Thoughts & Observations

2011-10-28T08:36:00.001-05:00

The Impact of Fathers on Psychological Well-Being and Social Behavior

2011-04-18T10:02:00.000-05:00

Quoted from : http://www.childwelfare.gov

Even from birth, children who have an involved father are more likely to be emotionally secure, be confident to explore their surroundings, and, as they grow older, have better social connections with peers. These children also are less likely to get in trouble at home, school, or in the neighborhood.13 Infants who receive high levels of affection from their fathers (e.g., babies whose fathers respond quickly to their cries and who play together) are more securely attached; that is, they can explore their environment comfortably when a parent is nearby and can readily accept comfort from their parent after a brief separation. A number of studies suggest they also are more sociable and popular with other children throughout early childhood.18

The way fathers play with their children also has an important impact on a child's emotional and social development. Fathers spend a much higher percentage of their one-on-one interaction with infants and preschoolers in stimulating, playful activity than do mothers. From these interactions, children learn how to regulate their feelings and behavior. Rough-housing with dad, for example, can teach children how to deal with aggressive impulses and physical contact without losing control of their emotions.19 Generally speaking, fathers also tend to promote independence and an orientation to the outside world. Fathers often push achievement while mothers stress nurturing, both of which are important to healthy development. As a result, children who grow up with involved fathers are more comfortable exploring the world around them and more likely to exhibit self-control and pro-social behavior.20

One study of school-aged children found that children with good relationships with their fathers were less likely to experience depression, to exhibit disruptive behavior, or to lie and were more likely to exhibit pro-social behavior.21 This same study found that boys with involved fathers had fewer school behavior problems and that girls had stronger self-esteem.22 In addition, numerous studies have found that children who live with their fathers are more likely to have good physical and emotional health, to achieve academically, and to avoid drugs, violence, and delinquent behavior.23

In short, fathers have a powerful and positive impact upon the development and health of children. A caseworker who understands the important contributions fathers make to their children's development and how to effectively involve fathers in the case planning process will find additional and valuable allies in the mission to create a permanent and safe environment for children.

The effects absent fathers have on female development and college attendance

2011-03-25T10:48:00.002-05:00

"It is ironic, and of some interest, that we have subjected joint custody to a level and intensity of scrutiny that was never directed toward the traditional post-divorce arrangement (sole legal and physical custody to the mother and two weekends each month of visiting to the father.) Developmental and relationship theory should have alerted the mental health field to the potential immediate and long range consequences for the child of only seeing a parent four days each month. And yet until recently, there was no particular challenge to this traditional post-divorce parenting arrangement, despite growing evidence that such post-divorce relationships were not sufficiently nurturing or stabilizing for many children and parents."

"There is some evidence that in our well-meaning efforts to save children in the immediate post-separation period from anxiety, confusion, and the normative divorce-engendered conflict, we have set the stage in the longer run for the more ominous symptoms of anger, depression, and a deep sense of loss by depriving the child of the opportunity to maintain a full relationship with each parent."

Examining Resistance to Joint Custody, Monograph by Joan Kelly, Ph.D. (associate of Judith Wallerstein, Ph.D) From the 1991 Book Joint Custody and Shared Parenting, second edition, Guilford Press, 1991.

Researchers agree the females who lack father figures are more prone to experience diminished cognitive development and poor school performance (Grimm-Wassil, 1994, p. 149).

Girls who have little contact with their fathers, especially during adolescence had great difficulties forming lasting relationships with men. Sadly these females either shy away from males altogether or become sexually aggressive. Girls with involved fathers learn how to interact with males by using the father-daughter relationship as a model. They not only have a concerned male to converse with but also a feeling of acceptance, knowing they are loved by at least one male. Females without father figures often become desperate for male attention (Grimm-Wassil, 1994).

Females who lose their fathers to divorce or abandonment seek much more attention from men and had more physical contact with boys their age than girls from intact homes. They also tend to be more critical of their fathers and the opposite sex. These females constantly seek refuge for their missing father and as a result there is a constant need to be accepted by men from whom they aggressively seek attention (Grimm-Wassil, 1994, p. 147).

Girls with absent fathers grow up without the day-by-day experience of attentive, caring and loving interaction with a man. Without this continuous sense of being valued and loved, a young girl does not thrive, but rather is stunted in her emotional development. The coping mechanisms that adolescent girls whose parents are divorced develop in response to the absence of their father include the following (Lohr, Legg, Mendell, and Reimer, 1989, p. 352):

* Intensified separation anxiety
* Denial and avoidance of feelings associated with the loss of a father
* Identification with the lost object
* Object hunger for males

Studies show that females with absent fathers often have diminished cognitive, development; poor school performance, lower achievement test scores and lower IQ scores (Grimm-Wassil, 1994). Cognitive development affects how children perceive and interpret the information they are presented, thus making it difficult for them to excel if cognitive development is impeded.

Santrock (1973) presented additional evidence indicating that early father-absence can have a significant debilitating effect on cognitive functioning. Among lower-class junior high and high school children, those who became father-absent before the age of two generally scored lower on measures of IQ (Otis Quick Test) and achievement (Standard Achievement Test) tests that had been administered when they were in the third and sixth grades than did those from intact homes.

Fatherless daughters compared to those with present father figures are in higher risk of teenage pregnancy, college drop out and low self-esteem. In addition fatherless daughters are in higher risk of suicide, homelessness and disorders. According to Getting Men Involved: The Newsletter of the Bay Area Male Involvement Network, (Spring 1997):

* 63% of youth suicides are from fatherless homes.
* 90% of all homeless runaway children are from fatherless homes
* 85% of all children who exhibit behavioral disorders come from fatherless homes.
* 80% of rapists motivated by displaced anger come from fatherless homes.
* 71% of all high school dropouts are from fatherless homes.
* 75% of all adolescents' patients in chemical abuse centers come from fatherless homes.
* 70% of juveniles in state-oriented institutions come from fatherless homes.
* 85% of all youths in prisons grew up in a fatherless home.
* Fatherless children are 20% less likely to attend college.

Inconstant father-daughter relations can have a devastating effect on a female's life by making her more vulnerable to outside influences. Daughters of single parents in comparison to those from intact homes are:

* 53% more likely to marry as teenagers
* 111% more likely to have children as teenagers
* 164% more likely to be a single parent
* 92% more likely to divorce if they marry

Daughters need the example of what a man really is, how one is supposed to act, what a man needs and how he thinks (Griffin, 1998, p. 29). Fathers are the key to teaching their daughters about men. Research has suggested that most women who see their mothers being abused will themselves become abused in adulthood (Griffin, 1998). Positive secure father-daughter relationships allow females the confidence needed to be successful in their effort as well as achieve their goals.

Fatherlessness is a social problem brought on by the breakdown of traditional family. The victims are innocent children who have little voice in changing public attitude and policy. Blankenhorn (1995) studied the epidemic of fatherless America and concluded it is our most urgent social problem. He claims it weakens the family, harms children, causes or aggravates our worst social problem, and makes individual adult happiness harder to achieve'(Soberman, 2000, p. 3).

The continued involvement of the non- custodial parent in the child's life appears crucial in preventing an intense sense of loss in the child.... The importance of the relationship with the non-custodial parent may also have implications for the legal issues of custodial arrangements and visitation. The results of this study indicate that arrangements where both parents are equally involved with the child are optimal. When this type of arrangement is not possible, the child's continued relationship with the non-custodial parent remains essential."

Reference

Adams, P., Milner, J., and Schrepf, N. (1984). Fatherless children. Canada: John Wilney & Sons Inc.
Bae, Y., Computer Consultants, Inc., & Smith, T. (1997). Women in mathematics and science [On-line]. Available: http://nces.ed.gov/pubs/ce/c97005.html
Biller, H., (1993). Fathers a00 families: paternal factors in child development. Westport, CT: Greenwood Publishing Group, Inc.
Blankenhorn, D. (1995). Fatherless America. New York, NY.
Coma, C. (2000, Aug. 5). Personal Communication. New York, N.Y.
Elium, J., & Elium, D. (1994). Raising a daughter. Berkeley, CA.
Getting Men involved: The Newsletter of the Bay Area Male Involvement Network. (1997). Statistics on fatherless homes. Available:http://www.statsonfatherlessness.html
Griffin, D. (1998). Fatherless women. Los Angeles, California: Milligan Books.
Grimm-Wassil, C., (1994). Where's daddy: how divorced, single and widowed mothers can provide what's missing when dad's missing. Overlook Press; ISBN 0879515414.
Hetherington, E.M. (1978). Effects of father absence on personality development in adolescent daughters. Development of psychology, pp. 313-326
Kopf, D.E. (1970). Family variables and schools adjustment of eighth-grade father-absent boys. Family Coordinator, 19(2) pp. 145-150.
Lamb, M. (1997). The role of the father in child development. Canada: John Wilney & Sons, Inc.
Landy, F., Rosenberg, B.G., & Sutton-Smith, B. (1969). The effect of limited father absence on cognitive development. Child development, 40, pp. 941-944
Lifshitz, M. (1976) Long-range effects of father loss: The cognitive complexity of bereaved children and their school adjustment. British journal of medical psychology, pp. 189-197.
Lohr, R., Legg, C., Mendell, A., & Reimer, B. (1989). Clinical observations on interferences of early father absence in achievement of femininity. Clinical Social work journal. 17(3), pp.351-365.
Mattox, W. (1999). The role of fathers in the lives of their daughters. [On-line] pp. 1-7. Available: http://www.frontiernet.net/~jfwagner/cf03100.htm
Maxwell, A.E. (1961) Discrepancies between the pattern of abilities for normal and neurotic children. British Journal of Psychiatry, 107, pp. 300-307.
Pollack, O., & Friedman, A.S. (1969). Family dynamics and female sexual delinquency. Palo Alto: Science and behavior books, Inc.
Popenoe, D. (1996). Life without father. New York: Martin Kessler Books.
Santrock, J.W. (1973) Relations of type and onset of father absence to cognitive development. Child development and behavior.
Soberman, S. (2000). Fatherless America and its impact of "daddy's little girl" [On line] pp. 1-4. Available: http://phoenix.marymount.edu/
Sutherland, H. E. G. (1930) The relationship between I. Q. and size of family in the case of fatherless children. Journal of Genetic Psychology, 38, pp. 161-170.
United Fathers of America. (1992). Statistics on fatherless homes. Available:http://www.unitedfat...america-statsonfatherlessness.html
Wakerman, E., (1984). Father loss: daughters discuss the man that got away. New York: Doubleday & Co.

Today's Quote

2010-03-11T15:51:00.001-06:00

A man who carries a cat by the tail learns something he can learn in no other way.
Mark Twain

The influence of Bias & Media on Peak Oil believability

2010-03-11T15:35:00.001-06:00

With the growth of online media in the last fifteen years, newspapers are becoming obsolete, with their demise comes a larger problem; misinformation. This problem is not new, however most authors have been rather ambiguous in their conclusions. A closer look on how unconscious human behavior impacts this issue should be given, especially with the news regarding Peak Oil--Spectators caused the oil price spike of 2008 vs. demand of oil was higher then supply rings a bell. Unfortunately, no large government agency has confirmed or denied these claims in midst of smaller entities giving alternative stories. The reason for this unequilibrium is explained here.

Confirmation Bias is a human condition that causes a person to seek out only information that matches their preconceived notions. It also can be in the form of interpreting data to reaffirm a given truth a person holds. This was the subject of an experiment held by Charles Lord, Lee Ross, and Mark Lepper. They gave subjects two studies on the death penalty—one for each side of the argument, Regardless of being pro or anti death penalty, the subjects chose the study most reliable to be the one that shared their viewpoint, even though the latter was more detailed. This illustrates two key things; the human conscience does not like contradictions, humans are irrational.

Another bias is looped with Confirmation Bias called Blind-Spot Bias. This often rears its ugly head during debate on the very subject of being bias. Dr. Emily Prolin discovered that when asked to rate ones level of bias compared to their fellow peers, humans will certainly assume the position they are less susceptible to bias and stereotyping. Blind-Spot Bias would ultimately prevent a person from realizing their confirmation bias. The question then becomes, how do I really know what heck is going on?

Thanks to the trusty—insofar—Internet, a simple Google News search shows a real life example of contradictions in the reporting of Peak Oil. The first story in the results claims “Peak Oil Period” to Be Attained By 2014, Alarm Scientists.” The fifth exclaims “there never was such a thing as "Peak Oil" or "Peak Hydrocarbons".. Economic success is balanced on how...” One gives you a feeling of panic, the other of ease. The contradictions in media today are of course in all subjects. The size of the Internet also allows an endless number of fictitious realities created simultaneously. As our perceptions become more divided, the effect has yet to be determined—depending on the severity of division will ultimately conclude the answer.

Many may be asking themselves if print media has any reliability? My answer is undecided. Every writer is prone to bias because they must create a voice in which to report the news. Also newspapers are littered with stories promoting new products and businesses while advertisements’ scatter in between. (The words conflict of interest comes to mind) However historically journalists were affriended with the common folk. I would like to think the historical significance of journalism should weigh on a few authors’ consciences.

As gas prices scamper to three dollars a gallon, I expect peak oil to finally gain some traction. Although because of theNormalcy Bias—the refusal to plan for an event because it has not happened before—should do us in regardless, or perhaps the argument that technology will save us all will come to suffice.

- Kristen Mcgreagor; Chanhassen, MN

The Over 30 Crowd

2010-03-05T11:25:00.001-06:00

If you are 30, or older, you might think this is hilarious!

When I was a kid, adults used to bore me to tears with their tedious diatribes about how hard things were. When they were growing up; what with walking twenty-five miles to school every morning.... Uphill... Barefoot...BOTH ways… yadda, yadda, yadda

And I remember promising myself that when I grew up, there was no way in hell I was going to lay a bunch of crap like that on my kids about how hard I had it and how easy they've got it!

