DrumBeat: September 26, 2006
Posted by threadbot on September 26, 2006 - 9:15am
WASHINGTON — There is no mystery or manipulation behind the recent fall in gasoline prices, analysts say. Try telling that to many. motorists.Almost half of Americans believe the plunge at the pump has more to do with politics and the November elections, than economics.
Retired farmer Jim Mohr of Lexington, Ill., rattled off a tankful of reasons why pump prices may be falling, including the end of the summer travel season and the fact that no major hurricanes have disrupted Gulf of Mexico output.
"But I think the big important reason is Republicans want to get elected," Mohr, 66, said while filling up for $2.17 a gallon. "They think getting the prices down is going to help get some more incumbents re-elected."
Cheap gas until the election?: Recent hype can't disprove peak oil.
Plunging oil prices put paid to 100-dollar forecast
Past the Peak: Actions everyone can take to prepare for the possible end of an era
Except for scores of cars abandoned on the shoulder, the eight-lane highway was nearly empty one Friday morning last September. Gas stations along the feeder roads were closed, with trash overflowing the bins and blowing across the pavement. Shopping center parking lots were empty; entry doors were blockaded. It was the day before the much-anticipated arrival of Hurricane Rita and the entire Houston area had evacuated. The highway, a virtual parking lot only the day before, now looked like a scene out of a sci-fi movie. It also looked eerily prescient of a day when people might no longer be able to afford to drive cars long distances along the extensive interstate highway system.
Indonesia: Residents of Medan protest blackouts during Ramadhan
Muslims in Medan are blaming state power company PLN for recurring power cuts, which they say are disrupting special activities during the fasting month of Ramadhan.The caretaker of Medan's main Al Ikwhan mosque, Asno Susanto, said the North Sumatra branch of PLN had broken its promise not to cut power during the month.
Coal-rich Zimbabwe faces acute shortages
HARARE - Drastic coal shortages despite massive natural deposits have had a ripple effect throughout Zimbabwe's economy and ruined a deal to renovate the country's biggest steelworks, the government has acknowledged.
Russia holds out olive branch to Shell: Minister says country is 'long way' from backing out of 1993 deal. US adds voice to concerns.
BP: Prudhoe Bay to resume full oil output end of October
Saudi Aramco to Open a 1.2m bpd Oil Field
Saudi-based international petroleum company, Aramco, signed two contracts for the development of the 1.2 million barrels per day (bpd) Khureis Increment Program (KIP)....According to Aramco's website, the KIP is the largest crude increment undertaken in the company's history, and is one of the largest industrial projects being executed in the world today. The program is slated for completion by mid-2009.
B.C. boosting natural gas production: New B.C. rigs are simpler and faster to operate than anything else in Western Canada.
Iraqi Govt Won't Recognize Kurdistan Oil Contracts
Iraqi Oil Minister Hussein al-Shahristani said in remarks published Sunday that the federal government in Baghdad won't recognize oil contracts signed recently by officials of the Kurdistan Regional Government.
Hyundai Heavy Wins World's Largest Oil-Facility Order
Hyundai Heavy Industries Co., the world's biggest shipyard, said it won a $1.6 billion contract from the United Arab Emirates to build offshore oil production facilities, the single-largest order ever.
Lower oil, gas prices hitting Canadian drilling companies
Raymond J. Learsy: The Potential Collapse of Oil Prices Makes Restraint of Gasoline Consumption Key to Controlling CO2 Emissions.
Global temperature highest in thousands of years
The planet's temperature has climbed to levels not seen in thousands of years, warming that has begun to affect plants and animals, researchers report in Tuesday's issue of Proceedings of the National Academy of Sciences.
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- more here
you can even test this out.
Which allows us to ignore it in good conscience.
- more here
http://www.bom.gov.au/oceanography/projects/spslcmp/reports_6mths.shtml
Also:
http://www.bom.gov.au/pacificsealevel/tides.shtml
http://www.sopac.org/tiki/tiki-index.php?page=Pacific+Country+Reports
- more here
And people think the most imporatnt issues are Iraq and terrorism. How many people have terrorists killed? How many species have died and will die because of global warming?
Still, I agree with your concern. Climate change is disastrous. Why is 'green advocacy' failing to stop the disaster.
On the energy supply side, advocates for wind power should stop misrepresenting the potential benefits of this solar conversion technology by repeating misleading claims based on 'installed capacity', and begin to address the real issues of maximizing the recoverable energy from that installed capacity. Otherwise, the supply game will continue to favour coal for who-knows-how-long.
On the energy demand side, advocates for wind power make a huge mistake when they suggest that it is substitutable for nuclear or fossil fuel derived energy. This is an imagined reality. A solar income based economy - wind power, direct solar power, bio-fuels mostly in solid fuel applications - will not maintain the amerikun way of life. The facts belie claims that it can. That is why governments and capital favour the coal entrepeneurs. They can show, factually, how they can reproduce the status quo. It does require discounting climate change. But propagandists who will do this discounting are easily purchased and since investors and politicians are tied to the short term, they are receptive to the message.
Wind power, other solar advocates and climate realists in general (except perhaps those waiting anxiously for the Rapture), have to offer a vision of society in keeping with the real potential of the energy transformation technologies they advocate. Logic demands it. If you cannot meet peak demand, you have to redistribute demand over the time frame. If you cannot meet trough demand, you must reduce demand. This involves tough choices, which cannot be pretended out of existence as those who hold the substitutability notion do, nor easily and justly made by whatever market is in place. Nor is is likely that the existing structure of government is entirely suitable for making these choices, since the structure is predisposed to self reproduction.
Nonetheless, the choices have to be confronted. Until this confrontation takes place, market design and government structure appropriate to successfully making the choice cannot begin to emerge.
This is how I see the failure of 'green' advocacy to make a difference in Texas and elsewhere.
What makes you say this?
Supply? There's more than enough power available from wind and solar (many multiples of what's needed); intermittency? this can be solved through storage (PHEV's and EV's, pumped storage, flow batteries, etc, etc), demand management, geographical dispersion, balancing with multiple sources; diffuseness? wind and solar take no more space than fossil fuels, and produce electricity, which is not at all diffuse. E-ROI? wind is at 60, solar at 10-30. Cost? wind is $.04-.07, which is very competitive, and solar is about $.25 and falling by 7-10% per year (that's cost - prices are staying high to ration supplies during phenomenal demand growth); lack of applicability to transportation? batteries are now becoming cost-effective at gasoline at $3-4, and also dropping by 7-10% in cost per year.
I am a proponent of wind energy but that EROEI seems high. If oil is roughly 20 to 1 (minus refining) then it seems hard to believe that wind would be 60 to 1 and still be so small.
Do you (or anyone else) have suggested reading on wind EROEI? (preferably something peer reviewed and not marketing info from the manufacturer.)
Doing the comparative analysis helps in giving one a perspective on the vast difference between the 'renewables' and fossil fuel.
I've seen some analyses and my own seat-of-the-pants figuring has our society (USA) doing with about a 90% reduction in energy consumption in moving to total renewables. Is it something we can do? .....
Are you asking whether I confused financial ROI with Energy Return On Energy Investment (E-ROI)? The answer would be, no, I was talking about E-ROI.
Are you talking about the difference between a capital energy investment, versus an operating energy cost? By that I mean that you might spend a certain amount of energy drilling a well, and then you have to spend a certain amount pumping the oil, transporting it, etc. If so, you're certainly right that wind and solar are more capital intensive energy-wise - IOW, the energy investment is all up front, then you get essentially free energy for a long time.
OTOH, I don't see how that changes anything. Wind turbines pay back their energy investment in much less than a year, and then you get essentially free, high quality, ready to use electricity for 25-30 years. What's not to like?
How did you calculate a 90% reduction in energy consumption needed to rely on renewables? That doesn't fit with any calculation I've ever seen.
As I've posted elsewhere, a study by Stanford researchers for NASA found 72 terawatts of average electrical production potential for the world, which can be compared to total world electrical production currently of only about 1.7 TW. Total world energy consumption equals the equivalent of only about 4 TW.
see http://news-service.stanford.edu/news/2005/may25/wind-052505.html
The US has better wind resources than most of the rest of the world.
So, there's more than enough wind, and at a E-ROI of around 60 and a cost of about $.06/kwhr, it's energy and cost effective.
Same is more true for PV. People cite the zillions of gigawatts of solar hitting the earth as though this automatically makes solar power our obvious savior. I've seen exchanges on energyresources by techie PV advocates where they simply could not grasp why PV was still so expensive. Simple answer, low EROEI compared to fossil fuel.
Both beer, but one has all the extras that one could want.
Combining the two is the key to high % wind in a grid.
VERY nice when storage hydro is available in quantity. But we can build our own hydro with hydro pumped storage wherever mountains are nearby. And then there is pumped air storage (say in exhausted NG fields).
Miami is problematic in a renewable grid, but most of the rest of the US has viable options. Thus a handful of nukes in South Florida ??
And, as you have noted elsewhere, the Great Lakes work very well, as in Ludington, MI.
I would think that you could do the same thing on the coast of Florida, which I believe does have some very good off-shore wind resources, if you could find a way around the problem of pricey waterfront.
Well, it is in a stampede to use wind. The biggest barrier to even faster growth right now is that manufacturers can't build as fast as demand is rising.
To really answer your question: wind only became cost competitive recently, as turbines got cheaper, and nat gas rose in price. It would be cheaper than any other source if all external costs were figured in (GW, other pollution, security, etc), but people have only started figuring out those costs recently.
Sure, intermittency is a problem for wind. No one would suggest wind as our only power source, but it's perfectly clear that it could provide somewhere between 20% and 50% of our power. The rest would have to come from solar, nuclear, ocean (wave & tidal), biomass, geothermal.
"Same is more true for PV."
PV has a higher E-ROI than oil. PV is more expensive because of the expensive labor required at this point (same technology as computer chips). Still, solar is about $.25 per kwhr and falling by 7-10% per year (that's cost - prices are staying high to ration supplies during phenomenal demand growth), which is cheap enough to be competitive in some areas even without figuring in external costs, which is why PV growth is exploding.
oops - forgot hydro. Sorry Alan.
There are very likely other sources I've forgotten too.
Amazing!!! You have figures to back this up???
Robert Rapier (our resident source of the oil company employee perspective) estimates the E-ROI for oil as currently about 10 (if you include refining it's about 5).
Take your average stripper oil well today, which produces an average of 10bbl/day and has long ago amortized out its capital expenses.
10bbl * 57700btu/bbl = ~570,000 btu/day from a well that costs very little to maintain and whose early returns quickly paid off the original capital expense.
Go to Mr Solar
http://www.mrsolar.com/Merchant2/merchant.mvc?Screen=SFNT&Store_Code=MSOS&Affiliate=google
and see that a commercially available PV system that produces 12000 watts costs about $75000. You would need 2.3 of these systems in a ~6 hr solar day to equal the raw btu output of the stripper well with the PV system costing you around $175000.
I don't care how you work it, at an expected return rate of 6% for this money, the PV system will never pay for itself in comparison with FF generated electricity. I also don't care how you juggle the figures, there is no way in hell that a PV system is 1 to 6 times the Energy Return on Energy Invested as compared to crude oil. I think you are completely deluded.
At some point, high EROEI will be reflected in the commercially available price of this energy source. PV people have been saying for years that this will happen. IMO PV energy will never be substantially cheaper than it is today especially considering the heavy FF subsidy that PV is using for production.
No one is arguing that PV is the cheapest form of energy right now, or that PV electricity can compete with coal, or even natural gas generated electricity on a simple cost basis.
PV is expensive because of expensive labor, not because of the energy it takes to make it. Please remember that energy is only a small % of the cost of most manufactured items, and PV is no exception.
