's not to say that I don't think we can come up with a little more equitable of a system, we can.  But for now people in the US still believe in two myths
a)technology is going to solve our problems
b) the "market" will help up do this

Once we can get people to understand these things we can start to move forward and be more pragmatic. Personally I think one of the huge anwsers is making large investments in mass transit.

I'm sorry you have such a desire and hope to wear a loin cloth and hunt rabbits.

Where did Leanan say he wanted to wear a loin cloth and hunt rabbits?

And how does your post address plastics bits in the ocean concentrating toxins up the food chain, the 130 year limit to Phosprosus, the depletion of water tables, the rising sea waters, and rising global temps?

Looks to me like the doom is still a-comming.  

Rise to the challege.  Show how innovation will win in the end.

"innovation will win in the end"

This is a religious belief, simple faith. Sort of like "Allah (God, FSM, the Sky Fairy, whatever) will provide for his children".

- sgage

""innovation will win in the end"

This is a religious belief, simple faith. Sort of like "Allah (God, FSM, the Sky Fairy, whatever) will provide for his children".

- sgage "

Are you disrespecting His Great Noodliness?  Say it ain't so!

When did Leanan become a "he"?

And of course, innovation will win in the end.  When the last humans are hunting seals in Antarctica, the hunter with the better atlatl will win!

Innovation still could win in the end, but there are an awful lot of BTUs to be replaced in the meantime.  Or is switching trips to electric rail, bicycle, and walking an innovation?  Hey, there you go, we will innovate and create "Transit Oriented Design".  Who gets the patent on that innovation?

This argument sounds like:
"Got a problem?  Get technology."

Sure lots of problems got technological fixes.  But people seem to forget that advanced technology is the spin-off of abundant, cheap energy.  There is no evidence AFAIK that any application of technology yields abundant, cheap energy.  The only new technology that has remotely approached this holy grail is nuclear, and even that required an extremely rare, hard-to-refine isotope, U-235.

Even that was 50 years ago.  And nobody has so much as come with a signficant, viable improvement for electricity storage over the lead-acid battery.

The underlying issue seems to be that abunbant, cheap energy, like abundant land, air, clean water are all endowments from nature.  We humans just can't make this stuff on any meaningful scale, with any amount of "innovation".

So that's why I'm pessimistic; not all problems have solutions.  I don't think any of us want to wear loin cloths and hunt rabbits.

The universe doesn't care about our wishing or innovation, no matter how hard we try.

"There is no evidence AFAIK that any application of technology yields abundant, cheap energy. "

Wind power has an energy ROI of around 60.  Solar PV is 10-20+.

"nobody has so much as come with a signficant, viable improvement for electricity storage over the lead-acid battery"

Both NIMH, LI-ion are improvements. Batteries are improving 7-15% (depending on chemistry) per year - it's more reliable than Moore's law.  

I'm not saying that we're home free - we have to spend the time and money to implement these things, and we're racing some clocks, but the technology is there.

"And nobody has so much as come with a signficant, viable improvement for electricity storage over the lead-acid battery."

This to me is the MAIN problem with energy(with the exception of geometric growth of population which is the FIRST problem.

If we can store energy better, longer, in a easy to use form many problems would be minimized.

If I could "Trickle" store energy from my microhydro/Solar Cells/WindTurbine I would be home free.  

In the alternative energy field, with windturbines for example, One of the problems is what to do with the electricity when your batteries are fully charged.

They actually dump it.  or Heat a hot tub or something else.

I'm thinking of taking the excess charging and lifting maybe a ton or so of rocks 10-30 feet,(instead of dumping it to ground) and then later when I need it, let it unwind like a clock weight and turn my generator....

As you said,  we only have the Lead acid battery for all intents and purposes.


Well, taking the lead of Alanfrombigeasy, I looked again at stored water in big water towers. and it still looks quite good, even tho the water tanks are huge- but cheap.  And you get a lot of other benefits, like using all that water for heat-coolth storage in a community.  

You can use just any source of energy to pump that water up, and you get perfectly good AC juice back out of it, at maybe 80% overall recovery.

And as far as tech creating energy- well, as good as.  When I did my little wits-for-watts experiment this hot season, pumping cool well water around to get my house comfortable, I was using less than 100 watts to get as good or better result than my neighbor using his 3kW AC. So that's something like creating 2900 watts, ain't it?

Or maybe it's just negating witlesswatts. Does that count?

Yes, yes, I know. First ya gotta get rid of about 70% of the people.  

You are right. Technology is not the same as Energy.

I have major problems seeing electrical cars as viable. The grid is stressed already. Even if we can find this great, cheap, clean energy storing feature, where are we giong to get the energy itself from? It is clear that the alternatives today are either to FF dependent, or lack the potential to scale up to present and future energy "needs", which means a lot more. If we asume the status quo of endless growth.
Just imagine, all cars on the road today being electrical. How much energy is consumed and where does this come from?. WWhere is al the new infrastructure (cars, grid) comes from? What does that cost?

No way, we are heading for permanent crises.

  You've Extrapolated this suggestion of Electric Cars to the extreme.

Just because Electric Cars work and may become a more appealing or viable option, it doesn't mean that our future would simply replace the entire, existing fleet with them.  It seems pretty clear, particularly with contributors like RR, that there will ALSO be signifigant other changes in how 'the roads will roll'~if we can manage it..  ie, FAR fewer vehicles, perhaps more shared or rented ones, more Trains and Trolleys, maybe wired, electric buses, etc...  Probably a subsiding population (why bother trying to predict that scenario?)..  In any case, without his having to state it outright, you just have to recognize that it's insulting to suggest that there is any assumption of 'Status Quo and Endless Growth' in his article, and so it is disingenuous to declare it.

Thanks for responding jokuhl.

I didn't mean to offend anyone. BTW, I wrote "the status quo OF endless growth" not "AND". Obviously, we won't replace the existing fleet by electric cars. IMO, some serious downsizeing
is needed in transportation, which probably means overhauling society as a whole.

And you've said it yourself, ~IF WE CAN MANAGE.

If someone asks RR what cars will we be driving a 100 years from now and he replies without hesitation that those will be electric cars, it more or less implies that we will replace the present fleet by electric cars, all is fine, and we can continue forever.

"..it more or less implies that we will replace the present fleet by electric cars, all is fine, and we can continue forever."

This is where I don't hear the same prediction as you have.  Having read enough of RR's other opinions, I don't for a minute think that this response can be taken as his portrait of our future, 100 yrs hence, without the likelihood of many factors having caused countless other shifts in the ways we get by.  How we've dealt with carbon and climate challenges, whether our elec generation will be able to grow away from coal,.. the present as well as the future uncertainties of our electric grid capacity and upkeep are all going to be questions heaped on top of our likely loss of most of our liquid transp fuels, and RR has never shown any sign that he isn't keenly aware of it all..   I think it just means that he sees an electrically powered vehicle as inherently simpler and more efficient than the current ICE models, and that they, if anything, will be what the visiting martian will see us using as a means of transp. a century hence.  I don't think he'd bother to try and paint the rest of that picture.. we're facing so many huge changes right now.. who could?

Bob Fiske

"The grid is stressed already"

Only at peak, during the summer.  At night there's plenty of power.  Electric vehicles are about 5 times as efficient as gas vehicles: they could charge at night using the existing grid.

"the alternatives today are either to FF dependent"

But, what does that mean?  That we still use FF for transportation?  Wind has an energy ROI of 60, which means that it doesn't use much.  

"lack the potential to scale up to present and future energy "needs""

As I posted elsewhere, a study by Stanford researchers for NASA found 72 terawatts of average electrical production potential, which can be compared to total world electrical production currently of about 1.7 TW.  Total world energy consumption equals the equivalent of about 4 TW.

see http://news-service.stanford.edu/news/2005/may25/wind-052505.html

So, there's more than enough wind, and at a E-ROI of around 60 and a cost of about $.06/kwhr, it's energy and cost effective.

Only at peak, during the summer.  

Ummm...wrong.  Here in the northeast, we've been threatened with rolling blackouts in the winter.  

