DrumBeat: September 22, 2006

[Update by Leanan on 09/22/06 at 9:17 AM EDT]

The gusher paradox

A new oil discovery is great for the drillers - but may be bad for us.

...I happen to be reading Matthew Simmons's Twilight in the Desert, which describes how Saudi Arabia in particular and the world in general are running out of oil. This "peak theory" of oil (as in, the world has achieved peak production) would seem to be off base with the discovery of a 15 billion-barrel oilfield. And, as Nichols points out, oil alarmists have been sounding the same bell for decades.

But I'm not sure that we should be so quick to dismiss the peakists. At some point they will be right, and I believe it's important to act as if they already are. Pursuing petroleum at any cost overseas, and even domestically, exposes us to all sorts of risk and merely makes it easier to avoid the tough steps that could reduce our dependence on oil.

Surviving The Oil Crash: Leadership And Social Structure

What is most apparent is the larger problem that there is no leadership, no sense of organization, for dealing with peak-oil issues.

One might consider as an analogy the Great Depression. During those ten years, everyone lived on his own little island, lost, alone, and afraid. It was a "shame" to be poor, so one could not even discuss it with one's neighbors. The press and the politicians largely denied that the Depression existed, so there was little help from them. In general, it was just each nuclear family on its own - for those who were lucky enough to have a family. Barry Broadfoot, in Ten Lost Years (p.353), records the memories of one Depression survivor:

"Every newspaper across Canada and in the United States always played up the silver lining. . . . There were no such things as starvation, hunger marches, store front windows being kicked in. Yes, they were reported, but always these were called incidents and incited by 'highly-paid professional agitators.'"

Opec production cutbacks likely to be just a question of time

Oil Companies are Split on Push by Nations for More Profits

Oil-producing nations demanding contract concessions or seeking outright expropriations have created a split in the petroleum industry, with some companies insisting a contract is a contract and others saying they are willing to renegotiate some terms to reflect higher oil prices.

Concerns Raised Over Natural Gas From Abroad: Critics say imported LNG burns hotter and pollutes more than the domestic product.

Army to test hydrogen fuel cell vehicle

Suits Say U.S. Impeded Audits for Oil Leases

Four government auditors who monitor leases for oil and gas on federal property say the Interior Department suppressed their efforts to recover millions of dollars from companies they said were cheating the government.

US DOE Releases Climate Change Technology Program Strategic Plan

House panel embraces "25 by '25" energy goal

Congress could set a goal of deriving 25 percent of all U.S. energy from renewable sources -- biofuels and hydro, wind and solar power -- by 2025 under a resolution approved by the House of Representatives' Agriculture Committee on Thursday.

Michael T. Klare: Taking Oil Out Of The Equation

Mubarak says Egypt will develop nuclear energy

Fears grow over Russia undermining EU energy strategy

Italy has sounded the alarm over Russia's recent energy deal with Algeria, amid fears that the Kremlin is undermining the EU's strategy of seeking less energy dependency on Moscow.

Heatwaves, biofuel demand push up price of wheat; Irish bread prices to rise

Brazil, Bolivia to address energy crisis

Brazilian President Luiz Inacio Lula da Silva insisted Thursday he's taking a tough line in a major energy dispute with Bolivia, and said he'll meet with Bolivian leader Evo Morales to try solve the crisis after Brazil's Oct. 1 presidential elections.

Australia: Gas could cost more in State supply plan

Australia’s peak oil and gas lobby yesterday criticised the State Government’s plan to force gas companies to develop marginal gas fields as a condition of increased LNG sales overseas, claiming it could distort the gas market, hurt producers and hit consumers with higher bills.

EU Imported More Energy in 2005

BRUSSELS, Belgium — The European Union imported more energy last year to plug a deficit after its own production of oil, natural gas, coal and nuclear power fell, the EU statistics agency Eurostat said Thursday.

[Update by Leanan on 09/22/06 at 3:07 PM EDT]

Putting ethanol in the fast lane

Despite falling oil prices and a corresponding drop in the stock price of various ethanol companies, famed venture capitalist, Sun Microsystems co-founder and ethanol investor Vinod Khosla outlined four steps he said would help the country use more of the plant-derived fuel.

Clinton debuts $1B renewable-energy fund

NEW YORK - Former President Clinton announced the launch of an investment fund expected to raise more than $1 billion for renewable energy on Friday, the final day of his global issues conference.

The Green Fund would focus on reducing dependence on fossil fuels, creating jobs, lessening pollution and helping to reduce global warming, all while making a profit, Clinton said.

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 to the Conference is by shuttle service to the subway (provided by the hotel) and then one change on the subway to the Conference at Boston University.

The Hotel provides complementary shuttle service to and from Logan Airport.

Full registration at the Conference includes breakfast and lunch buffets on Thru and Friday and the receptions Wend. and Thru evenings.

There will also be Saturday morning workshops.  I will be co-moderator for one on mitigation strategies.

Best Hopes,


That's great see you there.
Why don't you buy an advertisement?

This is getting to be a bit much. Reeks of desperation, IMHO.

I don't want to start a debate here so don't bother to respond.  I will be spending my time trying to do something constructive to help solve the Peak Oil problem not answering you.

Not desperation. We have about 250 people registered and would like to have about 500, with one month to go.

ASPO-USA has very little money.

There are about 6 people in total all volunteers organizing the Conference. The Organizer Dick Lawrence rides 30 miles to Boston University by bicycle to arrange things there.

They, and I are trying to help the situation, are you?

The Conference is primarily funded by the registration fees.

The organizers of the Conference are on the hook personally for the money it cost to put it on if it doesn't break even.

Would you do that even if you were able to?

What are you doing to help sole the Peak Oil problem beside complaining?

I don't have anything against you or the conference. I am sure APSO, like thousands of other organizations are trying to do and are doing good work. I wish you the best of luck with this event and your other activities.

However, it does seem you post on this an awful lot. It seems in this case that you waited for the Drumbeat and rushed to stick in the first post. I don't think there is anything wrong with mentioning the event, but as I noted in my first comment, it is my opinion that the frequency is "getting to be a bit much". It is my right to make that observation and I stand by it.

Your defensive reply and particularly this point, do seem to reek of desperation.

The organizers of the Conference are on the hook personally for the money it cost to put it on if it doesn't break even.

Regardless, I hope the event is a success and you get your money back.


A Scholar Is Alive, Actually, and Hungry for Debate.

Nice try, Hugo.

  In his afterlife Noam Chomsky's books have realy jumped on the Amazon sales lists. It must be nice to have a President who reads and recommends books. I like Hugo Chavez a lot-he's a great UnAmerican!
I'm sure there are a few people in the Land of the Free who would be happy to read Chomsky's obit.
"Kill the messenger"
I'm the messenger.
Video with English translation of Chavez' speech to the UN on Wednesday In Real Player format.

This is GREAT stuff! This guy has cajones, that's for sure.

Important Information:

This may not be appropriate for this blog, but if some one would like to make a few Million before the SHTF, design a complete line of no spill coffeepots to replace the current pots supplied with Mr. Coffee and other makes. I am sure some one would like to cash in on this idea, and advertise it as the no spill replacement pot, however I have solved the problem for myself.  Rip a half-inch strip of tape from a roll of duct tape and cut a 1-inch length and paste it below the lip of the pour spout so it extends beyond the spout about a 1/8th of an inch or more. Problem solved, of course my wife says, well now doesn't that look lovely, yes but look at all the spills I avoid, and the dishrags no longer turn brown. Now I am not a conspiracy advocate however I believe the paper towel Mfg.'s are subsidizing the coffee pot makers and some one is being paid off.

Try a German brand, like Krupp. I know Black & Decker makes toasters, maybe they've got a coffeemaker, too.

Good stuff. I'd give you 'Post of the Day,' but I think I already awarded it to Step Back. Runner-up.

i had an automatic coffee maker, but i have to say i prefer making it manually using a #4 paper filter.

i always wonder, what is more renewable - using water to rinse off the old filter, or using a new paper filter ?

as far as the paper towel - they come in very handy.

especially if you've run out of toilet paper  8-/

Bravo for Hugo Chavez !

That's what I use too, a manual cone filter.  I heat just enough water (pour it from the travel-cup), but that's more for speed than efficiency.

Probably the most renewable thing is to compost coffee+filter.

OK, just as long as everyone is being reasonable:

Noticeable for his reticence was Saudi Oil Minister Ali Al Naimi, who steers the policy of the world's biggest exporter.

But he broke his silence on Tuesday, saying that oil then around $62 a barrel was at a reasonable price for producers and consumers.

  I wonder if the KSA will change its tune on November 8th. With increasing water cuts and declining production,they can no longer keep prices down in order to discourage alternative energy and continued election of their pals the Republicans by overproduction. In yesterday's thread the question was asked about who had the money and motive to manipulate prices and possibly manipulate the elections in the US. Bingo!
  The Bin Laden family are Royal kin-folk, and the Al Quida financing is Saudi, plus I think Osama is most likely in Saudi Arabia in one of his half-brother's homes, not in the hills of Pakistan with the Pathan tribe. Dialysis takes sophisticated medical equipment. The Neocons are protecting him.

The sulfur smell in the air isn't just from sour crude.

The sulfur smell in the air isn't just from sour crude.

That's what Hugo Chavez said Wednesday at the UN, something like 'the devil was here yesterday', meaning W, and 'the smell of sulfur is still in the air'.

KSA already made its play: Decreasing demand will force production cuts across the board at OPEC. That's what they will say.

what does the acronym KSA mean?
long time lurker and occasional amateur agitator, but not familiar with that one.
Acronym Finder - recommended for all TOD readers :)
Hey, you still up for helping me with my database? Or was I thinking of somebody else? If I was, I apologize.
I think it was someone else - I did offer to help GreyZone but never heard back. I may be able to help though. Email me.
One of the editors here, some time ago, when asked about his personal preparations for dealing with the coming collapse, said he planned on "stealing pies from window sills".

Now it seems there's an alternative to the hobo life:

Yes, they were reported, but always these were called incidents and incited by 'highly-paid professional agitators'.

Anyone know where you sign up to be a professional agitator?

Apply at FOX, CNN or talk radio.
"Now it seems there's an alternative to the hobo life:"

 That comes as a surprise.  I most sincerely doubt it.


 PS When I was in school, they were called "outside agitators". I guess cuz we weren't smart enuf to agitate on our own. Which is probably why I am a Wharf Rat, and not a Maytag.

"They'll be Pie in the Sky when you die'-Joe Hill, famous outside agitator of the International Workers of the World
Well they tell me of a pie up in the sky
Waiting for me when I die
But between the day you're born and when you die
They never seem to hear even your cry

Jimmy Cliff

Michael Klare's article on TomPaine.com (above) is an excellent, if very brief, synopsis of US involvement in the Persian Gulf region.  I'm not so sure that I agree with all his conclusions, but the history lesson is worth reading.
Thanks, Leanan, for all those fascinating links.

Though I was about to go cycling along the Moselle river on this sunny September afternoon in central Europe.

Now I'm glued to the flatscreen again ...

Go riding. I spent a few days in Koblenz 2 years ago and loved it, rode around on the train and explored the city itself. I loved it even tho I couldn't speak a bit of German.
I wish I could have had a bike there.
As cyclist who lives in Koblenz, I can say with some confidence that I really, really miss southwestern Indiana ...
Anybody notice the typhoon that formed at the mouth of the Persian gulf?

Here is the Satellite  picture

Here is the projected strength.

both from the Joint Typhoon Warning Center

I think they should name it typhoon george.  It just seem the appropriate thing to do.

Here is another higher res image from the Arabian sea.

Be warned, these are some big files.
They are from a nasa near real time site

These pics are cool.  
Anybody notice the typhoon that formed at the mouth of the Persian gulf?

Yes, Yes, quite surprising. I thought I was the only one. My nephew brought me some new optical devices for my birthday. They are made in Germany by some American firms. Quite good. From my palace, I spotted something sinister. We decided to climb to the top of the Burj al-Arab Hotel to get a better look. Actually, we took the elevator.

You know it was me that decided to name it 'George.' My first choice was Muhammed. But that's so cliche. And it's not what you think. I had Democracy in mind. George Washington was the idea.

I suspected we were going to attack Iran. I just didn't think we would use the secret weather machine located in the Alaska.

weather machine

Yes. I was going to ask about this, my friend. You get your information from your government's military and space websites. Is this credible? How old are those photos? Do you worry about being captured and put in the Guantanamo? Sorry, the Abu Ghreib, my translators say. No...sorry again, my apologies. The Gitmo.
Yes I worry about ending up in gitmo.  

But as a peak oil advocate, at least I can look forward to being tortured with green power. When the electrodes are clamped on my testicles,  I will be secure in the knowlege that the amperage is provided by Gitmo's large, earth friendly wind turbines

Anyone know what the chances are of this damaging any of the oil infrastructure of the Persian Gulf?
The projection says it will remain relatively stationary.  The only possible effect is going to be interference with shipping traffic.  

Although I doubt that the insurance companies will be happy if you use a super tanker to play tag with a cyclone.  I imagine that the sea's will be pretty rough, even outside the storm.

Best question today.
I noticed in one of the lead articles concerning
"social responsibility and surviving the oil crash"
the following quote:
 "The press and the politicians largely denied
that the Depression existed". I think we are seeing
a repeat of this concerning peak oil. The Iron
Triangle existed even in the 1930's.
This is the second or third post that supports the notion of widespread political and social denial of the Great Depression.

The following is an exerpt from a speech FDR gave at Madison Square Garden in Oct. 1936. It was the last speech of his 2nd presidential campaign. There is no denial.

Tonight I call the roll-the roll of honor of those who stood with us in 1932 and still stand with us today.

Written on it are the names of millions who never had a chance-men at starvation wages, women in sweatshops, children at looms.