Why do you believe there is a heavy FF subsidy for PV production? I've heard such vague and general statements, and they seem to originate with writers like Kunstler who really know very little about renewables (and don't try to). I've provided some specific statements on PV's high E-ROI from reputable sources, like the National Renewable Energy Laboratory, and the IEA (certainly a conservative, pro FF source). Could you get some specific info, like what form this energy input is in, or what stage of production it is used in?
OTOH, PV may not be able to compete with coal or natural gas in most places, but it can compete with the cost of oil-generated electricity in Japan (at $.20+ per kwhr), where they tax electricity to capture some of the external costs of security of supply, pollution, etc, and where capital costs are low. It can also compete in parts of California, where they have a regulatory structure which raises the cost of electricity (for similar reasons), and where they refuse to use coal.
Nick,
I'm practically dumfounded at this question.
Go to any PV factory.
Where do they get their energy to operate?
Fossil fuels.
Go to the mines where the silicon comes from.
Where do they get their energy to operate?
Fossil fuels.
Go to the chemical factories that produce the chemicals necessary for the production process.
Where do they get their energy to operate?
Fossil fuels.
Aluminum, same thing.
Copper, same thing.
on and on and on.
You must live on a different planet.
Well, we certainly seem to be having difficulty speaking the same language.
When we talk about E-ROI, are we talking about the same thing? Do you not believe the NREL, and the IEA, when they say that PV pays off, energywise by between 10 and 30 to 1?
How do you know they get their energy from fossil fuels? A lot of aluminum is converted from bauxite with canadian hydro power. A lot of steel is smelted with cheap nuclear electricity at night. A lot of silicon is melted with cheap nuclear electricity at night.
what do you mean by "heavy subsidy"? Does 20 to 1 E-ROI seem heavy?
Sure, a lot of FF is used right now to operate industry. So what? That can change.
In one post you imply that wind is 6x better return than crude oil but then you say you realize wind and pv can't compete with fossil fuels. I'm not sure at all where you are coming from.
I believe the economics of a given energy source will ultimately reflect the energy return of the source. Right now our industrial infrastructure is mostly run on fossil fuels and it is difficult to get realistic figures on eroei for wind or pv because of what I'm calling a 'subsidy' of fossil fuels that build these renewable processes. The fact that hydro does some aluminum I don't see as changing anything, just shifting the 'subsidy' to a locally cheaper source.
I'd be surprised. Remember, crude oil still needs refining, and the BTU's from electricity from wind & PV are worth 2-3 times the BTU's from oil. Heck, electricity for transportation is about 7 times more powerful than liquid fuels.
I don't know why you think oil is so magical, or impossible to replace. Perhaps you've been reading Barton's or Hubbert's writings. IIRC most of their writings were in the 70's through 90's, when renewables were still inadequate. It's understandable that nuclear was the only replacement that Hubbert could think of, though I think it was a bit of a failure of imagination not to see a possibility in renewables at that time. Still, it's understandable. But, things have changed. Renewables are clearly up to the job now.
Remember, it doesn't matter if oil is better than renewables. It only matters if renewables are good enough. And, I've given you a lot of concrete info as to why they are. If you'd like more, please say so, I'll provide more. Another way of putting this is: it doesn't matter if wind is 50:1, and oil is 200:1; it only matters that an energy source is above roughly 5 or 10 - above that, it's a viable energy source.
"you imply that wind is 6x better return than crude oil but then you say you realize wind and pv can't compete with fossil fuels. "
No. I said wind is perfectly competitive (just not for 100% of the market), but that PV isn't economic in most places.
more later...
I wouldn't think so. The economics of energy sources generally reflects their overall cost, and their energy input is only a small portion of that cost.
Now, if an energy source has a negative E-ROI, then that's different, but that's not what we're talking about here.
Turn E-ROI on it's head, and look at the % of input to output. An E-ROI of 15 means an input of 6.7% of output, and one of 50 means an input of 2% of output. That's only a difference of 4.7%. The energy input is only part of the cost of an energy source: of it's 66% then the difference in cost between the two sources is only 3.2%, which is nothing.
" Right now our industrial infrastructure is mostly run on fossil fuels and it is difficult to get realistic figures on eroei for wind or pv because of what I'm calling a 'subsidy' of fossil fuels that build these renewable processes. "
But what do you mean by the subsidy? That suggests that there's something hidden. What would the people who have studied E-ROI have missed?
Remember, we're not talking about pricing, we're talking about energy inputs and energy outputs: they're the same things, more or less, and the only differences I'm aware of favor renewables, as they put out electricity BTU's, which are more valuable than heat BTU's.
I'm sure no URLs I can dredge up will sway you but I'd recomment reading Cutler Cleveland's work as he is one of the few who is doing reasonable comparative studies of energy sources. Ted Trainer is another. Try this one of Trainer's:
http://www.aie.org.au/material/trainer.htm
The total, absolute bottom line is, the 'renewables' are likely to always be several orders of magnitude more expensive than the 'easy to get' fossil fuels and this is simply because of much lower energy return on energy investment. Come back next year and the year after and tell me again that wind and PV are competitive.
This one previously posted on TOD is for small turbines - you can see that for turbines between 300KW and 750KW that E-ROI ranges from 20 to 40 (it would be higher for the larger turbines that are now standard):
http://www.theoildrum.com/uploads/244/EROI_of_wind_power_cleveland.jpg
Here's a reference to a study (#33, at bottom, also discussed in the text) which gives an E-ROI of 80-100:
http://www.oilcrash.com/articles/steps.htm
And here's a discussion from the the US wind trade organization which gives a payback of 3-8 months, or an E-ROI of roughly 50-60:
http://www.awea.org/faq/wwt_potential.html#What%20is%20the%20energy%20payback%20time%20for%20a%20win d%20turbine
Robert Rapier (our resident source of the oil company employee perspective) estimates the E-ROI for oil as currently about 10 (not including refining).
"it seems hard to believe that wind would be 60 to 1 and still be so small. "
It's not so small: In the US it's the single largest source of new generation construction. See the NEI report, page 8:
http://www.nei.org/documents/Energy%20Markets%20Report.pdf
You'll see that in 2007 wind is 44% of new generation, adjusted for capacity factor (please note that 2008 and beyond is beyond the planning window for wind, so it doesn't tell us much).
It makes sense to me that high EROEI sources will be exploited before lower ones. And from that assumption I would wonder why our economy is not 99% wind with oil and coal being the novelty items.
I will keep looking for more sources. Here is a presentation from ASPO but not the source:
http://www.aspoitalia.net/images/stories/aspo5presentations/Hall_ASPO5.pdf
This one has wind at about 40 to 1. And it places oil higher (but falling through time). There are some very interesting charts in here.
Their "Moore's Law" is not as quick as the one for computers, but it is fairly steep. I have followed the development of WTs and, even a dozen years ago, they were not that impressive (biggest 250 kW from memory) with much lower EROEI.
Projecting forward, one can see quite high levels of wind generation. But it will mever reach 99%. Too much hydro out there ! :-)
I simply think, after extensive review of the literature, and some analysis and discussion, that there is no reason to think that renewables can't do the job.
I hate to give a simple, one line objection when I write a reply to a post. So, instead I made a list of the most common objections with a brief response to each. It seems like a good way to move a discussion along to the heart of the problem, i.e., why the original poster feels that renewables are not a good solution to the replacement of fossil fuels.
Available wind power in the USA is ~1.2 TW; if 50% of this is captured, it comes to about 18 quads. There's an estimated 1.3 billion dry tons/year of waste biomass available in the USA; if this has 16 GJ/ton of energy, it comes to almost another 20 quads of raw energy; roughly half can be converted to charcoal for direct-carbon fuel cells at 80% efficiency (8 quads of electricity) and the rest might be converted to high-grad energy at 30% plus waste heat (3 quads electricity/work plus 6+ quads heat). So far we're up to 29 quads of electricity or equivalent, and we haven't even gotten into coastal wind power (0.9 TW potential) or high-yielding energy crops yet.
Note that the biomass, and charcoal derived from it, are storable and can yield energy on demand.
There are still issues with space heat, DHW and the like, but there are buildings out there which supply nearly 100% of needs from solar collectors.
Them's the facts as I know 'em. What makes you think the American Dream can't be green, clean and sustainable?
The hole-in-the-ground water recirculating cooler-dehumidifier worked great on less than 100 watts.
The wood stove stirling has made a couple of runs at low power- but absolutely silent and vibration-free. Will get there- just the usual infant indigestion.
I like pumped storage. 360 cubic meter-meters is one kw-hr (theoretical max) , and I have a pond and a hill.
And I hear that in production, home cogen. stirlings will comfortably beat my long time guestimated manufacturer's cost of $250/kW.
Of course the same engine works on concentrated solar.
And just to ward off the pessimists (hopeless case anyhow), yes I know hardware is not the fix, but better hardware is better than not better hardware, nicht? And what is better? You will know it when you see it.
I say that no combination of solar income conversion technologies, and you can throw fission and geo-thermal into the mix for good measure, will make the amerikun way of life sustainable.
The political and business elites who run just about every country in the world and certainly North American and Europe aren't choosing coal and dirtier and more expensive oil because of some giant conspiracy, but because on the basis of factual analysis they can see that windpower, solar panels, and the like will not deliver the goods. And one thing that they understand above all else is that their position and power depends upon their ability to deliver the goods.
It doesn't matter how many potential gigawatts the wind offers in Nebraska, or wherever, the cost of delivering those gigawatts to meet peak demand in Dallas, Denver or downtown Manhatten presents an insurmountable obstacle.
I propose you and the other naive hopefuls review and reflect on the meaning of the article by Hugh Sharman, Why Windpower Works for Denmark.
When I hear comments about near boundless amounts of bio-mass just going to waste rotting away in forest and field, I wonder how it is possible in this day and age for apparently literate people to be so mind numbingly ignorant about how the earth sustains it natural cycles.
So please don't you and your fellows stop working on your Stirlings and PV and wind machines etc. I'm all for every effort to find the best way to live within the bounds imposed by nature. But please, get real.
http://www.eia.doe.gov/emeu/cabs/inga.html
So this failed state is able to export power from the mouth of the Congo to South Africa. But we cannot get it from the Great Plains to Dallas, Denver & NYC, even with expanded pumped storage ?
BTW, northern Quebec supplies a good % of NYC today. Mixing wind and existing hydro could supply a good % of NYC. Remaining fossil fuel use could be phased out in stages.
I do not for one millisecond believe that anything on the horizon offers any chance of maintaining the amerikun way of life, including and especially motorized individual transport.
Only half ;-P
Now cite the evidence for it. With figures.
Dallas is not that far from the Texas panhandle, where wind turbines are being erected daily. Denver's not all that far from Montana. Manhatten's right on the coast (great place for the lines from floating windfarms to terminate), and all of them are served by rail which could bring in charcoal for fuel cells (just as rail now brings coal from Wyoming and West Virginia).
If you would like to place a small bet I will be happy to do the analysis to prove my essential thesis, but I'm not working for free. Not for an ideologue like you.
http://www.npr.org/templates/story/story.php?storyId=6110191
http://tinyurl.com/n56ve
There are eight categories of air pollutants...Texas is number one in six of them. Go Texas! We're Number One!
Catastrophic mudslide could last 100 years, say scientists
loved it! LOL
Interesting that it was likely triggered by digging an exploratory well. Big oops there! My guess would be that it was going to happen anyway someday.
And I just have to drop in the point that as GW progresses we are shifting the load structure on the cracked eggshell structure of what we incorrectly refer to as "solid ground". (Ask any Californian) I expect more frequent tectonic events. Gotta admit, though, this one is a doozie!
(by the way, what IS a "doozie"?? oh never mind...)
And while the villagers are being blamed for their misfortune and probably will be charged for the clean-up if possible by the American company, Good 'Merkans<sup>TM</sup> will gape in wonder if they hear (which they likely won't but beare with me here) on the news that the area is turning Muslim because those Evil Muslims<sup>TM</sup> have a policy of helping the poor.....