Though global warming may eventually solve the problem...

Here's an article.


A good discussion here from 2005 (before the mild winter), with a nice chart.


New England, and to some extent neighboring regions, is unusually dependent on natural gas for electricity (33-40% versus the national average of 18% of usage) plus it uses it for heating, and heating gets priority.  In a deep cold snap, gas supplies go to heating, and reduce electrical generation.

So it's not unexpectedly high peak electrical demand, or a transmission problem, it's a regional fuel problem.  California doesn't have this particular winter problem, even though they get 50% of electricity from nat gas.

hmm.  Even here you'd still have power in the middle of the night for charging.  OTOH, It's clear that there there is a real problem with dependency on nat gas in selected parts of the US: they're going to have to move to other sources of electricity. Time for NE to invest in alternative energy, like Cape Wind.

Of course California doesn't have the same problem.  They don't even have a real winter.  

It's a different story in most of the rest of the country.  

Well, what I'm thinking about is the fact that nat gas is only 18% of supplies for the whole country.

This means that potential nat gas shortages are only a problem for the minority of the country that is unusually dependent on nat gas, like CA and NE.

The midwest/Chicago area, for instance, is 50% coal and 50% nuclear, with almost no nat gas.  Oil and gas prices could go through the roof, and Chicago wouldn't notice much.

Second, as you note, having no winter means areas like CA and Florida that use a fair amount of nat gas, don't have the particular problem we're discussing.

So, as far as I can tell this problem of dependence on nat gas for both heat & power which causes winter problems seems to be pretty much limited to NE.

Here in my midwest, STL, we have NG heaters, mostly.  And I dont know what AmerenUE burns to create my electricity.  It really doesnt matter b/c if I'm still here 20 years from now, it's going to be a coal black city, and I'm not talking about the people.
So, as far as I can tell this problem of dependence on nat gas for both heat & power which causes winter problems seems to be pretty much limited to NE.

That would be news to the people in Colorado who suffered rolling blackouts last winter.

nick im writing a post on this now - we use as a nation 7 quadrillion BTUs for home heating in winter, 5 quads from NG, 1 quad from oil and 1 quad from wood, space heating, electricity etc. natural gas is the vast majority of it. and NE actually primarily uses heating oil, not gas
"... 7 quadrillion BTUs for home heating in winter, 5 quads from NG ..."


So, about 71% home heating is NG?

hmm.  It seems to  me that besides improved design (zero-energy homes) for new homes, that ground and air-based heat pumps are the path of the future (though they've been around for a long time - my father considered installing a ground-based one 50 years ago). They are said to be growing at about 40% per year. I understand that there are about 1M ground-based heat pumps in the US currently (so, about 1% of the market).  I wonder how many air-based heat pumps there are?  

7 quads.  That's about 18% of the 39 quads of primary energy used to produce 13 quads of electrical generation.  So the thing to do is to replace home heating using 7 quads of primary energy (nat gas, fuel oil) with heat pumps that produce about 3x as much secondary energy and consume about 2.3 quads of electricity.

So, that brings us back to needing an increase of 18% in electrical generation to replace natural gas and oil for home heating.

I remember that.  Apparently that had little to do with the kind of systemic problem that the NE has, and more to do with equipment and pipelines freezing in cold weather.  This article has some info:


It would be nice to share info and ideas, and gradually approach a consensus on some things, where possible.  To do that, it would be helpful if you went into more detail in your posts, so we build on the shared base of knowledge, rather than just going back and forth....

o do that, it would be helpful if you went into more detail in your posts, so we build on the shared base of knowledge, rather than just going back and forth....

The problem is that it's already been discussed, in depth, before.  But new people keep wandering in, and after awhile, you get tired of repeating yourself and posting links.  A blog is really not ideal for the kind of discussion you want.

The problem in Colorado, IMO, is natural gas depletion.  At least, that's what came out from industry insiders while it was going on.  All their fields are in decline except one in Wyoming, IIRC.

"Don't feed the trolls.  He obviously didn't even bother to read the discussion of that article higher up in this very thread."

That was his first post.  The fact that he chose to post some brand spankin' new and un-realworld-tested "change the world" ::gizmo:: in a manner which I first mistook as sarcasm, leads me to believe that he doesn't even lurk here (and hence has not recieved the benefit of the knowlege which floats about, nor developed the skeptical eye).

With the "cancel your apocolypse" and other implied bullshit aside, it is an interesting device but I doubt all that CNNMoney makes it out to be.  There's a good little discussion going on here: http://thefraserdomain.typepad.com/energy/2006/01/eestor_ultracap.html

 Posted by: Bob Smith | March 20, 2006 at 12:48 AM

I just dug through their patent to answer my own question. It's a REALLY BIG dielectric capacitor! Running 31F at 3500V in 336 pounds gives them 350Wh/kg.
I really hate to think what would happen if a single one of all those parallel dielectrics failed! 52kWh through a short circuit could melt the thing to slag. It better be self-healing.

 Posted by: Stephen Boulet | March 08, 2006 at 02:58 PM

I am very skeptical in general of super high charge rates for batteries or ultras or anything. Not the physical possibility, but the huge infrastructure requrements need to get peak electricy rates that high. Imagine if everyone had one, and 10,000 people happend charge a 52 kwh thing all at once. Talk about peak requirements! Of course the power companies could start putting those things in themselves

Work done = force X distance. I learned this when I was 11 years old. So you lighten the car, make the drivetrain, powerplant and arodynamics more efficient. What you can not do however is magic up energy with which to 'charge' any storage device, be it battery, supercapacitor, spinning weights etc...

My point is: us 'Doomers' have been discussing in the few hundred thousand previous posts or so, the subject of a dwindling energy supply and the problems involved in replacing that energy supply.

Sure you can use electric cars with storage systems with extremely high energy densities BUT you have use energy to charge them.

Herein lies the dilema.

'But we can make Nuclear power', I hear you say, 'and what about renewables'. Correct, but if we do not put significant effort and resources/oil into building those nuclear/renewable sources, some time in the near future the abality to tranform to these technologies will be diminished.


futureman, if you actually read the comment section you would have seen this article was already linked to and discussed above.

see in this thread: Robert Rapier on Thursday September 21, 2006 at 9:26 AM EST

....A good two hours after your post

If you had read that, instead of just clicking away perhaps I would not be required to write this... Double posting articles is extremely annoying, especially when you couple it with being patronizing.

Also, just to note, upon searching this thread for the word "apocalypse"--I got no hits, which stunned me cause I knew you had used the word, until I realized you don't know how to spell "apocalypse" (more likely a typo, but still, with such an annoying and fatuous comment you'd think you'd make sure to correctly spell things when in deriding mode--not to mention you spelled it wrong twice in a row.) I then guffawed that the only mention of "apocolypse" is in both of your comments.

It seems like you are, dear sir, the one who is fixated on this non-"apocolypse".

Your handle, by any chance, isn't a reference to the belligerently stupid older brother in the movie "Bottle Rocket" is it? If so, it is a appropriate.

While I believe there is some correlation between gas prices and presidential popularity -- I'll wait for a statistician to work that out -- let's put that US Today stuff in perspective, shall we?

From Media Matters -- CNN, Fox News, MSNBC, and NBC touted USA Today/Gallup poll with Bush approval rating at 44 percent, ignored earlier Pew poll placing his approval at 37 percent

Throughout the day on September 19, many television news outlets -- such as CNN, Fox News, MSNBC, and NBC -- touted the poll as a success for Bush, describing Bush's "bounce" in the poll as "good news," asserting that his rating is "the highest it's been in a year," claiming the poll is "bolstering GOP spirits and rattling Democrats" while illustrating that Bush is "gaining in popularity" with the American public, and stating that the poll demonstrates how Bush "has rebounded." Overall, on September 19, CNN referred to the USA Today/Gallup poll nine times, Fox News seven times, and MSNBC and NBC together five times. But on September 14, four days before the release of the USA Today/Gallup poll, all four news organizations completely ignored a Pew Research Center poll released that day showing Bush's approval rating at 37 percent, unchanged from Pew's previous poll and the lowest of all polls conducted within the last month.
Read the whole thing for the delicious details.