But now that I'm over the ripe old age of thirty, I can't help but look around and notice the youth of today. You've got it so easy! I mean, compared to my childhood, you live in a damn Utopia!
And I hate to say it, but you kids today, you don't know how good you've got it!

I mean, when I was a kid we didn't have the Internet. If we wanted to know something, we had to go to the damn library and look it up ourselves, in the card catalog!!

There was no email!! We had to actually write somebody a freakingletter - with a pen! Then you had to walk all the way across the street and put it in the mailbox, and it would take like a week to get there! Stamps were 10 cents!

Child Protective Services didn't care if our parents beat us. As a matter of fact, the parents of all my friends also had permission to kick our ass! Nowhere was safe!

There were no MP3's or Napsters or iTunes! If you wanted to steal music, you had to hitchhike to the record store and shoplift it yourself!

Or you had to wait around all day to tape it off the radio, and the DJ would usually talk over the beginning and @#*% it all up! There were no CD players! We had tape decks in our car. We'd play our favorite tape and "eject" it when finished, and then the tape would come undone rendering it useless. Cause, hey, that's how we rolled, Baby! Dig?

We didn't have fancy crap like Call Waiting! If you were on the phone and somebody else called, they got a busy signal, that's it!

There weren't any freakin' cell phones either. If you left the house, you just didn't make a damn call or receive one. You actually had to be out of touch with your "friends". OH MY GOD !!! Think of the horror... not being in touch with someone 24/7!!! And then there's TEXTING. Yeah, right. Please! You kids have no idea how annoying you are.

And we didn't have fancy Caller ID either! When the phone rang, you had no idea who it was! It could be your school, your parents, your boss, your bookie, your drug dealer, the collection agent... you just didn't know!!! You had to pick it up and take your chances, mister!

We didn't have any fancy PlayStation or Xbox video games with high-resolution 3-D graphics! We had the Atari 2600! With games like 'Space Invaders' and 'Asteroids'. Your screen guy was a little square! You actually had to use your imagination!!! And there were no multiple levels or screens, it was just one screen... Forever! And you could never win. The game just kept getting harder and harder and faster and faster until you died! Just like LIFE!

You had to use a little book called a TV Guide to find out what was on! You were screwed when it came to channel surfing! You had to get off your ass and walk over to the TV to change the channel!!! NO REMOTES!!! Oh, no, what's the world coming to?!?!

There was no Cartoon Network either! You could only get cartoons on Saturday Morning. Do you hear what I'm saying? We had to wait ALL WEEK for cartoons, you spoiled little rat-finks!

And we didn't have microwaves. If we wanted to heat something up, we had to use the stove! Imagine that!

And our parents told us to stay outside and play... all day long. Oh, no, no electronics to soothe and comfort. And if you came back inside... you were doing chores!

And car seats - oh, please! Mom threw you in the back seat and you hung on. If you were lucky, you got the "safety arm" across the chest at the last moment if she had to stop suddenly, and if your head hit the dashboard, well that was your fault for calling "shot gun" in the first place!

See! That's exactly what I'm talking about! You kids today have got it too easy. You're spoiled rotten! You guys wouldn't have lasted five minutes back in 1980 or any time before!

Regards,
The Over 30 Crowd

Today's Quote

2010-02-14T11:43:00.001-06:00

A person who won't read has no advantage over one who can't read.
Mark Twain

Our Obsolete Playbook

2009-12-07T06:12:00.000-06:00

I think it would be quite easy to make the case that our playbook has failed us quite badly. And to make matters worse, only a few are even aware of it. Energy and government experts are fudging the numbers on a daily basis, while our financial experts are groping in the dark. No one, and I mean no one that matters, is prepared to cope with scenarios not contained in the playbook. Our current world view, or “playbook”, is based upon classical, or “Newtonian mechanics” after Sir Isaac Newton and his laws of motion. Big thinkers of the time, like Rene Descartes, concluded that the world was one of mathematical precision, not confusion. Science and technology were seen as the tools to rearrange the stuff of nature in a way that best advanced the material self-interest of human beings.

Generations of economists have since proffered that an endless growth in material welfare is the economy’s long-run normal state and created a debt-based monetary system upon that ludicrous assumption. In a finite world of limits, constantly looking for expansion, for economic growth, for prosperity, and for solutions to a continuation of the unsustainable path we are on, will be the root cause of our inevitable downfall. Our hubris has fostered an increasingly objective view of nature; we admire its’ natural beauty in photographs, dissect it’s workings under a microscope, and then conquer it with technology.

As William R. Catton writes in his latest book; Bottleneck: Humanity’s Impending Impasse, “May future generations of people inhabiting this planet be descended from the most hubris-free members of each preceding generation.”

Any reasonably well-read person, unfettered by too much sit-com TV, should be able to recognize the unfolding trend; that limits to growth are manifesting, that our insolvent financial system and our global environmental sink issues are overwhelming, any and all, technical efforts to “fix’ them. And we won’t even discuss the elephant in the room—overpopulation.

The fundamental enabler of our industrialized American way of life has been a continuous access to enormous quantities of cheap, readily abundant non-renewable natural resources in the form of energy, metals, and minerals. That “access” is increasingly becoming problematic.

The problem lies with the fact that most of the remaining oil available in the world either has a very slow production rate, or is quite expensive to extract, or both. The production rate of any unconventional oil (such as tar sands or heavy crude) is never going to compete with conventional oil. In 1901, with gushers like Spindletop in Texas, the EROEI was something like, 100 to 1. Today, the EROEI of tar sands and deep water oil is 5 to 1 or less. When the EROEI becomes < style="margin-top: 0px; margin-right: 0px; margin-bottom: 0px; margin-left: 0px; padding-top: 0px; padding-right: 0px; padding-bottom: 0px; padding-left: 0px; ">
Thus, declining domestic and foreign sources of, primarily, energy, will force American society to powerdown all aspects of our economy, by either design or by default. We will have to learn to view the world differently, to a degree almost unimaginable to those who scarcely understand the concept just now. “The decades to come will see many things that are now done by machines handed back over to human beings, for the eminently pragmatic reason that it will again be cheaper to feed, house, clothe, and train a human being to do those things than it will be to make, fuel, and maintain a machine to do them.”

Many harbor an unquestioned assumption that it will be possible to just shift from the use of fossil fuels to alternative energies. The reality is that no basket of current alternatives can replace fossil fuels on the scale and in the manner we use them. People must realize that wind, direct solar, and other renewable technologies are all pretty marginal and take a lot of fossil fuel energy and time to construct the supporting infrastructure.

Our new playbook must be based upon an ecological world-view that recognizes limits; where nature’s renewable processes dictate the rate of resource consumption, not GDP, nor a desire for endless progress and growth.

And to reiterate the constant theme in my many posts over the years; peak oil is an economic crisis, not an energy crisis.

As James Kunstler recently wrote: “Both reality and history will probably take us out to some woodshed of the national soul and beat the crap out of us.”

Joe Sparano: The Facts about the Peak Oil Theory

2009-11-03T12:14:00.000-06:00

Part of the problem here lies in the fact that the word theory has two distinctly different meanings.

In science, the word theory is used to denote "a well-substantiated explanation of some aspect of the natural world; an organized system of accepted knowledge that applies in a variety of circumstances to explain a specific set of phenomena".

In colloquial non-scientific parlance, the word theory is mistakenly conflated with the termhypothesis, "a tentative insight into the natural world; a concept that is not yet verified but that if true would explain certain facts or phenomena". Of course obfuscationists rely on and encourage this confabulation in the public mind to keep the uninformed swallowing their drivel.

The latter is the mistaken sense in which the term is used when people utter the platitude, "just a theory". The former, scientific meaning is what is actually indicated when the phrase "peak oil theory" is used amongst those who understand the phenomenon. Denialists of course attempt to convince people that the colloquial misapplication of the term is what is meant...

The Big Move

2009-10-17T07:06:00.007-05:00

We just recently moved after looking for what seemed like forever for our new home. What a pain in the butt...! After arranging a million different details, then we still have to confront the actual move itself. We went with the rent a ruck & hire individuals method this time, which was a mistake.... broken furniture... missing items... tracking mud & dirt thought both houses... how I wish we had found these guys first. http://www.moveme.com

Conveyancing means more than just moving stuff, as we discovered. All the contract and legal work could have been done through a single vendor, but we tried to save money doing these things oursels and ended up spending even more money. All in all I sure wish we had done a little research before diving headfirst into this process without professional guidance.

We sure could have used this advice for a Conveyancing Quote.

The first mistake we made was being dependant on the sale of the old house to purchase the new house. This meant we could not close on the new property until we had cash in hand from the sale of our current property. This created all kinds of difficulties we could have avoided if we had used a service like MoveMe! Not only that but having professionals to help guide us through the entire process could have saved countless headaches as we went thorough the process of listing, closing, the old house as well as getting setup for the new house.... what a pain!

The key is finding Cheap Conveyancing of course. A little research suer would have saved us a ton of hassle, money and frustration. Make sure you do your homework on your next move and avoid these problems.

Hindsight is 20/20

IBID

2009-10-08T12:10:00.000-05:00

Sorry to serial-rant, but I should say that I think there is actually some hope in all of this....
.
I should also explain that I used to work in one of those places where the incumbent technology was about 40 years old, the sales cycle for innovative products was about 10 years, because it is a basic-materials business that is pretty well commoditized, selling into a mature industry (the automotive supply chain, of course)....It's similar enough to the refinery business that I can figure out a lot of the economics....

In that kind of environment, it is pretty easy to build a nice career, and get a nice salary, by being an innovation killer. Here is how it works: Someone in engineering, or maybe customer service, has some idea about how to improve the product, or improve some aspect of service, delivery or logistics, and in one of the periodic communication meetings that happens would thoughtfully put out some kind of proposal..... Sometimes this happened informally, but from time to time, this would happen deliberately, and a lot of the planning and business modeling would be laid out in some detail.

Meetings would be held, the innovators were allowed to state their case, and it was at that point that the "counter-innovators" would come up with a lot of excuses for not doing it, question the base assumptions, and slow down, if not completely stop, the entire process. The reason that this was a successful career strategy is that it is easy to kill an idea, or starve it to death, because the default position, so to speak, let things go on the way they have, is risk-free. The basic assumption is, "that's the way it is... it's what made us successful all of these years...."

An innovation that fails, of course, makes the innovation killers look brilliant and the innovators look like idiots. It takes 100 times more energy and talent to innovate than it does to kill an innovation, so most of the time, the innovation killers have the odds in their favor.

Any changes to this massive-scale equipment was expensive, of course, and sometimes the business would have to make a pretty sizeable investment to make it work, so in a way, in the short run, they were right. In the long run, of course, it's a catastrohpe.

An offshoot of this, of course, is the Al Dunlaps and/or Nardellis of the world, who built their career on cutting..... reducing overhead and/or streamlining operations, which is a useful skill in and of itself because it improves economic efficiency, but is terrible from the standpoint of innovation, because by its very nature, innovation is messy and inefficient.....That was the subject of an earlier rant, that we can probably unearth....

The point of all of this is, that there gets to be a lot of tension between the innovators, who have ideas on how to improve the business and make it grow, and implement change, and the counter-innovators......and at least in the mature business that I was in.....It was particularly dangerous for an innovator to be put into any kind of position of authority, because the first thing he or she did was start to shake up the status quo.... which got people nervous....and violated Peter's first and foremost rule of organizational behavior: The Hierarchy Must Be Preserved....Typically, the innovation killers were the ones that were populating the higher levels....being as it was one of those mature industries....

And, of course it is the very reason, particularly in automotive and other manufacturing, that these companies refused to change, even in the face of catastrophe, and had to be bailed out by the government.

The bright side is, from time to time, the analysts and management figured out that the headcount was too high, so there was an overhead purge, and along with the skill-free yes people, occasionally the innovation killers that were running the place would use it as an excuse to get rid of some of the 1% of the people that ticked somebody off at some point........From the point of view of the organization, these people were a bit dangerous..... but from the point of view of the rest of the world, they are the ones who are bright, ambitious, determined, innovative, risk-taking, and not afraid to keep the ball in play even if they failed from time to time...Naturally they did not fit into the corporate structure.....especially in a mature industry where a "success" might take you five years... A lot of them even had cluttered desks... can you imagine?

With these seeds of creativity finally liberated from their protective pod, these people are free to develop new products, establish new business and industries, and generally make things better for the economy and society as a whole. Of course, there are plenty of failures that are liberated as part of this too.... and it's kind of hard to distinguish between the two in the early stages.... but that is not all bad...

Failure makes you smarter, provided you learn from it, and use it as a chance to change....

The point is, that situations like this have the potential free up a lot of human energy that, in maybe 1% of the cases, can sow the seeds of a new industry. It's definitely going to be rough for the 99%.....

BTW a side point: I think the current argument about universal health care completely ignores the fact that a lot of bright people right now are dumbing themselves down, and putting up with a lot of BS in a corporate type environment, so that they can work in a place that has health insurance, rather than going out and innovating......

w/ population growth, a jobs recovery is now impossible

2009-10-06T10:52:00.000-05:00

Quote:

Just to stay even with where we are today, and keep our total unemployed number stable, we'd have to add 144,000 jobs a month.

Well, the population growth thing is a two edged sword, naturally, because population growth also equals "more customers"....

There is a school of thought that says that the population growth in the country is too slow, thanks to us baby boomers discovering artificial birth control, and having smaller families than the two previous generations. We got into the preposterous situation of this baby boom generation all reaching middle age, and not consuming as much as we used to. There's now way for the echo generation/gen Y to buy as much crap as we did....particularly in light of the fact that we have screwed them out of decent entry level jobs, as documented elsewhere, hence the big slowdown....