Written on it are the names of those who despaired, young men and young women for whom opportunity had become a will-o'-the-wisp.

Written on it are the names of farmers whose acres yielded only bitterness, business men whose books were portents of disaster, home owners who were faced with eviction, frugal citizens whose savings were insecure.

Written there in large letters are the names of countless other Americans of all parties and all faiths, Americans who had eyes to see and hearts to understand, whose consciences were burdened because too many of their fellows were burdened, who looked on these things four years ago and said, "This can be changed. We will change it."

We still lead that army in 1936. They stood with us then because in 1932 they believed. They stand with us today because in 1936 they know. And with them stand millions of new recruits who have come to know.

Their hopes have become our record.

We have not come this far without a struggle and I assure you we cannot go further without a struggle.

For twelve years this Nation was afflicted with hear-nothing, see-nothing, do-nothing Government. The Nation looked to Government but the Government looked away. Nine mocking years with the golden calf and three long years of the scourge! Nine crazy years at the ticker and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government with its doctrine that that Government is best which is most indifferent.

For nearly four years you have had an Administration which instead of twirling its thumbs has rolled up its sleeves. We will keep our sleeves rolled up.

We had to struggle with the old enemies of peace-business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob...

Will, I am a huge fan of FDR. He had the courage, wisdom, foresight, and decency so many other leaders past and present lack.

He also bucked every trend of his generation, Congress, the businessman, everyone. The media was almost as corporate controlled then as now, and everything else was ran by corprocrats. So, while FDR was working hard to change things, the spinmeisters were working hard to undermine him. That is the source behind all the newspaper articles etc, that were mentioned earlier.

Things were so bad back then that corporate farmers who couldn't sell their crops at a profit dumped kerosene on them and burned them, rather than letting starving people eat them. (BTW, a good ficitional account of these days is Steinback's The Grapes of Wrath.)

Let's get some perspective in this jubilant Roosevelt choir, shall we?

Congressman McFadden's 1934 Speech on the Federal Resercve

"Do not deceive yourself, Mr. Chairman, or permit yourself to be deceived by others into the belief that Roosevelt's dictatorship is in any way intended to benefit the people of the United States: he is preparing to sign on the dotted line! "He is preparing to cancel the war debts by fraud!

"He is preparing to internationalize this Country and to destroy our Constitution itself in order to keep the Fed intact as a money institution for foreigners. "Mr. Chairman, I see no reason why citizens of the United States should be terrorized into surrendering their property to the International Bankers who own and control the Fed. The statement that gold would be taken from its lawful owners if they did not voluntarily surrender it, to private interests, show that there is an anarchist in our Government.

"The statement that it is necessary for the people to give their gold- the only real money- to the banks in order to protect the currency, is a statement of calculated dishonesty!
"By his unlawful usurpation of power on the night of March 5, 1933, and by his proclamation, which in my opinion was in violation of the Constitution of the United States, Roosevelt divorced the currency of the United States from gold, and the United States currency is no longer protected by gold. It is therefore sheer dishonesty to say that the people's gold is needed to protect the currency.

"Roosevelt ordered the people to give their gold to private interests- that is, to banks, and he took control of the banks so that all the gold and gold values in them, or given into them, might be handed over to the predatory International Bankers who own and control the Fed.

I prefer the speech Eisenhower made at the end of his presidency.  I've got a hard copy, but don't know where I got it from.  It's titled something to the effect of warning about the military industrial complex being built following WWII.  He had the foresight to see what would become of the country following WWII with the new military power we demonstrated in that war.  Now it's going to bankrupt us all.  Grab a chair and bring some cold ones...
Dunno... Tate, I posted the tame section of that speech. FDR fires up the turbo-jets a bit further on...

Of course we will continue to seek to improve working conditions for the workers of America-to reduce hours over-long, to increase wages that spell starvation, to end the labor of children, to wipe out sweatshops. Of course we will continue every effort to end monopoly in business, to support collective bargaining, to stop unfair competition, to abolish dishonorable trade practices. For all these we have only just begun to fight.

Of course we will continue our efforts in behalf of the farmers of America. With their continued cooperation we will do all in our power to end the piling up of huge surpluses which spelled ruinous prices for their crops. We will persist in successful action for better land use, for reforestation, for the conservation of water all the way from its source to the sea, for drought and flood control, for better marketing facilities for farm commodities, for a definite reduction of farm tenancy, for encouragement of farmer cooperatives, for crop insurance and a stable food supply. For all these we have only just begun to fight.

Of course we will provide useful work for the needy unemployed; we prefer useful work to the pauperism of a dole.

Here and now I want to make myself clear about those who disparage their fellow citizens on the relief rolls. They say that those on relief are not merely jobless-that they are worthless. Their solution for the relief problem is to end relief-to purge the rolls by starvation. To use the language of the stock broker, our needy unemployed would be cared for when, as, and if some fairy godmother should happen on the scene.

You and I will continue to refuse to accept that estimate of our unemployed fellow Americans. Your Government is still on the same side of the street with the Good Samaritan and not with those who pass by on the other side.

Of course we will continue our efforts for young men and women so that they may obtain an education and an opportunity to put it to use. Of course we will continue our help for the crippled, for the blind, for the mothers, our insurance for the unemployed, our security for the aged. Of course we will continue to protect the consumer against unnecessary price spreads, against the costs that are added by monopoly and speculation. We will continue our successful efforts to increase his purchasing power and to keep it constant.

For these things, too, and for a multitude of others like them, we have only just begun to fight.

Today there is war and rumor of war. We want none of it. But while we guard our shores against threats of war, we will continue to remove the causes of unrest and antagonism at home which might make our people easier victims to those for whom foreign war is profitable. You know well that those who stand to profit by war are not on our side in this campaign.

Can you imagine this rhetoric today??? And he carried 67% of the vote in 1936. Come to think of it... he does sound a bit like Fidel doesn't he? <bg>

Holy crap....I never knew.  Everyone loved this man didn't they?  Or am I flying a kite?  The more I get into the other history not in my history book in high school, the more pissed I get.  Sucks though, b/c there is little I can do now.  Oh wait maximize my personal utility.  Right...check that.
Some more history:
"The Business Plot or the The Plot Against FDR was a conspiracy against President Franklin D. Roosevelt by a group of millionaire businessmen, led by the Du Pont and J. P. Morgan empires. Alarmed by the President's plan to redistribute wealth from the rich to the poor, they plotted to overthrow Roosevelt with a military coup and install a fascist government. The businessmen tried to recruit General Smedley Butler, promising him an army of 500,000, unlimited financial backing and generous media spin control. The plot was foiled when Butler reported it to Congress." Attempted Coup Against Franklin D. Roosevelt
Holy Shiite....
And it seems like every Democratic President since has tried to emulate FDR in some fashion, or be compared to FDR.

And remember FDR was the only president to serve 4 terms. The laws were changed to a max of 2 terms after his presidency.

Military-Industrial-Congressional complex is what Eisenhower first penned.
A very good non-fictional account of this era is Jimmy Carter's book An Hour Before Daylight.  The vivid descriptions of his childhood living on a farm are fascinating.  Carter is a natural born story teller and many of his stories are very entertaining.  I highly recommend it.  I read the book and I also listened to the unabridged CD on a road trip.

"Things were so bad back then that corporate farmers who couldn't sell their crops at a profit dumped kerosene on them and burned them..."

I recall that Carter said his father was ordered by govt planners to destroy some cotton crops and his father thought it was a sinful act but had to comply.

Carter also said the govt work programs were not effective in helping the unemployed.  I was surprised to hear a former Dem president make such an admission.

When I finished the book I had the sense that what got most people through those difficult times was a strong sense of community and a level of personal responsibility that we rarely see today.

I have spoken with elderly relatives who grew up on farms and had a lifestyle very much like Carter's.  I still smile when I think about one of these relatives telling me when the doctor made a house call he would leave with a live chicken as payment for his services and this was considered a very generous level of compensation.

My mother grew up on a farm in a Quaker community. They helped build each other's houses and with harvests. They were never in debt. They prospered through the depression. Can we learn that sense of community again?
Comparing this speech with Hugo's at the UN, it's obvious that Fidel wrote both.  Fidel would have been around ten at the time he penned FDR's words. Clever, how he has disguised his knowledge of English all these years.

I thank My lord and Personal saviour that "business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering" are standing tall again.  

Lemme get my tinfoil hat, I've got some real thinking to do!
Oh please. This is Roosevelt, the year is 1936. If you want to find evidence of Depression denial that's the last place you would look.
Good point.
The denial issue is really during 1930, 1931, and 1932.  Of course there were the nasty aristocrats who privately thought the Depression was a good thing because it would starve the unworthy.  There are a lot of Americans who think that way, perhaps now more than ever.  Every person who professes hatred of FDR is professing utter indifference over the fate of the millions of Americans who went hungry under Hoover, no matter how much he hides behind the Gold Standard, the Founding Fathers, and that Austrian autistic Hayek.  Maybe that's how superior humans think.  In that case, I'm cheering for our extinction, because our evolution into libertarian humanoids is not worth the current suffering of most of us.
Peak Oil has forced me to look at the New Deal differently, though.  Of course if Communists or right-wing fascists had taken over America instead we would still have burned up oil and polluted the land.  There's no point faulting FDR for believing in infinite growth when gas was 10 cents a gallon.  The capitalists of that time were so arrogant and violent (the National Guard was called out about twice a year to suppress strikers) that they had no choice but to promise a future of infinite growth to get their wage slaves to tolerate them.  Anytime a country suffered a long downturn it ended up on the verge of revolution.
The problem is that the forced-growth Keynesian liberalism of FDR, later the official theology of Marshall Plan Europe and Japan, was so successful that it ensured the resource crises would start decades sooner.  The alternatives to FDR would have given us more time thru sheer incompetence and meanness, but only until revolution broke out.  So I am rather suspicious of people at this site who think we can return to medieval steady-state economics while smugly preserving the fantastic inequality found with private property.  
super 390
I'm with you on most of your post but would rather make my original point over and stronger. Will started this by saying there was no Depression denial and then backed it up with "evidence" that was just meaningless, beside the point and thoughtless. tate423 gets in and says he thought everyone loved FDR.
There's leftist history and Marxist history and jingo history and Hollywood history and there's total bullshit.
Was there denial? Jesus Fucking H Christ there is always denial. Was there a time when everyone loved just one politician? Maybe if you believe the fantasies of Joe Stalin or Saddam Hussein. Or Karl Rove. My own grandfather, who lived through the Depression, at the absolute bottom of the lower middle class, relentlessly claimed that Hoover did no wrong, that FDR initiated the Depression in 1932. History at TOD is scarcely a hair better than what granpa talked. Few here have a concept what history is and everyone seems to believe that if you can supply a quote or a link you've established something. Wrong.
I was trained to think everyone loved this man.  
After a while it is hard to know what is reality and what is fantasy. All stories start sounding equally plausible. The only way to verify is to go back to the original printed newspaper stories (if they were preserved) and see for yourself what people were writing at the time. And then again, we all know how right MSM is when trying to relate a story. No doubt, in 10 years from now MSM will be fabricating a story about how no one saw Peak Oil coming and that it caught all reputable people by surprise. TOD posts will be "sanitized" off the records of history by the Ministry of Truth. We never happened.

(Click to learn why 1984 is one of my favorite books. It did happen. It happened here. It happened to us. Only a few elders remain & remember.)
Global Peak Growth?

From Singapore, where the IMF and World Bank are meeting.

As International Monetary Fund and World Bank officials meet here, economists say that irrespective of political risks - from the standoff between Western nations and Iran over nuclear issues; to Mideast tension; to increased oil nationalism in petrol-rich nations - global growth has probably peaked.

Will we slow or tip into a recession?

But whether the global economy merely slows or slips into reverse will, economists say, depend on people far more unpredictable than the Fed's chairman, Ben Bernanke


Volatile Oil Prices - Rising oil prices have widened the gap between nations with oil and those without it, sparking a race for supplies and a new confidence among exporters like Russia and Venezuela. With little spare production capacity, small disruptions in supply can cause sharp spikes in oil prices.

China's Overheated Economy - China is trying to cool its economy, which is distorting global growth by depressing manufacturing prices and raising prices for raw materials.

Terrorism - Experts cited terrorism as the second biggest risk to the global economy. A biological, chemical or nuclear attack in a major Western capital would be devastating.

The Middle East - The Middle East is casting an widening pall over global confidence. Experts say a key worry is that increased tensions could antagonize Iran, a leading oil exporter. The region also places an increasing military cost on the world's wealthiest nations and needs to be brought into the international community, the experts said. They tended to agree that U.S. strategy there appeared ignorant of the region's complexity, which could increase instability, and place further risks on oil prices and the stability of the global economy.

Yesterday, Nick posted a quote from me and a reply, I'll snip from and continue it (http://www.theoildrum.com/comments/2006/9/21/91441/3518/155#155):

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

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

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

Nick: "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. "

My (WeatherGlass) reply today:

Then where are they?  Why doesn't wind produce more than 0.1% of our electricity? Why can't I pull into to a Goodyear service center and have the guy install a 600 Amp-hr Li-ion battery into my Honda for $200 and a 60,000mile/5 year warranty?

It's one thing to assert a technology has an EROI of such-and-such, or that the charge density developments of Li-ion batteries are even exceeding Moore's law (which, BTW, I thought meant semiconductor densities doubled every 18 months, or 60% annual increase, associated with concommitant decreases in retail cost, since the mid 1960's.  Battery technology is not advancing anything remotely like this).

There is vast wealth to be made if you can scale it and sell it, it's not as if nobody is trying.  But these things are not scaling because of significant, barriers, technological and otherwise.  A lab bench demonstration is light years from retail shelves.