No manipulation going on here. Nope, nothing happening at all.

Dave - how about a TOD poll for bush approval ratings? Limit everyone to 10 votes.
I have little opinion on this, but it strikes me that gas price woes could correlate with other bad stuff happening at the same time.  The causation might be partial.
Re: I have little opinion on this

Perhaps we should be a bit concerned in so far as

  • the Bush administration and his allies in the Congress have set energy policy
  • that policy sucks
  • the Bush admininstration and his allies in the Congress have set climate change policy
  • that policy sucks

I don't know about you, odograph, but I live here in the US of A. I am pretty concerned about what life will be like down the road. Not that these elections will solve the foreseeable problems, but every little bit helps.

We have correlation due to related causation.

A big part of Bush's approval decline is the failure of the Iraq war.  A big part of high oil prices is the failure of the Iraq war.

Both things caused (in part) by a single, independent cause.

Oh, I do have opinions on the Bush administration ... cough-assholes-cough ... oh, excuse me.

I was speaking more to this idea of single varaible correlation ... others have covered that since this morning, I see.

Richard Heinberg in Atlanta October 11

We have finally found a venue, Trinity United Methodist Church in downtown Atlanta, opposite City Hall (see here for directions).  His presentation will be at 7:30 and is titled "Peak Oil: Challenges and Opportunities at the End of Cheap Petroleum."  

Locals, time is short, so if you can help with publicity and other tasks, please email me or lizlogan at bellsouth dot net.  We are meeting Saturday at 2:00 at my place at East Lake Commons cohousing, with a tour of the organic farm/CSA here thrown in. Email for directions.  

Netherlands adding wind power offshore

AMSTERDAM, Netherlands - For centuries, Dutch windmills have pumped water out of the low-lying country, and old-fashioned wooden mills are as closely linked with the Netherlands' international image as its dikes and bikes.

But in the face of a large and growing lobby against the windmill's modern electricity-generating counterpart -- the wind turbine -- the country has started moving them offshore and out of sight.

Hi Leanan,

Based in a coastal town in The Netherlands I feel a need to reply to this.

I suspect there is another reason for placing these turbines offshore. Last year a new study came out concluding we were more at risk from violent storms, and waves, then previously anticipated. I reckon a large off-shore windpark on concrete foundation is quite usefull as coastal defense (breaking waves)

Holland is certainly also one of the most densily populated countries in the world, iow we do not have a lot of other places to put the turbines up.

And, probably not a direct motive, North Sea fishing stocks are disastrous. More large scale wind parks are planned. Absolutely impossible to fish there (in an industrial matter); the windparks will be nursery rooms for cod, sole and the like. So that is good.

A few slight problems occur however. First, in the case of my country, my 2 young kids do not really have much of a future here, with 10 million other people close together living on/below present sealevels(no matter how many old-fashioned water-pumping windmills you put in). You get the point.

Second, we had a situation last year, where the Germans dumped their excess windpower on our grid (these are interconnected) almost collapsing it. There has been discussions and also articles on TOD why the Danish, for example are very succesfull in windpower, but aren't able to meet over 20% of electricity needs by wind.

Great picture, BTW. It is along highway A4 Amsterdam-The Hague. Congested anytime!

Too bad you can't make the big, ugly Dutch turbines look like the older, beautiful windmills. Then there wouldn't be a problem with visual pollution.
The old turbines are attractive because we've grown up with them, and they're familiar.

The new turbines have a beautiful, sleek look.  A lot of people's perceptions of the beauty of wind have to do with their interpretation of their meaning: "industrial intrusion into my idyllic wilderness" = ugly, and sleek generator of clean energy that saves us from global warming and scarce fossil fuels" = beautiful.

These are not going to save us from energy scarcity and, especailly for sub-sealevel Holand, it is absolutely positively certainly not going to save us from Global Warming


Could you provide more detail as to why you think so?

A study by Stanford researchers for NASA found 72 terawatts of average electrical production potential, which can be compared to total world electrical production currently of about 1.7 TW.  Total world energy consumption equals the equivalent of about 4 TW.

see http://news-service.stanford.edu/news/2005/may25/wind-052505.html

So, there's more than enough wind, and at a E-ROI of around 60 and a cost of about $.06/kwhr, it's energy and cost effective.

Intermittency is still a problem, which is why I doubt the best mix of renewable energy will include more than about 1/3 wind, but I wasn't proposing it as the single silver bullet.  Though...you could do it if you had to: it would just not be the cheapest solution.  It would be cheap enough, though, if you had to....

Nick- I always appreciate your comments.  With regard to wind's intermittancy- think about water storage.  I know it sounds absurd, what wlth a mental picture of a bunch of huge water tanks sprouting like toadstools all over a city, but at least at first glance, it doesn't look anything like impossible or even too expensive.

One cubic meter water lifted (or dropped) one meter per second is about 10kW (actually 9.8kW/no loss).

"I always appreciate your comments."

Thanks - nice to hear they're useful.

"One cubic meter water lifted (or dropped) one meter per second is about 10kW (actually 9.8kW/no loss). "

That's helpful info.  So, if you had water at a height of, say, 20 meters, you'd get 200 kw from 1 cubic meter per second.  So, to get a kwhr you'd need 3600 seconds divided by 200 kw, or 18 cubic meters of water.  A cubic meter of water weighs 1,000 kilograms, or 2,200 lbs, so we're talking about 20 tons of water per kwhr.  You'd need both a storage tank at the top and an acceptance tank at the bottom.

Hmm. I think we need the kind of really cheap storage you can only get by digging a big hole next to an existing body of water, in a semi-rural area, like the Ludington, MI facility, that uses Lake Michigan.

Someone else posted the original link....


Furthermore, Mr. Cilento said the Air Force Flying Hour Program budget will be reduced by 10 percent each year from fiscal 2008 to 2013. This equates to an annual reduction of $280-million worth in flying for ACC.

"The biggest drain on our (funding) support is the (war on terrorism) is either not fully funded, or funded very late in the fiscal year," Ms. Flemings said.

The continual flying-hour cuts not only hurt training, but also lower the combat readiness of the aircrews.

We aren't going to keep paying for this military complex, we arent going to be able too.

Oh, yes, we will
That would depend on just who you mean by "we."
Whatever, I assumed we were talking US, or North America. NATO is fine too. Not that it would make much difference, a nation state's weaponry is always paid for by the nation's citizens.

And in times of crises, which decrease stability, armies will tentatively move towards a tighter grip on domestic societies, while the possibility rises for action abroad. Armies are the first priority when it comes to access to resources, from oil to food, and increasing emphasis on their role, and their numbers, will surely not make them cheaper.

So we will all pay more for our military, not less, and we won't have a choice in the matter.

I apologize for being so cryptic. What I was thinking about wasn't so much nations, but poverty. As more and more people are impacted (read fall into poverty) by peak oil there will be fewer and fewer taxes collected. I have to wonder at what point the ability to collect taxes impacts the military machine - at what point the collapse of our economy "forces" governments to begin using their military to garner the funds to run their military.
Good point, that I implied but in turn was too cryptic to put in words.

Standing armies are an interesting phenomenon. From the first -Sumerian- agricultural civilizations, who freed up resources to allow for standing armies, to the likes of Rome, who, some claim, fell due to the rising cost of maintaining ever larger standing armies. The inherent expanding complexity of empires is often their downfall, and armies a useful symbol of it.

As more and more people are impacted (read fall into poverty) by peak oil there will be fewer and fewer taxes collected

Then it will be time to switch to a wealth tax rather than an income tax. There will still be plenty of wealth :) And disbanding the military would reduce the need for taxes! On reflection, disbanding the military might be a bit drastic; maybe have a "defence only" military - no foreign agression allowed. IIRC, Sweden's air force jets have limited fuel tanks so they can only protect Swedish territory but not fly beyond it. Just a thought.