This is a perfect example of the stereotypical ignorant American. One half of them the US is responsible for all good, the other half for all bad in the world. They are both equally ignorant.
I'm not sure there is a single fact in this post that is accurate, but don't let that stop your self-righteous rage. Instead force reality to fit your world view.
http://www.atimes.com/atimes/Southeast_Asia/HG14Ae01.html
the two Indo co's are listed companies.
.. and the driller Lapindo is a plastics manufacturer?!? "PT Lapindo International Tbk. is a publicly listed company engaged in plastic packaging manufacturing and trading for retail, electronic, automotive and various other industries in Indonesia. " http://www.lapindo.com/en_home.html
The disaster was inevitable.. get enough greedy idiots funding fools to drill lotsa holes ASAP, was bound to happen.
Will make an interesting case study for effect on seismic activity anyway.
Expect more earthquakes, tsu-namis, vulcanicity etc for a while. It would have made its way to surface in its own time anyway. It just blew out with the help of a well bore.
Sometimes a cigar is just a cigar, and sometimes it is just plain bad luck.
Not everything is down to evil drillers or portents of PO.
Otherwise known as a Dusenberg motor car ..
The "Bentley on steroids" of the 20's & 30's
Triff ..
I'll take "Peak Oil" for $1000, Alex...
They just "popped" the aquifer, which is now free to spew hot water/mud up into the air and down the watershed (in the form of a rather prolific geyser). Meanwhile, as material is removed at an extreme rate, naturally the ground that formerly was held up by a water/mud mix sinks.
Geyser basins tend to be reasonably dynamically stable(in terms of average ground level) because they're constantly opening up new vents and getting new rainwater for everything that flows away. But if an aquifer truly were trapped, and then heated, a huge overpressure could develop, kept in check only by 2 miles of rock.
Disclaimer: IANAgeologist
Doubtful of the US, Saudi Arabia begins looking east
Excerpt:
During this time period, oil prices traded at the highest (nominal) price level in history. Rising oil prices, falling production--sounds just like Texas in the Seventies, which makese sense, given that Saudi Arabia is at the same stage of depletion at which Texas peaked and started declining.
Absent a severe recession, I continue to expect to see a bidding war for oil exports in the fourth quarter.
Turning to the domestic economy, Al-Jasser said GDP growth this year is likely to be 7% and inflation at its present level wasn't a cause for worry. According to Al-Jasser, inflation is hovering around 1%.
"I don't expect a significant decline (in GDP) next year also," he said.
9/26/06 Oster Dow Jones 08:04:31
Yesterday we had Russia saying even as production reached a new 'peak', net exports were still slowly declining. Now KSA says says there GDP will be growing at 6 to 7% for two years. One can only assume that their internal oil needs will grow almost as much. Therefore oil exportland is already sending less oil our way - and that's with peak or near peak levels of production.
I find these two quotes somewhat contradictory:
If they have enough oil under the sands, then why will they need to exploit offshore reserves?
Best
Fernando
That's not healthy for yer EROEI ("Your tests show a low ee-roy, take these pills...")
The KSA and UAE are two seperate countries. Hence the seeming contradiction.
Thank you.
Next report is due Oct 19th.
Nuriel Roubini seems to be pretty well locked in his predictions about where the US economy is headed. Moreso than any other economist I read.
http://www.rgemonitor.com/
He predicts 0% GDP growth in the US in 4Q. So if indeed this net export squeeze is coming, that should mitigate things, if his forcast proves to be right. He predicts negative growth next year in the US economy.
It is indeed ironic that Bush's war for oil has backfired so completely. Instead of securing the middle east, US ground forces are mired so deeply in the Iraq tar baby that the other players in the region feel safe in ignoring the US entirely, selling their production to the new "economic hegemon."
The only good thing to come from this will be that just as Nixon became the scapegoat for everything that went wrong with this country (thus allowing everyone else to move forward), Bush will do the same now.
Soon, GW, PO, the housing bust, the debt bomb, the impending entitlements overdraft, etc etc. etc will be blamed on Bush, and everyone else will feel free to dump their own guilt onto Bush, and go with the new flow.
What are we fighting for?
Don't ask me, I don't give a damn
Next stop is old I-Ran.
http://www.countryjoe.com/fixins.htm
Everything you wanted to know about the song
http://www.countryjoe.com/rag.htm
http://www.countryjoe.com/
Da fish's home page
http://www.counterculture.net/thefish/
That's what Rush told me to think.
Does anybody happen to know what is the root cause behind the blackouts that have been occuring in several different countries lately? Grid failure? Lack of fuel for power stations? Any input would be appreciated. Thanks.
I think the situation is that Tainter said blackouts are symptom of impending collapse, so doomers rush to post any blackout news as soon as they can. So, same blackouts more reporting.
But seriously, are you claiming that there are more blackouts now than in the past? If so, make the claim overtly and try to support it.
I stand by my assertion that there are no more blackouts now then there were in the past, particularly on a per capita basis. However, reporting on those events is far more common than in the past. There is an enormous eagerness to search the web for this "evidence" and post on it.
And while I agree that there is a danger of casting all sorts of "news" in the light of your beliefs, this happens just as much on the cornucopian side as well. How many would be peak oil solvers have we seen prance through here with their "discovery" of some new technology? They're usually gone in a week as they learn that such nonsense gets shot down pretty quickly here. The other one I've heard over and over again the last few decades comes from my environmentalist and new age friends - we've got all these problems, but people are changing don't you think? Usually they think this because they have recently become "enlightened" and since they have become more aware they see what others are doing as well. But that doesn't make it a massive culture change.
So, please, do point out when people are being overly sensitive to unimportant "noise" in the news. But your attempt at sarcasm and jibes at doomers should probably be a little more carefully couched if you want people to listen.
I find the contortions that Tainter's follower put themselves through to find proof of doom to be egregious enough to warrant pointing out. Similar performances by the few cornucopians who do occasionally post here and flee are no better. However the doomers seem to be far more resilient in the face of evidence in contradiction to their faith.
Sorry I seem to have shaken you up a bit with my observation. I am sure reality should come with a warning label. I just don't have time to draft one for every comment.
"One wonders if he'd like the same done to him?" I don't know, why don't you ask him? I don't know if he'd like it, but I sure as hell know that it is done to him as much as if not more than anyone else here. And I don't see him complaining.
The deal with blackouts has been a subject he has brought up time and again. He has never been successfully refuted. And yet still, the absurd discussion of blackouts continues.
The duelling clowns themselves don't balk at any kind of fake and bogus "dialogs" just to raise the noise level.
I regret I cannot spend more time on this but may be the editors should realize that a handfull of long time posters are here just to go AGAINST the very purpose of TOD, Peak Oil awareness and fair discussion.
How can you NOT respond to this ?
However the doomers seem to be far more resilient in the face of evidence in contradiction to their faith.
I am sorry I cannot bear to do all the "cleanup" alone and I don't see any volunteers, wake up!
Remember a few weeks ago when they had to delete an entire post of yours because it contained multiple images of headless/mutilated bodies? I do.
I never got to see your photo gallery. But I could tell from the partly-sanitized post I read(before it was completely eliminated)that is was a doozy. What it had to do with oil, you'll have to explain.
This is not bashing Tainter. I don't even see it as bashing Tainter's followers. I do see it as pointing out that the increasing volume of posts on blackouts is not evidence of an increasing number of blackouts.
When people say the world is coming to and end because they read it in a book, I am not obligated to read the book to discuss whether the world is coming to an end. I only bring up Tainter because Tainter is brought up in connection with the misleading blackout posts. Tainter, as far as I know, did not set out to be the doomer's messiah.
At some point, when I have time, I will give Tainter a read. I don't have anything against him at all and doubt I will after the reading.
Most of us who get called cornucopains actually acknowledge a looming oil and energy shortfall, and advocate action in response.
In fact, if you read his book, you'd know he does not believe we are on the verge of collapse.
Yet.
Regarding my Tainter claim; other commenters have stated overtly that certain events - such as blackouts, pipeline explosions, and protests - are evidence of impending collapse or peak oil. I did not draw the link to Tainter on my own. In the future, I will not drag poor Tainter into the discussion, unless he is referenced in the post (or I have read the book).
My point has been that these events have separate causes, or often existed all along and we are just noticing them now. I have asked those who offer these events as evidence of a larger phenomenon to document the linkage.
I see this as a useful two way dialogue. Believe it or not, I have learned a lot and changed my mind in the course of various discussions at TOD. I intend to keep doing so. I do think many doomers and cornucopians are advocates who are promoting an ideology rather than seeking to find answers in an intellectual give and take. If that has made me appear dismissive, I apologize.
I am asking for evidence of a oft mentioned claim. I am not saying that I know for a fact that the claim is wrong. If in pushing for this evidence the result is that I am proven wrong, we are all better off for it, right? And the same if I am proven right.
Yes. It's commonly used as a college anthropology text here in the U.S. The good news is that that keeps it in print. The bad news is that it keeps the price relatively high.
I don't think Tainter should get the rap for the blackouts thing. I think you're confusing Tainter with Richard Duncan and his Olduvai Theory. He's the one who predicted blackouts leading to the collapse of modern society.
A few days ago, you said you were expecting "Tainterists" to jump on the Thai coup as evidence of peak oil/collapse. No one did, by your own admission. Perhaps your view of us here at TOD is incorrect? That is, many of us do believe society must simplify or collapse, but perhaps we have solid, intellectual reasons for this, and are not just pushing an ideology?
Yes. You are probably right.
That was a joke.
Sure! The Ann Coulter trick, it appears that you have been to the same "troll training school" than odograph, not a surprise to me.
Are you sure that this is an adequate answer to people who ARE pushing an ideology?
You should not address them, but the audience they are trying to confuse.
To this effect honest indirect arguments toward the trolls won't do.
I don't know what the "root cause" is. But if I were to guess, I would say it had something to do with the switch from candles and kerosene to electricity.
I heard a story on NPR this morning on the way in about baby boomers and their future housing needs, and how this is going to "reverse" the housing bubble. Apparently, many of the more affluent baby boomers are planning to downsize in the next couple of years -to single story houses of around 3,000 square feet. <sarcasm> I guess that they're going from Palaces to just run of the mill ordinary suburban McMansions. </sarcasm>
In 2010, there will be 50% more people aged 50 to 60 than in 2000. In simplistic terms, for every X number of households downsizing in 2000, we might expect to see at least 1.5X in 2010. And the Boomers will be trying unload the McMansions on the much smaller Baby Bust generation.
Compounding all of this, we expect to see rising costs to commute to and from and heat and cool the large suburban mortgages, plus the probability of a recession.
One of the little ironies of advising people to downsize now is that--assuming that you can find a buyer/victim for your large suburban mortgage--it just shifts the problem to some other poor sucker. Ultimately, to some extent we are all going to be paying the bill, via the Fannie Mae, et al, meltdown.
That's easy. Those 5,000 sq foot palaces can house several families of immigrants (who may be Mexican, or may be fleeing a submerging Florida).
When I was in college, I lived in a coop that occupied two adjoining, three story mansions, complete with grand staircases as well as servants staircases. We had 30 people per house, 59 in all. We had a workshift manager, and each of us did 5 hours of work, cooking, cleaning etc.
It was the best time of my life! Really cheap, and a lot of fun.
So if you house, say, 8 or 10 people in one of those big jobbers, they can garden all the yards within reach, while dismantling the empty house next door for firewood and other materials.
http://tinyurl.com/rrb3b
Lawncare is critical!
The original link I posted now required (free) registration so here is a link to the article in another paper (SF Gate)
http://tinyurl.com/egezh
It's costs are so great, we're like a bunch of CEO's looking at sunk costs going, "build it, they'll come, I know it." No one wants to walk away, there's far too much money involved now. Remember GDP may suffer due to lower crime, which means less cops, which means reduction in prisons which means they aren't making money either. This fails to take into account to flip side which would be producers vying to be number one and competing, thus driving prices down and taxes up.