I remember reading popular science 25-30 years ago.  Wonderful developements in energy production and storage were just around the corner, and anticipated to be old hat long before 2006.

A developing nation of about 90 million people, with 3% of US GNP (2005), and without access to advanced technology, built subways in it's largest cities and 500 electric rail systems in most cities and towns of 25,000 and larger in two decades.

They did this with coal, mules and sweat.

That nation was the United States of America, 1897-1916.

BTW, US wind production is now over 0.1% and growing quickly.

And hydro pumped storage is an excellent way to store electricity.

Hello AlanfromBigEasy.

That's interesing (FWIW, I vaguely remember the last few red trolley cars in Anaheim, CA in the early 1960's).

It seems technically and financially feasible (compared to the $500 billion Iraq war, and $200 billion savings and loan bailout - remember?) to reproduce the electric trolley system.

The benefits seem so obvious, and the barriers seem so tractable, I wonder why it's not being done?  Or is it quietly?

Secondly, someone (probably me) should sit down with a paper and pencil and calculate just how much energy we could store in water towers.  Maybe there is a practical solution to electricity storage under (over?) our noses, at least for residential use.

Small "tourist" streetcar systems have been built in recenty years in Little Rock, Memphis, Tampa, Long Beach, Seattle, Kenosha, Dallas, Charlotte, and more that I cannot remember off the top of my head.  Real atreetcar transit systems in New Orleans and (kind of) San Fransisco.  

And Light Rail is slowly growing (Phoenix, Charlotte & Seattle first lines under construction; additional lines about to open in St. Louis & Denver, others under construction (Portland, Los Angeles, Dallas, etc).  

MUCH more is desired, but the Bush Administration is promoting birth control.  Get 80% or better fed funding if a city builds improved bus; 50% or less if they build Urban Rail.  A special small streetcar funding grant was blocked by Bush Admin rules.

We could start on about $120 billion worth of Urban Rail within 1 to 3 years used existing (some old) plans.  Everything from NYC 2nd Avenue subway to New Orleans Desire Streetcar Line.

  Weatherglass, I question your assertion that wind provides only 1/1000th of our electricity. Texas has approximately 10% of our electricity generated by wind, and so does California. Its cost competitive and the utilities are building like crazy. Check out the American Wind Energy Association website.
  I also question your claim that batteries have not improved. Why do cell phone batteries keep shrinking while lasting longer? How about new appliances like hand-held cordless saws?
  This does not mean I think electricity is the answer to all our problems, but wind is a silver BB in the shot gun load.
I'm not claiming batteries haven't improved, just that they are not making economic inroads into bulk power storage.  And by "bulk", I'm referring to the charge storage typical of a car battery.  If we could get charge densities of just one order magnitude beyond a lead-acid battery with otherwise similar cost and reliability, the electric car could be competitive with internal combustion, and we could make inroads decoupling ground transportation from oil.  Lead-acid is 100-year old technology fer cryin' out loud, why isn't Moore's law coming to the rescue?

The American Wind Energy Association site is impressive, I only perused it and couldn't find those 10% numbers for TX and CA; I'm a bit skeptical.  The 0.1% figure (for combined wind/solar) I recall from a year ago from presentations posted(if memory serves) by Matt Simmons, and Stuart Staniford.  I'll stand corrected if newer figures are better :o)

 I also reviewed the AWEA site. I'm too optomistic, Texas is only at 2% and California I'm sure is probably a lot lower, since they have a population about twice that of Texas with about the same generation capacity. Thats still 1/6th of the US population having over 1% wind energy, and its growing..
  Still, they are building the heck out of windmills, everybody loves them in West Texas because they pay about $1500 a month per windmill to the ranchers (conversation with a landowner) and add non-resident taxable value to all the schools, as well as good paying jobs for local residents. They are helping to offset declining oil and gas production. And , unlike oil wells or George W. Bush, there is no lingering sulfur smell.
Generating capacity and electricity generated are two different balls of wax.

Alan is fighting the good fight with the notion of pumping water into energy reservoirs.  This on the surface looks just like the kind of technology solution that has an outside chance of working.  Investments in low technology are probably more likely to benefit society over time than high tech solutions.  Still, I would like to see some numbers.

If you google, Sharman why wind power works for Denmark, you can see another way to optimize wind power.

As someone who recently researched and set up an off-grid PV home system, I can assure you that had Lithium Ion, or NIMH batteries been available as an alternative to lead zinc, I would have bought them.

If anyone is aware of better batteries in the 12 volt/ 300 Ah category, please let me know, and I will convert (unless it is orders of magnitude more expensive).  


I put in a 3.6kW system 6+ years ago.  It operates at 48volts DC through dual Trace (now Zantrex - sp) 5548 inverters to give 220volts AC.  My battery bank consists of 32 L-16, 6volt lead-acid batteries in four banks of 8 batteries each, wired in series for 48volts DC.  I also use desulfonators (Solargizer) to extend the battery life.  The Solargizers are for 24volt DC systems so I use two that I rotate through the battery banks (one week per bank).  The Solargizer comes with a little PV panel but I set mine up via transformers so they run 24/7 rather than just a few hours a day.

L-16's are about the best battery choice for AE storage systems since the other lead-acid choices don't last - like golf cart batteries.  There are far more expensive lead-acid choices, for example, the ones made by Pacific Chloride.

FWIW, I also used to have a 1.5kW Whisperwatt wind generator.  I sold it because I either had to go to a much higer mast or move it to another hill about 1,000' feet away.  I didn't feel like additional work and expense.

I don't know if this helps or not.

Todd; a Realist

Hi Todd. Your system is huge! Ours is a couple 123 w PV panels and 2 L-16 batteries. That powers our CF lights, a laptop (for music and DVDs as well as internet and ranting); and we have plenty left over for our eGO electric scooter.

With all the talk about upscaling NIMH's and  Li-Ion, I figured I'd troll around and see if anyone had any knowledge of whether, even for a tiny system such as ours, these could be made to work.

Until someone like me can store electricity in an advanced battery, I'm saying that they are still in the toy stages.

Hi Jim,

It's big because it has high loads.  We are on the grid in the boondocks on top of a mountain, in fact we are the end of the line.  We use it when the grid goes down which is more often than is nice.  Also, we have TOU metering (the PV isn't grid tied)and we run the PV system every day from about 10:30AM until 6 or so PM (peak rate is from noon to 6PM weekdays).

We have a 450' deep well with a 2hp pump.  The system is also used to run the 40 gallon electric hot water heater.  Now, even my system won't run these things continuously so I have some work-arounds so they cycle to allow the batteries to recover.  As far as regular household stuff goes, we have a 25cu ft freezer and a 25cu ft fridge/freezer.  All the lighting is CFLs and has been for years.  Although the inverters will produce 10k watts continuously, I really try to never pull more than 5k watts to save the batteries.  But, sometimes I screw up and both the well pump and water heater come on a the same time and it's a little over 10k then.

We can run the electric range on the PV too - just not all the burners at once.  BTW, we have a back-up 6 burner wood cookstove in the kitchen too.

One of the minor household demands is the little circulating pump on our solar hot water system.  This is usually only used in the summer and drained down for winter since we have a heat exchanger in our wood heater and it would drive the differential temperature controller nuts trying to do two systems at once.

Todd; a Realist

The problem is the new technology and the dispersion of dealers, I believe. If you go to the COBASYS website for example, you will see that there are great NiMH systems for backup power available, but they are starting by targeting larger industrial markets first, and don't seem to be at the local PV dealer level yet. I hope they get there soon, because I believe they have great advantages.
Real world results from Bath County Pumped Storage (poster at HydroVision conference) showed how retrofiy had increased cycle efficiency from just below 80% to just about 80%.  Some additional transmission losses to & from site (say an extra 5% since this is optimized).
In 2002, California enacted legislation, which the company supported, requiring that 20 percent of electricity sales come from renewable resources by 2017. In 2003, approximately 12.4 percent of PG&E's power sales came from California-eligible renewable resources, as defined in the legislation. The chart below provides a breakdown of the Utility's California-eligible renewable energy mix as a percentage of sales.

Pacific Gas and Electric Company Adds More Renewable Geothermal Energy to Electric Mix
New Agreement to Provide Enough Renewable Electricity for More than 125,000 PG&E Customers
PG&E has a long history of developing, generating, and purchasing renewable power. The utility currently supplies 32% of its customer load from renewable resources: 20% from its large hydroelectric facilities and 12% from smaller renewable resources that qualify under the State's Renewable Portfolio Standard (RPS) Program.

2004 energy portfolio

http://www.pge.com/education_training/about_energy/how_electric_system_works/2004_generation_portfol ...

Yesterday we had a good discussion on the article "Gentlemen, stop your engines"
about potentially groundbreaking electric auto development, possibly based upon using a capacitor.

As I analyzed the electricity requirements of this thing (if it works), I woke up to the enormity of the disruption this thing would cause.

The average household uses about 20 KWh/day, but if the homeowner gets an electric car that holds a 52 KWh charge, they could instantly double or triple their electricity usage.

Since our grid is in very poor shape, any sudden surge of electric car usage may well crash the grid.

Who would pay to upgrade the grid? Where would the additional fuel come from? Would this be self directed(by the power companies and their associations), or would the government get involved and mandate a stronger and larger grid? Would this mandate hold water?

Reflecting on the realities surrounding the grid, as it exists, is a conversion to electric vehicles a realistic option?

  Peak Oil means we cannot keep expanding our oil consumption exponentially. Population growth of over 1% a year, plus declines of crude oil at 8% a year (Schlumberger) while all the other folks in the world want to live a hugely improved lifestyle doesn't add up very well. And the military outranks us all in the supply line.
  What is more likely-the automobile industry goes out of business because of lack of gasoline, the road building industry collapses, the refining/marketing segments shrink to provide products only for the rich, or do we start finding something else ? Electric cars look like a pretty good bet to me, considering our society.
  But of course, if we were rational and elected honest, smart leaders we would have electric rail mass transit. . And if frogs had wings they wouldn't bump their butts when they hopped.
"while all the other folks in the world want to live a hugely improved lifestyle"

Could I encourage you to remove the value judgement from this statement? Whether or not their lifestyle will be "improved" is a matter of what you are measuring. Perhaps you could sat that they "want to live a hugely western lifestyle"?

Western things like pumped and chlorinated drinking water? Electricty? Longer distance transportation? Pestcides?
SUVs, cell phones, a/c, plastic crap from Sprawlmart, plasma tvs, McMansions, fast food and lots and lots of driving.
reminds me of Trainspotting...Choose life.

I don't think most people in the world want all this.
I would hope not.

"for all the good that would do me    i might as well stick it up my ass "    (rents about a heroin suppository )
Most people don't want this,
But those that sell it want everybody to want it, and that is enough.

our desires are so easy to manipulate.

Approx. 1/3 of the humans on the planet don't get enough food every day.  Their lives are consumed with just trying to somehow survive another day, with no hope that tomorrow will be any different.  They don't stress over coming up with the bucks for a new ipod.  So to say that their lives wouldn't be improved considerably by adopting a "western lifestyle"?  I think they'd disagree.  Our lives are easy.  We have to work at not getting fat!
Our lives are easy.  We have to work at not getting fat!

Well said.

Not so fast. I understand that's not easy at all.

Saw a headline somewhere this morning:

The world now has more fat people than hungry ones.

Reminds me of what Lou Reed said 20 years ago about Americans:

Stick a fork in their ass and turn them over. They're done.
The world now has more fat people than hungry ones.

Which is exactly what was said.  It is more work to stay fit, than to get fat and this isn't localized to only the US.  Kinda funny, but sadly true.

Having just come back from a 3 hour bike ride aboard my new CF road bike, I'd like to say that I'm enjoying this little subthread.
Jon Stewart on The Daily Show had a great suggestion for Al Gore a while back - We should just run our cars directly from liposuction hoses attached to the engine.  Drive around on our own fat.
considering that corn and its byproducts goes into most of the food we eat, we're not too far away from running the cars on it anyway...
the fucker must be lurking here. That was MY idea, a couple of months ago.

Great minds, etc.

I am pretty certain he reads Tomdispatch.com...he's echoed a few things that were posted a couple of days earlier.
Ah, but I suspect that you are underestimating just how much that poverty is created by our excess.

And just for the record - an easy life is not an "improved" life. Nor is eating too much necessarily and "improvement" over eating too little.

Hello oilmanbob-
"But of course, if we were rational and elected honest, smart leaders we would have electric rail mass transit."

Matt Simmons has been arguing for this and for revitalization of rail for cargo.  Of course long-distance rail could also be revived to displace air travel (airline consume 10% of world oil production, no?).

Simmons is an insider, so I wonder why these things are not being done.

TPTB surely must see the sh*t making a bee-line for the fan.  It would be a simple matter to launch an ad campaign to mobilize public support, allocate the money and give out the contracts.

Are TPTB just going to let TSHTF?  If so is it because they are stupid, feel they can't, or that they are just fine letting this go down?

Building these sorts of projects makes sense only if there is a profit to be made, or it otherwise makes sense to develop means to transport masses of people.

I think y'all perhaps overestimate the value that these masses have in the future US economy. There is no more large scale manufacturing base, no productive workplaces to bring people to and from.

Those same people will to a large extent live on the brink of insolvency, so they have no money to spend in the destinations the transit would deliver them to.

Why construct such facilities for people who can neither produce nor consume? It makes no economical sense.

In our society, your economical value is your main, even only, value. Those that still do produce and consume have a highway system at their disposal that will have lots of empty space soon.

"Are TPTB just going to let TSHTF?"

Dude don't be a dumbass. It should be obvious what the plan of TPTB is. TPTB are invested heavily in weapons technologies. The U.S. spends something like $100 on war for every $1 on renewable energy and that's not even counting the costs of Iraq, Afghanistan, or black book operations that don't appear in publicly available sources of information. The plan is stunningly clear: make money from resource wars. Everbody, including lots of intelligent TOD members, seem to think, "well if we just alerted the proper people . . . " or "once TPTB understand the severity of the situation, I'm sure we can get them to suppert sensible response X or reasonable mitigation strategy Z."