I think the demographers have been worried about this for years... The solution: Import the most productive segment population from south of the border, so that they can buy cars, cellphones, and rent our apartment buildings. and pop out a few babies to keep the game going...Same can be said for the H1B cases that we were talking about the other day.....In either case, we are not going to tell 10 million people at the prime of their consumption phase to go back home......You never hear that argument....

Quote:

Those in their 50s who remain unemployed for any serious length of time are completely screwed. They are too old to go back to school and too expensive to insure. Moreover, these are exactly the people who have been draining their home equity to fund consumption.

I just have to comment on this, as well.....since I am in this age group....I am focused on the 50-year old white collar worker at the moment....

I've been around some corporate-type environments, and I have to say that it never ceases to amaze me how many people there are in some of these places that add no real value to the business....They show up every day, email things back and forth to one another, have important meetings to determine the agenda for the next meeting and do a lot of wheel spinning, and a lot of them get paid a lot of money for it. How did such a thing come about? There was a 25 year period without a serious business downturn, and during this time, a lot of weak managers got jobs they shouldn't have, and set up their organization full of attractive people with good lines of BS but no real skills....There was no "cleansing" period during which some of the excess could be wrung out of the system.

The modern "HR" systems added to the problem. If you could manage somehow to get a job, all you had to do is be pleasant around the office, ideally well-dressed and good looking, and you'd get a favorable job review every year, because the systems are set up, as Laurence J. Peter suggests, to measure "input", that is, your participation in the system, rather than "output", the performance of some measurable amount of work....

So year after year, even at the high levels, these companies were populated by people who got where they were by agreeing with the boss, looking good around the place, and making as few waves as possible. Some of these people actually became managers. A lot of them, not all, have never run any actual business more complicated than a lemonade stand...

This did no favors to the employees, as we are now seeing. You get a job, you figure out the corporate environment, you keep your head low, and make sure to show up at the company christmas party and play nice during the meetings, and you get a good review and you do exactly the same thing the next year.... so there is no incentive to innovate, to take risks, develop new skills, and do anything if there is a potential of failure. You get people in their jobs who have not developed any sort of risk-taking skills, have no real self-assessment ability, since all they did was agree with the boss for all of those years....You get your 3% raise every year, and eventually, you are making pretty good money doing nothing of real value to the organization.

Naturally, you go out and buy a bigger house, you get a nice car, so that you can be seen as powerful around the office, you take your vacations to Cancun, put your kids in private school.... I suppose I do not need to rant at this point.....because Tyler is exactly right.... this is where the spending habits entrap them even more into the situation.

So the business hits a brick wall, the few competent managers around finally correctly start to question some of the activities, and start to lay people off, and before long, a lot of these people find their way onto the street....The situation is correctly described above: No relevant job skills except agreeing with the boss, a lot of overhead to pay for, maybe you are smart enough to save and maybe not, and you get a lot of fearful people....the most fearful, of course, are the stepford/trophy wives, that are at home taking care of the status symbols.... and have themselves developed no useful skills since getting their MRS degree in 1985 and then retiring....This adds one more source of irritation to the already frustrated man of the house..

A lot of them got overweight during this period too. Just saying.

Ironically, well, not ironically but tragically, the reality is, that a lot of these people know that they're trapped. They are not emotionally or intellectually satisfied with their jobs either (it is soul-robbing to spend your career being a yes-man )..This causes just as much stress and frustration, and makes it pretty unsatisfying to show up at the office every day.

So, what ought to be a blessing, a chance to be liberated from this kind of environment, be creative, be all you can be, and reset your career to something fun, which gives you a sense of accomplishment, becomes a life catastrophe for some of these guys. They sit around and whine, and do their outplacement which is a placebo version of what their job was, and wait....I am sure the suicide rates among these people are increasing, but suicide requires a bit of initiative, so it would not surprise me if it did not....Their stepford wives go into panic mode, at the prospect of losing their gravy train, which makes the situation even worse....So the divorce rate starts to climb....The health insurance thing makes it even worse.... I can name at least 3 overweight 50-55 year olds that need hip replacements....

So, what is going to happen? Well, these are the flower children of the 60-'s and 70's... They will use their political power (it's a democracy, after all) to do what they always did, which is to whine so that someone comes and bails them out.

So that is what is going to happen. This will go on as long as it can.

BTW my personal attitude toward this issue is completely different than most....

US will experience collapse from First to Third World

2009-09-23T07:02:00.000-05:00

laissez-faire economics... Keynesian fiscal policies...

Social Darwinism anyone?

Institute of Economic Affairs (IEA)

Quote:

The core belief of free-marketeers is that people should be free to do what they want in life as long as they don't harm anyone else. They say that on the whole, society's problems and challenges are best dealt with by people and companies interacting with each other freely without interference from politicians and the State. This means that government action, whether through taxes, regulation or laws, should be kept to a minimum.

http://en.wikipedia.org/wiki/Institute_of_Economic_Affairs

Quote:

There are "troubling similarities" between the US President's actions since taking office and those which in the 1930s sent the US and much of the world spiralling into the worst economic collapse in recorded history

Quote:

"It is also not impossible that the US will experience the kind of economic collapse from first to Third World status experienced by Argentina under the national-socialist governance of Juan Peron."

http://www.telegraph.co.uk/finance/economics/6147211/Barack-Obama-accused-of-making-Depression-mistakes.html

Cell Phone Technology

2009-09-15T06:51:00.006-05:00

So not long ago I laundered my BlackBerry. I was just washing a load of laundry, and found my BlackBerry Curve staring up at me from the bottom of the washing machine with a look of sad resignation on it's face. Just as a note for future cell phone treatments, this washing did nothing to improve the performance of my device. In fact... well... you can imagine.

I've been a BlackBerry user for many years as a corporate warrior, and consider the phone an extension of my digital presence. So of course I went on a hunt for a replacement for my now water-logged device right away. Being the Internet guy I am, I started looking online for shops specializing in smartphones and came across these guys. I had intended to just replace my damaged phone, but after looking at some of the other offerings I decided to replace my BlackBerry with Google's GPhone. I had considered the iphone because of the many iphone accessories, and cool iphone case choices but went with the Gphone instead. I liked the iphone car charger available with the iphone, and the full body case as well as the dockking station which is also a charger, but liked how the GPhone used the same mini USB for headphones. It was a tough decision because the iphone is so popular, and there are many add-on applications available for it, but in the end it was the open source operating system of the GPhone, and the excellent HTC hardware which won me over.

I love it...

Since I already use GMail & Calander etc... the GPhone was a simple transition. Popped my old sim card into my G1 and the phone did the rest. All my contacts, email, calanders etc... just appeared like magic and I was off to the races.

And take my advice... if you want a headset... get the JawBone... you will love it. Clear as a bell.

Now if I can just manage not to wash this one... I'm good.

Why Peak Oil may prove irrelevant (REDUX)

2009-09-02T13:49:00.001-05:00

No. The US experience is vastly different than that of other nations owing to the ability of citizenry to own mineral rights, which has created a whole class of minor scale operators who have no analogue in any other producing nation.

Look at the EIA page for Distribution and Production of Oil and Gas Wells by State. 355,537 operating oil wells, 125,933 of which produce 0-1 boe/d. This is not a situation that obtains elsewhere. I've asked people with experience in the industry such as R Rapier or ROCKMAN if they thought NOCs could replicate this level of attention by opening up drilling rights to citizenry, and the answer was "damn unlikely," followed by "likely wouldn't make much difference."

The HL method seems to suggest overall world decline will be fairly gentle anyway, however. But we have a lot of very steep declines making their way into the equation, owing to the prevalence of deepwater in the last quarter of the 20th century, which could hasten the decline somewhat.

More pressing than that is how nations will react when peak oil registers as a fait accompli, which of course is wholly unmeasurable.
Where you measure the decline rate is of import as well:

Biggest Losers for 2008 from Stat Review:

Code:
Yemen -11.59%Chad -11.50%Italy -10.88%Brunei -10.00%Mexico -9.05%Tunisia -8.89%Other Africa -8.33%Nigeria -7.89%Denmark -7.72%European Union # -6.24%Vietnam -5.98%United Kingdom -5.76%Other Europe & Eurasia -5.18%Other Middle East -4.98%Syria -4.10%

Biggest Winners:

Code:
Other Asia Pacific 3.23%Brazil 3.48%Indonesia 3.48%Saudi Arabia 3.66%Turkmenistan 3.66%Oman 3.70%Total Middle East 3.94%Kazakhstan 4.54%Thailand 4.81%Azerbaijan 4.95%Peru 5.13%Kuwait 5.32%Angola 8.27%Colombia 9.21%Rep. of Congo (Brazzaville) 10.92%Iraq 11.52%Qatar 13.17%

Would be interesting to compare decline rate to overall production.Tex - US Production minus Alaska:Looks like a neolithic spear head.

That piddling little uptick in the 80s is what the greatest drilling campaign in history produced.

Heart Surgery In a couple hours

2009-08-28T08:12:00.000-05:00

So I've been recovering at home in what I assume is the traditional fashion.

No unexpected complications to relate... just the healing process. Had my first follow-ups with surgeons & cardiologists which seem to have gone well, so it seems like these folks have saved my bacon, as it were.

As mentioned earlier this thread, I fall into a category of preexisting, & therefore non-insurable cardio-treatment. Which basically means I'm on the hook for 100% of the costs associated with this experience. This makes me a poster-boy for medical reform efforts in the US I suppose...

The short version is I'm a 45 year old male with a pretty typical history of medical care, as well as professional history. I have been working since 14 years of age in a variety of occupations, the last 20 years of which have been as a professional technologist. I started at $2.10/hour way back when, (minimum wage) & worked my way up the wage ladder over these many years to the 6 figure guy I am today.

It's been a rocky ride between 1975 & today, with many ups & downs along the way; both personal & financial.

The vast majority of this time I have been contributing to mandatory taxation including Social Security contributions, as well as voluntary insurance programs mostly sponsored by my employers. I'd be hard-pressed to give an accurate total for these contributions over the decades, but it's certainly been many 10's of thousands of dollars.

Fast-forward to a period where my Cobra extended insurance coverage expired before I managed to procure new employment-sponsored insurance, and we find my first cardiac event. This of course makes all subsequent heart-related medical events preexisting as far as insurers are concerned, and therefore un-insurable.

The result of this timeline of events is of course, massive amounts of debt.

Multiple trips to the stint lab for angioplasty plus this latest bypass procedure adds up to about a million bucks in debt. This excludes doctor visits, prescriptions etc... I'm paying for all of this "out of pocket" as it were, which is, of course, absurd on it's surface. It effectively makes me a medical share-cropper for life. No possibility of repaying this debt in my lifetime, and therefore in perpetual servitude to the medical-industrial community in perpetuity. To be fair, this beats the alternative... these folks saved my life... no doubt. And I also have a keen appreciation of the triage process which much have occurred prior to this bypass surgery in my favor. A panel of medical folks who were well aware that I'd never repay the debt generated by this procedure, made a decision to perform the surgery anyway. What a nightmare decision this must be, especially since they must get confronted with multiple instances representing individual lives on a regular basis. Our system is literally forcing life/death choices on medical administrators, surgeons & doctors across the country.

So where do we assign blame/responsibility for this condition?

My fault for failing to get new insurance coverage and prevent gaps in coverage?
Insurance companies for excluding preexisting conditions?
Medical device/service providers for the incredible costs of these systems?

All the above?
More?

And where do we go from here?

Since I can't possibly pay for the accumulated debt of these treatments, this financial burden will fall onto the shoulders of taxpayers & insured consumers at the end of the day, in the form of higher taxes & higher premiums.

In a world of shrinking resources, what will be the criteria our medical community employs to determine who receives these heroic measures... & who does not?

I am of course grateful beyond words to be here to write this post, and my thanks goes out to all of the people who made this possible for me. But if you're gonna save Aaron from peakoil.com, you're gonna get some pointed questions eventually which are directly related to energy, resource depletion, financial fidelity & the moral/practical application of these concepts to individual humans, and society as a whole.

As always, your thoughts & comments are most welcome...

A Dark Hole: How the Fed Prints Money Out of Thin Air

2009-07-22T18:55:00.001-05:00

William Greider, The Nation

Quote:

If Congress chooses to take charge of its constitutional duty, it could similarly use greenback currency created by the Federal Reserve as a legitimate channel for financing important public projects -- like sorely needed improvements to the nation's infrastructure. Obviously, this has to be done carefully and responsibly, limited to normal expansion of the money supply and used only for projects that truly benefit the entire nation (lest it lead to inflation). But here is an example of how it would work.

President Obama has announced the goal of building a high-speed rail system. Ours is the only advanced industrial society that doesn't have one (ride the modern trains in France or Japan to see what our society is missing). Trouble is, Obama has only budgeted a pittance ($8 billion) for this project. Spain, by comparison, has committed more than $100 billion to its fifteen-year railroad-building project. Given the vast shortcomings in US infrastructure, the country will never catch up with the backlog through the regular financing of taxing and borrowing.

Instead, Congress should create a stand-alone development fund for long-term capital investment projects (this would require the long-sought reform of the federal budget, which makes no distinction between current operating spending and long-term investment). The Fed would continue to create money only as needed by the economy; but instead of injecting this money into the banking system, a portion of it would go directly to the capital investment fund, earmarked by Congress for specific projects of great urgency.

This is what Ellen Brown, author of Web Of Debt, has been advocating strenuously - get rid of the Fed and have the government print its own money without any indebtedness to private bankers. The national debt is beyond repaying anyway. Who still believes it could possibly by paid down? The current system is bound to snap.