Countering your claims - there is an increasing number of Babyboomers that have their children moving back home to live with them after college.
With expensive energy I expect families to live closer together, if not in the same house. Surely a 3000 square foot home could be relatively easily reconfigured to house a pair of elderly parents, along with a younger family of 4.
I realize the boomers are getting older, but at the same time the US population is still growing.
Us Census Data predicts 308 Million in the US by 2010, 335 million by 2020, and 363 Million by 2030.
I'd be curious, when do you expect the mass exodus from Suburbia to start happening?
Besides, isn't everyone going to want to stay in suburbia so they can grow their own vegetables?
A mansion can feel awfully empty if you had kids and suddenly they were all gone, so either people will downsize or become obsessed with lawncare and gardening I guess. But, for the ones who think about it and who aren't interested in lawncare, I would guess many will consider moving to a walkable community and the lifestyle it enables rather than a smaller suburban house. The problem is that there are not too many of these types of places and therefore the prices are likely to remain at a premium over the suburban alternative.
Cheering just about every other driver on the road, General Motors Corp. yesterday said it was ditching the H1 by June.
The vehicle, which delivered a shot of in-your-face masculinity, has a price tag of $140,000, weighs 5 tons and gets less than 10 miles to the gallon. But sales have slowed to a trickle. GM has sold fewer than 100 this year.
Many see the H1 as a symbol of personal excess and American over-consumption. The H1 has been the target of at least a half-dozen attacks by radical environmentalists, and the Web site FUH2.com has posted photos of thousands of people giving the H1 the center-finger salute.
"It's the ultimate statement of outrageous excess," says automotive consultant Daniel Gorrell of Strategic Visions in San Diego. "It's the statement of 'I will run over you and crush you like a bug.' "
GM has steadily expanded the Hummer line but shrunk the models' size. In 2002, GM introduced the H2, a medium-size version, and last spring it brought out the H3, the smallest of the group. The H3, which sports a 5-cylinder engine, is popular, but the entire Hummer group has been outsold this year by the Toyota Prius, a gas-electric hybrid. A key member of GM's board of directors has suggested that GM scrap Hummer altogether to save cash.
Source: Washing Post
The H-1 is done. Darn, and i thought good times were her again!
I like the recent Monbiot article where he says that all these worried, rainforest-concerned liberals would rather drink Toilet Duck than cut down on their own consumption.
I too have a problem with the hyrocriticism many liberals display, but let's be honest here -the number of conservative to liberal SUV and truck owners has to be at least 3:1. That doesn't excuse them a bit -but it is a fact.
What?!?!?!
I want a see a link to that...
I live in Taxachussets, and let me tell you - there's a ton of SUV's and pickup trucks here.
HOW MANY MILES PER SOLDIER DOES YOUR SUV GET?
gallows humor, to be sure, but it brings the message home. I printed a bunch (on paper) and will adorn the beasts on my stroll home from work.
-PoP
What is going on there?
-C.
But then again, when did the "price" noise that humans bark out alter geological reality?
Things that make you go...
They are occasionally behind, but I like the little graph, that seems right most of the time.
Europe: "Losing Afghanistan"
Asia: "Losing Afghanistan"
Latin America: "Losing Afghanistan"
US: "My Life In Pictures"
http://www.msnbc.msn.com/id/3037881/site/newsweek/
(hung by their own automatic site layout)
I though crap like this happened only in communist countries...or is it that americans will not buy the other cover...?...follow the yellow brick road...
Would you rather pay to watch a bloody defeat in slow motion, or to get a good look at Angie baby?
Judging from the checkout lines at Safeway, that's a no brainer. 1 rack of Newsweek/Time in the entire store; 238 racks of skinny models and the entra-marital affairs of Brad and his harem. We know what Americans want to see and read. And bloody explosions are really only good sales if they are domestic.
(all together now) "P - R - A - V - D - A"
"Very good class..."
The number of people who believe this is amazing. I just wrote an essay on this a few days ago, highlighting Jerome a Paris' excellent essay on why prices have been falling:
No Price Manipulation
In the end, people will believe what they want to believe. But we certainly aren't dropping prices to help with the election.
So, at least in my mind, it certainly seems plausible that prices are being manipulated, even if there are also fundamentals that are simultaneously driving prices lower.
No snub intended at RR, who continues to do us all an amazing service here, but I have to take issue with anyone who claims that "we certainly aren't dropping prices to help with the election." It's one thing to be unconvinced by the paltry evidence, but entirely another to KNOW that a negative has been proven. In my experience, when a claim of certain knowledge and dismissal of even the possibility of an alternative explanation surfaces, it is either an honest slip, an artifact of blind faith, or an attempt at manipulation itself.
I say that with confidence, because I am involved with the group who sets pricing. I know for a fact the factors that affect pricing, and the election is not one of them. In fact, I have a pricing meeting in 3 minutes, and I know exactly what will be discussed: System inventories, competitor's pricing, and forecasted inventories (related to production and demand). Those are the things that set pricing.
Personally, I'm watching the factors roll by ... withtout getting a real handle on which has most contributed to this decline.
Humans make up the "price signal".
Irrespective of what the real reality was, how would your meeting have gone if everyone entering that meeting room was of the belief that an extinction level asteroid was going to hit in a month? How would your meeting have gone if everyone entering that meeting room was instead of the belief that crude demand by China would double in the next month? Nothing is set except the pre-programming of our brains.
I think there has been a bit of a misunderstanding based on some of the comments. I don't mean to imply that other factors, like political posturing, etc. don't affect prices. Politics often affects prices in a big way. What I am saying is that there is no intentional price reduction by oil companies in order to influence the election. If everyone decided to take a driving vacation this week, I guarantee you that prices would rise, election or no election, because inventories would start to come down quickly.
I dont think anyone is saying oil co's are manipulating prices, rather through the SPR, the gov't is.
To the contrary, a LOT of people are saying it. Maybe not right here in this thread, but check out the link to the discussion at Daily Kos (linked to from my essay). But the guy who pointed out that oil companies don't have the stroke to make gasoline prices go up and down at will hit the nail on the head.
I wish I could let everyone here sit in on a pricing discussion some time. Most would come away with a different opinion of how prices are set. It seems that the majority seems to think that we decide to make $X billion this quarter, so we raise prices to reach that target. But it just isn't that simple.
You said you guys look at forecasted supply, pricing from competitors and system inventories. Now to me this is all the same since supply is part of pricing, competitor pricing is based on his supply, & system inventories will fluctuate again based on price. If you're low on inventory b/c it isn't coming out the ground and getting refined fast enough, you raise prices to offset short term demand and stock back up. So even though you are not talking prices, indirectly yes you are.
If you're forecasted supply is lower next month than this month, unless demand reduces, I can say prices should rise short term based on decreasing supply and flat demand.
Robert R- with all due respect I cannot believe that there wasn't at least some phone calls going on asking to get the price of oil down for the elections. I will never believe that you can pack the whitehouse with that many oilmen and they don't know the score.
If repubs lose will the dem's investigate Bush and his little group of friends? I think the score is known if they lose control and have an angry electorate.
Again with all due respect - I don't buy it - not completely.
Phone calls to whom? And how would the recipient go about getting the price down? It doesn't work that way. As I said, politicians can do things to bring the price of oil and gas down. However, none of them involve calling up the CEO of Big Oil and asking him to get the price down.
It like getting in trouble for something that wasn't your fault. You probably deserve it for something else, just not for what you are getting blamed for.
I think the market is responding to financial factors and the political factor of Israel/Lebanon slowing down and Bush backing of Iran. The impact of someone losing 5 billion dollars in a commodities market can be underestimated.
I certainly think that in the highest financial circles political aspects are important. The fundamentals haven't seem to have changed all that much.
So we have the unknown impact of the loss of 5 billion rolling around the market plus the political manipulation buy Bush simply being quite etc etc.
Now how does this effect the real oil business they price according to to market same as they always have. If any serious manipulation going on its in the financial markets and has nothing to do with the oil industry itself.
At that level its hard to prove or disprove. Except I have to think if its done for political reasons the manipulators are potentially losing a lot of money short term in exchange for pay pack later. All I can guess is they will know the timing of the next major SPR release or it could be related to some other concession from the government which has made several lately. In any case its easy to see conspiracies and manipulation everywhere at this level and hard to see real ones. I'm pretty sure we will never really know its like JFK's assassination the truth is pretty obvious he was killed for political reasons their is simply to many connections to consider otherwise but what reasons and who ?
For the oil market the dead give way is the classic daily sawtooth pattern. The market wants the price to increase each morning and someone steps in and cool it off in the afternoon its a classic pattern in the stock market when a big buyer and seller are in collusion moving a large volume of stock back and forth to keep a certain price.
Now I'm not sure how the price was brought down thats the intresting part but it seems that now its down it is being manipulated.
Now if these prices stayed low for a while we would see some of the demand destruction that has happened worldwide slacken causing prices to rise again. From what I can tell watching production numbers we have basically no cushion outside whats in large reserves like the SPR.
In any case I don't see the current prices stable in the least the only question is what will set them off again ?
At best I figure we will see one more low price swing in 2007 as recession kicks in but I suspect sometime in 2008 or so the oil supply will begin to be lower then whats required to even maintain no growth receding economies.
Note that say the GDP declines are varies by say 1-2% this is not a huge change in overall oil usage.
It would be cool if someone had a map of the GDP vs Oil usage so we could see the effects.
Once oil available decreases faster then the economies collapse the price will rise and stay high.
In my opinion the only manipulation the Bush regime has carried out so far is to wisely back down from confronting Iran.
That's not to suggest that the price change is primarily due or due at all to manipulation. I don't know. I think the administration has shown its willingness to do much less ethical acts to protect itself, so I am confident that they would use any tools they have availabe.
I agree with you on this, as well as with what Jim Burke said below. Yes, politics can affect prices in the ways you mentioned. After all, I think Iran has done a great job of manipulating prices over the past year. The point I am trying to argue against is that oil companies aren't purposely dropping prices to help incumbents. But incumbents can do and say things to affect prices.
No matter if it is factual or not...people will tend to think along these lines unless faced with contradictory evidence...like, perhaps, the details of Cheney's Energy Task Force meetings.
http://en.wikipedia.org/wiki/Energy_task_force
Picture this: We're heading into the election, Bush's poll numbers are radioactive, and one way to get a quick 10 point rebound is to lower the prices.
Since there is a large risk premium because of a possible Iran war, it would be a simple matter to drop the saber rattling, put out the word to traders through a "reliable source" that war with Iran is "off the table".
The saber rattling can always be resumed after the election, but that move alone would be likely to catch some hedge funds out on a limb, and send the others scrambling to cover their positions, thus lowering the price temporarily.
I'm sure there are other avenues, but that one alone would probably be sufficient.
Another reason for the drop in prices, that no one wants to talk about, is recession. As in, we could be in one right now.
There may be "momentary" drops in price like now, I only paid about $3 a gallon the last fill-up, but the Empire is headed towards high prices, rationing, Fischer-Tropf, and hell while we're at it, Volks-Brot with shredded turnips in it or something. Or was that sawdust? Was it the Nazis who put sawdust in the bread or am I thinking of that "fiber" shit they sold in the 1970s.......
Yes, it was. But people who don't understand the reasons for changing gasoline prices tend to ignore data that doesn't fit their conspiracy theories.
Did the majority of voters (people, since most don't actually vote) in 2004 give a damn about gas? I thought the main issues two years ago were terror crap and national security. I also remember the Rx plan being big was it not? I hardly remember gas being a topic of major discussion. So the emotional tie to gas wasn't important and people weren't hurting paying $1.50-$2/gal. It's a lot more painful at $3 when wages are keeping up. It's relative I suppose.