I wonder if these people with this attitudes are paying the slightest bit attention to world events sometimes. I know they are since they're posting on TOD so I'm left a bit befuddled how they could hold on to hopes/ideas that are so incredibly contradicted by easily obtainable facts about global financial flows.

In the must-see documentary 'Why We Fight', Chalmers Johnson puts it this way (paraphrase):

'Our Defense budget is 3/4 of a trillion dollars. Profits margins are up by 25%,
If war is that profitable, you can be sure we'll see a lot more of it.'

General Dynamics and Boeing knock 'em down.

Bechtel and Halliburton pick up the pieces.

"Dude don't be a dumbass. It should be obvious what the plan of TPTB is. ... The plan is stunningly clear: make money from resource wars. "

Now-now-now.  The implicit understanding is that TPTB are a giant parasite.  No argument here.  But a parasite that kills its host is one dead parasite.

There is no way advanced weapons technologies can be developed and deployed without a semi-intact ecomony supporting them, never mind the costs of actual war.
Money as we know it loaned into existence on the expectation that tomorrow's growth will pay the interest.  If the underlying economy goes 'phffft', there goes your capacity to wage a resoure war.

If there is no provision for the economic consequences of peak, then that is the end of economic growth, money as we know it, capitalism, the whole shebang.  If TPTB are simply letting us run into a brick wall, they must have plan in place for picking up the peices, and starting all over as in retro-feudalism.

If that really is what planned, I don't see how they intend to preserve the apparatus of repression that would be required for this new order.  This view makes no sense.

I have no doubt the "ship of state" has a direction, but from all the evidence, I can't really make heads or tails of it.  If they plan to run it on the rocks and enslave the survivors, I don't think it will work in the long run, but God help us all.

About 25 years ago I had a discussion with a friend who had just come out of the army. I never got a straight story about exactly what he did while in the service, but it was some kind of intelligence work (also left him with a nasty drug habit). Anyway, he had been involved in this work for more than 10 years and was convinced that the top brass were convinced that the Communist Party of the USSR was intent on conquering Europe in a lightning assault that would drive out NATO forces so fast that deployment of tactical nuclear weapons would be forestalled. Why, I asked, would they do this? Because they coveted the industrial infrastructure. They were, he said, willing to risk a strategic nuclear assault on the Russian provinces because they were relatively undeveloped. They could then launch against the U.S., destroying its industry while moving their base of operation to Europe (where the U.S. would not target). In essence, his argument was that the party elite had no real connection to the people of the soviet union and they would just as soon work their global domination plans from the Rhine.

Leaving aside the level of paranoia such a belief seems to suggest, it does hint at a similar "concern" when it comes to globalization of the western capitalist economy. Many people continue to talk about nations or nation-states as if they had any meaning to TPTB. Globalization means that they don't have to care. Those who manage this system are just as happy to move the corporate infrastructure whereever they can make a buck. They will not, as a class (group if you don't like the Marxist overtone), necessarily look out for the future of the american nation (though they are likely to continue to use the U.S. government to advance their cause). If they can make more money by employing people in outer elbonia than they can in north america, know with certainty that they will do it. Nor do they have to protect North America as the primary consuming location, their are plenty of places where people are just as happy to buy their plastic crap.

I think this points to one thing that we can count on in the post oil world, the nation states that we now know will not exist in the same configuration in the future.

"Those who manage this system are just as happy to move the corporate infrastructure whereever they can make a buck."

And to illustrate that point here is an article describing how the VP has placed a large amount of his assets  into " high-quality foreign bonds (predominantly in Europe)"


Hugo Chavez and much of the non-aligned world see Globalization and so-called "Neo-liberal" economic policies for what they are -- an attempt by western capitalists to hide their need for increasingly scarce resources (energy, metals, cheap labor, etc.) under the cloak of "economic development" for the third world. When M. King Hubbert demonstrated to TPTB that, indeed, there would come a day when world energy supplies would peak, there became an urgent need to develop an economic and philosophical framework for securing those dwindling resources before someone else (Russia, China, India) got their grubby mitts on them.  This is the true nature of "Globalization."

I completely agree that TPTB don't care where their bread is buttered, so long as it is buttered by someone, and for that reason, old concepts of national boundaries and allegiances have often been de-emphasized or derided as antiquated (recall GHW Bush's "New World Order", Clinton's NAFTA, or Bush Jr's current "humanitarian" appeals for legalizing the importation of large numbers of low-wage workers from south of the border).  So, the problem isn't one of maintaining national boundaries and identities -- after all, those things often get in the way of western economic goals (recall Cheney's reaction to Putin's moves to exert control over Russian energy supplies).  The problem is making sure that that TPTB have the first pick of the goodies.

It has been speculated by some on TOD that Bush/Cheney are in the "Doomer" camp.  In unrelated posts TOD'ers have suggested that TPTB have access to much more information than we "little people" have and so they (TPTB) should be in a better position to know whether there were indeed new technologies coming down the pike that would save western civilization.  I would suggest that both are true and that the strongest evidence that species homo is in for an ugly future is to be found in the futile American/European military adventures currently underway in the Middle East and S. Asia.

<< " In unrelated posts TOD'ers have suggested that TPTB have access to much more information than we "little people" have and so they (TPTB) should be in a better position to know whether there were indeed new technologies coming down the pike that would save western civilization.  

I would suggest that both are true and that the strongest evidence that species homo is in for an ugly future is to be found in the futile American/European military adventures currently underway in the Middle East and S. Asia. " >>

I mentioned that they have more info than us, and I agree with your conclusion.  There are a lot of things coming to a head at this point in time.  Peak Oil,  The Dollar staying up,  the FED Raise rates, kill economy, Lower Rates, Kill the $USD, The Middle East/IRAN/IRAQ...,  

I am keeping my ears perked for the next 6mos/yr.


I don't argue that the TPTB are wedded to any particular nation-state.

But they do need one thing at a minimum:  They need sufficient social cohesion and organization through which they can exercise power.  Even as basic a construct as "ownership" pre-supposes a functioning society.  If you just let TSHTF with peak oil, you endanger this big-time.
You can't "make money" without society and economic growth.

For the life of me, I can't see how the direction things are heading will suport this.

Peak oil/nat gas are immanent or here.  For a few years there will be adjustments, efficiency improvements, pricing out the 3rd world and so on.  Then there will be year-on-year "demand destruction" because all they easy efficincy gains and adaptations are wrung out.  Now loans/bonds can't be repaid, loans can't be made etc....  There will be increasing crises and dysfunction.  Then at some point, the economic/social organization of capitalism will be over, period.

TPTB must know this, and must be planning for it.  So shouldn't they be trying to delay it? (e.g. electric trolleys, conservation and such) I don't see the evidence.  So are they putting together a plan to re-introduce feudalism?  Apart from last year's bankruptcy "reform", I don't see any steps that might suggest this sort or preparation.

Being cynical to the max is not sufficient to understand things.  The stuff (the war, economic decisions, debt, environmental, transportation/energy policies...) going on makes no sense to me.

Your assuming TPTB are not cornucopians.  

You don't join TPTB by being technically literate.  You get there by being a ruthless narcissist who is good at acquiring power and money.  It is possible to be powerful, ruthless, intelligent and clueless at the same time.  

"It is possible to be powerful, ruthless, intelligent and clueless at the same time."

If you're right, we're screwed.  Soon probably.

Then can one organize a life-boat party, and build a life-boat with one's self, loved ones, and minimal community in it?  With luck, said Powers That Be might not survive (in organized form at least) the consequences of their own cluelessness.

You seem to have thought about this.  If you believe it, what are your plans to cope?

I'm not ready to rely only on prayer.

TPTB at the moment are the reactionaries.

Every action has an equal and opposite reaction, and every revolution has a counter revolution.

We had a earth-shaking cultural revolution centered around the year 1968. And when it ran out of steam, the reactionaries joined forces and counter attacked.

Using W as a flag, they've seized most levers of power. But as we know from history, counter revolutions burn out as well, and they're usually replaced with moderates who have learned from both swings of the pendalum.

As fortune would have it, the reactionaries have total control just when global civilization (starting with Columbus and gathering force for 500 years) is peaking.

Therefore, they will get all the blame for both the peak and whatever follows it. More importantly, they have it in their power to set the course, so that the initial stages of what is to come is determined by them.

The metaphor I've used when writing about this is the monastery. It has a bit more purposefulness than a life boat and also suggests that it can influence those around it, even if they are not directly members. Little more hopeful, I think.
"Your assuming TPTB are not cornucopians."

They can't be.  Why invade Iraq if you're cornucopian?

Bush-the-first is an oil man, and former CIA head, Bush II, Cheney, Condi Rice et al are all from the oil business.  If they were cornucopian, they'd still be in business raking it in.  The MSM wouldn't be in overdrive trying to discredit peak-oil if TPTB felt threatened by the public realizing it (although I grant westexas in his Iron Triangle hypothesis has a highly plausible explanation for this latter phenomenon).

I don't think it's a coincidence we have this constellation of faces, events, and peak oil at this time.

I've given up trying to guess why bush does things.  According to him, god told him to invade.  Also, a cornucopian would believe there is oil out there, you just have to go get it. (which he did)

As for the Life boats, they are expensive and kind of pointless.  I read an article years ago about what happened in Bosnia when things fell apart.  The basic point was that individuals do not survive only communities.  A man or family living alone will eventual fall prey to nature or their neighbors.   There is a reason mankind originally organized into tribes and villages.

As for me, I have a little food and a lot of guns, but I'm not under the delusion either will save me.  I've also planted my backyard with about a dozen fruit and nut trees and have been experimenting with gardening.

Try this link

scroll down and click on the WHAT IF links.

"There is a reason mankind originally organized into tribes and villages."

I know it is just a means of expression, but to be accurate, there never was any decision to organize into tribes or villages, there never was any "original" in this sense.

By the time you can meaningfully talk about human beings, homo sapiens sapiens, we were already group oriented animals, tied by kinship and shared activities. Our socialness goes way back beyond our humanity.

Well, that's if you accept some form of evolution, if you think the world is only 6000 years old, then all bets are off.

You know, there is no rule that says that a highly evolutionarily successful arrangement among members of a species needs to feel particularly "pleasant" to all of the members thereof.

We are apes, and not so terribly different from other apes in our basic living arrangements, if you strip away all the crap and think it through.

Which notion, if you are a biologist (as I am) does not necessarily fill you with hope that we will come to some graceful "solution" to our "problem". Primates are wired to the max, in general. I should know, some of my best friends are primates :-)

What is "natural" for us? What is a "proper" way for us to live? We are so smack in between the real world and our own virtual world that, in my opinion, these questions represent the maddening crux of the human condition.

Whatever is "best" for "us", I have a strong sense that it's not where we're at now. I have a strong sense that we've been working on entirely the wrong project for the past several millennia. We've applied ourselves diligently, efficiently, and seemingly effectively, but alas, it was the wrong project.

Just sayin'.

Back to your regularly scheduled virtual reality.  :-)

- sgage

One thing I find fascinating is how some of our ancient hard-wiring has become so maladaptive in today's world.  

We crave fat because it was difficult to get in our Stone Age past, and necessary to support our large, expensive brains.  That's not a problem today, but that ancient hardwiring leads us to suck down Doritos even if we're overweight.

In developing countries, the poor sometimes sell their blood or use money that should buy food for their children to buy movie tickets.  This seems highly maladaptive at first blush...until you realize that our chimpanzee brains don't distinguish between the pretty images on the screen and real people.  We are hard-wired to be interested in our fellow primates, especially attractive ones.  And keeping up on our neighbors' doings was once a matter of life or death.  What Tom Cruise does really doesn't affect the average Joe, and Paris Hilton  is not a potential mate for anyone except hunky young tycoons...but don't tell our Stone Age brains.  

Those doritos are gobbled up b/c of all that cheesy goodness, duh!
Paris Hilton is not a potential mate for anyone except hunky young tycoons...but don't tell our Stone Age brains.  

and definately don't tell Oil CEO.

By the way, I partially disagree on the fat craving. I think it's also habit. Same with sugar. Once you cut out sugar, cut down fat and eat wholoegrains, that's what your body associates with food.

Let me ask this of your 'community lifestyle'.

What if you are in the community yet do not PRODUCE? Too old,crippled, deaf and dumb, or in any manner NOT able to carry the load required?

Suppose you have quite a few of these types or they began to become more prevalent?

Suppose an alpha male arouse and your loved ones(females) transferred their allegance to that male?
My point is the rules and regs. How do they come about?

I think far better is ONE family unit. More than one you get wife-swapping and all other nasties. (Obligatory smiley here).

Just wondering how this all works out. Seems a mite tricky. The one with the biggest gun rules? The one with the most testerone? Whatever?

Don't you think that 'communities' might war on each other?
"lets take what they got,,get some female slaves too,come on lets roll"

maybe bush thinks that iraq is where they will drill into the mother lode of inorganic oil source   bush was a major failure at finding oil when he ran harkin energy
I don't doubt that you are correct, WG. What I would expect to  happen is that the North American working class and middle class will be written off. Social "cohesion" will come through fear mongering and (when that fails) the point of the gun. Not because they have evil intent, but because they will use what is at their disposal. (In terms of preperation, you'll note that the administration has been pushing to remove restrictions on using the military inside the borders of the US.)