I'd be in favor of another Estate in government, in addition to the Executive, Legislative and Judicial branches, called the Monetary branch. Members (say, 12 of them) would be appointed by the president, confirmed by Congress and would serve open-ended terms similar to Supreme Court Justices.

The infamous Mayer Amschel Rothschild Quote, "Give me control of a nation's money and I care not who makes the laws", is a pretty good indication that the People, not private interests, ought to control their own money supply.

Why is nuclear power so successful and popular in France?

2009-07-01T15:11:00.000-05:00

Tanada

Post subject: Re: Why is nuclear power so successful and popular in France?

Posted: Wed Jul 01, 2009 11:47 am

Expert

Joined: Thu Apr 28, 2005 2:00 am
Posts: 4766
Location: West shore Lake Eire, MI, USA

Aaron wrote:

Quote:

The French State still owns 79% of Areva – the company supplying the Finnish reactor,which also operates the French reprocessing plant at La Hague. Having unnecessarily givenlarge contracts to Areva over past years to reprocess its spent fuel, EdF has accumulated over80 tons of plutonium, and vast quantities of nuclear waste at the reprocessing plant at LaHague. So it is now confronted with huge liabilities, but insufficient funds to cover them.The Court of Accounts estimated France’s nuclear liabilities at Eur 71-billion, with Eur 48-billion of that belonging to EdF. There are also huge uncertainties attached to these liabilities.For example, the cost of a potential deep disposal facility for nuclear waste could be between40% and 230% higher than allowed for by EdF, according to radioactive waste managementagency Andra. (35). It appears, therefore, that EdF currently plans to fund only around half ofFrance’s nuclear liabilities.

Nuclear power is a failed technology which has failed to deliver. It has squanderedunparalleled, unstinting support from taxpayers around the globe leaving them with burdensthat may last for millennia. The idea that such an industry should be resuscitated with orwithout even more public subsidy is absurd.

http://www.no2nuclearpower.org.uk/reports/Nuclear_Subsidies.pdf

That's just funny given that Edf turns a large profit every year selling electricity and that money is turned in to the French General Fund to be spent on other government expenditures.

_________________
Always appeal to a man's enlightened self interest, you can trust him to look out for himself honestly, It's when you appeal to his Honor or the Common Good that he stops paying attention.

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pstarr

Post subject: Re: Why is nuclear power so successful and popular in France?

Posted: Wed Jul 01, 2009 11:52 am

Expert

Joined: Mon Sep 27, 2004 2:00 am
Posts: 9065
Location: Behind the Redwood Curtain

Why is nuclear power so successful and popular in France?

Can we now safely assume the correct nswer is SOCIALISM?

_________________
yesplease wrote:
"Odds are economic growth will start to even out as population reaches it's top of ~10+ trillion"

yesplease wrote:
"What we're seeing, adding about a billion people every thirteen years or so, is linear population growth."

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Tanada

Post subject: Re: Why is nuclear power so successful and popular in France?

Posted: Wed Jul 01, 2009 11:55 am

Expert

Joined: Thu Apr 28, 2005 2:00 am
Posts: 4766
Location: West shore Lake Eire, MI, USA

pstarr wrote:

Why is nuclear power so successful and popular in France?

Can we now safely assume the correct nswer is SOCIALISM?

I think in this case it is, the electricity industry is government owned and operated. Isn't that the definition of Socialism?

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Aaron

Post subject: Re: Why is nuclear power so successful and popular in France?

Posted: Wed Jul 01, 2009 12:13 pm

800 lb Gorilla

Joined: Thu Apr 15, 2004 2:00 am
Posts: 6868
Location: Houston

Tanada wrote:

Aaron wrote:

Quote:

http://www.no2nuclearpower.org.uk/reports/Nuclear_Subsidies.pdf

That's just funny given that Edf turns a large profit every year selling electricity and that money is turned in to the French General Fund to be spent on other government expenditures.

Sure it does...

With taxpayer funding you always "turn a profit".

_________________
America will never be destroyed from the outside. If we falter and lose our freedoms, it will be because we destroyed ourselves.

Abraham Lincoln

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Arthur75

Post subject: Re: Why is nuclear power so successful and popular in France?

Posted: Wed Jul 01, 2009 2:40 pm

Tar Sands

Joined: Sun Mar 29, 2009 4:10 am
Posts: 35
Location: Lutèce

pstarr wrote:

Why is nuclear power so successful and popular in France?

Can we now safely assume the correct nswer is SOCIALISM?

I'm not sure you can really call that Socialism ...

First of all a lot of these big "national enterprises" , EDF for electricity , SNCF for rail date back from right after WWII or just before for SNCF, France Telecom (ex PTT) even before, and are all related somehow to "infrastructures".

And since the war, there as not been any "socialist labeled" government before 1981 and Mitterrand's election, it was either "Gaullist" in power or "center right"

Now it is true that there is a strong "services publics" tradition associated to the "corps de l'Etat" and major engineering (and administration) schools as stated above.

But this tradition is somehow down for quite some time already, the Anglo Saxon "liberalism" (European meaning) having taken its toll on this glorious devoted nationalist spirit ...

And in concrete terms, all these markets are being liberalized these days (EDF has been splited between the network and producers part, same for SNCF (network and trains operators), telecoms deregulated like for AT&T at about same time, etc)

To tell the truth I'm not sure the big "no government everything private" dogma means much when you talk about infrstructures ...
And for instance, whereas in France and other European countries many freeways are privately operated (with tolls), the US highways infrastructure is what ? A socialist shithole ?

What was exactly AT&T before the deregulation ? Is AT&T eating most of what was deregulated right now or not ?

As to EDF, the CEA, or Areva making or not a profit, yes they do (maybe not for the CEA)

Letter from a Dodge dealer

2009-05-21T08:16:00.000-05:00

May 19, 2009
Letter from a Dodge dealer

letter to the editor
My name is George C. Joseph. I am the sole owner of Sunshine Dodge-Isuzu, a family owned and operated business in Melbourne, Florida. My family bought and paid for this automobile franchise 35 years ago in 1974. I am the second generation to manage this business.

We currently employ 50+ people and before the economic slowdown we employed over 70 local people. We are active in the community and the local chamber of commerce. We deal with several dozen local vendors on a day to day basis and many more during a month. All depend on our business for part of their livelihood. We are financially strong with great respect in the market place and community. We have strong local presence and stability.

I work every day the store is open, nine to ten hours a day. I know most of our customers and all our employees. Sunshine Dodge is my life.

On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them. My new vehicle inventory consists of 125 vehicles with a financed balance of 3 million dollars. This inventory becomes impossible to sell with no factory incentives beyond June 9, 2009. Without the Dodge franchise we can no longer sell a new Dodge as "new," nor will we be able to do any warranty service work. Additionally, my Dodge parts inventory, (approximately $300,000.) is virtually worthless without the ability to perform warranty service. There is no offer from Chrysler to buy back the vehicles or parts inventory.

Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.

HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?

THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY

This is beyond imagination! My business is being stolen from me through NO FAULT OF OUR OWN. We did NOTHING wrong.

This atrocity will most likely force my family into bankruptcy. This will also cause our 50+ employees to be unemployed. How will they provide for their families? This is a total economic disaster.

HOW CAN THIS HAPPEN IN A FREE MARKET ECONOMY IN THE UNITED STATES OF AMERICA?

I beseech your help, and look forward to your reply. Thank you.

Sincerely,

George C. Joseph
President & Owner
Sunshine Dodge-Isuzu
http://www.americanthinker.com/printpag ... ealer.html

Response:

Dear George:

Sorry you are having so much trouble. In a way, it's not all your fault, to be sure, but in a way, of course, it is.

You have spent the last several decades selling Dodge cars. You of all people ought to know that far from a glorious tradition of automotive excellence, a lot of these cars were pieces of junk. The contract you had with Chrysler Corporation said that you agreed to sell whatever they sent you, no matter how crappy, and you did so, with a smile on your face, for many years. I am sure you are good at what you do.... you have to be in order to stay in business.

http://www.daimlerchryslervehicleproblems.com/

One of the ways that you stayed in business is by the service department that you are so proud of. I am sure you told your sales people to brag about it every chance they got. What you did not want to tell them is that making crappy cars works in your favor.... you get to charge your poor customers for the honor of fixing up the car that you sold them. What they really, really wanted was a car that would not break down. I am sure you have a dealer convention or something where you could feed this information back to Detroit, but evidently they did not get the message.

Another of the ways you stayed in business is by making sure your prices were lower than the Dodge dealer in Ft Lauderdale. To you, it was important that if someone wanted to drive a Dodge, they could go to you for the lowest price in the area. The guy in Lauderdale was doing exactly the same thing. From Dodge's point of view, both of you were undercutting one another, and it was costing them several hundred dollars per car. So, with one of you out of the picture, they are hoping that they can do away with some of this.

What they don't know, unfortunately, is that people nowadays can get on the internet, find the lowest price in the nation for the car they want, and with a couple hundred dollar airplane ticket can go someplace else and drive their car home. You, and the rest of the dealers, did not embrace this technology and take advantage of it, because you, after all, are just the grey haired version of the same greasy car sales people that you hire and fire every day.

Speaking of which, I can think of no other business where the customer is so shockingly humiliated and disrespected as he or she is in the American automotive sales transaction. Just saying.

Anyway, George, I do not want to keep you too much longer, because I know you have a short attention span, but I would just suggest that there are plenty of ways for you to make a living, starting with your big service department... people still need to have their cars worked on, even Toyotas break down occasionally, and they all buy tires and other supplies..... You are a victim of cirumstance, it is true, but what you really are is a victim of hubris... doing the same thing over and over and expecting different results. You probably could have made the change gradually... or you could have gotten the message back in 1979 when the first Chrysler bail out happened.... but you stayed with what you know because you could, and now you can't. Sorry.

Anyway, if you are smart, you will figure it out. That really is free enterprise for you.

Later
pup55

My old man said. ....

2009-05-06T19:56:00.000-05:00

My father is 85, born as a menonite farmer during the depression, was going to be a preacher until he went to World War II were he met my irreverent Italian mother whom he married and brought back to the US. He dropped religion and became an athiest even though in all other ways culturally he remained quite conservative and true to his prudish upbringing. He ended working for Westinghous in their atomic energy division until that closed down. He was a lifelong democrat until Reagan, become a republican through George Bush's first term. He voted for Obama.

So I asked the old man yesterday how he viewed the current economic crisis and what he saw happening going forward.

He said the economic recovery will not happen quickly this time around since there is no more bubbles to inflate since the last two, the banking and consumer were fake, unlike the manufacturing and information technology booms which were based on something concrete. He said the era of governments backing corporations and the banks is over and that the government will turn to a more socialist agenda to focus on the needs of the middle class. He said this is necessary since now it has become clear that corporations and banks are only out for their own profit. He said it is time for the government to look out for the little guy. He is a great fan of Obama by the way.

Around mitigations for issues like peak oil and global warming my Dad said the human being is not capable of changing his appetite for growth and expansion and all attempts will be futile. He said this will be taken care of by mother nature sometime in the next 200 years. I told him it will happen in my life time and certainly in the lifetime of my daughters. He is skeptical of any radical changes to the status quo in either direction, up or down.

Just interesting getting an old man's view of things which I thought I would share.

Weekly US Petroleum and NG Supply Reports 2009

2009-04-28T09:32:00.001-05:00

Prediction
Unleaded Prediction 24-Apr
Beginning Inv mbbl 217.3
Imports Wk/Day 7.7 1.1
Production Wk/Day 64.4 9.2
Available 289.4
Balance Wk/Day 70.7 10.1
Ending Inv Mbbl 218.70
Prod Supplied 9.1
Predicted Change 1.4

Distillates Prediction 24-Apr
Beginning Inv mbbl 142.3
Imports Wk/Day 1.4 0.2
Production Wk/Day 27.3 3.9
Available 171
Balance Wk/Day 28.7 4.1
Ending Inv Mbbl 142.3
Prod Supplied 4.1
Predicted Change 0.0

Crude Oil Prediction 24-Apr
Beginning Inventory 370.6
Domestic Prod 38.15 5.45
Imports 65.8 9.4
SPR+/Supply- -1.61 -0.23
Total Available 472.94
Provided to Refineries 101.5 14.5
Ending Inventory 371.44
Predicted Change 0.84
Refinery Utilization 83.000

You just get the feeling that there are some funny things going on.... maybe it's just below the surface... maybe it just stayed too quiet for too long.... maybe it's just the season, people getting ready to gear up for summer...

a. We have this situation with the tankers, noted above... an unprecedented collapse in the baltic dry rate, lots of floating storage available.

b. big fluctuations in the import figure every week... the system importing as much oil as ever, even though the inventory is at a multi-decade high....

c. the refining capacity dropping temporarily to a new multi-decade low for April a couple of weeks ago, followed by an uptick last week..

d. the pricing, increasing a couple of dollars on Sunday night, like it did yesterday... still off by 66% versus a year ago...

e. You have the demand. Unleaded demand is within roundoff error of what it was last year at this time. Distillates way off, jet fuel way way off....

f. The little "gap" between calculated and actual demand on unleaded.... it was over 1.1 mbpd last week, which is really high, compared to its historical level of about .7, which suggests that there are a lot of blending components coming into the country, that are double counted as they are blended at the tank farm....

g. We have the trillions of dollars that were pumped into the economy over the last six months looking for a home... some of it ended up in gold, which is still over 900 I think.... perhaps some of it is ending up in oil....

h. No word from China on anything.... except their demand was down 16% or something year-on-year.

i. Suggestions that OPEC did indeed cut back this spring, but all of the volume being made up by Russia and Brazil

j. Potential collapse of Cantarell....

So, there are a lot of things going on in the subsurface, that for the moment are ending up as nothing, but might at some point end up as something.....