The inventory numbers include 30 million barrels borrowed from Europe last year, 10 million from KSA when the Prudhoe Bay pipeline stoppage occurred, and 10 million from the SPR. Thus, unless we include a world inventory analysis, 50 million off of 324 million leaves the real US inventory of 274 million or around 16.5 days and below inventory levels needed for efficient operation.
Stock option and oil trader short positions were agreed to by executives and traders as in previous years, and loading up at the end of October will be evidence of the conspiracy on a prima facie basis,
At that time, news releases of Cantarell and Mexico's supply problem along with cuts in KSA, Kuwait, Russian exports, UK, Norway, Venezuela, and Nigeria supply issues will lift the market to an average of $70 for each quarter.
The Russian bear has indicated his disapproval of these actions and will bring the IOC's in line.
Of course, the election is icing on the cake.
This will probably be the last year of such fun and games.
Is Karl Rove naiive and altruistic?
Want to buy a bridge?
With everyone wondering about the reasons for the recent drop in gasoline prices, Rob Kirby at Financial Sense yesterday gave a very clear explanation. He may be wrong, or partially so, but he is clear. So what do we think?
I do notice that the response was not immediate, but took a couple weeks to kick in. Is this conducive to the theory? Could it take a week or two for index traders to respond, or should the response have been instantanous?
Wow ...
As I recall, some who said it would be filled were claiming that Bush was in league with the oil companies and would fill it to keep prices high to support their profits. You can make anything fit a conspiracy theory one way or the other.
I have a problem with this logic to refute conspiracy theories. Here is why:
What are you going to do about it? Suppose you are the one who can't keep his mouth shut and wants to expose the conspiracy of which you have been apart. Or maybe you overhear that one who talks. What will you do about it?
Let's say someone leaks that gas prices have been manipulated. Well that person could just be shot and made to look like a suidice. Or just discredit him as some 'disgruntled mentally unstable' type. Or just deny it as outlandish fables made up for political reasons. Or just hush up the story since the MSM is bought off. Or maybe just change the story, come up with some new OJ Simpson story to be feed to the masses.
My point is everyone involved doesn't have to be quiet. How hard of a time is TOD having getting the word out about PO?
Oil prices tumble over fears of US recession
By Edmund Conway, Economics Editor
(Filed: 26/09/2006)
· Add oil, and a price dip is suddenly a slippery slope · Audio: Edmund Conway comments Oil prices have dropped to the lowest level in six months, as markets' concerns about geopolitical instability are replaced with worries about an impending US-led economic slowdown The plunge in oil prices has hit mutual funds for $4.5bn (£2.4bn), and there are fears that more investors could fall victim to unexpected falls in energy prices.News of the oil price fall will come as a relief to motorists and manufacturers, who have been hit hard by higher prices in recent months. But economists warned that the drop in crude prices would not lower the chances of UK inflation hitting 3pc this winter. Brent crude prices in London dropped 79 cents to $59.62 a barrel yesterday, though they bounced back above $61 in the evening. The drop was sparked by news that BP has received permission to restart production in the eastern half of its Prudhoe Bay oil field in Alaska. Experts warned that the fall in past weeks - the biggest since the recent boom started - is due to more deep-seated concerns.
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/09/26/cnoil26.xml
- And somehow the 'blabber' is going to filter through all the other noise and be picked up by YOU and THEN taken as credible?
- Many conspiracy of silence have occured in the past where we end up knowing something else. Operation Northwoods, the Manhatten Project, the nuke explosion in Chicago, the sabotage of the russian gas pipeline.
- And if there IS a "conspiracy" that someone has a "theory" about and it turns out to be the truth, what are YOU * gonna do about it? Esp. 5,20,50 or 100 years later?
There are plenty of "conspiracy theories" that are nutty - the UFO's attacked the WTC complex. In the case of lower gas pump prices for election reasons....what *ARE you gonna do? Not vote? Not buy the gas? Complain?Big Hairy Whoop. Short of some form of reaction in the form of personal violence, what you do won't matter much to a system that can jerk prices about for votes. And if you choose the personal violence route, odds are you'll end up dead, so your ability to effect others will, again, be rather limited.
It seems like a big change to make to an index. It would be different if it were just a fund, but indices aren't supposed to change often or on a whim. I wonder if they gave a reason for that?
- Goldman Sachs revised its GSCI index on July 12
- This forced hedge funds and institutions to sell 75% of their natgas futures
- Gasoline prices started dropping soon after
Any serious comments should address these points. Everything else is just rant. Is it like he states, or not?- What is the value of those 75%?
- Is it enough to influence the market to the extent the graphs seem to indicate?
- Are there other factors, for instance other investors that have sold?
I have seen numerous theories about dropping gas prices, but none as clear and transparant as Kirby's. And that's why I posted this."Theory 3: More political pressure on an administrative agency--let's say the Commodity Futures Trading Commission--to change some little noted regulation on speculative limits on crude trading. For example, reducing the number of contracts that large players can hold at one time in crude oil down to 2,000 for the spot month. This means that anyone holding more than that would need to sell the excess in near-month contracts, making the price of those contracts go down. Surprise: Here's the current limit, and here's the request in the Federal Register to reduce those limits from last year (.pdf warning). I was unable to find confirmation of when the new limits took effect, but note that the current limit advisory was published in August 2006."
Now, at any given time, large investors do tend to be somewhat preferentially invested on the long or short side. It's not generally exactly 50-50. It doesn't get too far off, from what I understand, maybe up to 60-40 or 40-60 longs to shorts. But there can be a modest imbalance, and it will tend to change over time with market dynamics.
If there is an imbalance then as traders close contracts in the expiring month this could push prices a little. As it happens, I think I read that large traders were net long in August and are somewhat net short now. So that could have produced a slight price decline, but I wouldn't think it would account for a 20% fall.
In the case the price is driven by future contracts, then indeed the tail is wagging the dog.
Silicon Valley's Mr. Green
So, not too long ago Mr. Khosla claimed that it was twice as efficient to produce ethanol as to produce gasoline. Now that this fallacy has been pointed out to him, he has changed his opinion:
No, the important question is: Does it cause a reduction in fossil fuel usage? If it causes a reduction in petroleum usage, while consuming lots of natural gas and coal, it certainly doesn't help us much from a global warming perspective (his 2nd "real" question). The reason energy balance matters is that an energy balance of 1.0 says you have no greenhouse gas reduction, and you are merely turning fossil fuels into ethanol. That's why the question is important.
It is funny, though, that only now that Khosla knows better on the energy balance issue has it become a "silly question."
You can find more on Khosla's latest here:
Vinod Khosla Clean Technology
There should be a requirement that all ethanol claims come with a warning like the warning on cigarettes pointing out the true net reduction in greenhouse gases and the true net reduction in fossile fuel use, if any.
Otherwise, people might get the impression that ethanol is the holy grail, that so called alternatives are, in themselves, the answer.
I still think that ethanol can help our energy balance, but of course by no means it is the answer or even a significant part of it.
Many of them were surprised, but none of them were arguing to the contrary. I think everyday people are able to form their own conclusions when given the facts in snippets. No one left that party thinking ethanol is the holy grail.
Unfortunately there was an article in our newspaper yesterday saying that our Governor, Jim Doyle (a dem) is pushing to make Wisconsin the leader in alternative fuel production. Makes me cringe! Politicians should be slung up by their nuts.
Tom Anderson-Brown
I think that they have them surgically removed, which is why none of them can take a bold position.
Now Keith Olberman has got a pair that are solid steel and the size of baseballs. If you haven't watched his latest special comment, you really, really need to.
http://www.crooksandliars.com/2006/09/25/olbermanns-special-comment-are-yours-the-actions-of-a-true- american/
Tom Anderson-Brown
We are not going to avoid 1984.
Interestingly, in one of them, a world map of the world of 1984 is shown - the UK remember, is "Airstrip One" and is the Americas' bitch. It shows the US, Mexico, S. America, and Canada as one superpower, hmm.... isn't that exactly what TPTB have planned? And the UK is literally a launching point for the Americas' wars against Europe and Asia, which is exactly the role I'd expect to see the UK in after we're kicked out of the ME and engaged with Eurasia in massive resource wars.
Go to http://marshallbrain.com and read his story about the computers that are used to run retail stores and then eventually run society, for a grade B potboiler that story will haunt you. It does show how we could have the view screens, the systems able to pick up Ownlife or Thoughtcrime etc and it's easy to see the world of 1984 is not impossible at all. Especially since in 1984 clothing, food, etc are very scarce compared to now, in fact I'd say we could end up with a 1984 type world with about half the present world population due to slow die off, maybe Orwell foresaw our most probable future, a slow and miserable catabolic collapse.
http://marshallbrain.com/robotic-nation.htm
http://marshallbrain.com/manna1.htm
kind of jumped off the board they were building there.
Simply reading & rereading CEJL beats any of the bios.
I strongly suggest that both you and tandersonbrown go through the following document before posting anymore nonsense: http://rael.berkeley.edu/EBAMM/FarrellEthanolScience012706.pdf
IMO this is the most definitive paper to date in regards to ETOH production and I'm sure Robert would be glad to provide his assesment.
I believe you took issue with this part of my post:
I read the article you referenced from Science Magazine. I learned that ethanol must be blended with gasoline. Is this what you were getting at in your post when you said the following?
If not, I'm confused about what was nonsensical about my post that I should have learned from the Science article.
It looks like cellulosic ethanol does a lot better in both the FF input category and in the Net GHG category than corn. That's cool. But then why are we not using cellulosic ethanol instead of corn-based ethanol? I know that it is because it is still in development. All of the claims in the article related to cellulosic ethanol use words like "expected" and "under development".
We should be pissed that our policies are encouraging corn-based ethanol, since cellulosic ethanol is purportedly right around the corner. Will the infrastructure and investments being made to produce corn-based ethanol work with cellulose once cellulosic ethanol methods have been hashed out? Or will all of the infrastructure now created for corn be obsolete? Or will the two types of ethanol compete against each other?
My gripe with ethanol is that the claims speak to it as a cure-all for our problems. Monoculture crops destroy the soil. There are people who don't have enough to eat. A tank of ethanol amounts to a lot of fuel. My view is that we should use less energy. I know it's a pipe dream.
Thanks for the info. Interesting article.
Tom Anderson-Brown
There's corn ethanol, sorghum ethanol, wheat ethanol and sugar ethanol (cane/beet) - the food-chain feedstocks.
Then you have wood ethanol, rice straw ethanol, switchgrass ethanol - the cellulosic feedstocks.
Followed by biogas ethanol, landfill waste ethanol, MSW ethanol - the waste feedstocks.
And lastly coal ethanol, NatGas ethanol - the hydrocarbon feedstocks.
Now with all these different feedstocks, there are a myriad of ethanol production paths that can be utilized including: fermentation, enzymatic fermentation, acid-hydrolysis, bacterial fermentation and perhaps the best method, thermo-chemical conversion via FT or pure catalysis.
Pick a feedstock and match it with a process and I'll find you a company, university, government or public/private venture that is either in R&D, trials, commercial production or any stage thereof.
For all intents and purposes, the US ethanol industry is a fledgling one and although corn ethanol is not the best application of resource and technology - you have to start somewhere and as I pointed out a few days ago, the cover story in Ethanol Producer for August is Peak Oil - a significant observation for such a young industry wouldn't you say?
Consider corn ethanol a launch pad to get the ball rolling as it were because this production path utilizes existing known technology that is improving all the time and yes, the infrastructure and investments being made will complement each other with 2nd and 3rd gen production paths not to mention other technologies such as hybrids, plug-in hybrids and hydrogen fuel cells.
Remember that Peak Oil is ultimately a liquid transportation fuel crisis (check the Hirsch report for reference) that needs to be initiated 10/20/30 years prior to peak. Of all the options, biofuels are the best choice for a vast number of reasons -not just peak related- but mostly because biofuels can be a global endeavor to overcome a global problem.