I think where your disconnect comes in (I don't believe its a lack of understanding, you seem to get it pretty well) is in the belief that, looking at the same information, that TPTB would draw the same conclusions you do. If we start from the assumption that they are "true believers" in the current economic system (a fair assumption given that it has benefitted them so), then why would you expect them to act in any way other than in an attempt to perpetuate it? There is no master plan here, it is the logic of the system itself. They believe that the end result of this logic is global trade system with them at the top. They will also continue to believe that any setbacks suffered by, say, the american middle class is a temporary adjustment to globalization.

Oh, and just for the record, I'm way past cynicism and into the amused observer stage ;-)

"Oh, and just for the record, I'm way past cynicism and into the amused observer stage ;-) "

Thank you for defining my current state of mind. After a number of years of research & background reading.

Somewhere past cynicism.
Amused observer.  

I am hoping Kunstler proves to be right when he said that "They will be lucky to be able to answer the phones"

And After watching Katrina/Rita and what resources were brought to bear on New Orleans,  I asked myself, what if 10-50 cities went code red.  

One way or an other,  things might get tough.

If TPTB were as interested in social stability as you suggest they would spend a little money on basics like universal healthcare. They would be more like Nixon than like Bush.
What we have is just endless black reaction, endless counterrevolution. The current crowd could care less if things fall apart. They figure they still have the guns and the only game in town.
"a plan to re-introduce feudalism?"
Yes. Is Bush's rationale for torture and wiretapping one whit more or less than "L'etat, c'est moi"? And Bush surrounds himself with nutjobs far to the right of that>
The population has become economically worthless. They're broke. Why keep them around? They'll consume more than they produce. Which with dwindling resources makes no sense. You'd need an economy going just to feed them.

They just take up space. In an economy such as this that is all that ultimately counts. It's not your pretty blue eyes, it's 'what have you done for me lately?'

You keep a bunch to work the land, a few to clean, a few more to protect you, and the rest will be in coal-pits, in the army, in brothels, in their mass-graves, or beating each other's heads in over scraps of food, or shoesoles, in some landfill.

That is an accurate picture in quite a few places in the world today, not some made-up dark fantasy.

The whole thing can go many ways, and what do I know, but it's naive to presume that most people over here will be an asset by 2020, or that anyone cares to keep all this alive because it's so beautiful or valuable.

We have lived almost solely off credit for 2 decades. The credit is gone. How will you produce what you need to pay back what you owe?  Not just your personal obligations, the federal ones must be paid as well.

This land is your land, and this debt is your debt.

That's and interesting point.  So much of the population is in the service industry that they don't really have any value.  Coal, oil, electricity, food and health care are all that's required.  The one caveat would be the requirement for a military to keep the starving masses away from you.
Take a look around, at yourself, your family, your friends, and ask who produces actual physical products, and how much of that production is directly related to oil. It's not hard.

This society has been kept alive by:

  • Cheap abundant energy and resources
  • Other people's labor
  • Other people's resources
  • Credit and Debt
Isn't it really just debt.  There isn't credit...it should really be called a debt card, not a credit card.  Think about how little you would spend if we all called them debt cards.  Yeah I dont believe that either.
Roel, I enjoy many of your posts but some of them just have an incredible arrogance to them.
This is of them.
Of course, YOU will survive what's to come, because YOU aren't 'worthless', YOU have skills, and YOU are oh so superior to all the others out there who don't have your brains, cunning, and foresight.
Have I hit the nail on the head?

Who are YOU to decide who is worthless or not, who is needed or not, and who should live and die? You basically state that a good portion of the country should be killed -and good riddance. (Though of course YOU wouldn't be one of them.)

Another assumption is that the only ones to survive the coming 'kill or be killed' ethos are the 'fit' ones. Survival of the fittest? That ways lies madness, darkness, destruction, and the downfall of the human race.

The ones who will not just survive, but prosper, in what is coming will be the ones who recognize that survival lies not just in themselves, but in a group, and who band together to form communities.

Callous perhaps but still just an observation there optimist.  Nothing Roel posted was a personal attack.
Have I hit the nail on the head?

Your own head perhaps. You read presumptions in my words that are simply not there. I have never said that I am better than anyone else, or have a better chance of surviving, or that I decide who is worthless. And I certainly haven't said that "a good portion of the country" should be killed, and you should be careful when you put that kind of words in other people's mouths. That is not a joke, and I resent it. There are limits.

I paint a picture that repeats itself all over the world and through history, and there is no value judgment anywhere in there. I'm trying to say that this can happen here too, and it's not bright to have too rosy a picture. Down the line, people are simply resources, and we are no different. I could have quoted Hanson's words about a bio-weapon used against a population, and chose not to. I try to say that when a mass of us neither consume nor produce in this world of ours, it's time to watch over our shoulders.

Personally I'd give the best chances to the richest and the poorest in the world, the first because it's easiest for them to adapt, the latter beacause the have the least adapting to do. The first have the most resources, the latter need the least.

I have no illusions about my survival.

The reason I find it important to write a post like the one above is that I see a lot of easy assumptions being made, that in my view lack the full scale of what is happening. The developments in the North American economy point down, and only down, and people are too complacent about that.

To see the reality of declining resources is not the whole story; there are a lot of things that exist only by the grace of a century of abundance, and one of those things is people, billions of them. Nothing arrogant about noticing that. Our problems are much more complex than can be solved by putting some corn in your vehicle, or changing a light-bulb. It's far too late for that kind of stuff, our cradle is 50 years of denial.

FWIW, I didn't read your original post as arrogance or advocating a vicious starving dieoff...just an acknowledgment that TPTB (I hate that acronym) will look at it that way.

"I could have quoted Hanson's words about a bio-weapon used against a population, and chose not to"

Dang,  I was going to post the link of those dioff.com articles as a possible scenario,  but now it would be a cheap shot to say..


And also remind everyone about the only bio-attack on the US of A,  The forgotten/CollectiveMemoryErased...
 "Anthrax Letters" (aka the Ames strain from Ft. Detrick).  

Which just happened to arrive in Leahy's mail box by chance a couple of days ahead of him surprisingly voting YES for the patriot act.  Hmm..

Who did that foul deed anyway, Did anyone get the conclusion on that one???

Anyway...  Dang.

Maybe, but holding onto power still requires social organization and resources to support and equip your minions.  The Nazi's had years of preparation with "clubs" that were really networking/education organizations that prepared members to step into the German beauracracy once the Nazi's had power.  Then they established "Hitler Youth" corps to condition young people to cruelty, and so on.

True, the US military is clearly planning for a energy-strapped future.

But it takes an awful lot of planning to organize the survival of a select minority, never mind preserving power in the event of a "die off", if indeed that is what's planned.

Again, events have the appearance that we are collectively going to run off the cliff, with no signs of preparation for ANY future.  But I just don't believe that is reality, and wonder what is really going on.

Who says TPTB are planning a dieoff? Just that they don't much worry about it. And you keep assuming that the big boys are smart, that they plan ahead, think about the big picture.
My experience of pols is that their most consistent trait is alcoholism. Lechery number 2. Salemanship 3. These folks are not planning past the next election. They hire RAND and other like them to do the deep thinking for them. And ignore that advice anyway.

"Are TPTB just going to let TSHTF? "

In a simple word.  Yes.

They are driving the car into the wall on purpose at this point.  They know all we know and more.  PO, Financial Crisis, GW, Housing bubble, etc.  

Imagine if there is a huge global meltdown in the financial Markets,  The dollar becomes worthless.

China implodes with it's population.

Unemployment 10,20,30%.

People loosing their homes...

Hmmm.  $USD becomes worthless.   Good time to institute the Amero new currency for North America.

Consolidate Canada, US, and Mexico.

180 Days - A Critical Time In Economic History

I truly believe right now - today - we are entering into a 6 month period where world government's responses to economic conditions will determine if we move into the "end game" of our US dollar fiat currency in 2007 or if it gets delayed until 2008/09. This time period we are now living in is critical. Here I believe is why:


This essay does not even cover the geopolitical games that are in dangerous phases (Iran's nuclear program, Iraq's instability, Israel's conflict with the Arab world) that could precipitate a move to the end game. What is certain however is that the end game - if it comes within the next 6 months or 6 years - will not be pretty. It will be a time of turmoil and volatility the likes of which we haven't seen in decades. The powers that be are not yet ready for the Amero. The Security and Prosperity Partnership ( http://www.spp.gov/ ) isn't set to have real legs under it until 2010. The question dead ahead is - will the global markets cooperate?


Everything from the Patriot Act (that was approved the day after Leahy and Daschle got their mail with some Ft. Detrick Ames strain Anthrax,  Hmm I wonder why we NEVER hear that brought up by George(nor ANYONE) when talking about the terrorist threats? ), SPP,  Code yellow, code orange, code Red...

Moving along quite on schedule.

What is more likely-the automobile industry goes out of business because of lack of gasoline...

From a personal standpoint, it won't be the cost of fuel that forces me to abandon my automobile (theoretically, at least, I could limit my driving to the amount of fuel that I can afford), but it will be the associated costs of automobile ownership - care and upkeep (a car ages even when parked), insurance, licensing, etc.  Once we reach this point, the auto industry will have a hard time selling the average person a new car -- at any price.

Currently, my wife and I each spend about $5,000 per year to operate our vehicles (both are long since paid for).  This works out to roughly 15 percent of our take home pay.  We're very close to saying we're going down to one vehicle.

Why try to build the grid to handle the load of all these cars being charged at people's homes?

Why not replace gas stations with these "powerblock" stations, whereby you hotswap powerblocks on demand.  The used powerblocks could then be transported via light/freight rail back to recharging stations located near powerplants so that the only additional infrastructue needed would be more powerplants, and the distribution wiring from the powerplant to its nextdoor neighbor the "powerblock" recharging plant.  Recharged powerblocks then get shipped to powerblock distribution stations(future "gas" stations), and the cycle repeats.  Instead of paying for gas, you pay to "rent" powerblocks.

An implementation of standards might be needed so that all car companies have to use the same(compatible) types of powerblocks so that there won't be monopolistic oppurtunities, but solving that, consumers would then be able to be presented with choices in powerblock providers.  If I wanted powerblocks recharged purely by Green energy, I could pick a powerblock station that caters to that desire.

Even if this worked, you still have to come up with vastly more electricity. Which means more coal, does it not?
Exactly.  There isn't going to be mass electric cars, but I can see where there will be cars for those who can afford it, the fuel, the licensing (fees will sky rocket), & putting up with shitty roads.
Bingo! I was hoping someone else saw the problem..

Electric vehicles have a fatal flaw vis a vis scaling. Once enough people convert to them, the grid crashes and not only does transport suffer, but the entire electic based system crashes as well.

Coal production is going to have to grow at an alarming rate just to cover for declining natural gas; while hydro is static, and unless nuclear is be resurrected, there will be an additional hole left by decommissioning old nukes.

Meanwhile, solar, wind and other alternatives will have to grow exponentially just to be relevant.

So, any electric vehicles for the foreseeable future will be just one more burden on an increasingly overtaxed grid. Without fusion or some such pie in the sky alternative, it won't work without taking the entire system down.

... Except for marginal users such as myself; we have an electric scooter for short runs, powered by our PV system. We'd love to have something more substantial, powered by PV electricity, but I don't see it.


Not disagreeing with that at all, but even in a distributed network where by we allow people to charge cars at home, we are going to need additional generating plants.  In fact in a distributed network I would think MORE powerplants would be needed due to the fact that we lose power over distance, where by "powerblock" recharging plants located beside powerplants would save us some of that entropy.

The "powerblock" device whatever it turns out to be is just half a solution.  And my reply was geared more towards how do we manage this half of the solution.

I'll be the first one to agree that we still need options to deal with the other half solution in that we need more generating capacity if we pursue this on a <bold>scale that meets current demand</bold>.

But then, I'm not sure, or even in favor of supporting levels of current demand for mass levels of individual transport.  Hence I think that is where AlanfromBigEasy and his rail push comes into play.

When I read anything like this, as a finance guy I just wonder where the cash is going to come from for ANY improvements once TSHTF.  The only way I see it happening is bankruptcy for this country as a whole.  
Exactly.  Much of our infrastructure was built decades ago.  The electrical grid, in the 1930s even.  We have not upgraded it, despite long-obvious need (see the Blackout of 2003).  We can't afford it.  If we can't afford it now, how are we going to afford it when TSHTF?

The fact that we built the Interstate system, suburbia, the electrical grid, and whole lotta rail in the first 2/3 of the 20th century does not mean we could easily do so now.  Even with our larger population, better technology, etc.  Tainter's declining marginal returns applies.  


Westexas, as well as others, have made the arguemnt that it all ready is, and I tend to agree.

I think the jury's still out on the date of the peak, though if I had to bet, I'd say Deffeyes is probably right.

I don't think TSHTF yet, though.  We may be like Wile E. Coyote, already over the edge of the cliff, but still running, not realizing there's no ground beneath our feet.  

How many billions of dollars did it take the current auto-industry to get going?  All those roads, and highway projects over the course of decades.  The technology to develop assembly line car manufacturing.  The vast technological and infrastructure challenges presented by the Oil industry.

Now we got an alternative, the electric car.  What uphill battles does the Electric car have to face?  Roads?  Nope.. already there.  Factory improvements?  Not really.. the grunt work has been done by its ancestor.  The money being poured into Oil?  Well won't need as much of that since we are going electric.  BAM you have a source of funds.  Powerblock rentals can be a revenue source to fund additional powerplants, recharging stations, and distribution centers(hell you could turn existing gas stations into distribution centers if you wanted to save money).

I'm not denying there are hurdles to jump.  But the problem isn't insurmountable especially since a lot of the grunt work as already been done by the current ICE cars.

So where does the electricity come from? Coal.

Coal will have to expand dramatically to replace the void left by declining natural gas. Coal will have to be converted to liquid fuels.

The problems have NOT been mostly solved, unless you're claiming the grid is robust and can expand dramatically without crashing.