  That's a very happy thought, but, untrue. There will just be less money left over for the peasants after the Lords extract the taxes. And "National Defense" always takes priority over a starving underclass. So, either get rich or learn to get by on a whole lot less.
If I'm not mistaken, Japan has a "defence only" military and lately they have become a bit nervous about that fact.
Japan's "defense only" military also happens to be one of the largest in the world as measured by funding (4th according to the CIA Fact book). It is also one of the most sophisticated technologically, certainly the most advanced in asia. They will likely soon remove the pacifist portions of their constitution in order to project their military might vis a vis China in the China Sea regions where there are fair reserves of oil and gas.
But I thought I remembered seeing they sent a few troops to either Iraq or Afghanistan w/ the Americans.  In Japan this was a huge fight, but ultimately they sent some troops I thought.  I could be off, but I dont have time to google this.
Japan sent troops, but they were supposed to be for humanitarian missions only.
I think decreased ablility to collect taxes was a major cause of the fall of the Roman empire. Is history about to repeat itself?
Nope...just rhyming....
Consumer Reports weighs in on The Ethanol Myth
Great FIND!

The FFV surge is being motivated by generous fuel-economy credits that auto-makers get for every FFV they build, even if it never runs on E85. This allows them to pump out more gas-guzzling large SUVs and pickups, which is resulting in the consumption of many times more gallons of gasoline than E85 now replaces.
US to spend $2.5 billion on 900 watchtowers along Canadian border

U.S. border officials have tried technology in tA Homeland Security spokesman declined comment but he confirmed that Homeland Security Secretary Michael Chertoff has scheduled a news conference for this morning. The move comes as the U.S. Senate begins considering legislation that would authorize the construction of a fence extending 1,100 kilometres on the southern border with Mexico.

The Boeing consortium involves several partners, including a U.S. subsidiary of Elbit Systems, an Israeli defence electronics firm that has designed reconnaissance and observation systems to secure Israel's borders and stop terrorist infiltration.

Boeing spokesman Robert Villaneuva said that Boeing's plan calls for a total of 1,800 surveillance towers on the southern and northern borders. Asked how many would be placed on each frontier, he responded, "It could be about 50-50."

Initially, Boeing plans to concentrate on the southern border, with the first installations to be built on the Arizona frontier with Mexico, which has become increasingly popular with illegal immigrants because of tighter surveillance and construction of barriers at border crossings in Texas and California.

"It will take three years to fully deploy all the assets on both borders," said Mr. Villaneuva, who declined to say how the system would function across the massive expanse of Great Lakes separating Canada and the U.S.

I've been wondering when this would go public. I know someone who is working on this program -and trust me, this is only the tip of the iceberg. Its not just a fence, and it gets worse from there.
There was a time -not too long ago in fact- when Americans and Canadians both took pride in sharing the world's longest undefended border.


I think so too.
It lloks like the most useless plan ever devised, unless you're Boeing. The article meantions some lack of clarity in how to patrol the Great Lakes water surface. That is plain hilarious. Think there's a lot of 'illegal refugees' coming to the US via Canada? Canadians on the whole prefer to stay where they are, there may well be more Americans trying to go north.
It's terrorists they're worried about.  
Get your own terrorists. You're taking all our stuff, you guys are never satisfied.

The Canadian government today officially apologized (can you spell empty?) to a Canadian citizen who had been sent, under US instructions, to Syria, where he was tortured for months. There are a few more waiting in the wings who have undergone the same joyful treatment.

A propos the terror subject, a short book review I wrote came out today. Here's an excerpt:

When the U.S. first announced its war on terror, Michael Moore remarked: "You can't declare war on a noun." He need not have worried; the faces of terror were already there. Saddam Hussein, al-Qaeda, the Taliban and Osama bin Laden were the new enemy. Incessant repetition of faces and names in media and government reports continues to work towards the same effect: establishing a new "myth" of evil. Sept. 11, 2001, was merely the culmination of a process.

In order to make the myth suitable for "our" purposes, things are simplified, distorted and exaggerated. Stories about fabulous fortunes coming from the drug trade, counterfeiting, blood diamonds et cetera were to a large extent invented; the evil men were neither very rich nor highly organized. Just as Saddam Hussein had no weapons of mass destruction, bin Laden's wealth was never near what is claimed, nor was funding for al-Qaeda or the Taliban, or their alleged organizational skills and coherence.

You're taking all our stuff, you guys are never satisfied.

Well, duh!  That's the whole point of free trade/globalization.  We've used up our own resources.  Now we're using yours.  

Ok, ok, you can have our terrorists, but after that we want to renegotiate.

Water and NAFTA

.... if water ever were to be traded, the North American Free Trade Agreement [..] would make it virtually impossible to control. Under NAFTA, once trade has begun in a commodity, the supplying country is obliged to maintain those levels of trade and cannot unilaterally reduce them. That means once water begins to be pumped in large quantities across the border, there is no mechanism for slowing trade to ensure sufficient quantities remain in Canada.

At best, that means higher prices for water in Canada, which in turn means higher costs for some Canadian manufacturers, for whom readily available water is a considerable comparative advantage over some other countries, including the U.S. At a more extreme level, [..] even if faced with a drought, Canada would still be forced to ship established quantities of water to thirsty American businesses and farmers.

And whaddaya know, it gets better: As per Canadian TV, there are plans in the US to build an actual fence from the Pacific to New York State, or thereabouts. Time to get out or time to get in?
As someone here noted today: pot will get real expensive in the US.
What?  No one took the opportunity to suggest it was to stop us from escaping?
Bingo! We have a winnah....
You know, a thought has been crossing my mind in the recent past. This fence on the Mexican border fits this amazingly.

It starts with the KBR deal to build camps for a sudden influx of a lot of (illegal) immigrants. Now this fence.

So figure this(I'll leave out the present political impaasse). A large proportion of Mexico's budget is from oil revenues. . So Cantharel crashing will have profound implications, probably directly on cross-border migration.

My guess is the US Gov is well informed about PO, knows perfectly well about Cantharel crashing, and the fence and KBR prison deal is actually to handle the sudden influx of immigrants.

What would you say, Totoneilla?

I don't know what Bob would say, but I say amen to that.
PaulusP -

The thing you have overlooked is that those Kellog Brown & Root detention camps (the number and location of which are currently a state secret) are not necessarily just to temporarily hold illegal Mexican immigrants.

One does not have to be a paranoid conspiracy theorist to posit that these camps might very well be the nucleus of an American gulag, into which political dissidents and anyone else 'not with the program' might find themselves placed ... without charges, without trial, and on the basis of merely being accused of being a 'person of interest' in the War on Terror.

Everything I see happening points to the formation of a true police state in the US. Nothing I see happening points to an increase in our liberties.

If one actually read the Patriot Act,  You will see that the term "Terrorist" is intentionally "Vague"  something we in Computer Programing call a variable instead of a Literal.

It means whatever they WANT it to mean at some point in the future.

Today it is an Arab looking person,  Tomorrow, it may be drug dealers in the US, Then maybe gun collectors.

Eco-terrorists, etc.

The term will morph and it will contain different values as time goes by and events happen.

Fatherland security... Sorry my slip,  Homeland security will DICTATE that "We" take these actions to protect our Consumers... sorry my slip,  Citizens.

May I see your papers Bitte?

The police state is forming just fine without anyone taking any particular differnce with it. The new front on domestic terrorism is about to open, and the profile is that of self-radicalising individuals that use the web to form opinions. This is a segment from a lenghty article at Dissident Voice.
The Web and the New "Enemy Within"

As part of its drive toward a fascistic state, the regime has found a new "Enemy Within" -- and it's not just the Muslim Americans targeted for arrest, the Mexicans targeted for round ups and deportations, or the Blacks, Native Americans and "gang members" targeted for prison.

It's what they now call the "homegrown terrorist" -- apparently a most dangerous kind of terrorist, according to The Los Angeles Times; one almost impossible to track; one with no formal ties to known "networks"; one with no particular religion; a self-radicalizing "terrorist" whose "terrorist breeding ground" is the Internet and whose piper is not just "Osama Bin Laden," but the radical writer, the blogger, and the so-called "conspiracy theorist."

The BBC, in the opening line of a piece entitled US plans to 'fight the net', states it plainly: "Bloggers Beware."