Sure, a lot of people in the world don't have enough to eat, however, this has nothing to do with ethanol production nor will it. First world protectionist trade policies have decimated indigenous food production through the guiles of globalization in many countries; if anything, these countries are very excited about the prospect of a first world fossil fuel transition to biofuel like ethanol because of the tremendous opportunities presented to what are predominately agrarian societies to begin with.
A finite world holds a host of challenges and solving them is what makes us count.
"Ethanol has an EROEI of..."
"Ethanol produces X amount of GHGs"
"Ethanol costs $x to produce"
Is like saying:
"Electricity has an EROEI of..."
"Electricity produces X amount of GHGs"
"Electricity costs $x to produce"
It may be true for some kinds of electricity or some kinds of ethanol, but the generalism is inaccurate.
Saying that ethanol has about 70% of the BTU content of gasoline is an irrefutable scientific fact.
Thanks for your excellent explanation. I feel much better about ethanol knowing that it isn't just corn and speculation about switchgrass. You've really opened my eyes. Your post and the link to Keith Olberman's special comment by enviro attny have been two of the most hope-inspiring posts I've seen on TOD.
Thanks again,
Tom Anderson-Brown
I am not so sure that he "knows better", rather that he cannot weasel around anymore.
Let me relish in "I told you so..."
OK, I will correct you. Prior to this issue being pointed out to him, he was giving presentations and doing interviews, in which he invariably claimed that "The energy return on corn ethanol is 1.3-1.6, and for gasoline it is 0.8, therefore it is twice as efficient to produce ethanol as to produce gasoline." That sure was a funny (and wrong) claim to make if he believed energy balance was a silly question.
Now as for your most important question: "Does it cause a reduction in fossil fuel usage?"
I will refer you to the Berkeley study posted above wherein GHG and fossil fuel usage of ethanol production are addressed succinctly.
That wasn't the question you asked. You asked if he thought is was a silly question. A reader today sent me an interview in the upcoming Wired magazine in which Khosla again makes the silly claim:
So, is it a silly question? Only when he is shown to be wrong.
I will refer you to the Berkeley study posted above wherein GHG and fossil fuel usage of ethanol production are addressed succinctly.
Look at the report, and you will see that the GHG reduction for ethanol over gasoline is very, very small. Look at Figure 1, and compare gasoline to ethanol today. You will see that there is almost no GHG reduction. That was the point. That's why energy balance matters. If cellulosic ethanol ever becomes economical, then there will be a bigger greenhouse gas reduction.
Look at Figure 1 again, and tell me that ethanol has a substantial GHG reduction.
The E3 quote is not a silly claim nor is the part about the EROEI of corn ethanol - only the .8 gasoline part which he is referencing from Wang's work.
And since I referenced the Berkeley report, you'll know that I would never assert that corn ethanol produces substantial GHG reduction but according to you, that's not the most important question remember?
But it shows that he is being inconsistent about whether the question is silly. Here, it appears that he thinks it is not.
And since I referenced the Berkeley report, you'll know that I would never assert that corn ethanol produces substantial GHG reduction but according to you, that's not the most important question remember?
Yet that's the argument Khosla makes, isn't it? He says "Energy balance doesn't matter, greenhouse gas reduction does." Yet we don't get much of a greenhouse gas reduction. Why? The energy balance is too poor. So it does matter.
Khosla is pulling a bait and switch. He talks about the EROEI and GHG reduction of cellulosic, as if it is what "IS". Corn ethanol is what "IS". Cellulosic is what may some day be.
'Someday' is a lot closer than you think =]
Would you care to bet on that statement? Iogen, for instance, has been saying they were going to build a commercial plant for 3 years or more. To my knowledge, they haven't actually broken ground anywhere.
Here's what I think. Someone will start up a cellulosic ethanol plant, maybe as early as 2007. That part is really not difficult, and I am surprised it hasn't already been done. The difficult part is going to be making money doing it. I think it will bleed red ink as far as the eye can see. Do you see if differently? If so, I have follow-up questions.
Bluefire asserts that their first facility in California will generate $55 Million a year in revenue, however, what the company claims or intends to do (as is the case with Iogen) is what we have to rely on.
I know first hand that the US permitting process is holding up construction plans of other groups due to the 'refinery' aspect of the projects in question.
Look up the capacities, and then tell me again why you think those are commercial facilities. I don't view a facility that makes a few barrels a day a commercial facility. For example, that Bluefire facility in the presentation had a capacity of 500 barrels a year. That is a pilot plant. To operate an actual full-sized commercial facility, they have to have an economic process, or a steady supply of money to run through.
Bluefire asserts that their first facility in California will generate $55 Million a year in revenue, however, what the company claims or intends to do (as is the case with Iogen) is what we have to rely on.
Yes, I remember the Xethanol claims as well. Not that these companies are in that category, but I will bet the farm that Bluefire will have a significant operating loss on that revenue. Ah, but your company is working on this problem as well, no? So why isn't your company in the process of building a commercial plant? I bet you know just how tough it will be to make cellulosic ethanol in a cost-effective manner. There are some serious hurdles yet to be overcome. So, how are these other companies doing it? They are going to bleed red ink, just like I said. They will bleed until they run out of money, and then they will beg the government for funds or shut the process down.
If you believe this is true, could you supply the sources you are basing this opinion on?
I read the paper you referenced above (EBAM model) but they don't seem to be using a commercial plant or even a pilot plant for the Cellulosic Ethanol case. Instead, they seem to refer to "possible improvements" based on lab results.
Pimentel seems very negative on the idea. And so far I have not seen anyone publish a description of a method for breaking down the cellulose into sugars that is not energy intensive. It seems that while there is more potential energy, it is locked up tighter and is harder to get out.
The Berkeley report is perhaps the best review to date on ethanol production and yes they use lab or pilot plant results because 2nd gen technologies (those other than basic fermentation) are barely out of the starting blocks if you will - but they are tangible.
That said, it's quite misleading to equate ethanol production as some sort of singular entity as you would gasoline production because there are many ways to produce ethanol from a variety of feedstocks.
Gas comes from oil and it has one EROEI whereas ethanol can be made from corn, sugarcane, sorghum, molasses, coal, NatGas, biogas, ag waste, green waste - any carbonaceous material. Ultimately, this means that ethanol has a wide range of EROEIs that logically should be averaged out not pegged at corn ethanol's 1.3-1.8 and recalculated to reflect implemented best practices as even corn ethanol production improves.
True, not all of these production paths have been perfected but we're close. A combination of Peak Oil, record gas prices and Bush's speech has only recently put new empahsis into developing and commercializing 2nd and 3nd gen technologies.
As for Pimental, you'll note that his study is almost the only negative EROEI corn ethanol study in the world and the Berkeley report does a very fair job of outlining why this study has been discredited almost outright.
I would like to spend a few weekends on campus reading up on these 2nd and 3rd generation technologies. Can you recommend some papers or well known authors?
We have been discussing wind EROEI just a few posts above. Wind may have an EROEI of 40 to 1 or better (granted, capacity at that return may be limited). Is there any real chance that cellulosic ethanol could reach 40 to 1 (or even 20 to 1)?
Right now, Brazil may be getting an EROEI of as high as 10 to 1 from sugar cane.
I am not sure how important the distinction between 10 to 1 and 100 to 1 is. As I understand it, EROEI is measuring a single conversion. However it seem to me that if one process has a lower EROEI, but can be done more frequently, it could balance out. Likewise the different inputs matter are they coal, natural gas, oil?
I would like to think about and discuss this a bit more. My feeling at this point is that you can not just rank technologies by EROEI and assume that their utility follows the same order.
- Jack
1) FO Licht presentation to METI,
http://www.meti.go.jp/report/downloadfiles/g30819b40j.pdf
EROEI Calcs: Page 20
2) IEA Automotive Fuels for the Future
http://www.iea.org/textbase/nppdf/free/1990/autofuel99.pdf
3) IEA: Biofuels for Transport
http://www.iea.org/textbase/nppdf/free/2004/biofuels2004.pdf
EROEI calcs: page 60
4) Worldwatch Institute & Government of Germany: Biofuels for Transport (Link to register - study is free)
http://www.worldwatch.org/node/4078
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
Also:
- Grado, S.C. and Chandra, M.J. (1998), A factorial design analysis of a biomass to ethanol
production system, Biomass and Bioenergy
- Johansson, J. and Lundqvist, U. (1999), Estimating Swedish biomass energy supply, Biomass and
Bioenergy,
- Kimmins, J.P. (1997), Predicting sustainability of forest bioenergy production in the face of
changing paradigms, Biomass and Bioenergy
- Ogier, J.C., Ballerini, D., Leygue, J.P., Rigal, L. and Pourquie, J. (1999), Ethanol production from
lignocellulosic biomass, Oil and Gas Science,
The so-called permaculture miracle in Cuba is a myth, it never happened. However the folks in Cuba are not nearly as bad off as those in North Korea. North Koreans are, on average, eight inches shorter than South Koreans. The link that reported this fact is the first one below but the link to the Kansas City News that first reported this fact seems to have been deleted.
Cuba, since the collapse of the Soviet Union has always been a desperately poor place, in spite of the pundits who tout the so-called miracle of them overcoming their peak oil problem. Food shortages were desperate in the early 90's then got a little better but three or four years ago things begin to get much worse. Cubans, in 2004, were having to live a whole month on two weeks worth of food.
And this year things have gotten desperately worse:
And this will come as a shock to most of you, the US is feeding much of Cuba. Of the massive imports of food that Cuba requires each month to feed its citizens, much of it comes from the United States.
Ron Patterson
We'll be more like North Korea.
Famines ...
I am glad to see the US blockade being circumvented, since the US's policy seems to have been to isolate the people and keep Castro in power. If not for the blockade, Castro would have been ousted decades ago.
Yeah, I don't expect it to be Beverly Hills, but they do seem to have kept things running (and reading/writing) a lot better than the US press would have us understand.
Bob Fiske
Something scary...FED powers need to be increased....while I won't argue that they need oversight...I hardly want the FED in control.
http://www.bloomberg.com/apps/news?pid=20601103&sid=awN8EyEyUjbg&refer=us
This is only the beginning...banks are getting pissed at manufacturers ability to repay bad loans.
http://www.latimes.com/business/la-fi-loans26sep26,1,6099386.story?coll=la-headlines-business
Some more bad loans but this time the focus is Mortgage Backed Securities which I believe will do us in, but that's saved for another show....
http://www.businessweek.com/magazine/content/06_40/b4003063.htm?chan=search
Oh yeh Starbucks is getting sued....
http://today.reuters.com/news/articlenews.aspx?type=businessNews&storyid=2006-09-25T230836Z_01_N 25297858_RTRUKOC_0_US-LEISURE-STARBUCKS-LAWSUIT.xml&src=rss&rpc=23
Best part of this story is that it's in Seattle. If that last part is true...prices may be rising or falling depending on how you look at it. If they lose and competition is brought in, prices will fall.
Marx is difficult to digest. There's a lot to digest in the truth he noted that in poor countries the people are generally doing OK while in rich countries the mass of the people are generally miserable.
Yeah, we've had a 40-year hiatus from that in the US, from the end of WWII until the 70s or 80s, but we're reverting to the historical norm now. The historical norm without cheap domestic oil, virgin farmland, etc.
I've seen plenty of hatred for the First Nations people in Canada for not playing the civilization game but they're turning out to be right, aren't they?