And again I ask where does this money come from for this too?  What this all boils down to is dollars, er, money of some sort.  And a shit load of it.  Come to think of it, I'm in a particularly negative mood, I'll end this before I go on ranting for awhile.
That's a very interesting way to look at it.  American taxpayers have invested countless billions in the road system that enables all those cars to be sold.  Now, isn't it fair that the cars sold to run on those roads should be made by American labor?  If not, then fine, the manufacturers should pony up their share for the road system.  

How much has BMW paid towards the road system?  How much has Kia paid for the road system?  Should American workers be put on the street by those freeloaders, or should they pay their fair share?

Take the gas you didn't put in your car, take it home to run a generator that charges your car. A stationary engine operating  under fixed optimal conditions will be more efficient than what you could build into a car. Hybrid car engines take this principle part of the way.
This would be a clumsy awkward way to operate a fleet of electric cars, but possible. It also avoids the distribution losses of our electric grid.
And of course... burned in a CHP the waste heat usually lost to the atmosphere by the car could be diverted to heat your house too!!!

But this brings up an interesting point...that I have never seen mentioned on TOD...

Do you really think TPTB are going to let us charge our cars with cheap domestic electricity that doesn't include some form of "gas tax"... or to put it another way... if we all switch to EV...where is the lost gas tax revenue coming from???

That was one defense of the Oregon, track you and tax you by GPS, plan.  It was said that we are "heading" toward home fueling, and those folks still use the roads, etc.

<shrug> You could just increase vehicle registration, and solve two problems at once.

Regarding the article above saying we should assume peak oil, even if we are not sure.  While I agree, I am not sure it matters one way or another.  Those few in power who acknowledge peak oil or are convinced we must be less dependent upon imports stress alternatives such as the 25 by 2025 program. Any calculation that concludes we have replaced 25% of our oil consumption with alternatives need to look at the net energy contribution of those alternatives not the gross.

You will not hear about a program to cut 25% of our automobile use by 2025 or, with the exception of California,  any program to cut 70% of our carbon production by any date much less 2025. You will only hear about alternatives and about technology initiatives from the Bush administration.  None of these people are serious about addressing the problem and are more than willing to sacrifice the future to continue business as usual and to stay in power.

The window is closing.  Any program that just talks about ten years of technology, including Branson's, is just whistling past the graveyard.

I spent yesterday tooling around Boulder on the best technology yet invented to address peak oil and global warming -- the bicycle. And I feel better to boot.

It is not or shouldn't be about the technology.  


Nate and I had a discussion yesterday concerning the pricing and nature of options. Having traded options for years, with some success but truthfully not very much, I feel I know options. (I did slightly better than break even over the years, but not very much.) And having read Nate's opinion that options have a formula that can give you the fair price for an option, I feel that I know options a bit better than he does. Don't get me wrong, I know there is a formula that is supposed to give you the fair price but in actuality that formula is not worth a tinkers dam. Explanation below.

Options come in two types, puts and calls. Unlike stocks or futures, which have only two positions you can take, short or long, options have four positions you can be in. You can either sell or buy puts and you can either sell or buy calls.

If you buy a put or call, you have the right, but not the obligation to exercise that call. That is, provided the put or call has interstice value, (is in the money). (Even out of the money options can be exercised but it would foolish to do that.) To exercise an option one must convert that option into the underlying stock or contract. Options are always exercised at the strike price. That is, if you buy an Call for XYZ stock at$30 when XYZ is trading at $28 then you have the right, but not the obligation to convert that call into 100 shares of XYZ at $30, any time you please prior to or at the expiration of that Call. If XYZ is trading at $40 prior to the expiration of your call, you can convert that call to 100 shares of XYZ at $30. You then have a paper profit of $10 per share minus the price you paid for the out of the money option.

A seller of an option, a put or a call, has the obligation to sell you that underlying stock, if you exercise a call, or buy that stock from you if you have a put, at the strike price which he purchased the option at, if you choose to exercise your option. All options that expire out of the money disappear into thin air. However the buyer of that option is out the entire purchase price and the seller of that option gets to keep the entire amount he received for it. Most options, like most futures contracts, either expire worthless or are settled for cash. That is, they are never exercised.

Now it would take a book for me to give you all the ins and outs of options trading. But I could do it if I so desired, having traded options for years and read several books on the so-called profitable strategies for trading options. But a general rule of thumb is; "sellers of options usually make money, provided their pockets are deep enough, and buyers of options usually lose money."

But here is the point of contention between Nate and myself, how to determine the fair price of an option. Nate contends there is a formula that one can use and I contend that the formula is virtually worthless. There are services and programs you can buy that will give you the so-called fair price of an option and even alert you when an option becomes under priced for buyers or overpriced for sellers.

Three things determine the price of an option. 1, the interstice value, or the amount the option is either in or out of the money. 2. The time left before expiration, (time premium). And 3. The volatility of the underlying stock or contract. There are three serious problems with any formula that uses these three pricing inputs. (Of course the price of the underlying security is also an input. That is a stock priced at $100 a share will usually have options priced about twice as high as a stock priced at $50 a share. But that is a given.)

The first is with #3, volatility. Volatility is like the weather, it changes daily. You may buy an option on a highly volatile stock only to then have the volatility disappear overnight and your option will wither away to worthlessness.

The second problem with the formula is that it ignores the trend. For instance during the last five weeks, had you a service that alerted you to over-priced or under priced option, it would have alerted you that calls on WTIC crude oil were dramatically under-priced and puts were dramatically over-priced. But had you bought one of those under-priced calls you would have lost your entire investment. And likewise had you sold one of those formula-derived priced puts, you would have been taken to the cleaners.

The third problem with formula priced options is execution. If you see an under-priced option and put in a market order to buy that option, the option will seldom, if ever be bought at the desired price. (A market order means buy or sell at the price the market gives you at the moment.) And if you place a limit order to buy at the desired price, you will find that the order will be executed only if and when the market moves against you. And if the market moves in your favor, you will find that your order is seldom, if ever, executed.

As I said earlier, pricing options using any formula is not worth a tinkers dam* and any trader will lose his ass if he tries to trade using over-priced or under-priced option alerts.

This is my last post on options and Nick or anyone else may have the last word. I was a little insulted by his insinuation that I did not know options. Having studied and traded them for many years, I do know options. I learned one thing during my trading years. That is you cannot understand options by only studying them. To truly understand the problems of option pricing, you must trade them. Though I primarily traded only stock and index options, the principle is the same.

Ron Patterson

*Tinkers used to make a dam of clay on the bottom of the pot he was mending. He would then pour the molten patch metal into the dam. After it hardened he would knock the used dam off to be trampled into the dirt. It was then worthless, just like any formula that attempts to determine the fair price of an option.

"But here is the point of contention between Nate and myself, how to determine the fair price of an option."

I think if you re-read what Nate wrote, you will see that that wasn't Nate's main point (although it was a secondary point).

Nate's main point was that by buying a put or a call, you indirectly have an effect on the underlying commodity because of the way the seller has to hedge. You also disagree with this, but didn't explain why Nate's argument on this point was wrong.

Nate says it works like this: as you know, the buyer of a put or call only stands to lose the money they he/she spends to buy the put or call, whereas the seller stands to lose a lot more. Nate says that the sellers try to hedge this risk by buying or selling the underlying commodity accordingly.

For instance, he says that if a company sells  oil call options, then they stand to lose money on this deal if the price of oil increases and the call option is then 'in the money'. This is because the person they have sold the call options to then has the right to buy oil from them at a price which is lower than the price of oil. The way sellers of such call options hedge against this is by buying oil (or oil futures) when they sell call options, so that if the price of oil goes up, they win back some/all of the money they have lost on the call options on their oil futures.

Therefore, when someone buys oil call options, they indirectly drive the price of oil up since the company they have bought from buys oil futures for hedging purposes. Similarly, when someone buys put options, they indirectly drive the price of oil down.

I have seen this argument made quite a few times by those who say the trade in options does have an effect on the underlying commodity, and it makes a lot of sense to me. What I have not seen, is a proper response to this argument by those who claim that the trade in options has no effect on the underlying commodity.

Coilin, some traders sell what is called covered calls. This is a step down the risk reward latter. A few traders sell puts and short the underlying stock. This is also taking less risk for a chance of less profit. The amount of stock or the amount of futures traded using covered calls is not very great. I don't know what the percentage of calls written are covered calls, but I would guess it is around 10% or less. Likewise the same for commodities.

That being said, my buying a call is not really moving the market. However if I exercise that call then I am moving the market. However I am moving the market because I am buying the stock, or futures by exercising the call, not because I am buying the call. Exercising a call and buying a call are two entirely different things. Likewise a man who buys a stock or futures contract then covers it with an option moves the market in one direction when he buys the stock, and it is moved in the other direction when and if the option is exercised. (The stock is bought or sold by the option being exercised.) Buying or selling the option itself however does not move the underlying stock one whit. Only buying or selling the stock or futures can actually move the market.

Now you may say that is splitting hairs. However I do not think so. My contention is that buying or selling the option, even if the option is a covered option, does in itself not move the market. It is foolish, to my way of thinking, to say that it is the buying or selling of option that moves the market. It clearly is not. It is the buying or selling the stock or futures that moves the market, even if it is done in conjunction with the selling of an option or the exercise of one.

The vast majority of people who sell calls or puts sell naked puts or calls. They get around the risk problems by selling puts and calls on a vast number of stocks or futures and doing it over a long period of time. If they lose on one stock or future they gain it back in another, or gain it back another day.

Selling naked puts and calls is a very lucrative practice if you have deep pockets. In the long run, option sellers make money and they make a lot more than the T-bill rate. One could probably make 20 to 30 percent per year on their money by writing naked options. The most successful traders anywhere are naked option writers. There are two parts to the price of any option, the inartistic value (amount in the money) and the time premium. The time premium ultimately always goes to zero. So if you write enough naked puts or calls you will always make money. And most option writers write only out of the money options. That is they have no interstice value, only a time premium. A time premium that will ultimately go to zero.

Sorry, I know I said I would not post on this subject again but as Coilin pointed out, I neglected to cover this point on Nate's contention.

Ron Patterson

You say: "My contention is that buying or selling the option, even if the option is a covered option, does in itself not move the market."

Yes, but no one said it did. The point is that, indirectly, buying covered options moves the market, because the seller is buying the underlying commodity.

You say: "The amount of stock or the amount of futures traded using covered calls is not very great. I don't know what the percentage of calls written are covered calls, but I would guess it is around 10% or less." and you say: "So if you write enough naked puts or calls you will always make money. And most option writers write only out of the money options."

I don't know what percentage of options sold are 'covered' and what percentage are 'naked', but I'll take your word that most are naked. What you say about naked options being sold 'out of the money' is definitely true, but if subsequent price movements result in the options moving into the money, then presumably the seller will then have to hedge, or will hedge in some cases. If this subsequent hedging occurs, then the original buying/selling of the options will ultimately have had an impact on the price of the underlying commodity, albeit indirectly.

Coilin, I never said that "buying stock" (or futures of course) or "selling stock" did not move the market. It does of course. And buying futures or stock in conjunctin with an options program is still "buying stock or futures". Yes, if you do that, then that moves the market of course. But the option half of the equation does not move the market. It is only if you actually buy or sell stock or futures that moves the the market.

And naked option sellers do not hedge by buying the underlying stock if their option moves into the money, as you suggested. Sellers, just like futures traders are required to put up margin money. They simply forfit part of their margin money if the put or call moves into the money. And if it moves further into the money than their margin can cover, they get a margin call. And if they fail to answer that margin call their position is simply closed out.

A naked seller of options would never hedge by buying the underlying stock because that would require far more money, with no gurantee of more profit or less loss, than simply closing the position.

Ron Patterson

"Coilin, I never said that "buying stock" (or futures of course) or "selling stock" did not move the market."

Ron, nobody said that you did say this.

the inartistic value (amount in the money)

inartistic = intrinsic? Kind of like inartistic though  :)

http://www.theglobeandmail.com/servlet/story/RTGAM.20060922.wxrbanff22/BNStory/Business/?cid=al_gam_ nletter_maropen

Edwards sees threat to oil sands projects



"Given the current challenges we face . . . it is going to be difficult for the Canadian sector to deliver the forecast growth in oil sands volumes over the next 15 years," Mr. Edwards said in his presentation to the conference. "Costs are accelerating to the point where you have to start wondering if projects are still economic."
I've said it before: it's not if the oilsands will come tumbling and grinding down, it's when, and why.

  • Dave Cohen has asked here where the natural gas will come from in the near future, and nobody knows
  • The amount of fresh water used boggles the mind, and the forecast for the Prairies is drought
  • Shell, Total have already halted/postponed projects, so Ebner is wrong in his claim that "It was the strongest public declaration yet from a senior industry executive that some projects may not go ahead as planned.". There is not nearly enough personnel, equipment, infrastructure, gas, water and go on. Quadrupling output? With what?
  • Former premier Lougheed, the big driver 2 decades ago, has called for a slowdown/moratorium, as has just about everybody else by now, including the communities that get rich off the developments
  • First Nations will start raising their land rights and claims. Their elders will point to the obligation to respect the land and conserve it for future generations.
  • Protests over the destruction and pollution will soar all over Canada

They're trying to squeeze far too much through a narrow bottleneck, and as they keep squeezing, the bottle will break. And then all that's left will be a trickle.
Dave Cohen has asked here where the natural gas will come from in the near future, and nobody knows

If the EROEI is good enough, they will end up using part of the oil to fuel the process. But the water issue is another matter entirely.

Possible, but not yet happening, still. who knows? There's talk of nuclear in the air as well, though that doesn't address the hydrogen issue, if I'm correct, and it takes years to build a plant, apart from the permit process.

I feel like I'm sitting back wondering where the balloon will burst. Looking at the devastation, I'm not so sure it's a bad thing if it does.