As long as we continue to import 1.1 mbpd of unleaded into the country, at the current usage levels, we will continue to build inventory.

Despite the increased refinery usage, plus deposits into the SPR, we will continue to build the crude a little... despite the fact that the citizens of Cushing are already ankle-deep...as long as we continue to import over 9 mbpd

the production dial is all the way turned toward "unleaded" right now, so we will be about even in distillates, as long as the demand remains seasonally like it now is.

This could get fun, if there are widespread disruptions in the travel system because of the flu.....

Perhaps it is time to lay in a supply of popcorn....

Re: American Tax Protests Growing

2009-04-16T12:38:00.002-05:00

Quote:
I wonder if a tea party Party could be formed out of this

...yeah, right. This stuff happens every few years.... and never accomplishes anything, because in the famous words of Howard Ruff, Americans have figured out how to vote themselves benefits out of the federal treasury, and that goes double for the middle class white guys who are running these so-called "protests". They whine about lower taxes, but at the same time do not want to give back the generous government benefits that they themselves are getting.They drive to the rally on roads that are paid for by the government, they go home to their suburban tract homes which are subsidized by tax breaks on their interest, they complain if their public school has a smaller stadium than the next suburb over.

They whine if somebody breaks into their car and steals their stereo because of too few policemen patrolling the streets... it's a big scandal if the government ambulance or fire department takes five minutes instead of one, to get to their house when they have the big H from eating subsidized beef and pork... They drive to work on to either a Lockheed plant, whose profits depend almost solely on their ability to sell more and more complex weapons systems to the US Military or Space Program, or else to their job on an assembly line at the new Kia plant, which was built out in the country by generous industrial revenue bonds issued by the county, or direct subsidy by the local and state government, which they were happy to do in order to get people to work and pay taxes to keep the whole thing going.

On the weekends, they go to the local lake, an impoundment put up by the Corps of Engineers to generate power, so that their electricity will be nice and cheap.... they catch a nice bass that was stocked in the lake by the Fish and Wildlife department. It is nice out there, clean, because the state paid someone to go out and pick up the old beer bottles....and kept the chemical plant upstream from discharging its waste directly into the water supply.

They call their elderly parents on the phone that night.... their elderly parents that have been kept alive via Medicaid and Medicare the last couple of years, after their heart attacks, which were caused by smoking the government subsidized tobacco all of those years, and they are happy that the old folks are able to live in their own house, subsidized by social security and/or a variety of other public pensions, without which they might actually have to (ugh) move in with them....

Who wants to cut back on all of that stuff?

nobody.

They go shopping.... where do we begin? The produce aisle? How much government money went to irrigate all that land out in California to produce all of those beautiful vegetables.... The bread department? Farm set-asides and supports for wheat farmers, regulation of the product by the FDA to keep it from poisoning you, and naturally, easy transportation via the highway system.... The milk section? Lord knows how much a gallon of milk would cost.... or whether or not it would be thinned out with formaldehyde like it was at the turn of the last century without government resources.... Anyplace else in the supermarket, including the supermarket itself, which is inspected by the local health authorities on a frequent basis to keep rats from overrunning the place....You can look no farther than the nearest jar of peanut butter to know what would happen to the food supply without some sort of government review or regulation.... and it is a huge scandal if the health department lets some guy get something past them....

So, these guys can protest all they want.... but they would not think of walking away from some of these things...Better yet, they should spend some time in the so-called "developing countries" to see what life is like without a lot of this stuff....starting first with a minimum wage, and some labor and job safety laws, that keep you from getting your fingers chopped off in some piece of unsafe equipment.... all of that stuff takes government resources...laws, regulations, and inspectors.....I have been all over the world, including the so-called worker's paradise in China, and can tell you some stories....

Now to be sure, the tax system we have is bullshit, and I am second to no one in my desire to have some of this be common-sense such as not requiring 10 handicap parking spots in front of the local skating rink...but I would say that 99% of the fat white guys that are running this stuff have no idea how good they have it.

Since I am in a ranting mood.....That is not to say that the government, at any level, is organized in some kind of efficient way either....Billions spent on weapons systems, hardware, satellites and other crap for the military that is the next thing to useless....I just had to laugh at the following article on Savinar's site today....http://exiledonline.com/the-war-nerd-this-is-how-the-carriers-will-die/
Quote:
Seriously: why are there aircraft carriers? For asses like John McCain to crash on. Why do they keep getting funded long after they’ve been shown up? The same reason knights were galloping around pretending that the longbow hadn’t turned half their friends into pincushions: because it was a way of life for the richest and dumbest people in the country and they weren’t about to let it go.

A military that is designed to project power and protect our oil supply and keep the system together another year, which is unable to protect two of our three tallest buildings from attack by a seven-foot, left-handed, cave dweller on dialysis, and unable to conquer a nation of 22 million rug salesmen in five years, at the expense of a Trillion dollars....and unable to protect our southern border from an invasion by somewhere between six and ten million potential guerilla fighters....A school system in which the lowest paid people, the teachers, are the least respected, but simultaneously the ones in charge of performing the actual customer service, while the good old boy ex-football coaches, as Ross Perot used to say, are running the show, making the curricculum decisions to fit the economy of 1977, while the kids are going to have to earn a living in 2037, while the little kids in Malaysia are working their asses off to learn English so they can take our jobs while we sell hamburgers to one another.....

In our state, the two highest paid State employees are the two football coaches at the state universities... followed by the basketball coaches.

The ongoing catastrophe that is our "social welfare" system, that is anything but, and fails to produce anything except another generation of government-dependent thugs....and the development of a permanent underclass...

State and local agencies that are used as a jobs program, to fatten up a particular constituency, or tilt regulatory activities in one way or the other, rather than as a way to provide government services....

The Democrats used to be the prime proponents of this, as anyone who has waited in line at the DMV knows, but Republicans became expert in this by populating the federal agencies with of graduates of Liberty University and other similar places ref: Monica Goodling

http://en.wikipedia.org/wiki/Monica_Goodling

Our billion-dollars worth of jails are full of non-violent drug users, while our biggest growth industry, from various reports, is the importation of "illegal" dope from places such as Afghanistan, which is ostensibly under the control of the US Military, and one or more of our Southern neighbors.....

Our bridges fall down, our levees break....one thunderstorm in Chicago sends our air-traffic-control system, if you want to call it that, into complete chaos....

we have a massive bureaucracy in charge of preventing 75 year old ladies from carrying on more than three ounces of &^#$& toothpaste aboard an airplane flight...and containerloads of dope and other contraband coming into the country via the highways and ports....

But, we keep spending the money. In fact, we spend much more than we take in, because the coward politicians will not go to the public and ask them to pay for the government services...I don't blame them. They're probably embarrassed, the system being in the condition that it is in. They might be held accountable.

And accountability.... that's a joke. A politician's popularity is more linked to how much pork he can bring back to the state.... and congress still has a 90 percent re-election rate, despite the chaos.The bailout thing... that adds a completely new dimension to the problem....an unprecedented taxpayer reward of incompetence.... or corruption... or some combination, never before seen in human history. Ironically that whole thing has an excellent chance to swamp any of the above in terms of the sheer magnitude and audacity ....

I can come to only one conclusion: We are stupid.

I guess people are people.... maybe it's human nature. Individually, we can all see that there is a problem, but collectively, we are a bunch of idiots. I am afraid there is going to be a lot of chaos, and there is no way to make it any better with the system the way it is, and no guarantee that any other system will make it any better.

But, it's unsustainable, at the scale at which we are now trying to run it, in the way we are trying to do it.

Sorry to tell you this close to lunchtime. It's enough to make you sick.

GM Pensions Could Be Worthless

2009-04-14T12:28:00.000-05:00

All pension schemes, be they GM, Social Security or 401K are not supportable in the long term without perpetual growth. The longer a company is in business, the more retired workers it generates. You need to keep increasing the number of new workers and the size of the business to pay for all the retirees you produce as well.Immigration was encouraged in the US to keep the Ponzi scheme alive. As long as more workers kept coming in and could be taxed on their labor and their consumption, those at the top of the pyriamid who got in early could still be paid off. Now of course, nobody wants new immigration, because there aren't any jobs for them on which they could be taxed to support everyone else.

It doesn't matter whether you saved for your retirement yourself in a 401K invested in "safe" Bonds or whether you participated in a pension scheme like GM or just stuffed your mattress full of dollar bills, you still will get the same result in all cases. There isn't productivity to keep paying nonproductive people in perpetuity. The money in the matress gets renderred valueless over time thru inflation.

There is no such thing as a "safe" investment, and everybody is going to get punished for simply being part of this system to begin with.Blaming GMs failure on the burden of its pension system or the Unions is ludicrous. The whole REASON workers gave up their lives to deadly boring jobs on the assembly line was because of the PROMISE made to them of security through the pension and health care bennies they offered to employees. That is HOW GM got its workers. Unions simply negotiated on behalf of the workers for the best deal they could get, and you always have more bargaining power as a group than as an individual. Of course as soon as they could find cheaper forms of unorganized labor in China and Mexico, off they went to those places with the jobs, but by then it was all being financed thru debt anyhow, and they still had the burden of obligations made to get the car company off the ground in the first place.

It had to fail, and so it did. Its really just a microcosm of the whole Capitalist scheme, which eventualy becomes top heavy and periodically has to crash. Long as there is still exploitable resource out there you can restart after a while, but we are fresh out of those resources now.How long before every last system here collapses?

ShortonOil pins the maximum as late in 2011, that seems a reasonable estimate to me, but I'll be surprised if it lasts that long. Every last financial scheme out there is in some stage of collapse at the moment, and is only being propped up by steady infusions of Funny Money. Its all going up in flames now, in the Greatest Bonfire of Paper Wealth in all of Recorded History.

AIG sues the US taxpayers for $306 million

2009-03-21T08:50:00.000-05:00

Quote:

While the American International Group comes under fire from Congress over executive bonuses, it is quietly fighting the federal government for the return of $306 million in tax payments, some related to deals that were conducted through offshore tax havens.

A.I.G. sued the government last month in a bid to force it to return the payments, which stemmed in large part from its use of aggressive tax deals, some involving entities controlled by the company’s financial products unit in the Cayman Islands, Ireland, the Dutch Antilles and other offshore havens.

A.I.G. is effectively suing its majority owner, the government, which has an 80 percent stake and has poured nearly $200 billion into the insurer in a bid to avert its collapse and avoid troubling the global financial markets. The company is in effect asking for even more money, in the form of tax refunds. The suit also suggests that A.I.G. is spending taxpayer money to pursue its case, something it is legally entitled to do. Its initial claim was denied by the Internal Revenue Service last year.

http://www.nytimes.com/2009/03/20/busin ... .html?_r=1

These guys are putting the robber barons of old to shame. They're actually using the American peoples' money to SUE the American people to get back all the taxes AIG was forced to pay when they got caught red handed in their tax haven scams.

Natural Gas Crisis Looming

2009-01-31T06:05:00.001-06:00

Rockman has come up with a startling view of the near term future for natural gas in the US. He said he was ok with me starting a thread on this very important matter. Here are some of his quotes from the neighboring thread on drilling:

"...NG is where we'll see the big decline due to rigs being dropped. We're one of the big unconventional NG drillers and are dropping 40% of our rigs in the next few months as the contracts expire. The drop off in drilling combined with the steep decline rates of all those unconventional NG wells (which were the primary source of NG production increases in recent years) will result in significant supply drops in the next 12 to 24 months. Even if demand continues to fall as the economic contraction worsens we may see increasing NG prices down the road. And that's one more burden we won't need on top of every thing else."

"...I suspect the rig drop in the next few months will shock some folks. The down turn came very quick and companies responded as quickly. But the UNG wells take 2 to 3 months to drill. Add contractual commitments and it can take a company 5 or 6 months to completely shut down if they choose to do so. We and other companies are paying penalty fees in order to drop rigs faster.

And we see it daily on the personnel side. Rig workers at the bottom level are being dumped daily as well as salaries being cut for the keepers. As I type I’m working on a deep well in S La. There are a few young guys here with shiny new pick up trucks and worried faces. There are different job levels and many are being demoted to the next lower level. Essentially improving ability levels at a lower cost.

What I can't guess is how quickly production will fall. I might be too optimistic (for the consumer) by guessing it won't impact significantly for 18 to 24 months. If we have a colder then average winter (always the NG seller’s wet dream) there’s an outside chance we could see short term shortages as well as higher prices by next winter."

...
"Until I saw our latest drilling schedule I figured we wouldn't see a big drop for 18+ months or so. And then only if the slow down stretched out. But when I saw us cutting back from 18 rigs to 3 rigs I wondered if it might hit you folks by next winter (it will hit us air conditioned folks hard in Texas too...a big chunk of our electricity comes from NG). Even a better chance of rougher times ahead if the others operators are cutting back to a similar degree. I don't have a data base that I can model the decline potential but perhaps someone hanging around TOD does. Qualitatively, I am concerned we could see much higher NG prices in the next winter cycle even if demand destruction continues. Higher unemployment and higher NG/electricity prices: truly painful times."

"The current NG rate is composed of a number of different types of reservoir drive types (with different decline profiles) of different ages (thus at different points in their decline lives). There are old conventional NG fields which individually produce small volumes but collectively add up to a good bit. The decline rates in these fields is generally low. Then there are other conventional reservoirs which are relatively new. Last summer the Deep Water Independence Hub pipeline system became active in the GOM. It came on close to 1 billion cubic ft per of NG. Fortunate timing because it made up almost exactly for the production soon to be lost from the hurricanes. Much of that lost production is still offline and coming back on slowly. But no way to project those gains. Those Deep Water NG fields have high initial rates but fairly quick declines (4 to 6 years) but not as rapid as the unconventional NG plays. And then there are the UNG wells themselves with high initial rates and then quick decline followed by a low decline but a potential long life at those low rates.