Tomorrow is the global climate change class and next week is the peak oil class. The required reading for the peak oil class is the Hersch Report. It a discussion based class with lots of bright students, so I'm soliciting ideas about discussion topics. I'm thinking about discussing electrified rail and the need for more wind / possibly nuclear, since the other alternatives leave much to be desired. I don't think it's the correct forum to state that overpopulation is the real problem and we have to have some die-off, but a discussion of oil and food production might have some people connecting the dots.
http://www.globalpublicmedia.com/lectures/461
Dear Mr. Bezdek:
The Peak Oil mitigation strategies that Hirsch, Wendling and you have evaluated in two DoE papers have overlooked the "best" approach, most probably due to a lack of expertise in that specific area. An approach that can realistically replace 10% of current US oil consumption in ten to twelve years (see attached paper) with oil "production" naturally increasing over time rather than depleting. The worse the oil supply situation becomes, the more this approach will "produce", thus providing a "safety net" for the worst case.
In an oil supply interruption, "production" can, in the vast majority of cases, be scaled up 50% to 100% within a week or two. I have not calculated the cumulative twenty year savings from my proposals, but they will be a very large percentage of 44 billion barrels of oil and quite possibly larger from this overlooked approach. This approach, comprehensively implemented over decades, allowed Switzerland to survive a six year, 100% oil embargo and maintain an advanced industrial society with a decent quality of life with ~1/400th of current US per capita oil use.
I respectfully request that your co-authors and you incorporate this approach with your tar sands/heavy oil, coal-to-liquids, enhanced oil recovery and vehicle fuel efficiency options. Understandingly, this approach is beyond your experience and expertise and is unfortunately not commonly discussed. It's ancillary environmental and economic advantages should make this approach the first alternative implemented on a crash scale and the alternative most aggressively pursued in anticipation of Peak Oil and post-Peak Oil.
Electrifying our inter-city rail freight lines and building Urban Rail on a crash basis are better solutions than those listed (only slightly better than improved vehicle efficiency). The crisis of Peak Oil may require that all viable solutions be applied, not just the best. (On the other hand, a la Switzerland, no other approach may be needed). But the best solutions should never be ignored in favor of sub-optimal solutions !
Shell Oil recently announced that their current, under development tar sands project is experiencing 60% cost over runs and will cost Can$110,000 for each barrel/day of capacity. This clearly demonstrates a need to "hedge our bets" in dealing with Peak Oil.
Limitations on the rate of expansion of tar sands appear to be already developing. Coal-to-Liquids and Oil Shale will use many of the same industrial resources as Tar Sands and shortages of key components, materials and personnel are likely to slow your proposed build-up for the first decade below your hypothesized output. The industrial supply chain and personnel should, in my opinion, "catch up" in the second decade.
The two overlooked mature technologies that I espouse can cost effectively mitigate Peak Oil in the medium and longer term and utilize an entirely different supply chain. Many of the resources, physical and personnel, that are currently used for highway construction can be redeployed for Urban Rail. Since Western Europe (except UK) and Japan have largely electrified their railroads and Russia and India are currently doing so, specialists can be readily imported. All technical problems are already solved, given the very large installed base and century of experience. Existing overseas support infrastructure can supplement domestic shortfalls.
There are historical and modern precedents for such crash programs of Urban Rail. "Peak Streetcar" construction in the US was roughly between 1897 and 1916. In a nation of little larger than 100 million citizens and still predominantly rural, over 500 streetcar systems were built with most towns over 25,000 getting electrified transportation. Thailand, a 3rd World economy with 60 million people, has recently budgeted 550 billion baht (~US$14 billion) for mass transit. France has recently been building a new tram line for every city (that "voted correctly") of 150,000 and two lines for those with 250,000 or more.
A backlog of viable Urban Rail projects in the USA, with detailed (if sometimes dated) routes and studies exist for over $100 billion of investment. (A synopsis is attached). Construction on almost all of these could start within 1 to 3 years and completion within six years (on a crash basis). This interlude of postponed construction would allow for detailed planning and evaluation of the second wave that could adopt criteria similar to that of France.
Twenty years is long enough to have a significant impact on national living patterns. See the United States of 1970 versus 1950, two decades when almost every "downtown" died, many established neighborhoods declined and suburbia & shopping malls became dominant. Parallel to the Urban Rail build-out, a massive electric trolley bus and transportation bicycling initiative could also be built-out. The cumulative results of many local projects can have a global impact !
The impact of these initiatives is proportional to the resources used to build them out and inversely proportional to the availability of oil. The worse things get, the better Urban Rail, electrified inter-city rail and even bicycling and trolley buses will perform !
In a "bad case", the Urban form and shipping will quickly adapt itself to the non-oil transportation alternative ! Necessity will drive adaptation. The same is true of milder scenarios resulting from Peak Oil; just at a slower rate of adaptation. Again, I respectfully suggest that you expand the scope of viable alternative strategies in dealing with Peak Oil.
Alan Drake
Ready-To-Go Urban Rail
There is a backlog of viable Urban Rail projects in the USA, with detailed (if sometimes dated) routes and studies for over $100 billion of investment. Construction on almost all of these projects could start within 1 to 3 years and completion within two to six years of construction (with stream-lined procedures). This time could be used to plan a second wave of Urban Rail projects, perhaps using criteria similar to those of France.
Streetcar and electric trolley bus feeders to Light Rail and Rapid (subway) stations should be emphasized. The ~$10 billion Washington DC Metro transformed local commuting patterns from 4% by bus in 1970 to over 40% today, saving a half billion to a billion gallons/year. This can be replicated in a majority of US cities. The author prepared the list below from memory. It is meant to be illustrative and not definitive.
New York City - 2nd Avenue Subway, 3rd Tunnel under Hudson, Penn to Grand Central conection, Staten Island Light Rail
Los Angeles - Red Line "Subway to the Sea", Vermont Avenue subway, over 100 miles of Light Rail
Washington DC - Dulles extension, Purple Line, 40 miles of streetcar lines
Miami - 104 miles of elevated Rapid Rail (subway type), Miami Beach streetcar (already locally funded) 90% of the population would be within 3 miles of a station and half within 2 miles of a station.
Denver - 117 miles of Light Rail and Commuter Rail (already locally funded)
Salt Lake City - 90 miles of Light Rail, streetcar and Commuter Rail (vote soon to accelerate)
San Jose - BART extension, several Light Rail extensions
Minneapolis-St. Paul - Central Light Rail connector between the cities
Atlanta - Beltway Light Rail or streetcar, Northern Light Rail extension
Portland - Green Line (both routes, one funded, other "studied" for future build)
Austin - Two Light Rail Lines plus Commuter rail and streetcars
Dallas - All plans through 2015 and all 2015-2030 options (roughly 145 mile system)
Houston - All plans voted for
Phoenix - 90 miles of Light Rail already approved
Pittsburgh - Two Light Rail Lines north from current, under construction line
St. Louis - All plans evaluated, perhaps 100 mile system
San Diego - Light Rail spur to North, another to West
San Francisco - New TransBay tunnel, trolley line, BART extension, eBART
Baltimore - East-West Light Rail Line, 4 mile extension to current subway
Buffalo - Planned extensions to current light rail subway
Boston - All rail plans promised as offset to "Big Dig"
Charlotte - All plans currently scheduled
New Orleans - Desire Streetcar Line
Since he donated $1 billion to the UN in 1998, Turner heads the UN Foundation. The what? No idea either.
Now TT gets to address the WTO, the third leg in the deadly triangle that also includes IMF and World Bank. The DOHA talks, meant to push free trade, are going nowhere. The world's poor are not playing the usual games anymore. They know what is meant by liberization of world markets.
But Turner has the answer. Farmers growing food, that's the problem. What are these people thinking? They stand in the way of progress and prosperity, of the tide that lifts all boats.
In modern agriculture, farmers grow fuel, not food!!
.
So for those of you want the whole story...
Ted is proposing an end to the stalled DOHA rounds through a global biofuel movement that would see 1st world nations growing fuel while 3rd world nations grow food and/or fuel for domestic and export markets - taking advantage of cheap labor and southern climes in what have been historically viable sectors.
As I've alluded here on previous occasion, the food vs. fuel debate is a myth. 3rd world agrarian economies have been devastated by 1st world trade protectionism - the number 1 factor stalling DOHA.
For example, Turner asserts (correctly) that if US corn exports were dedicated to ethanol production then there would be no corn available for dumping on Mexico; the market price of corn would rise, hence the country's domestic corn industry -decimated by US corn subsidies- would have a chance to be profitable again.
And with a global biofuel infrastructure, developing nations would be presented with food or fuel markets for their crops and a chance to participate in the global economy with a high value product while cutting out prohibitively expensive, hard currency hydrocarbon imports.
Now the word 'manipulate' is a pretty strong one, and conjures up images of a a secret cabal with unlimited power. If there is manipulation (I prefer to call it 'influencing the market'), then it is of a far more subtle nature ... things done with a wink and nod rather than outright rigging.
The government can do certaint things to exert downward pressure on gasoline prices, and the oil industry can also do a certain things.
As has already been pointed out by others, the government has not topped off the Strategic Petroleum Reserve, it has given regulatory relief to both the oil industry and oil traders, and has toned down the war-like rhetoric against Iran.
The oil industry has fewer degrees of freedom, but it does have some wiggle room regarding the price of retail gasoline. First, it can ensure that its refineries are all operating at close to full capacity. Then, it can build up inventory whether it is immediately called for or not. And finally, it can shave or temporarily eliminate its normal profit margin on gasoline exiting the refinery. While the latter goes against Economics 101 good business sense, it is a practice that has a long tradition: it is called DUMPING. Japan got into trouble for dumping steel on the US market in the 1970s and early 1980s. So, there are many precedents for this practice.
To use the Don Rumsfeld Socratic method: Does this mean that the Bush regime and the US oil industry have total control over the price of gasoline at the pump? Of course not. But is it possible that there is an unspoken understanding between the Bush regime and the US oil industry to keep a lid on prices, to the greatest extent possible, in the run-up to the November elections? Yes, it is possible.
And to address Robert Rapier's outright dismissal of this possibility: I doubt that he's high enough up in the organization of whatever oil company he's employed by to be aware of what communications have transpired between the CEO of his company and top officials of the Bush regime. Sometimes strings are being pulled under your very nose.
It does not matter if there was a personal phone call between Bush and my CEO, begging for him to drop the price. My CEO does not have the power to do this, because no oil company controls enough of the market to dictate prices. This isn't Microsoft and the software business. Besides that, my CEO is not in the pricing group. I am. I have these discussions 3 times a week. I am more in the loop on how prices are set on a day to day basis than he is. And I know exactly why prices have been behaving as they have.
Let's take a few of your suggestions:
First, it can ensure that its refineries are all operating at close to full capacity.
Refinery capacities have been running at maximum for most of the summer, which you can see in the weekly EIA reports.
Then, it can build up inventory whether it is immediately called for or not.
It is pretty hard to build up inventory when supply and demand are closely in balance. However, gasoline inventories have been creeping up as demand has started to slow.
And finally, it can shave or temporarily eliminate its normal profit margin on gasoline exiting the refinery.
This is the one that doesn't make any sense at all. First of all, we don't determine our "normal profit margins." Our profit margins are something that the market gives us. If we determined profit margins, they wouldn't vary all over the place.
But here is what would happen: Company A drops their prices. Companies B-Z look at their inventories, and think "Company A is freaking nuts. We can't drop our prices like that, or we are going to run our inventories down as demand picks up." Company A, after a few days of low, low prices, runs out of product. Companies B-Z now see prices start to rise, because Company A's low, low prices spurred demand, and now supply is short. Supply and demand wins again. Prices are where they are because of the market, not some conspiracy between Republicans and oil companies.
As I said, people will believe what they want. But I want to repeat, so the message isn't missed: AN OIL COMPANY CEO DOES NOT HAVE THE POWER TO DROP GASOLINE PRICES IN ORDER TO INFLUENCE AN ELECTION. CAN'T BE DONE. Well, I can think of one possible way they could drop prices by lying. If they announced that they had hit the biggest oil strike in the history of mankind, then that could put downward pressure on prices. But they can't do it in the normal context of running the business.