Roel, I'm a doomsayer. There's no doubt in that. Ask anyone who listens to me. However, your pessimism about Canadian Tar sand production misses the point. If there are profits to be made, then the projects will go forward.  

IMO the oil from the tar sands is going to be extremely valauble and thus profitable. This value will override all of your arguments. Everyone in the know knows that oil prices are heading higher. This blib of a downtrend in prices is going to be very short.

Once prices start rising again, these Tar Sand projects will go forward at a robust pace.

New Green Cabs for NYC - All electric PT Cruiser

Yellow cabs are getting more stylish - and more green.

The Taxi and Limousine Commission has approved testing of an all-lithium-battery-powered PT Cruiser to be rolled out on the streets within the next couple of months, officials said.

There are about a dozen different gas-electric hybrid cars approved for use as TLC medallion cabs - including models by Lexus, Toyota, Saturn and Ford - but the Cruiser will be the first fully electric one.

Interesting article related to SEC oversight of hedge funds:

Hedge Funds Withdraw SEC Registrations After Ruling


Sept. 22 (Bloomberg) -- Dozens of hedge funds are reducing the information they provide regulators after a court said the U.S. Securities and Exchange Commission can't enforce a rule that required more disclosure by the industry.

D.B. Zwirn & Co. and Mason Capital Management LLC, which together manage almost $7 billion of assets, are among 106 hedge funds that withdrew registrations since the federal appeals court in Washington made its ruling in June, the SEC reported.

Some opted out this month, while Greenwich, Connecticut- based Amaranth Advisors LLC was losing about $6 billion on bad bets in the natural-gas market. The SEC wanted hedge funds to report their size, number of employees and types of clients, and submit to random inspections.

``I have said for a long while that a train wreck might well occur because of a failure of adequate regulatory oversight,'' said former SEC Commissioner Harvey Goldschmid, who voted for the agency's hedge fund rule. ``Amaranth only indicates the continuation of that concern.''

Not to burst you're bubble, but why does a story that happened in June take 3 months to be news?  I read about this in June and the hedge funds withdrew their registrations almost immediatly.  It's not like they waited for Amaranth to implode and then withdraw, which it seems the MSM is trying to put this together since HF are the topic de joure.
Do you really want to stop climate chaos, or do you just want to feel better about yourself?
Monbiot is at it again, turning seemingly logical points on their head. And he's right again, and points out exactly where Al Gore fails miserably. Not that he mentions him, but Gore is one of the people who fails in the assessment of what needs to be done, a "feel-good" messenger talking us to kingdom come.

Almost everywhere, climate change denial now looks as stupid and as unacceptable as Holocaust denial. But I'm not celebrating yet. The danger is not that we will stop talking about climate change, or recognising that it presents an existential threat to humankind. The danger is that we will talk ourselves to kingdom come.

If the biosphere is wrecked, it will not be done by those who couldn't give a damn about it, as they now belong to a diminishing minority. It will be destroyed by nice, well-meaning, cosmopolitan people who accept the case for cutting emissions, but who won't change by one iota the way they live.

... Friends of the Earth had already set the target before it asked its researchers to find out what the target should be. I suspect that it chose the wrong number because it believed a 90% cut by 2030 would not be politically acceptable.

This echoes the refusal of Sir David King, the government's chief scientist, to call for a target of less than 550 parts per million of CO2 in the atmosphere, on the grounds that it would be "politically unrealistic". The message seems to be that the science can go to hell - we will tell people what we think they can bear.

So we all deceive ourselves and deceive each other about the change that needs to take place. The middle classes think they have gone green because they buy organic cotton pyjamas and handmade soaps with bits of leaf in them - though they still heat their conservatories and retain their holiday homes in Croatia. The people who should be confronting them with hard truths balk at the scale of the challenge. And the politicians won't jump until the rest of us do.

Very nice article by Monbiot.  I'll definitely be buying his book when it comes out.

Yup, I think the housing bubble is definitely popping:

I am Facing Foreclosure.com

Do you think this guy is representative of what is going on in the real-estate industry? Honest question, 'cause I don't really know myself. However, he seems to have made a number of amateurish errors in his investing 'strategy' and I've read other stuff that indicates that 'flipping' is not all that common.
I don't know if he's representative.  But I do think he's a harbinger.

I knew the dot-com boom was a bubble when everyone from my mail carrier to the teenager who delivers papers in my neighborhood got into day-trading.  Similarly, real estate has become the hot new investment.  Which means if you're in it, time to get out of it.  If you're not in it, now's not the time to get in.

Actually the time to have gotten out was last year. There are so many properties on the market it is almost impossible to sell anything unless you are willing to drop the price considerably. I sold my dilapidated apartment building at a high price in a hot neighborhood last October to a piranha like mortgage broker who did not have a clue as to what was going to transpire in the following months. He must have encountered financial difficulties because after sinking much money in improvements the building is still sitting idle. On the flipside I recently purchased a ten-acre farmette from someone who was about to go into foreclosure. He walked away with 100 bucks from the sale. The property had three loans on it. He just couldn't resist that personal ATM in his living room.
Re: I knew the dot-com boom was a bubble when everyone from my mail carrier to the teenager who delivers papers in my neighborhood got into day-trading

How right you are! Excellent comment!

Dave said:

I knew the dot-com boom was a bubble when everyone from my mail carrier to the teenager who delivers papers in my neighborhood got into day-trading

Which make me remember that

I knew the oil boom was a bubble when everyone on The Oil Drum was claiming to be getting rich on everything from futures to stocks
If you're so sure it's a bubble, and think $60 a barrel proves your point, what about a prediction? Won't cost you anything.
Well since you managed a second sentence, why not?

Actually, I don't think the majority of the increase in oil prices has been due to an asset bubble. I think supply constraints and growing demand have structurally changed the market and prices will stay at higher levels than historic trends. I am not claiming to have seen a price drop in advance.  

My guess (which I think is a better way to refer to it than a prediction - at least in the short term) is that prices will continue to fall a bit over the next few weeks, before bottoming out and going back up.

If the world economy stays strong, I expect the annual average price next year will be at or above the average price this year. If not, I don't see any reason why we could not have $50 a barrel oil for a while.

I am a peak oil believer, but think the world will survive it. Shrinking oil supplies and a world economy that continues to grow will result in sustained high oil prices. So, I see a long-term bias upwards.

My views can and will change. If we had a poll to predict the oil price in one year from today, we would declare the winner a genius. If we had a poll to guess a random number, we would call the winner lucky.  But I don't think there is much of a difference.

So I think everyone who was making money on short-term oil investments up until last week was lucky. Last week they were unlucky. But they weren't the first to be Fooled by Randomness, so I don't fault them.

Your turn.

The commments are particularly good.  

"Funshway" - putting the fun back into getting out of debt. (Feng shui).

If that doesn't work, of course there's praying.

If that doesn't work, it probably won't matter because you're in jail for all kinds of fraud.

I hate to break it to the guy, but in addition to all his other problems, lying on a mortgage application is a federal crime.  If any of those banks lose $ on his loans then, well, look out.
CNN has started running a series on people who are having trouble selling their homes.  

Help! Home for sale

This couple paid $167,000 for a four bedroom, two-and-a-half bath, 2,861 square foot house, on the last day of 2002.

Now they want to buy a bigger, $562,000 home.  Because they hope to start a family one day, and obviously, you can't be expected to raise kids in a puny little 4-bedroom, 2,861 square foot house.  

They hoped to sell their old home for $402,000.  They did make some improvements, but jeez.  Hoping that a house that was $167,000, brand new, three years earlier, will go for $402,000?  Even their "reduced" price of $349,000 is more than double what they paid.  

That's completely ridiculous.
Yuppies run wild. My house is 3 bedrooms, 2 baths, and 1,000 square feet -and I'd be perfectly happy to raise 3 or 4 kids in it!
And because people like them exist..there will always be spam.
This'll throw back development a lot

German magnetic train accident kills 15

A high-speed magnetic train traveling at 125 mph crashed in northwestern Germany on Friday, killing 15 of the 29 people aboard and injuring others in the first fatal wreck involving the high-tech system.

Trains using maglev technology can reach 270 mph, but it was not immediately clear how fast the train was traveling. One such train in Shanghai caught fire last month.

Most of the 29 people were in the front of the train when it crashed head-on with a maintenance vehicle on the elevated track.

Video showed the front end of the train as a mangled mess of metal. Rescue workers used fire trucks to reach the track, which is more than 13 feet high.

This is like a side note...it's not been discussed really anywhere.  All I can say is marginal gains made with increasing complexity and eventually something is going to happen.
Some views of the Middle East.

Here is a vivid image of Iraqi domestic oil consumption:

And here is an article about Iran's Jewish population.  It does appear to undermine claims of Jewish and Christian zionists that a resurrected Hitler is running that country: http://news.bbc.co.uk/2/hi/middle_east/5367892.stm

Oops.  You have to go to image number 3 for a vivid image of Iraqi oil production.  No harm meant for the faithful.
Clinton debuts $1B renewable-energy fund

Isn't it a great confidence booster to see Vinod Khosla and the World Bank line up to save the planet?

Is there any significance, you think, in the bizarre lineage of names, Wolfensohn to Wolfowitz, for the World Bank presidency?

In a little over a month, Clinton has gone from "The world should be talking more about Peak Oil" to "...we are running out of fossil fuels."

$1B from Clinton plus $3B from Branson this week alone and you don't think this is good news?


This is what I call Kabuki theatre.

These are the firefighters who set the fire.

  • You know Khosla from Robert's posts. He's at best deluded, but he may well have an agenda. And you ain't the beneficiary. Save the world by making a profit.

  • The World Bank was set up for one goal: bleed the third world. The havoc they have left in their wake is hard to describe.

  • Branson puts $3 billion into the development of "green" fuels for his jets. How is that good?

The bottom line is we get dragged further into the quagmire.
Sorry but I know Khosla from Khosla, not from Robert's commentary thank you very much.

Meanwhile $4 billion literally drops out of the sky for renewable fuel development and you think it will drag us further into a quagmire.  Methinks the only deluded one around here is you.

But we already knew this....
Isn't it a great confidence booster to see Vinod Khosla and the World Bank line up to save the planet?

Look at what he says:

He also said the current government ethanol subsidy of 50 cents a gallon should be based on a sliding scale corresponding to the price of oil: 25 cents a gallon if oil is at $75 a barrel ranging up to 75 cents a gallon if oil falls to $25 a barrel.

That is NOT what he told me. He said he thinks the subsidy should be eliminated for corn ethanol. He said it is so much cheaper to make ethanol than gasoline, they don't need any subsidies. So which is it, Mr. Khosla?

RR -

I think way back a few weeks ago, when you were all excited about making contact with this Very Important Person, Vinod  Khosla, I expressed some thoughts to the effect that you should beware of him and not to be sucked into his sales pitch promoting the ethanol agenda. I think I more or less said that he is not to be trusted.

Now tell me: Am I wrong?

This guy is a far better BS artist than you or I ever will be (is it possible that that is one of the reasons he's become such a financial success?)  Such people are extremely subtle and highly expert in co-opting opposing opinions. I think you came pretty close to going over to the Dark Side, but I am glad that you have not (so far).

It is axiomatic that where big bucks are at stake, the devious and the ruthless come out of the woodwork. That is what's happening here, and the big play appears to be taking advantage of the government's ethanol subsidy. That's about all there is to it. Without that subsidy EtOH from corn is dead on arrival.

I think you came pretty close to going over to the Dark Side, but I am glad that you have not (so far).

No, I listened to him with an open mind, and gave him the opportunity to make his case to TOD viewers. But my opinion is still the same as it was when I wrote the first debunking essay on him. If I wanted to go over to the dark side, I have had many, many opportunities to date.

Just saw this on Global Guerillas:

3. Gasoline prices have fallen because speculators have decided that Iranian supplies won't be blockaded. We're talking about real money. The oil traders must have gotten the news from some very good sources.

Somebody decided not to do Iran?

I dont know, but that's interesting when I read this over at urbansurvival.com

"My friend George Ure, Peoples' Economist, has been very worried about the Fed watering down money. Some of his disciples must be posting on thehousingbubbleblog. Anyway, I have some very good news, from a well-placed mole at the Fed, for George -- There is a severe shortage of water at the Fed and they have decided to drastically cut down the water usage and let the lawn and plants die. Only the trees with deep roots will survive.

Rather than being watered down the money will begin to thicken like the evaporated milk.

In case you wondered, they are not talking about water.

Amaranth's assets slashed by 65%, losses $6 billion

Amaranth had about $9.2-billion in assets at the beginning of August. It now has about $3-billion. Just last month, Amaranth boasted to investors that its funds were up nearly 20 per cent year to date.

That story keeps getting worse. When I first heard it, the losses were $2 billion. I have written several times that part of what's been pushing up prices were speculators, but every time I bring it up there are a lot of people who dispute that they have a meaningful impact on prices.
Right up your alley, I read hedge-funds have apparently lost a lot in sugar (cane) speculation as well. Good harvests in many places, that sort of thing.
Speculators made of whom?  RR, you have been told speculators dont have a meaningful impact on prices?  Are you talking strictly the NG market?
No, oil and gas. Some of the conversation a few months back was that high oil prices were saying "peak is now." I gave a number of reasons for high prices, including speculation. I had linked to a number of articles that said speculation was contributing significantly to higher prices, but several people argued that the impact was very small.
I am being asked to make a presentation to a group of agriculture consultants who market many services to the ag sector.

They are very deep into analysis of reports and market their  advice to farmers and other ancillary areas.

The subject will center around ethanol and biodiesel. I am not an expert by any means but it appears that I am the only one who speaks of issues that they are apparently unware of or have entirely different views of.