To come up with a projected US NG rate for the next couple of years one needs the numbers and age of wells in each category above and their current flow rates to generate even a rough production model. That is the lacking data base I refer to above. A rig count projection only gives a part of the model: how many wells won’t be drilled in the future. An important part of the model but only a portion. That data base isn’t so much lacking but beyond my time and logistic capabilities. The USGS could throw 4 or 5 folks at the task and come up with a fairly good projection in a month. The data is out there and all publicly available. Whether they know to do it, want to do it, have already done it and don’t want to tell the public….who knows. I can only offer a qualitative guess. The rapid rise of US NG rates were due largely to the UNG and the Deep Water GOM. Both have relatively high decline rates. Thus my final conclusion: we’ll see NG rates go down almost as quickly, just as quickly or even more quickly then they rose.

Whatever the case, it won’t be good for the economy. Whether it drives NG rates below demand even as that demand declines with a worsening economy remains to be seen. Remember: all NG reservoirs are always declining at some velocity. The UNG reservoirs at a very high velocity. It’s their relative percentage of the mix that will determine the potential impact. It was only the ever expanding UNG drilling that hid that overall decline from view."

Link

Denninger to Congress: The Truth Ben & Hank aren't Telling

2008-11-26T06:49:00.001-06:00

Congress, please listen:

The Truth is that we now require about $5 of debt to generate $1 of GDP.

The Truth is that the reason you were not asked to approve $700 billion to capitalize 10 new banks, thereby creating seven trillion in lending capacity is that the economy cannot soak up that new lending capacity; each dollar of new debt generates almost no aggregate GDP. If this were not true then that would be the logical and effective cure for the 'credit crunch" - if the borrowing capacity and impact on GDP necessary to help existed. They do not.

The Truth is that you were lied to about the purpose of the TARP/EESA, because what you were sold was mathematically impossible. It is supposed to be unlawful to lie to Congress.

The Truth is that the purpose of the EESA/TARP is to rescue the bankers on Wall Street and elsewhere who have made imprudent loans, all of whom are aware of the declining value of a dollar of debt in the economy - a fact they have intentionally concealed from you. The bankers (including Hank and Ben) all know how to do this math, and they are well-aware that the best they can do at this point is to "Rob every dollar you can while the getting is good, and hope they don't figure it out before you get the cash."

The Truth is that once you reach a level where a dollar in debt will not support a dollar in GDP you must inevitably either pay down or default that excess debt. Unfortunately, in this case we must pay down or default approximately 80% of the aggregate public and private debt in the United States in order to return to a standard were $1 in debt will generate $1 in GDP. Defaulting or paying down less will "turn the clock back" to a degree, but does not change the ultimate outcome. Only returning to $1 of debt returning $1 or more of GDP, and holding the total level of debt outstanding at or below that level, results in a stable monetary system.

The Truth is that if we reach the point where a dollar of debt has a NEGATIVE impact on GDP The United States monetary system and government will implode. The reason for this is mathematically obvious - each additional dollar of borrowing beyond that point actually contracts GDP instead of growing it; this is, for all intents and purposes, a "black hole". It is that event that has led to the implosion of other monetary systems such as the hyperinflationary implosion of Argentina.

Oil Price: Dead Cat Bounce

2008-10-29T11:00:00.000-05:00

You may have heard this little nugget of wisdom referring to market behaviour as prices fall.

"Even a dead cat will bounce if it falls far enough".

It works the same way in reverse. Take a peek at oil's roller-coaster ride over the past decade. link Expect price volatility like never before seen... if Peak Oil is a credible concept.

It's just Adam Smith's cold, dead hand enforcing supply & demand economic behaviour. The recent meteoric fall in oil's price should be at least as disturbing as it's assent... it heralds the violent correction to come.

These swings will devastate hydrocarbon alternative industries globally. With no firm economic base to ensure profitability, these fledgling oil alternative businesses will struggle for financing, and ultimately be delayed by years... perhaps decades. Imagine the downstream impact this interruption will have on our collective future.

"Drill baby drill" should contribute nicely to wild oscillations in price.

Can you say "demand destruction"?

I knew you could.

How about "poverty"?

Yeah... thought so.

The Coming Peak Oil Grand Depression

2008-10-21T20:54:00.002-05:00

Posted: Mon Apr 04, 2005 10:48 pm

Yeah... in '05

The Great Depression, which began in late 1929 and lasted for about a decade, was the worst economic downturn in U.S. history, and one which spread to virtually all of the industrialized world. The coming Grand Depression will be no less far-reaching. The "roaring twenties" was an era when our country prospered tremendously, much like we have done over the last few years. And, like then, it was all due to wild speculation and inflated assets. In the 1920's, the U.S. came to rely upon two things in order for the economy to remain on an even keel: credit sales, and luxury spending and investment from the rich.

Same thing today.

Our consumer spending is not funded by an increase in income wages, but by an illusionary equity in our homes. In other words, all the inflation has gone into real estate prices. Prices have reached levels that make no sense in terms of traditional patterns and rules of thumb for valuation. A range of evidence suggests that at the market peak in September 1929, something like forty percent of stock market values were pure air: prices above fundamental values for no reason other than that a wide cross-section of investors thought that the stock market would go up because it had gone up. Now, real estate investors think the same thing of the housing market.

In particular, the FED's efforts to lower interest rates have caused an asset bubble to form around real estate. People tend to over-invest when interest rates are low and when interest rates are raised to stave off the inevitable inflation, the bubble pops. That process is under way as I write this. Throughout the years preceding the Stock Market crash of 1929, the Fed did just that. The Fed set below market interest rates and low reserve requirements that all favored easy credit. The money supply actual increased by about 60% during this time. The phrase "buying on margin" entered the American vocabulary at this time as more and more Americans over-extended themselves to take advantage of the soaring stock market. Today, it is the housing market, and to some extent the stock market again. It was in 1929 that the Fed realized that it could not sustain its current policy. When it started to raise interest rates, the whole house of cards collapsed. The FED is starting to raise interest rates now for the same reason--to cool off consumer spending/speculation and reel in the trade deficit.

One of our members, somethingtosay, suggested I "interview and learn from the people that lived and survived the great Depression of the 30's. Report back to this Web site on the wisdom they learned the hard way." Some of the following is from some old-timers I talked with recently, and the rest from interviews posted on the Internet. I will let the following quotes speak for themselves. It is a chilling account.

Quote:

Well, everybody went on relief, and everyone raised a big garden. We raised everything from peas to potatoes and onions, and the extra vegetables we had we sold to people who didn't raise one. We lived off that garden for some time, and it was a big help. Once a month they'd give commodities out. You'd get dried beans, pound of bacon, pound of butter, dried milk, and sugar, and depending on how big your family was, was how much you got; and since we had the cow, we would trade the dried milk for coffee to people who didn't like coffee. That was supposed to last you a whole month, but that was government surplus, and they'd have a place that they dished that out; and I tell you we were so poor we had a gas stove, but we didn't even have the money to hook it up. We also had an icebox and couldn't even afford ten cents a day to put ice in it. When my son was born I'd mix his formula and put it down in the well on the rope and every time I had to feed him I would pull the rope up and get the bottle, but we had no refrigeration and everything we needed refrigerated went across the street to my mom and dad's place. When the war started in 1941, a lot of jobs were left vacant when the men left for war, so unemployment virtually disappeared after that.

Quote:

Gas was sparse, so when me and a group of buddies would drive down a hill, we'd turn off the car so we wouldn't waste gas.

Quote:

Seemed to have just enough food to eat...no leftovers...had to eat everything on our plate. Things we take for granted now, such as water and heat in our homes was something precious in the depression. All farmers had to can food for winter and they ate out of gardens in the summer on a farm, there was no money and the people had to eat from gardens

Quote:

It has affected me all my life. It made a lot of people learn how to conserve. My dad could not find work so we went to live on the farm with my dad's parents. We had no money so when we needed something we had to "make do" or do without.

Quote:

The city was affected more than rural areas. We always had food and wood from the farm, but city people had very little food or wood. They had to collect coal that dropped from the trains. Lived on a farm and had plenty to eat because we grew everything moved from town to live in Smithfield MO on a farm so that they could grow crops and have food to eat.

Quote:

African Americans suffered more than whites, since their jobs were often taken away from them and given to whites.

Quote:

Every tear I saw my mother shed was over the lack of money. All we seemed to do was to, literally, count the pennies in the house among all of us. We fought over money almost all the time, my mother would go into a panic if she could not account for every penny. Not one cent was ever foolishly spent and not one cent ever went for anything that was not vital to life. The memory that I retain to this day (77 years old) is that of my parents crying, singularly and together, about money! I remember one dinner where my mother, myself and my brothers and sister sat down to a meal. The meal consisted of 3 boiled potatoes and one slice of white bread which we divided up amongst us. I noticed my mother was not eating and I asked her why she was not eating. She answered that she was on a diet. When I was about 50 years of age it hit me that she had not been on a diet but was giving up what there was to us!

Quote:

When I talk about the essentials of life I mean just that. The list is easy to put together and here it is:
Rent, food, but no ice cream, candy, baked goods; only the essentials, electricity, gas for the stove, clothing, medicineâ€”and that was it. We walked everywhere and I do mean everywhere. If a trip was less than 5 miles we would walk it.

There are five things that seem to be predominating in all that I have read about the Great Depression:
1) There was not one single private or public institution that was up to the task of coping with the depression.
2) The United States suffered more than any country in the world since we were the most industrialized.
3) People had to grow much of their own food in gardens.
4) There was a mass exodus to the country to live with farm relatives.
5) Money was seldom seen.

Are we headed there once again as peak oil/gas inhibits our ability to grow the economy, provide new jobs, and feed--clothe--house the new comers? Even without peak oil, this seems to be in the cards. And without an abundance of cheap energy to grow our way out of it, the forecast for the future is ominous.

Bush Bailout Plan is Unconstitutional debt servitude

2008-09-25T11:39:00.001-05:00

The Thirteenth Amendment to the United States Constitution prohibits "debt servitude." The 13th Amendment prohibits the use of "fear" and "intimidation" to coerce payment of debts. The prohibition of debt servitude includes peonage. For a primer, read this wiki on it:

13th Amendment Wiki

The Bush plan violates the 13th Amendment, because it is a plan to socialize the debts of wealthy onto the backs of the taxpayers using fear tactics. On the one hand, the President argues a bailout is needed to prevent "financial panic", but what does that mean? Bush, in his address to the nation, defined "financial panic" as a "recession."

Quote:

And ultimately, our country could experience a long and painful recession.

Text of Bush' speech

A recession is a normal part of the economic business cycle. America has gone through many recessions. The normal recession last about 6-9 months, the longest recession since 1953 lasted 18 months.

Quote:

On average, the market peaks about six months prior to the start of a contraction and begins to decline more aggressively as the contraction begins. Based on the 9 previous recessions since 1953, the market bottomed an average of 6 to 7 months into the recession (the average recession has lasted 11 months). But this average masks a lot of variability. There have been important bear markets that lasted longer. The market bottomed 18 months after the beginning of the 2001 recession and 10 months after the start of the 1973 recession.

A recession, even a severe recession, doesn't justify pushing capitalism aside and socializing debt of the wealthy and forcing taxpayers to pay for it long after the recession is over.

This bailout is not in the best interest of the taxpayers and is not intended to help them. The fear mongering isn't justified. For example, last night Bush tried to scare the taxpayer by saying if the bailout wasn't approved immediately, their local banks might close. Here's what Bush said:

Quote:

The government's top economic experts warn that without immediate action by Congress, America could slip into a financial panic, and a distressing scenario would unfold:

More banks could fail, including some in your community.

Text of Bush' speech

This isn't true. The bailout won't prevent community banks from failing. The problem is, the subtle lie is, the bailout is not intended to help the local banks and won't help the local banks. In fact, for over a year now, the FDIC has said that in 2009 they expect numerous regional bank failures, and the causes of these failures will not be alleviated by this bailout plan. In fact, as Bush is asking for $700 billion bailout, the FDIC, which insures the banks, is asking for a $150 billion in insurance based on an its estimate that 100 banks that are going to fail next year.

Bloomberg

Further, this banking expert says the banks can weather this storm just fine, that the bailouts aren't necessary.

Quote:

So you oppose the idea of the government putting preferred equity into solvent but troubled banks that cannot raise capital on reasonable terms?

Ely: Yes, it is not necessary, even now. There is absolutely no need for the Treasury to have the authority, as you suggested, to "inject capital into solvent banks that are temporarily unable to raise new capital." If a bank truly is solvent, it can raise additional capital or sell itself, if its present owners are realistic about what their bank is worth. The reason solvent banks have a problem raising capital, or selling themselves to a stronger bank, is that they set their price too high, as did AIG. As an aside, I am glad to see AIG's shareholders getting whacked by the warrants associated with the Fed's taxpayer's loan to AIG. There is absolutely no need for the taxpayer to subsidize banks so they can stay independent, provided no barriers are erected to prevent new entrants into bank or specific banking markets.

This bankinNaked Capitalism

So, Bush is full of crap. He is fear mongering. He is using unjustified fear of calamity to coerce the American people to pay the debts of the wealthy, which is classic indentured servitude prohibited by the Constitution.

Relocalization and Cottage Industry

2008-08-18T07:57:00.001-05:00

I started this all off by thinking about food preparation. I was packing corn in Mylar bags and got to thinking that none of my neighbors were doing this, and that few of them would know what to do with it, and that even fewer have the tools to do much with it. This is where it took me... Having spent the last few decades living in cities, eating fast food, prepackaged TV dinners, and food so heavily processed they can't identify the ingredients, a great many people have lost the ability to prepare basic meals from fundamental ingredients. Corn, rice, wheat, oats, and beans are simple foods. They are available cheap, in high volume, and store for years when properly packaged. There are plenty of people who are not able to identify whole wheat. Hand someone a bag of whole dry corn, they have no idea what to do with it.