Could they just slightly overhype a medicocre deep-water find that was actually discovered a while ago and count on a cadre of analysts to further amplify its impact by declaring that 'peak oil is garbage' ?
The Index Fund (Goldman Sachs) thing mentioned earlier is also very interesting.
I think its possible that these type of things alone or together can take advantage of the momentum of an already dropping price (due to end of driving season, lack of hurricanes) and nudge the price down further or faster.
I don't really believe in most conspiracy theory, but the nudging of commodities markets for financial gain I think almost certainly takes place, which is one of the reasons small fry should stay out.
The ratio of diesel/#2 products and gasoline can be varied within bounds (I have heard 8% to 10%) at any given refinery.
Refineries can maximize gasoline production (thereby minimizing diesel production) and then let the market take it's course.
Supply and demand accoutn tor the record delta between gasoline & diesel prices today. The supply of gasoline can be easily affected by refinery management fiat.
Refineries will swing between diesel and gasoline depending on which has the better netback. Part of our gasoline demand is filled with European imports, but they don't have excess diesel to export. So, we have a tigher diesel market. But, because diesel margins are better, refiners choose to make as much diesel as they can right now. Nothing to do with politics, though. Well, I guess it has a bit to do with the European politics that promoted a diesel economy, which is why they don't export diesel to the U.S.
It is also not a coincidence that other commodities have fallen in price. Does the oil conspiracy involve other commodities markets as well?
The fact that people still have this misunderstanding, in this forum, means I haven't done a very good job of conveying the details of how prices really get set. Either that, or some people just don't trust me to tell them the truth.
You'll excuse me now, the aliens have asked that I make my report on their efforts to alter the earths climate to their liking.
But I think you've neglected to take into consideration the possibility that it might not only be Company A that has decided to try to keep prices low, but also the rest of Companies B through Z, all of whom have a vested interest in playing ball with the Bush regime, whom they were heavily instrumental in putting in power. What about that possibility?
I think your objectivity might just be a bit clouded by the fact that your livelihood depends on being an employee of the oil industry. As such, you probably have a hard time envisioning your upper management doing anything shady or outright illegal. Well, wake up! It wouldn't be the first time that the oil industry has done something venal or illegal.
Don't forget, these were the same bunch that were part of Dick Chaney's Energy Task Force, of which it has been reported that one of their chief tasks was to study maps of Iraqi oil fields well before the Bush regime created the crisis that led to the invasion and occupation of Iraq. Deciding on how to divide up the spoils?
The oil industry and national politics are inseperable and make for a truly unholy alliance. For example, who put the Shah of Iran in power, and for whose benefit was that done? Just look at the mess that has resulted from that little caper.
No, I trust the oil industry about as much as I trust the Bush regime. By the way, I think part of the bill for this Iraq fiasco should be sent to the US oil companies, because part of it was supposed to be for their benefit. (Though things haven't quite worked out the way they were supposed to, have they?)
That's quite a conspiracy theory. All of the oil companies working together to win an election? Given the supply/demand situation, artificially lowering prices (i.e., when demand does not warrant it) would mean that we would pull inventories down and run out of gas. The reason prices are falling is because demand is down, and a lot of speculators have been driven out of the market lately.
I think your objectivity might just be a bit clouded by the fact that your livelihood depends on being an employee of the oil industry.
Consider the alternative view that I have very detailed knowledge of how prices get set, since I am close to the process, and therefore I know that this conspiracy business is laughable. I know the "lack of objectivity" angle is a lot sexier, but it just doesn't hold up. Besides that, my livelihood in no way depends on being an oil industry employee. I get a couple of job offers a week, many of them from ethanol companies.
It wouldn't be the first time that the oil industry has done something venal or illegal.
Seems like this is always the way these discussions go. No evidence? It doesn't matter, because WE KNOW JUST HOW BAD THEY HAVE BEEN! If they aren't guilty here, they have been guilty before. I had this same discussion with 2 different people this week who insisted the oil companies had lobbied against higher CAFE standards. When they couldn't come up with any evidence to support their claim (and I came up with evidence against it), they resorted to the same line: "doesn't matter, because we all know that oil companies are bad."
thanks for posting here I for one greatly appreciate it.
Yes, deliberately dropping prices and profit margins will eventually screw up the inventory situation, but we are only talking about a time period of less then two months.
Of course, what happens to gasoline prices after the November election will be very telling. If they remain on a flat or downward path, then there would apper to have been no conspiracy to keep prices low. On the other hand, if gasoline prices start rising precipitously, with no apparent good reason, then while that doesn't prove a conspiracy, it will look very very suspicious.
In modern times other large industries, both in the US and abroad, have played games with rigging prices, with varying degrees of success. Some have been caught, and others have not. So, I don't see why you find the notion of subtle downward price manipulation on the part of the government and Big Oil to be such an outlandish propositon.
My point is this. It may be in their best interest. Someone in the Bush administration may beg and plead for them to drop prices. But the CEOs really can't do much about it. They watch the prices rise and fall just like the rest of us. They don't control the rise and fall. As I said earlier, margins are not something that we set. Margins are something we get, based on what prices are doing.
Of course, what happens to gasoline prices after the November election will be very telling. If they remain on a flat or downward path, then there would apper to have been no conspiracy to keep prices low. On the other hand, if gasoline prices start rising precipitously, with no apparent good reason, then while that doesn't prove a conspiracy, it will look very very suspicious.
Prices will start to rise by next spring, as they almost always do. Winter blends will be phased out, and driving season will be here again. Sometimes demand picks up around Christmas and Thanksgiving, as people are driving to see relatives. Otherwise, prices will be flat, barring some major new development (we go to war with Iran, for instance). Mark my words. If I am wrong, call me on it. If I am right, do a post in January or February in which you acknowledge that I was correct, and that you were wrong when you questioned my objectivity.
But let's get your exact prediction here. My prediction is that regardless of which party wins the most seats, prices will remain flat until Spring (again, barring a major development), with possible short spikes around Thanksgiving and Christmas. What do you predict?
I guess you are saying that Big Oil is incapable of influencing prices in any way, correct? Even though in its heyday Big Steel was caught doing a bit of a fiddle on prices, and going further back Big Rail was also guilty of egregious pricing practices.
Would you agree, that within a certain narrow degree of freedom, it is much easier for a company to make its prices go down than to make them go up? (One can always cut profit margins, but cannot always make them increase.) This is why I did not blame Big Oil when gasoline started rising.
I haven't even gotten into what sort of mischief can be done by major players in the oil spot market and oil futures market. It is not an area that I fully understand, but commodities have historically be subject to attempts at manipulation. But that is a whole other consideration.
Yes, if prices surge upward, and there are no falling inventories to explain why prices might be rising, I would definitely think something was up. Now, if prices stay flat or fall, would you agree that it is possible I may have been accurate as to why prices have actually been falling?
I guess you are saying that Big Oil is incapable of influencing prices in any way, correct?
Not incapable, but difficult in the short term. In the longer term, overbuilding capacity can cause prices to fall. That's why the industry is cyclical. In the short term, nothing short of major collusion would do the trick, and you would see strange happenings like falling inventories and falling prices.
Even though in its heyday Big Steel was caught doing a bit of a fiddle on prices, and going further back Big Rail was also guilty of egregious pricing practices.
To do that, one would have to control a majority of the market, or collude on pricing. None of the oil majors control a large fraction of the market, so that leaves collusion. In the face of no evidence of collusion, despite repeated investigations, I have to conclude that collusion is unlikely, and we are left with the simplest explanation: Market forces. This is further supported by rising inventories.
Would you agree, that within a certain narrow degree of freedom, it is much easier for a company to make its prices go down than to make them go up?
No. It is much, much easier to make prices go up. All I have to do is shut down a major refinery, and suddenly supply and demand are no longer in balance. Prices spike up. But to make prices fall, I would have to jack production up much higher than demand. Since production has been running at full capacity all summer, I can't actually jack up production. The other alternative is demand destruction, but I can't do much about that, especially in the short term. High prices over an extended period will do the trick. So no, I don't agree. I can see many ways to cause prices to spike up tomorrow. I don't see a way to make them spike down tomorrow, outside of making a false announcement about some new technology that gives everyone cheap energy.
(One can always cut profit margins, but cannot always make them increase.)
As I have pointed out already, margins are not something we set, they are something the market gives us. If they were something that we could control, they wouldn't vary.
By the way, I strongly suspect that if I had raised suspicions about California energy prices a few years ago, you probably would have said that Enron was just responding to market forces. Right?
I suspect that your problem is that, as a faithful employee of a US oil company, you have far too much faith in the integrity of corporate America. I don't believe I have ever heard you say anything the least bit critical of Big Oil, and I don't blame you, for it might jeopordize your career. You apparently suffer from a failing of many engineers and scientist in the employ of big business: You don't recognize a fundamental conflict of interest in publicly expressing opinons on issues that potentially affect your company's welfare and thus your's.
At the risk of being repetitive, I will again quote Mark Twain:
"Show me whar a man gits his corn pone, and I'll tell you what his 'pinions is."
I have written a load of stuff that is not in my best interest as an oil company employee. I have also clearly explained that since there is no dominant player in the market, it would be essentially impossible for 1 company to drop prices below the market for very long.
In closing, let me refer you to a Harvard economics professor who weighs in on this issue:
http://gregmankiw.blogspot.com/2006/09/omnipotent-potus.html
While you apparently believe I fall in the "can't see the issues clearly" category, I am certain that you fall into the "need better and more widespread economics education" category. Who knows? Maybe the professor moonlights for an oil company and therefore can't be trusted. That must be the case.
By the way, I am sure you noticed that inventories built this week? Not exactly what you would expect if the price was being artificially manipulated downward when demand wouldn't warrant it.
So, I don't see why you find the notion of subtle downward price manipulation on the part of the government and Big Oil to be such an outlandish propositon.
The reason I find it outlandish is that I am very close to the process of setting prices. I work in the planning and economics group, and one of the things we do is pricing. I know exactly what dictates pricing. I know the factors that cause us to move prices. It isn't calls from upper management or incumbent politicians. The only time the election has ever come up in any of these meetings was a couple of weeks ago when I brought it up as a joke. After everyone had a good laugh, someone said "Do people really believe that?" Sadly, I had to answer "Yes, many do." To which my manager responded "Don't they understand what sets pricing?"
I don't know what you do for a living, but if I conjured up this kind of scenario going on right under your nose, in the area of your expertise, you would probably react the same way. Of course then I would challenge your objectivity, instead of presuming that your expertise allows you to analyze the situation better than I can.
(Though I am not defending that Gibson religious maniac and his apocalyptic thinking)
Did you just write a two sentence post with appropriate use of capitals, no bold, no underlining, and no stupid links?
Holy Christ, I think I'm cured!
Now if only you'd write something about oil once in a while.
Recall my recent postings on how a VLCC arriving on the West Coast is tantamount to a tsunami enegy wave. PostPeak, when only one VLCC will arrive per month to serve the ENTIRE West Coast-- I wonder how the Govt/IOCs will strategize the optimal burn-rate of this energy? Refine it all quickly for the military to use at a high burn-rate in a kill-pulse, or trickle out slowly for agriculture and medicine as needed? What will the market decide, or will it all be topdog-allocated at this point? What tipping point of US detritus burn-rate starts radical changes-- 18 million barrels/day, 15 million, 10 million, 5 million?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Seems to me that there is no real distinction between those two.
KSA seems to have it's own recent production number woes.
They had better crash the economy soon if they want to be able to feign chances for a "recovery" so that the "recession" can mask the downward break-out from the plateau.
This will be the reason they don't take back congress if they wind up unsuccessful.
Then you can just pass me the frickin Kool Aid and I can become another Stepford American for the next 2 years.
Bill Frist was on CNN four days ago taking credit on behalf of the entire Republican Party, much to the shock of Soledad O'Brien.