Therefore I am going to draw heavily on the information I find in this forum/website and links it has to other valuable information.  Information such as charts and commentary. This is so that I do not have to travel about the net securing them and wasting a huge amount of time and resources in the process.

So my question is , am I doing anything illegal or stepping on any toes in pursuing it in this manner? The charts and other commentary may have been in the past used on other sites and I am not sure of possible copyright  violations etc.

Any advice in this area would be appreciated. As I have been a user of the internet since its inception and even before(BBS,IBM Teleprocessing,Ham Radio networks,etc) I am vague as to what laws if any cover this area. Its seems to be very open IMO.

I would be willing to give credit where credit is due.  

I am uncertain as to whether the presentation will actually take place so at this time I will just be gathering data in a preliminary format. In fact I do not like presentations and prefer to just talk extemporaneously , and then hold a roundtable discussion. I used to be an instructor and hate formal presentations as they come off rather stiff and too preset for my likes even though that was part of my job requirements.

I could probably talk a long time about Peak Oil and have been doing so but never to a largish(unsure of the number)  captive audience. I therefore intend to use technology and my laptop with a large screen projector.I will NOT be using PPT for I detest it having seen so many foil presentations and the like with my previous employer.  

If am wondering if anyone else has already gathered such material for a presentation and wish to share it.

On the topic of biofuel(ethanol and biodiesel) , that follows the same vein as my last post about giving a presentation, let me place this link to show the readers here how bullish the trade magazines and editors are on this subject:

Its a very long URL so an alternative is to just go to


..and click on wilson Weekly. The subject article "The Bio Fuel Revolution" can be easily found then as well as others. His most recent in the Oct issue is "Unleashing the bio beast", not on the web site as yet.

http://www.farmfutures.com/ME2/dirmod.asp?sid=43CF0BC83E0F40E4A8D1D9169C0EB31A&nm=Wilson+Weekly& amp;type=Blog&mod=View+Topic&mid=34A5B201939F4AF7BB2D398CBD0B5CA7&tier=7&id=6FFEDD46 6F3E43D3A9CBB8DEC448B349

I found this article to be very good: http://www.spiegel.de/international/spiegel/0,1518,426736,00.html

And the RFA has some good resources at: http://www.ethanolrfa.org/

Being AG, I imagine that ethanol talk will center on fermentation so make sure to incorporate RR's work on BTUs for corn ethanol and Jack's commentary/references for sugarcane ethanol.  For 2nd gen ethanol processes, check:

Thanks for the links. Will check them out.

IOGEN I am aware of. The Brazil scenario I am somewhat tuned into the conjecture.

REG is getting ready to plunge into a proposed site in southern Illinois very soon, partnered with Bunge. Right now the politicos are grandstanding about it.

S. Illinois is a very big corn state.

Sugar cane? Tell me honestly just how far north can it be profitably grown? My understanding is that it requires a very long growing season. Perhaps 9 months being the minimum. Kentucky likely can't make that. Also we have some very high winds, enough to blow corn down and lodge wheat as well as soybeans. Right now we have 8 inches of rain , flooding and quite high winds. Very much more and the soybeans may get in trouble. Today I saw many fields flooded.


You will get more info than you will outta TOD.

And yes, sugar cane is not an option for most of the US of A.  Sugar beets are, as is jererlsum artichokes and even cattails as starch/sugar source for making ethyl alcohol.

Oil seed path for the farmers - press the oil seed - save the oil and use the cake as critter feed.

Here are the links i usually provide for Brazilian ethanol.

Regarding the US, the problem is not so much climate as the tariff regime. Sugar prices are supported at such a high level that diverting any production for ethanol is unprofitable.

I would also look at Engineer Poet's blog. He has made me realize that ultimately the best pathway from biomass to vehicle fuel is electricity.


Here are five studies that all cite figures of positive 8-10 EROEI for ethanol from sugar cane. I have given page references for three of them and will find and post the others later.

1) FO Licht presentation to METI,

EROEI Calcs: Page 20

2) IEA Automotive Fuels for the Future

3) IEA: Biofuels for Transport

EROEI calcs: page 60

4) Worldwatch Institute & Government of Germany: Biofuels for Transport  (Link to register - study is free)


EROEI Calcs (for 12 fuel types): Page 17

5) Potential for Biofuels for Transport in Developing Countries

http://www-wds.worldbank.org/external/default/WDSContentServer/IW3P/IB/2006/01/05/000090341_20060105 161036/Rendered/PDF/ESM3120PAPER0Biofuels.pdf

Thanks Jack for the info. I will be researching all of it with an open mind, even though up til now I was rather negative on ethanol, however the 'closed loop' farming scenario does look interesting.

Coshocton, Ohio......Harrison Ethanol LLC
Hereford, Texas......Panda Ethanol

I believe Robert pointed this out as E3(?) and with more possibilities that a plain ethanol plant.

I am very sceptical about many biofuels in gerenal, but do think it is possible to make them work to a certain point. I don't think the idea of "replacing" oil with biofuels is viable, especially in internal combustion engines.

In many cases the environmental impacts can be extreme. For example biodiesel in Malaysia and Indonesia look like to could be a massive threat to what little of the rain forest still exists there. I also don't dispute Robert Rapier's key points regarding EROEI and US policies.  

However, I do believe in peak oil and think we need to be pretty agressive in looking for solutions. I am sure ethanol will provide a partial solution in tropical countries, where sugar cane makes it work.

I am not expert enough to even comment on the US. I do agree that the US policy is ridiculous. The offsets that allow car companies to produce more cars of poor standards if they produce ethanol capable vehicles that never use ethanol is a scam. I don't think E85 will ever work and doubt even tropical countries will get over 25% of their gasoline equivalent BTUs from ethanol. It is also clear that ethanol has less BTUs per unit, so mileage results will be worse.  

However, the benificial impacts of sugar cane ethanol are immense, not only as a gasoline substitute, but as one that hugely reduces climate impacts. In order to be a good solution in the US, I think fossil fuel input has to be lessened and environmental impacts reduced.

I am not an advocate either way. I do think the studies I linked to are a great resource. I hope they are useful and help you reach a solid conclusion, whatever it is.

There's great potential for sugar->ethanol in the US -last year 1,000,000 acres of cane and 1,000,000 acres of beet were grown and that's just the tip of the iceberg.

Hawaii, Louisiana, Texas, Florida and California can plant cane, while all the northern states can plant beet, however, in the face of  a) US sugar demand   b) US sugar subsidies (kudos Jack)   c) US corn subsidies

The end result is:
 - political and economic support for artificially 'cheaper' to produce corn ethanol
 - the simultaneous decimation of both Cuban(Sugar) and Mexican(Corn) interests

This is where the food vs. fuel debate as it relates to increased ethanol usage becomes a total strawmen because if it weren't for US protectionism -insofar as Cuba and Mexico are concerned- then there would be plenty of sugar and corn available albeit from non US origin.

Ironically though, it is US policy once more (this time through mandatory ethanol usage in the RFS) that may ultimately lead to a re-invigorated Cuban and Mexican sugar and corn sector as demand for the ETOH feedstocks pushes depressed world prices high enough to sustain domestic production.

I live in a town that has a large switching yard for trains and I keep reading about how we need to build up our train system in the interest of fuel efficiency.  Well, today in the mail I received an unsolicited postcard from Union Pacific saying they have JOBS in my town:
"So don't settle for just a job when you could be doing important work that's vital to our nation's economy....apply online today at http://www.uprr.jobs".

This is the specific job and it looks horrible: http://www.uprr.com/employment/jobdescription/trainservice.shtml

You would be on call 24/7 for 12 to 15 years???

what do they pay ?  For some, worth doing for enough $$$.

One good point, rail employees get out of Social Security and into what is generally considered a better system.

Best Hopes,


It's not all it's cracked up to be and when TSHTF, I wonder how solvent the program is.  Not to mention the lack of SS is used as a reason to keep you there. Once you've devoted say 10-15 years, do you want to give up the retirement you've been paying for since you're not vested?  I think not.  It is better, but it's a carrot too.
Note the workers are unionized. So it's not like the boss can abuse your leash. Note also if the rail system does expand, UPRR and the other companies will go away from "just in time" management of personnel to somethign far more humane. And they are expanding.
Given the fact that Hugo Chavez stood in front of the United Nations and slammed the President of US while on American soil combined with the fact that Iran's President stood there also and slammed the US and it's policies.

Why hasn't the Iranian Oil Bourse occurred? If these 2 countries want to put the hurt on the USA, wouldn't the Iranian oil bourse be a good start?

  1. Beacuse the currency that oil is traded in makes little difference to the well being of the US. It is the long-term holding of US currency assets that prop up the $.

  2. The credit risk of these countries would overwhelm any potential benefits from creating and exchange.

  3. Talk is cheap.
I highly doubt the credit risk part.  There is so much liquidity in the entire world system, that any number of hedge funds would line to up fund this.  Better yet, invesment banks would help set it up anyway to reep their nice fees.  
I highly doubt the credit risk part.

If you ever get an interview for a finance job, I suggest you keep that little observation to yourself.

So right you are. I am keenly aware at what truths I allow myself to utter.  College is my sandbox now, I'll have to find something else when it ends.  Wait I think I'll get my shit together to move out of the middle of the country.  
Given that both of them are megalomaniacal drama queens, it is  likely the bourse won't compete with NYMEX for a long time.
Last Tuesday, Juniata Valley Audubon Society hosted, 'Wind Energy Development in the Appalachians: Promises and Problems' a talk by one Dan Boone, "a conservation biologist and wind energy policy expert."

Boone objects to the term "wind farm" as sounding too comforting. He says he is not against wind power, but he feels that the companies behind wind development in Pennsylvania (Enron remnants and BP) are behaving recklessly while trying to portray wind as a benign source of energy. Frankly, this sounds routine for energy companies, if not corporations in general.

PA seems to be about the most promising place on the East Coast for wind, but Boone claims that putting 420-foot turbines on forested ridgetops will hurt both migrating raptors and bats, and the nesting birds within the newly eviscerated forests below. Boone also cited the usual concerns about noise, but surprised me with his calculations of the thousands of turbines required to match the electrical output of one of PA's large coal-fired or nuclear-powered generating plants.  

Boone presented charts comparing low wind production during summer doldrums against peak electrical loads of air conditioning. I think we must adjust to life without A/C, but unless and until we let go of the status quo, wind production is not reliable enough to be the primary source of energy.  

Boone challenged claims that using wind energy would reduce our dependence on coal or oil, noting that clean-burning, but expensive, natural gas would be the first fuel to be cut back if and when wind comes on line. He even slipped in an
implicit plug for new, clean-scrubbed coal. His arguments are valid at present, but don't hold up in an energy-depleted scenario.

In short, Boone made a lot of excellent points against wind turbines. But, as others were asking questions, it occured to me that there were probably equally good, if not better presentations to be made, against nuclear power, against coal, against wthanol, etc. Being PO aware, I couldn't help but feel that we're going to need wind energy (and coal, and nukes) anyway, but it would be preferable to put up turbines without despoiling the forests.

Ideally, someone would advocate for forward-thinking development of wind energy the way AlanfromBigEasy does for public transit, but it seems that Corporate Wind is primarily interested in profits and tax write-offs.

Concerns Raised Over Natural Gas From Abroad: Critics say imported LNG burns hotter and pollutes more than the domestic product.
That's ridiculous! Are they saying Qatari butane has hydrinos or something? Whatever it is, whyn't they just blend it down like they do with domestic gas? A colleague once told me they cut as much as 20% air into NG that goes for domestic consumption.
I just came across this prediction made by Charlie Maxwell in November 2004:

For the period 1987 to 2003, the historical range of oil prices was approximately $10 to $40 per barrel, with an average of $20. For 2004 to 2010, the price range could be $30 to $60, with an average of $40. For 2011 to 2020, the range could be $50 to $100, with an average price of $70 per barrel.

Such prices would unleash both destruction and creativity throughout industry and finance. As occurred in the 1970s, the design of cars, trucks, ships, planes and trains would change, commercial buildings and homes would be modified; chemical and industrial processing and most machinery would be redesigned to emphasize fuel economy or substitute fuels; tax systems would be thoroughly overhauled, with changed incentives and penalties. Urban planning and residential patterns would change. Living standards might slip a bit and they would recover in different shape: Cooler rooms in winter and warmer rooms in summer, changing clothes instead of thermostats, taking quicker showers and buying fewer hot tubs, using less lighting, indoors and out, accepting smaller and lighter cars, walking and bicycling more, and using public transportation; these are the obvious changes to come. Europeans, who long ago forced themselves to accept this lifestyle by imposing high energy taxes, might at last receive an economic return on their investment, while the U.S. struggles to change.

Could all this really result from the lack of a few extra barrels of oil in the non-OPEC world, and only five or six years out? Actually, a crisis could develop even earlier if one or two of the main OPEC producers were closed down for an extended period by a political or military emergency.

Close to 40% of global energy consumption is based on petroleum. Currently, we are utilizing about 98% of our world crude oil-producing capacity. The system should be considered stressed at a 95% utilization rate. We are no longer investing enough to lift capacity additions above the level of future demand growth on a consistent basis.

...Most of the likely oil-bearing basins of the world have now been prospected, and the odds of vast new reserves suddenly making an appearance are low. Of course, relatively large individual discoveries will occasionally turn up in the years ahead, but not in size and number to suggest these finds can equal the substantially greater amount of supplies that are being burned up...


CHARLES T. MAXWELL is a senior energy analyst at Weeden & Co., in Greenwich, Conn. He has been working in the energy field for 36 years.

Bill Maher comments on oil, hemp and Willie:
Everybody's got something. But if there's one drug above all we should be cracking down on, it's oil. Oil is the addiction poisoning our lungs, and our political system, and our foreign policy.                  

Here is a link to Bill's Huffing-and-Puffing (on Willie's biodeisel bong)