Rice, on the other hand, has a chance. I was looking online at some recipes for beans. One recipe said something like open the can, cut some hot dogs, mix the hot dogs and beans in a bowl, microwave for 2 minutes, serves 4. years ago I was training a kid to be a shrt order cook at a diner just outside albany NY. We had an order for 2 eggs over easy with some toast. I told him to put two eggs in a pan, buttering it first, then 2 slice of bread in the toaster. He buttered the pan, put in 2 eggs, then showed me to see if he had done it right. I said "Thats good with the butter, but you'll need to crack the eggs open. I though it best if I took care of the eggs, he moved on to the toaster. After a few seconds I hear the guy going "Ouch, Ouch!" It was a conveyor belt toaster, he did not understand that you simply set the bread on the belt. He was singing his hands holding the bread inside the toaster. Simple skills have been lost. Much of the loss is a result in the simple nature of modern appliances. It used to be common for every home to have a woodstove or fireplace, a couple of cast iron skillets or pans, and every town had a grain mill. The loss of the electrical grid will remove the ability to cook a meal from a great many homes in the developed world. If you don't own a grain mill, how many of your friends have one. Where is the nearest one to which you can gain access. What can you make with dried whole corn and or beans?

In the absence of electricity, how many people out there can heat a quart of water to 160 degrees? Its not that many. There are some people who have the ability, campers, camp stoves, bbq grills, some woodstoves out there as well. I can see these items being in high demand in a crisis situation. Bread is a common staple. Local bakers are still around, although the big box stores with a bakery department are surely cutting into the market. I live in a town with 10,000 other people. I know of 1 small bakery downtown. Where is the bread made that the big box stores stock? I have no idea. How many people do you know who have made bread before? The ability to bake bread in a crisis situation would be a skill in such demand that I don't know what to predict. This of course assumes ground wheat, oil, sugar, salt and yeast is available, along with a working oven to bake it in. To maintain bread production a community would need everything already in place to last a considerable period or the ingredients and energy brought in regularly. Equipment which operated on locally available renewable energy would be required at the very least in the event the electricity goes down. In a Post Peak Oil collapse, everyone returns to gardening to replace the lost goods from failed distribution systems. How many of these people will be able to raise enough tomatoes, as well as other ingredients, and produce tomato sauce.

How many have a cooking device which will allow them to do so if they knew how? Preparing for the Future is a tremendous project, requiring tools, expertise, systems, equipment and skills for even the most basic of self sufficient production. The ability to raise and grow food. Garden tools, arable land, water, energy to move the water, the know how to raise this food in a sustainable, duplicatable manner. Harvesting and processing the food, and storing it. Pressure canners, as well as jars and lids, dehydrators, sinks, stoves, pots and pans, mills, grinders, knives, and of course all the tools and supplies to clean up and maintain sanitation. Cooking equipment, be it stoves, ovens, open fires, smokers, BBQ pits, pots, pans, griddles, and a myriad of smallwares are essential to a diet based on local foods coming ripe at different times. How many people do you know who can make their own cheese, flour, butter, vinegar, or wine, have all the equipment in place and are able to grow all the ingredients in their backyard? Don't get me wrong, there are people out there with some ability. Soap and candle making is a hobby craft, basket weaving, pottery, cooking, organic gardening as well. There are those who tinker around in the shop with metal sculpture or blacksmithing, woodworking set up with great skill and a keen eye for detail. Some people make quilts, dresses, even hats. Of all these people, what percentage would be able to continue their skills without electricity and a distribution system to bring them supplies and actuate equipment? A crash that is slow enough to motivate people to get deeper into their crafts to such an extent that they are able to create their products from local materials is a best case scenario.

Small economies and team work can help. One guy cuts down trees, makes lumber and firewood. Another builds fences and cabinets. Someone raises sheep for meat and wool, another takes fresh wool and turns it into yarn, then socks. Someone raises bees for honey and wax, others make candles and mead. The population needs time to relearn crafts which were performed locally a century ago, lost to the ravages of machines and industrial production. A town without a beekeeper has no honey and no candles. Maybe there is a beekeeper in a town close by. Sure their may be horses, but the closest farrier is 50 miles away. If the farrier needs charcoal, he's hoping there are plenty of trees around and someone who knows how to produce charcoal, with the equipment in place. There are seamstresses out there who can make a suit of clothes in her home, but she needs a source of thread, fabric, and parts for the sewing machine. Farmer John can raise the wheat, mill it, even bake the flour into bread. He still has to get it from the farm to the customer, and needs a system of money or barter in order for his activity to be worth his effort.

Relearning a single skill for a cottage industry is all well and good but for that industry to be viable, a support system needs to be in place. While barter can replace money as a means of trading goods and services, there needs to be something out there to trade for. Farmer John is not going to spend all his time baking bread in order to give it away. He'd do better spending some of his time canning tomato sauce or cutting firewood for the winter. An entire community needs to relearn a wide array of skills in order that ancillary products and services are available. It takes time to learn a craft, and the right tools and equipment to do it. Whats more, the tools equipment and skills need to be useful in a pradigm of energy depletion. You can't run to Sears, buy a bunch of tools and start building cabinets unless you already have an understanding-even a basic one-of the steps involved. To keep going, your tools will need to work without elecctricity or fossil fuels. People can learn, they do it all the time, but the awareness of what they will need for the future is not in place on a scale that will be needed to continue any sort of localized barter based economy. The firewood guy will eventually have to give up his chainsaw for an axe, and give up his F250 for a team of horses to haul the logs out of the woods, otherwise there is no more firewood. Furthermore, someone needs to have axes and teams of horses in place ready to sell.

How then, do we move backwards? How does a society, with most of the people having no clue of future events, move from being dependent on a vast and intertwined network of goods and services produced by the indigenous people of whereever, to a local resource and renewable energy based society, and do so in the timeframe available (20-30 years using the most liberal extimates, 10-20 with resonable estimates, 5-10 with worst case scenarios), all the while prices on everything increasing, world politics getting more militaristic, governments continuously reducing civil liberties, shortages of goods on the market and weather patterns resembling bad Hollywood movies? I think the world will simply explode under the pressure.

Environmental Services Industry Booming

2008-07-03T22:25:00.000-05:00

So I have been tracking the activities of industries directly related to peak oil, including associated environmental remediation markets as an indicator of where we really stand in confronting the massive environmental challenges ahead of us.

If there is anything that the so called "free market" system does well, it's getting on top of potentially profitable trends. By examining these commercial efforts we can deduce the level of engagement on a variety of environmental topics, as well as make some meaningful predictions about the future based on the trend analysis.

I like to examine primarily environmental remediation & disaster prevention companies which I consider to have much more real-world impact than stuff like indoor mold remediation for example. These industrial caliber outfits handle things like cleaning up hazardous material sites, radioactive remediation, environmental compliance monitoring etc...

While the governmental side of environmental services is an influential and useful contribution, it can never match the power the market has to transform the landscape of a given market.

Make almost anything profitable, and business will make it happen... guaranteed.

Peak Oil means the smart money goes into oil-alternative businesses, for very obvious reasons. A person could look at Peak Oil, and conclude that there are significant opportunities in environmental services, based on the idea of servicing the needs of oil-alternative companies, who in many cases, will have painful environmental challenges to handle.

Imagine the scope of what is happening to the global energy business as companies & governments struggle with ever increasing prices for conventional oil. We will strip-mine Canada for oil... level the rocky mountains for shale... exploit our nature preserves... convert coal into oil... and on and on.

All these activities have terrible environmental consequences both in terms of destroying ecosystems, and accelerating greenhouse gas emissions from these very dirty fuel sources. Even gentle solar businesses use heroic amounts of electricity in manufacturing.

So, if my theory is correct about the market following trends, then we should see many new ventures into markets to serve these needs.

Sure enough... amazing growth in new companies & new initiatives from existing companies. There is a buying, merging, partnering frenzy going on that reminds me of the DOT com days, where an entire new market was being born in months rather than years.

Fluor, (a giant energy company), is well ahead of the curve looking at co2 sequestration technology for coal power plants, in anticipation of future demand.

Quote:

The primary focus of this partnership is to enhance the technology and to demonstrate its application to safely separate carbon from the flue gas of a coal-fired power plant. This will be the first demonstration of the technology on a coal-fired power plant. Both companies, in applying the Econamine FG+ process, will demonstrate an optimized adaptation of the CO2 scrubbing process that complies with U.S. and EU environmental requirements. E.ON brings essential experience in the operation and engineering of coal-fired power plants to this strategic partnership.

Forbes

Small & medium sized companies are re-capitalizing to expand their services in anticipation of mounting demand. USA Environment just partnered with an investment firm for exactly this reason...

Quote:

Wingate Partners and USA Environment LP (USA) have joined forces in a recapitalization of USA.

USA is a full-service environmental contractor that provides a full range of high-end environmental services. The company is a licensed contractor in 30 states that specializes in turnkey solutions for any environmental construction, remediation, industrial services, radioactive material handling, disposal, transportation or spill problem.

IVS

And so forth & so on... too many to really track, but a very clear indicator that despite their silent treatment of peak oil, many seem quite aware of what's coming.

It would be interesting to see some gross statistics showing percent growth broken down by service I think.

Your dog wants remediation.

Weekly US Petroleum and NG Supply Reports

2008-06-30T10:46:00.000-05:00

Quote:

Prediction
Unleaded Prediction 9-May
Beginning Inv mbbl 211.9
Imports Wk/Day 9.8 1.4
Production Wk/Day 61.6 8.8
Available 283.3
Balance Wk/Day 72.1 10.3
Ending Inv Mbbl 211.20
Prod Supplied 9.3
Predicted Change -0.7

Distillates Prediction 9-May
Beginning Inv mbbl 105.7
Imports Wk/Day 1.4 0.2
Production Wk/Day 29.4 4.2
Available 136.5
Balance Wk/Day 30.8 4.4
Ending Inv Mbbl 105.7
Prod Supplied 4.3
Predicted Change 0.0

Crude Oil Prediction 9-May
Beginning Inventory 325.6
Domestic Prod 35.679 5.097
Imports 72.8 10.4
Total Available 434.079
Provided to Refineries 104.3 14.9
Ending Inventory 329.779
Predicted Change 4.179
Ref Utilization 86

I am not smart enough to predict that this week will be any different from last week. The last couple of weeks we have seen a flood of imports in both crude oil and unleaded (not distillates) and lower than normal refinery utilization, because of the high crude oil prices and relatively low refinery margins.

The unleaded inventory will be especially interesting. We should be in the time of year when this inventory is built up to take care of summer demand, and the numbers themselves suggest that there is plenty of gas around, but even with fairly strong imports of 1.4 mbpd, the demand lately has been such that with the refinery system running the way it was last week, at about 85% capacity, we will still see a slight draw down in unleaded inventory. The longer this goes on, the more serious it is going to get.

In crude oil, I have assumed above the same low inputs to refineries, high imports (despite the pricing) and the same domestic production we always have, and the result is a pretty strong build.

In distillates, we saw a little bump in demand last week, with spring planting just underway, and very low net imports, and if that same thing happens this week, with typical production levels of 4.2 or so, we will see this inventory break just about even.

Code:

Closer to Reality

pup55 28
Analysts 26
Tie 0
Avg 0.518518519

Directional Correctness
pup55 36
analysts 41
ttest 0.028524

Sum of Weekly Predictions
pup55 Analysts Actual
Unleaded 12.187 -0.125 4.1
Distilla -19.537 -13.820 -21.5
Crude 34.839 32.660 36

Avg Difference from Reality
pup55 analysts t-prob
Unleaded -0.426 0.222 0.07
Distilla -0.103 -0.404 0.22
Crude 0.061 0.176 0.34

Deviation from Reality (Abs Value)
pup55 analysts t-prob
Unleaded 1.601 1.536 0.41
Distilla 1.168 1.180 0.48
Crude 3.844 3.021 0.02

pup55 Forecast Correctness
Production
Avg Exact
Unleaded 0.019 4
Distilla -0.013 5
Crude 0.007 18

Imports
Avg Exact
Unleaded 0.025 5
Distilla 0.000 7
Crude 0.026 1

Demand
Avg Exact
Unleaded 0.104 2
Distilla 0.047 3
Crude -0.061 5

Here are the stats for the year-to-date. Despite being slightly ahead of the analysts on closeness to reality (over 50%, which as we all know was my long term goal) the pesky analysts are beating me on average deviation from reality in crude oil and unleaded, by a statistically significant margin.

The reason for this is that my little unleaded demand model underestimated demand consistently in Jan-March (it has been pretty close the last couple of weeks) and also, the lack of ability to predict crude oil and unleaded imports. Of the first roughly six months of the year, I have only managed to correctly predict crude oil imports once.

Other than that, pretty good. Now that I understand the seasonality a little bit better, it should be possible to refine this demand model some.

The crude oil imports are up to the Saudis, Mexicans, and weather conditions in the Gulf, so I do not feel too bad about that.

Thanks for your help as we continue to try to understand this important data a little better, to keep with the original goal of the thread, which is to use these reports as a potential indicator that the effects of PO are being felt in the US.

Top 20 Oil Consuming Countries in the World (2007).