The LA Times reports -- with a straight face -- "US officials said the enemy from within was posing a new challenge and a new danger."

The self-radicalized new "threat" doesn't fit previous "profiles," and the Feds are working overtime to build a new profile for these misfits. The Times says that according to one "terrorism expert" it's "very difficult to find someone like that, someone not from the Middle East, not converted to any religion."

Attorney General Alberto Gonzales made it clear; the new target is those who "are radicalized over the Internet." Citing the "threat" of "home grown terrorists" FBI director Robert Mueller said the FBI is focused on understanding the "radicalization" process.

L.A. police chief William Bratton plans to build a new national anti-terrorism training academy for cops to reinforce the idea of "getting the bastards before they get us." The Attorney General backed Bratton, framing it this way, "We know local police departments are in the best position to identify home grown radicals, so our network will be led by them."

In other words, if you're reading this essay -- or writing essays like this one -- you're a potential target; you may be engaged in a process of self-radicalization. If so, the FBI wants to "understand" you. They want to know what makes the thought criminal tick. Make no mistake; thought crime, much of it bred by the relatively free flow of information on the Net, is costing the neo-fascists dearly and creating a hell of a "breeding ground" for "home grown terrorists" -- which is to say it is helping to create a social base for mass resistance to the emergence of home grown fascism and imperial war. A recent Zogby poll shows that 52% of Americans now question the "official story" of the 9/11 attacks, even as an overwhelming majority oppose the military occupation and colonization of Iraq.

This free flow of information is what the Bush regime calls "Subcultures of conspiracy and misinformation."
So read it and weep debaters of circumstances that do not conform to the mainstream. You are being profiled. And when the time comes where your message is in conflict with the government's the knock on the door will soon follow. This is a preemptive based policy. Oh America, how we thought we knew ye.....
Well, darn it, I find that I have to agree with this too...just can't imagine a benevolent purpose for those enclosures.
What would you say, Totoneilla?

Are humans smarter than yeast?
Hello PaulusP,

Sorry for my late reply, but I hope this is interesting:

You may be entirely correct in this assumption, or if the Cornucopian desire for 'business as usual, infinite growth' Paradigm of SuperNafta goes through:  protesting or rioting US detritovores may get shifted by force to these laborcamps for 'educational biosolar reform'.  Of course, the Mexican MilGov will probably have similar educational camps.

Speculation Ahead!

The Emancipation of our Energy Slaves through Entropy

The sheeple of the world, in their blissful ignorance and denial, constitute the vast majority of the population that makes up the Cornucopians.  In their minds: the market will easily provide fossil fuels for the next 10 generations as the exploration and extraction of never-ending cheap energy is as easy as putting the gasoline nozzle into their Hummer's gastank, or pushing the POWER button on their big-screen TV remote control.

Never forget that a barrel of oil = roughly 25,000 man-hours of physical labor.  Obviously, it is currently more efficient and logistically easier to pour 42 gallons of diesel into a bulldozer to move dirt from a hillside for four hours, than to assemble 6,250 men on-site to pick, pry, & shovel the same quantity for four hours.  

From this link on Mexico energy usage:
Energy consumption per capita has been variable since 1990. Recent data showed 61.5 gigajoule (GJ) per capita (or 10.5 BOE per capita, compared to 58 BOE for the United States) for the year 2002, which was 3.2 per cent lower than in 2001. The highest consumption was recorded in 2000 at 65.2 GJ.

It is only logical that as Cantarell collapses that not only Mexico, but also the US will use less BOE over time.
Thus, detritus entropy never stops, therefore we will eventually be forced to gradually substitute human labor for 'energy slave labor'.  I believe the current statistic is that each American is entropically emancipating 147 energy slaves/hr 24/7/365 into the planetary ether to then leverage climate change, pollution, and specie extinction. TPTB seek to let the market's invisible hand determine this rate of detritus usage.

Many Cornucopians confidently assert that through techno-econo-magic we can easily & peacefully reduce our postPeak detritus usage 90%, or a reduction to only freeing approx. 15 slaves/hour per American.  This equates roughly to using only small refrigerator per American family and nothing else being manufactured, powered, then converted to waste by FF detritus; no vehicles, no lightbulbs, no cooking stoves, no hospitals, no heat or A/C, etc.  Prepare to bicycle and labor in the fields unless you prefer violence as your solution.  Thus, my warning that we need to move 60-75% of us to localized permaculture before the invisible hand of Mother Nature forces us by her endless array of violent tools.

If we truly desire to help a prolonged stretch of future generations have access to fossil fuels, and the Cornucopians confidently assert that this is easily achieved with a gradually induced market-driven 90% conservation rate from rising prices-- we need to model ourselves towards the Bangladeshi detritus burn rate of two cups of crude/capita/day.

Per capita also gives us more understanding of the implications of Peak Oil than reviewing large numbers for massive populations. An example is the per capita consumption of minerals and fuels in the U.S. The average American consumes 46,414 pounds of materials in a year.6 This includes coal (7,400 lbs), oil (6,420 lbs - the weight of 1,069 gallons of gasoline), natural gas (3,240 lbs - the weight of 72,000 cu. ft.), cement (902 lbs), iron ore (440 lbs), and clays (290 lbs). The total weight of the three fossil fuels burned per person each year is 17,060 pounds.

Our annual food consumption per person is only 2,200 lbs per person. It is surprising to realize that the total weight of coal, natural gas, and oil per person is about seven times the weight of the food we eat. The difference comes from our "lifestyle," which is our houses, cars, food, furnishings and the industries that support them.

This example shows what is needed to maintain the American lifestyle. Per capita figures can also be used to compare different lifestyles. A citizen of Bangladesh consumes 1/48th the energy that an American consumes. Yet such people can survive on that limited amount, living a much simpler, more sustainable lifestyle - one that is easier on the earth. In fact, most of the people in the world are living in a simpler manner, much less dependent on fossil fuels...

America leads the world in fossil fuel burning with a per capita energy consumption of 57.5 BOE, approximately 2,400 gallons.
2,400 gal/yr x 1/365 days x 1/48 Bangladesh burn rate = 0.14 gallon/day = 2.24 cups/day/Bangladeshi

A 90% Cornucopian conservation burn-rate is: 2,400 gal/yr x 1/365 days x 1/10 = 0.66 gal/day = 11 cups/day/American-- barely sufficient to run a very efficient, very small refrigerator for a family of four. A lifestyle five times better than your average Bangladeshi citizen.  On my being the generous sort: I will overlook the energy required to actually distribute this 11 cups to everyone everyday-- visualize the logistics of everyone getting a half-gallon of gasoline at their front door every morning or a small, freshly recharged battery.

Recall from my previous postings that I believe a refrigerator is the one appliance that Americans will give up last.  That tiny scoop of ice cream, or that one cold beer may be all that separates us from the mindless violence of the "3 Days of the Condor" scenario.

Again, this is with assumptions of no detritus powerdown violence and no population control; the business as usual, infinite growth scenario of deluded techno-econo-magic.  Aren't you glad TPTB plan to continue this goal with the MSM?  Afterall, doesn't a wolfpack have the best interests of the sheep paramount in their plans?  To suggest otherwise is to admit that you don't know Jack and the resulting Cornucopian hoopla for the Energy Fiesta Bliss.

If a detritovore sheeple cannot afford FF energy and gets violent, surely that is not TPTB's fault, but perhaps a KBR workcamp will convince you that your problems are your fault.  Expect Carter's Sweater Speech [from so long ago], playing incessantly during dinner at these workcamps, to convince you that TPTB warned you: it is not their fault that you and your offspring ignored this wise advice on exponentiality and 'the Tragedy of the Commons'.

From my above example, we are being MSM-educated to be looking forward to enjoying the global Cornucopian detritus bliss of us & TPTB both living together in delightful 'inclusive fitness' peace at this Bangladesh x 5 lifestyle vs a full-on Outreach press to bring us all up to PO & GW speed.  Thus, a rude shock postPeak for those violent detritovores that suddenly believe reality may be different.  Your conversion to biosolar labor will be swift, but as the saying goes: 'your mileage may vary'.

Any truly sustainable biosolar generation, if not exclusively consumed by the topdogs to live in energetic splendor and lavish feasts, is optimistically projected at best, to only provide a small fraction of renewable energy slaves. But let's give the Cornucopians their due:

It is hard to tell, but lets assume the long run, truly sustainable renewable processes, from all sources, for the next 10 generations is an additional ONE gallon/capita/day of 'energy slaves'.  If world population = Cornucopian levels of ZPG, or just replacement, at 7 billion souls with no violence, then we need fairly dispensed worldwide 7 billion gal/capita/day; 166.6 million barrels; only 82 supertankers at 2 million barrels per load.

So, now we are at 1.66 gal/day/capita of bliss with no violence [surely, Cornucopians & TPTB WILL NOT replicate the Hutu-Tutsi machete' dance in your neighborhood to take your child's mere spoonful of ice cream?]; 26.6 cups/person of 'energy slaves' busting their ass for your family's enjoyment.  Surely, the peace & joy of this vastly elevated Bangladeshi lifestyle will equal the joy of the avg. American Cornucopian?  Time to hold hands as we all joyfully sing "Kum-Bay-Yah"?

How many Cornucopian energy slaves is 1.66 gallons? 25,000 human physical man-hours/ barrel divided by 42 gallon/barrel x 1.66 gallons = 988.1 hours saved of ball-busting labor/day.  I think a wise person will choose to use their renewable energy gallon for cooking, heating when required for survival or hygiene, and access to potable water than does not have to be lugged by hand too far, with some residual for medicine.

From the above EB link: this energetic total of 8.7 BOE is the approx. lifestyle of the Chinese [8.1 BOE], but hopefully we will solve the equivalent pollution levels.

To conclude: if the entire world could agree that every family gets a small refrigerator, a small cooking and heating stove, clean, available water, some bicycles, and a smidgen of soap and medicine, AND everything else is accomplished with hand-labor -- we could live in Peace.

It is just that I just cannot see the topdogs voluntarily enlisting to emancipate their energy slaves by using a humanure outhouse, picking watermelons and cotton, slaughtering a farm animal, and personally pedaling everywhere.  No private yachts and jets?--Never!!!  They would rather enslave people first.

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

Whoa. Great post. You must have been saving that one. Careful, you might scare some of the newbsters away.

I know you are a big fan of Condor and Syriana, so I've got a couple more to add to your list.

The Sentinel, out on DVD this week, is actually a decent movie. Right up your alley. I loved it. It's got a great cast. Michael Douglas, Kim Basinger, the super-hot Eva Longoria. But it's all about The Bauer. I know he's not Jack Bauer, but it's that guy, what's his name? - why does he look like that other famous actor, you know, whatisname...

Anyway, it's great, conspiracies, evil foreigners, you name it.

The other one is a book.

'Bomber Command' by Max Hastings. Simply the best war historian alive. You can probably get it on Amazon. I think it is out of print for the most part. It was written at a time when nobody cared. I read about ten pages a day. It is just too intense. It covers everything we speak of here, including the apocalypse.

Some day you're gonna hear that name Hastings, and you'll remember who told it to you first.

Alright, Bob, Over and Out.

your problems are your fault.  Expect Carter's Sweater Speech [from so long ago], playing incessantly during dinner at these [KBR] workcamps, to convince you that TPTB warned you: it is not their fault that you and your offspring ignored this wise advice on exponentiality and 'the Tragedy of the Commons'.

That's not the proper framing. It's a Globally Competitive and yet at the same time, "Free" Marketplace. We don't choose the winners and the losers. (But thanks to options back dating we always are the winners.) If you are a "Loser" it is because you didn't compete hard enough. You didn't follow the Nine Steps*.

** See the movie, Little Miss Sunshine if you don't yet know what the Nine Steps are. This movie is guaranteed to change you from being a "Loser" to being one of the winners. Let the competitions begin. Music Maestro.

Nigeria runs out of jet fuel

Abuja - A shortage of aviation fuel in Nigeria has caused airlines to cancel or delay hundreds of domestic flights over the past week while British Airways planes are stopping in neighbouring Benin to refuel.

Airports have been crammed with passengers desperate to get onto flights and some airlines have resorted to changing their routes at the last minute according to fuel availability.

As for why there's a shortage of jet fuel in an oil-producing nation....  Like Iraq, Nigeria lacks refining capacity.  So they buy refined products such as kerosene for people to use for cooking.  Kerosene can also be used as jet fuel, but is cheaper, so the suppliers were selling it to the airlines at great profit, rather than to the people it was meant for.  They've cracked down recently...which means the airlines are facing shortages.

News just in from the BBC:


US authorities in Iraq believed that Peak Violence was now in sight.  Having recognised that resource depletion was getting close to 50% (i.e. half the poulation are now dead) they expected the violence to tail off.


Sir Richard Branson (a target of George Monbiot) announced that all profits from his air (Virgin Air) and rail (Virgin Rail) businesses will be donated to green causes, principally developing environmentally friendly jet fuel - £3 billion not to be scoffed at.  Virgin Green, Virgin Friendly, or maybe bio-Virgin?  No - I got it - Virgin Environment.

Wait a minute now Sir Dick - let me work this out.  You are now running your businesses on a not for profit basis - so why not just shut them down - job done - climate saved.

Please get in touch and I'll do the sums for you.

So his $3 billion goes straight into producing fuel for his own fleet of planes, soaking up a pretty penny in subsidies, and he gets to look green in the process.

That is like the ultimate scheme. Vinod eat your heart out.

Thought i'd through this random thought out:

It is often said as the US account for 4% of world population yet use 25% of world oil and so would be hardest hit in a peak oil scenario. I have more omtimism for the human race. I reckon the inverse is true. As the oil useage per capita is so high would it not therefore stand to reason that the average Americal can curtail the most oil use per capita?

I reckon America is BEST prepared to ride out the energy rodeo simply by virtue of the amount of oil it consumes.

Look at it this way. I am Mr John West developed and use 100 barrels a year (I enjoy slick oil wrestling). Now take Mr Ping Long Woo developing who uses 25 barrels. Mr West can cut a lot more oil usage than mr Woo. You try and get mr Woo to cut his oil use by 20 barrels!

If it counts for anything, the painting I was doing this evening has released vapour which may have affected my thought process a bit. You know expanded my mind Man. Peace.

Another thought: CO2 was around 2500ppm at the time of the dinosaurs: there must be shed loads more fossil fuel..........somewhere! If we already burned 1 Trillion barrels and added 100ppm to the atmosphere then there must be 20 trillion barrels of oil in the earth. OOooops. forgot about the coal. Alright there must be shed loads of that! Anyone care to shed light on my 2500ppm CO2?


I reckon America is BEST prepared to ride out the energy rodeo simply by virtue of the amount of oil it consumes.

I would prefer preparations like having most of the population in fairly dense towns with bicyle and collective traffic networks, biomass fueled district heating, good rail lines, nuclear and hydro powered electricity grid, and so on.

I would add a nation with more exports than imports at today's oil prices; and hopefully with strong exports to oil exposrting countries.

A viable non-oil transportation network as an easy alternative  to driving, so citizens can easily leave their cars at home most days and business does not have to truck anything in or out.

CaCO3 = carbonate rocks are, by far, the largest reservoir of carbon in the Earth's crust, with about 2/3rds of the 5*10^19kg of carbon in the crust. In the mantle is a (probably) far larger amount that exchanges very slowly with the crust (via subduction and volcanism). Most of the rest in the crust is organic carbon as a minor constitiuent of sedimentary rocks (~1-2%). All the oil, gas and coal make up a tiny fraction of the total carbon reservoir. But it easily liberated (compared to C in carbonates) and really enjoys combining with an O2 molecules to make CO2.

If all the reduced C in sedimentary rocks could find an O2 to make friends with, it would consume several times over all the oxygen in the atmosphere.

Wehappyfew - I'm breathless.

So how about some links and a carbon budget:

Organic C in crust =
Carbonate C in crust =
CO2 in atmosphere =
CO2 / HCO3 in ocean water =
Reduced C in mantle =

Residents times (atmosphere and ocean for CO2) would be good too

(with moles C in each case)

And why do hydrocarbons exist in the first place?  Life cycle..  this is a virtual university with posters dying to learn.

You made some great points - pleae email me if you post a reply.



Why do hydrocarbons exist?
Obviously they were deposited in a safe place by Gaia to reduce the CO2 concentration in the atmosphere so the greenhouse effect could be be gradually scaled back to compensate for the slowly increasing luminosity of Sol.

An interesting byproduct of this process is the release of all that wonderful electronegativity.

carbon cycle links:




Why does a PhD geochemist need to see this?

I'm 186 years old now, despite having worked with radioactivity all my life, but my memory's a bit gone .. and I thought other folks looking on might be interested.

You still got to fill in the blanks though - nothing like hard numbers to help folks understand.

If you are really one hundred eighty six years old, can you share some of that radioactivity?

You must remember Garrels and McKenzie, they are the ultimate font of geochemical data, even if a bit old (oops, not to imply that old is bad, since we have a 186 year old in our midst) ;)

Here's a some tables from 1971 G&M:


Holland is a good source too, but his data is mostly from G&M.

Holland, H. D., 1978. The Chemistry of the Atmophere and the Oceans

Good links - but don't forget to fill out the table.


As I recall from a few days ago, he did mention he's 95 yrs old! I'd say he's been around the block a few times. And sharp as a tack.

I listen to what he has to say!
Crywolfe can i have my $5 now?

correction: he's 95+


Geewiz - how do you do that?  Normally I can't find stuff I wrote the day after - let alone remember what I said!
on the right side of the screen, where it has you logged in as Cry Wolf: click on the bit that says: Your comments.

I just typed in your screen name and searched a few days back.

Then cut and paste.....

Then for more fun... Ctrl and keystroke F opens up a Find block, where you can type in a keyword like oil, or your screen name and hit enter.

hope that helps

95+ ? really

Thanks - I'll try it - there's a lot of information to keep track of.
Hello Cry Wolf,

Your quote: "And why do hydrocarbons exist in the first place?  Life cycle..  this is a virtual university with posters dying to learn."

Any TODers who have not read this are missing half the facts of Peakoil & Climate Change.

Reg Morrison, an astounding writer IMO, has an excellent article entitled "HYDROGEN: Humanity's Maker and Breaker" (PDF WARNING: 1.82mb) on his website at http://www.regmorrison.id.au/

HYDROGEN: Humanity's Maker and Breaker

A reassessment of life, its cosmic role, and the future of our species.

The primary molecular ingredients of earthly life are carbon, hydrogen, nitrogen, oxygen, phosphorus and sulfur (CHNOPS).† All six play vital and particular roles in the structure and behavior of organisms, but the traditional emphasis on carbon obscures a more accurate, cosmic view of the biota, the biosphere and our place within it.† This skewed perspective effectively conceals the magnitude and immediacy of the threats we face on this hydrogen-regulated planet.
Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

From memory, the atmosphere went from reducing to oxidizing (oxygen went from a rare and extremely toxic poison to the source of life) about a half billion years ago, at the start of the Cambrian period.  Limestone was formed only then.
Isn't the carbonate cycle now slowing due to ocean acidification? Coral and forams are dissolving rather than getting buried in the mud as a long term carbon sink. If the dinosaurs truly did breathe air that was more rich in CO2 it suggest things will get back to normal after
  1. extinction of the top predator
  2. tens of millions of years have passed.
Lovelock points out that ocean algae, which remove a lot of the CO2 from the atmosphere,  like cold water.  So this is one of the bad negative feed back loops, as ocean waters warm, the distribution of algae become more confined to high and low latitudes, and less CO2 is removed into the Oceans.  He is also keen on the idea of a stable warm upper layer of water, that becomes saturated with CO2 - and becomes acidified.  This stable upper layer does not mix with deep ocean water, so the ability of the oceans to remove CO2 by solution is significantly reduced.

Lovelock likes the idea that the Earth is happier in its cold glacial state. And here we get a positive feed back loop in that this would probably leave OIl CEO under about 3km of ice.

And the difference between a happy and a sad earth is?
A happy earth is a stable earth, not one that holds horses, but one where prolonged equilibrium is maintained. We are actually living in a (historically speaking) warm interglacial. Warm interglacials are less stable and therfore less 'happy'


Well what I've read is that sea levels might rise, coastal cities may get destroyed by storm surges and that the inner continental areas of N America, Europe and Asia may dry out leading to shortage of water and food:-(

Africa and Australia, of course have alreday become used to this.

I reckon America is BEST prepared to ride out the energy rodeo simply by virtue of the amount of oil it consumes.

The human condition is to expect more and be unhappy with less. Numerous economic experiments have shown that the mental pleasure we receive from making 2,000 $ on a $10,000 base is more than offset by losing back $1000 back to $11,000.

I think though theoretically the US could reduce dramatically, our propensity to want more will cause misery and war rather than sacrifice (that is, unless we can convince people that using less is actually better for them instead of viewing it as a sacrifice)

Hello Nate - you need to post some references for the numerous economic experiments part so that She Wolf can check these out.

I've often wondered about behavioral fractionation caused by forced migration - whether or not those who decided to get on a sail ship and cross the Atlantic in search of fortune may in some way be different from those who stayed behind for a life of purgatory.  And if there is a difference, whether that could be correlated with CO2 emissions?

In other words - are the numerous experiments controlled outside of the US - and why does Denmark have falling oil consumption - despite record oil consumption - when the trend else where is opposite?

Fully expecting to get slapped down big time on this one:

so fire away

And why is it that you always spot the mistakes a mili second after you hit the post button?

Correction despite record oil production not despite record oil consumption

Oh oh, and cross correlate with the first happiness story I listed below:

The exception is Denmark, where people have become more satisfied with life over the last three decades.

Lower oil consumption, higher happiness.

is that a plan, or what?

Production is consumption!!!:)
Cry Wolf (ironically I heard some wolfs cry last night - Im near Alaska presently, harvesting wild Matsutake mushrooms of all things).

You bring up several related and important points:

1) google 'loss avoidance' and economics and you should find some references.  The main point is that we are hardwired to go forward not backward. Going backward (unless we THINK we are going forward), just 'feels' bad.

2)Regarding migration, you are spot on with that observation - on average those happy with the status quo stayed and those antsy and eager for adventure, disovery, riches, etc migrated - we are a migrant culture - how much of that is genetic or cultural is being tested (the most looked at genetic component is a certain dopamine (DRD4) receptor which makes us more impulsive and have the propensity to seek novelty - American Mania by Peter Whybrow (who is on my dissertation committee) is a great book on this subject

3) the Danes are truly remarkable in that graphic, but much of that energy was replaced by wind so their total energy consumption did not go down. but the point is that people will do things to improve their well being, period. If, as historically has been the case, an increase in energy consumption accomplishes that goal, then they will attempt to increase energy consumption, even at the expense of the commons. If, by some miracle or hard work by internet bloggers and neuroscientists, people realize they are actually better off (healthier, happier, etc) by using less energy, then we could see consumption decline and possibly dramatically so - the key is what is the cultural carrot - today its money and the things that money buys - tomorrow who knows?

By the way - regarding nordic countries and happiness - here is a post about that.

And whos the She Wolf? Your research assistant...?  ;)
Sounds more like his probation officer ;)
Oooooo..   The Last of the Sasquatches
Better contact SuperG and have him remove that quip.

Alaskan border munching mushrooms - can't be that hard to find.

And clearly shown on this chart you'll see (if you look closely) that the oil consumption of the Northern Countries (Iceland, Norway, Sweden, Finland and Denmark) tracked very closely the oil consumption of the Benelux Countries (Belgium, Holland and Luxembourg) until the early 80s.  And then an extraordinary thing happened.  Consumption in the Northern Countries remained flat while the Benelux consumption took off like an Airbus.

I don't have time to get too distracted by such detail, but in terms of understanding cultural differences driving greed and consumption, Europe may provide an interesting testing ground.  Got to be careful analysing the data cos there are countries like Spain and Portugal who's ecomonies boomed following admission to the EU.  But maybe they could be used as models of what can be expected in the newly joined East European States.

I've not looked at population.  I guess I know that population in the N countries has been pretty stable.  Maybe it has grown dramatically in Benelux - but there again there would be a message about economic migrants and consumption.

Part, of this story I imagine may be related to waste associated with the EU parliament centred on Belgium.

Darn, there goes another job opportunity.
Uggh. Graphs! The sun hasn't even come up here. That's worse than garlic on a silver crucifix. Don't you have any manners? Please, not until 3pm your time. Cheerio!
Regarding your earlier question about whether Stuart Staniford was wrong in claiming oil prices were not a bubble:

The sudden influx of financial investors into commodity markets has introduced excessive risk premiums and driven prices higher than justified by fundamental factors. According to the International Energy Agency, hedge fund holdings in energy markets, for example, increased from US$3 billion in 2000 to about US$100 billion last year, inflating one of the biggest speculative bubbles in recent history.  However, the tide may already be receding, as fundamentals and geopolitical considerations point to lower commodity prices.


Sure.  Loss avoidance.  Things feel bad.

While there is some debate in the happiness research field about the very nature of happiness, I think that most agree it is a fairly long-term measure.  We may all hate getting cut off in traffic, but how we deal with that might relate to our long term happiness.

I question whether your focus on short term fincancial feedback is appropriate to the larger question of happiness in societies.

At the same time, I do recognize that a consumptive lifestyle is a hard road to happiness.  Most researchers to agree that less "desire" contributes more to happiness than getting X fraction of everything you want.

So ah, when you speak of "going forward not backward" remember that there might be an off-ramp to happiness along the way.

For those who haven't followed the links:

Modern humans, stuck with an ancient brain, are like rats on a wheel. We can't stop running, because we're always looking over our shoulders and comparing our achievements with our neighbours'. At 20, we think we'd be happy with a house and a car. But if we get them, we start dreaming of a second home in Italy and a turbo-charged four-wheel-drive.

This is called the "hedonic treadmill" by happiness scholars. It causes us to rapidly and inevitably adapt to good things by taking them for granted. The more possessions and accomplishments we have, the more we need to boost our level of happiness. It makes sense that the brain of a species that has dominated others would evolve to strive to be best.

Dear wolf no slap Conservation and transition into Natural gas, coal, wind,biomass and district heat-cogeneration has resulted in the less use of oil. In Denmark more than 40% of the total primary energy use is spent in the home, so even if the transport fuel use is up, the substantial reduction of oil use in electricity/heat and home heating far outweighs transport oil use. Statistics here for Denmark. http://www.ens.dk/graphics/Energi_i_tal_og_kort/statistik/indikatorer/DanishReport2004.pdf Regards/ And1
The dutch have windmills too.  You see the demand destruction in Benelux and Northern tracking each other down in the early 80s - and I would find it hard to beleive that Benelux then went and started using fuel oil again - in fact Holland is a shining example of a post-industrial economy.  So I suspect a lot of the growth in their consumption in transport - Schipol probably gets through a chunk of jet fuel?
The dutch consuption wonders me too. My guess for this anomaly is that the Dutch oil imports are shown, not the local consumption. That makes a big difference if your harbour (Rotterdam) is the largest in Europe and a main "oil hub".

(20 kilometers from Rotterdam)

That would lead to double accounting.
To reduce this a bit (Nate, have you read Luxury Fever?) we are the most wasteful, and we should be able to conserve more, but we are more 'emotionally' addicted, and will bitch and whine more (and start wars too).
The good news is that from I've seen, national measures of happiness do not correlate well with either GDP or energy consumption.

The bad news is that (eyeballing it), climate matters.  Go to where the sun shines.








A good lead from that last site:


And finally:


IMF warns global growth may be peaking

Global economic growth is at risk of peaking because of high oil prices and rising protectionist sentiment, warned Rodrigo de Rato, the International Monetary Fund's managing director, on Tuesday.

"The global growth cycle may be close to its peak," Mr de Rato said in his opening statement at the joint IMF and World Bank plenary session in Singapore.

Let's get this straight: it's a cycle, but you're trying to not let it be a cycle? Or one without a peak, a cycle that keeps going upward? How do I visualize that? You talk about a "risk of peaking", but doesn't a cycle simply have a necessity of peaking? Is that a foot in your mouth?
"The best hope for continued high growth lies in further increases to international trade. If this does not happen, the outlook is less encouraging."

Mr de Rato also warned of a continued risk that current account imbalances will unwind in a disorderly way.

Further increases in trade that mean simply swapping 'equal items' make no sense, there has to be a party that wins, and one that loses.
I think de Rato means that the US is ready to use any kind of force and power it has, to do something about its negative trade balance, if need be, in a 'disorderly way'. And the EU is expected to join the festivities.

"There is a growing risk that protectionist sentiment will overwhelm good sense. If it does, all of the other risks loom larger."
These threats are hardly veiled anymore. Protecting your resources and your people is NOT good sense. Good sense is to bend over, spread your legs and take it from behind. Or else, 'the other risks loom larger'. You wouldn't want that to happen would you?

The IMF chief urged developed and emerging countries to renew their commitment to multilateralism and resume the stalled Doha round of world trade talks.

"It delays an agreement that would raise prosperity and support growth around the world, and it feeds a growing inclination towards, at best, bilateralism and, at worst, protectionism."

I think this means that the "developed" countries have (over-)reached their limits to growth, and now have their eyes on the riches in the rest of the world, even more than they already have. This time we mean business. Your resources are all we have left.

'Raise prosperity around the world' is of course the most utter nonsense you could ever formulate, since it's impossible to have a positive trade balance in every single country on the planet. Guess that's why the word 'balance' is in there.

And all this talk about Doha is just a way of telling the 'developing' world that if they don't let us in through the front door, and hand us the loot voluntarily, we have other ways.

We in the west have all grown up reading terms like healthy, and sturdy, economic growth. Terminology works miracles. The positive connotations get rammed in so often and early in life, it takes a real effort to ask ourselves what it is we want to grow into, or even why we need to grow at all. We need more than we have? The IMF is going to get it for us, whether we want it, need it, or not.

Free trade? Free is positive, right? Well, if you're living in Bolivia, Burundi or Borneo, it only means you're free to choose whether we come in through the front door or the back door.

ASPO-USA Conference on Peak and Decline of World Oil Production in Boston now has reasonable priced rooms available.


Limited time availability - rooms at special discount rate of $99 at Comfort Inn, 900 Morrissey Blvd, Boston MA 02122
Offer expires October 2, 2006.

You may reserve a room for the nights of October 25, 26, and 27 or any combination of those 3 nights.

To make a reservation, call (617) 287-9200.  Be sure to mention ASPO-USA conference.
Rate is $99.00 plus 12.45% Massachusetts Room Tax.  
Guests will be asked for a valid credit card to secure reservation when they call.

Check-in time is 3:00PM or later, check-out time is 12:00 noon or earlier.  

All rates include complimentary deluxe continental breakfast offered from 6AM to 10AM daily.

Transportation: complimentary shuttle service to and from Logan Airport and to/from JFK-UMass subway station.  This is the Red Line subway going north into Boston; change at State Street to the Green Line (B line) to get to Boston University at BU-Central stop.

How close to conference site ?  Can a day be added before or after conference ?

Best Hopes,


It's in Dorchester. $20 cab ride or 40 mins. to an hour on the T.
The Conference is at Boston University (BU) so this (below)is how to get to and from the Hotel to the Conference. I believe it is a 20 min. ride.
Hotel shuttel to the subway then 1 change to the Conference.

I would guess you could add another night at the same rate but don't know for sure. Call them. I did it at another hotel. Email me at 1rblock@comcast.net with your phone number and I'll give you a call.

 Hope to see you there, Rick

Transportation: complimentary shuttle service to and from JFK-UMass subway station.  This is the Red Line subway going north into Boston; change at State Street to the Green Line (B line) to get to Boston University at BU-Central stop.