2008-06-30T10:41:00.001-05:00

Country Consumption (MBD)

1. USA- 20,698,000

2. China- 7,855,000

3. Japan- 5,041,000

4. India- 2,748,000

5. Russia- 2,699,000

6. Germany- 2,393,000

7. South Korea- 2,371,000

8. Canada- 2,303,000

9. Brazil- 2,192,000

10. Saudi Arabia- 2,154,000

11. Mexico- 2,024,000

12. France- 1,919,000

13. Italy- 1,745,000

14. UK- 1,696,000

15. Iran- 1,621,000

16. Spain- 1,615,000

17. Indonesia- 1,157,000

18. Taiwan- 1,123,000

19. Netherlands- 1,044,000

20. Australia- 935,000

Source: BP Statistical Review of World Energy 2007.

Why Technology Will Solve Peak Oil in the End

2008-06-30T10:35:00.000-05:00

Over human history Every boost in sustainable population levels has been achieved by a new energy technology.

Neolithic people relied on human muscles for energy/food production.

Early agriculture used animals for hunting/plowing/milling/pumping.

Later agriculture used wind and rivers (for pumping/grinding/shipping)

Even later it used steam for mining/shipping/rail

Modern society is based on liquid fossil fuels.

Our next technology is biotech and this will save us. It will save
us because it will harness the greatest source of energy within
reach- life itself. Indirectly, life is powered by the sun and nothing, not even all the petrochemicals on earth can compare to it.

Think Manhattan Project- 6 years to build a nuclear weapon.

Think microbes that will break down ANY plant cell wall (the real problem in ethanol production is we can't just use any plant matter to produce it. Hence we stupidly use food crops).

They are already looking for the needed microbes in termite guts.

Think genetic manipulation and who-gives-a-damn about the possible environmental consequences of the bugs they produce. (I mean this is civilisation at stake rght?)

Think of all the weed infested waterways, junk land, byproducts of agriculture (stubble, chaff and waste), household waste and simple algae ponds that could be converted to ethanol?

Think of microbes that will turn tar sands into usable fuel instead
'of using clumsy chemical/mechanical processes that pollute and use far too much energy?

Think water weeds manipulated to grow like bamboo (some species grow 1 metre (3 feet) in a day) as feedstock for ethanol.

Think plants engineered to produce high energy hydrocarbons (i mean crush a eucalypt leaf and smell that oil) and which are engineered to release it only in the presence of a new engineered organism.

Plants that grow in salty, dry soil faster than asparagus.

Unbelievable? The gene that protects some crops from the herbicide called roundup is actually from a fish.

Human genes are now in the DNA of lab cows and pigs so they can produce human antibodies for us.

Rest assured, if civilisation is under threat the people with money
and power will spare nothing to solve the technological issues that underlie it. Not because they love we poor and powerless scum but because it offers them the potential to become even richer and more powerful.

We aren't there yet because it was easier for them to play the same old game and win. But if the game is about to change, they will make the rules for the new game as they always have.

Whether we like it or not, life on earth will be engineered and exploited to suit our needs. It always has been whether thru domestication, breeding, overfishing, extinction or whatever.

We don't give up easy which is why we're still here and dinosaurs
aren't.

Do people really think that all the brilliant minds in the world haven't
had a passing thougt to all of this and that a civilisation that can put men on the moon, extract energy from fission, calculate the first moments of the big bang, and NOW!!! has created the first hand made genome from scratch (yes never before in nature) will
just slap its forehead and say "well, this energy thing sure beats me".

No way. I'm not saying society/government is very forward thinking (why would it be when short term approaches make so much money anyway) but when threatened as a species we have tyically had the gonads to find a way out.

We have the embryonic tools to solve this and soon we will have the money, focus and priority to make it happen.

Former crashed civililsations had nowhere near the intellectual understanding or sheer resources to rescue themselves to rescue themselves, but we sure as hell do.

strontium

Abandoning Cargoism & Embracing Our Options

2008-06-30T07:09:00.000-05:00

As humans, we tend to be very shortsighted; driven by short-term gains. We live for today and assume tomorrow will take care of itself. The first thing we must learn to do as humans and custodians of the future is to consider the impact of our present actions on that future and modify those actions accordingly. If we cannot do that, the time will come - and soon - when the future will definitely be worse than the present.

We are largely a Cargo Cult, and we suffer from Cargoism: the belief that carrying capacity can "always" be raised anew by further technological breakthroughs. We blindly copy something, without understanding it, to get some positive effect that we’ve observed.

As Catton observed in his book Overshoot: “People continue to advocate further technological breakthroughs as the supposedly sure cure for carrying capacity deficits. The very idea that technology caused overshoot, and that it made us too colossal to endure, remains alien to too many minds for"de-colossalization" to be a really feasible alternative to literal die-off. There is a persistent drive to apply remedies that aggravate the problem.”

Bottom line: There is no techno-fix. But we are obsessed with the notion that one exists.

As James Kunstler points out: " It only made me more nervous, because this longing for "solutions," strikes me as a free-floating wish for magical rescue remedies, for techno-fixes that will allow us to make a hassle-free switch from fossil hydrocarbon power to something less likely to destroy the Earth's ecosystems (and human civilization with it). And I think such a wish is, in itself, at the root of our problem -- certainly at the bottom of our incapacity to think clearly about these things.”

As Sharon Astyk writes: “That is, we're betting our kids lives on the hope that at some point renewables will become self-perpetuating, even though we have no idea how that will happen, that would require major, multiple large scale technical breakthroughs in many cases that might or might not happen, AND, we're not willing to do it now, when we have energy to burn, lots of money and no crisis - instead, we're going to bet the farm (and lives) on the fact that we'll be able to do this 20 or 30 years into a depletion crisis with much less money, much less oil, much less availability in a society that we simply don't know the shape of. That is, we're going to stick the next generation with the problem, and hope it isn't too serious. But if we can't do it now, when we have lots of energy and lots of money and all the time in the world, the chances are excellent we won't be able to do it.”

The Planning Forum has been discussing our options for years, so we know what they are. It’s time to start embracing those options and learn to cope and adapt to the coming changes.

Trying to dodge the die-off bullet is not an achievement to pursue; it is a detour to the same destination.

Our Money System and Oil Depletion; Are they Compatible?

2008-06-27T12:19:00.001-05:00

Our Money System and Oil Depletion; Are they Compatible? "Houston, we have a problem." The world's present industrial civilization is saddled with a dilemma: how can a debt-based monetary system based upon infinite growth in a finite world deal with resource depletion? Quote me and answer that question with your reply. On another thread, nero wrote: "The belief that the current monetary system is incompatible with a declining energy resource is not an essential component of the peak oil thesis." It's not? I care to differ. It's part and parcel. The steady state economy into which we are being inexorably forced by oil and other fossil fuel depletion means the end of the current money system. The following is a quote from a summary of a seminar taught at MIT by M. King Hubbert in 1981:
Quote:
"The world's present industrial civilization is handicapped by the coexistence of two universal, overlapping, and incompatible intellectual systems: the accumulated knowledge of the last four centuries of the properties and interrelationships of matter and energy; and the associated monetary culture which has evolved from folkways of prehistoric origin. The first of these two systems has been responsible for the spectacular rise, principally during the last two centuries, of the present industrial system and is essential for its continuance. The second, an inheritance from the prescientific past, operates by rules of its own having little in common with those of the matter-energy system. Nevertheless, the monetary system, by means of a loose coupling, exercises a general control over the matter-energy system upon which it is superimposed. Despite their inherent incompatibilities, these two systems during the last two centuries have had one fundamental characteristic in common, namely exponential growth, which has made a reasonably stable coexistence possible. But, for various reasons, it is impossible for the matter-energy system to sustain exponential growth for more than a few tens of doublings, and this phase is by now almost over. The monetary system has no such constraints, and, according to one of its most fundamental rules, it must continue to grow by compound interest. "Hubbert's Prescription for Survival, A Steady State Economy http://www.hubbertpeak.com/hubbert/hubecon.htm Richard Heinberg, in The Party's Over, wrote: "Hubbert thus believed that society, if it is to avoid chaos during the energy decline, must give up its antiquated, debt-and-interest-based monetary system and adopt a system of accounts based on matter-energy--an inherently ecological system that would acknowledge the finite nature of essential resources." Our system of fractional reserve banking suffers from an inherent instability that increases over time; because at the base, fractional reserve banking is a kind of Ponzi or pyramid scheme. As long as there is economic growth the pyramid stands, but if not, it collapses like a house of cards. Under our current economic system, Hubbert wrote that the maintenance of a constant price level in a non-growing industrial system implies either an interest rate of zero or continuous inflation. However you spin it, there is no price component for resource depletion. What if the supply of oil cannot increase forever, but the demand for more oil continues to grow? The conclusion is simple: The house of cards comes down. Who is going to loan money at zero interest?

2008-06-24T07:55:00.002-05:00

According to the most recent EIA chart below, Saudi net oil exports have fallen more than 1 million bpd average, from 9,095,559 bpd average in 2005 to 7,925,464 bpd average in 2007:

And so far, it appears that Saudi total oil production had peaked at 11,095,559 bpd average in 2005. Was down to 10,236,101 bpd production average for 2007: At the same time, Saudi domestic oil consumption continues to increase at a steady pace: And so does total Saudi domestic energy consumption:

Source: EIA This probably isn't 'news' to anyone here. Still, interesting to see their exports dropping at a time when the world needs more oil than ever before. Saudi domestic oil consumption appears to be increasing about 275,000 bpd per year the last few years. Even if they increase oil production some, will it get sucked up domestically instead of being exported?

http://www.peakoil.com/fortopic41979.html

Why I'm Here

2008-06-20T17:59:00.002-05:00

Why are you here?

What is it that moves you to spend your valuable time reading (or writing) on the Internet about our energy future?

For some, it's simple boredom... others may feel a social responsibility to inform ( & be informed). Maybe you feel confused, and are looking for some bit of truth to latch on to, or perhaps your job has thrust you into this environment, without even asking. I imagine countless thousands looking at the price when they fill up, coming home, and Goggling like crazy trying to discern what's causing the crazy-high gas prices.

Maybe you feel threatened... vulnerable & exposed, & are looking for some hope to carry you through.

For each of us, there remains some launching point for the journey of discovery, which lead us to this place. Every person reading these words has some original purpose... intending to fill some need they harbor. All of us share this feeling... this idea of need.

I'm not any different than you.

As is so often the case... I'm here for a girl.

...of course.

My wife Marnie passed in Sept. of 1999 from suicide... hanging.

Needless to say, I was devastated by the senseless tragedy, ( & in many ways still am), and retreated into my own little world; which was basically raising my son David, and trying not to cry all day. It didn't work... I cried all day... every day.

I took as much time as I needed mourning this tragedy... more than 2 years. Ever cried daily for years? It's ... ummmm.... ...unpleasant. Eventually you get sick of almost any repeated pattern of course, (I say almost because I never will get used to the screaming dreams... Can you imagine your young child standing at the foot of your bed scared & weeping 'cause you're screaming in your dreams? ...me either, but then, I don't have to); eventually I grew out of my selfish wallowing in misery and an emerging consensus of thought tightened it's grip on my fragile mind.

You can't imagine the irrational feeling of guilt that comes with this most intimate event. How could I still be here when she's gone? It is so unfair it borders on insanity... lunacy even. But I promise you it's where all of us suicide survivors end up... guilt.

I have remarked many times, (& will continue I'm certain), that 'it's a funny 'ole world. I left my highly paid (6 figure) job in 2002, and began searching for some meaningful place for me to reside; Some way to sooth my terrible feelings... a task which mere alcohol was powerless to confront or abide. And as is often the case, the answer to my dilemma came from the most unlikely of places.

My son David & I bonded in many ways, and still do. When he was younger, it was music, the outdoors, art... and computer gaming. I have been participating in computer gaming for many years (decades?), and so it was a natural place for us to meet as cross-generational partners. We eventually joined a gaming clan ( competitive league gaming on the Internet), and made many friends and had great adventures. And so it was, that peak oil came into my vision.

A member of our gaming clan posted a link to Matt Savinar's website on our clan forum, and my casual click of the mouse led me into the world I inhabit today.

I was already acquainted with resource depletion topics for many years. That's why Matt's website hit me so hard. His eloquent description of Colin's "Peak Oil" gripped me immediately, and has not let go since. It took me a month to read all the links on dieoff.org.... and I knew what my place was without doubt.

peakoil.com

And that ladies & gentlemen... is why I'm here.

And it's more than a little cathartic to write this.

Thanks... much.

Lifting the Ban on Off-shore Drilling:The Facts

2008-06-19T09:43:00.001-05:00

“The U.S. has huge amounts of untapped oil, but pesky politicians and environmentalists won't let us get it.” That’s the indignant cry we hear over morning coffee these days.

So, George Bush proposes we roll-back the ban on off-shore drilling to ease oil prices.

Ease oil prices? When? Not today and not tomorrow…maybe never.

The U.S. Energy Information Administration (EIA) recently did a detailed study of the likely outcome of offshore drilling for their Annual Energy Outlook 2007, “Impacts of Increased Access to Oil and Natural Gas Resources in the Lower 48 Federal Outer Continental Shelf (OCS).”

http://www.eia.doe.gov/oiaf/aeo/otheranalysis/ongr.html

The conclusion:

“The projections in the OCS access case indicate that access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030. Leasing would begin no sooner than 2012, and production would not be expected to start before 2017….Because oil prices are determined on the international market, however, any impact on average wellhead prices is expected to be insignificant.”

According to the Energy Information Administration, lifting the bans might boost the nation's oil production by 1 or 2 million barrels a day by sometime next decade. Places like the Atlantic coast, thought to be rich in natural gas, lack drilling platforms, pipelines, terminals, storage facilities, and other energy infrastructure.

“Although a significant volume of undiscovered, technically recoverable oil and natural gas resources is added in the OCS access case, conversion of those resources to production would require both time and money. In addition, the average field size in the Pacific and Atlantic regions tends to be smaller than the average in the Gulf of Mexico, implying that a significant portion of the additional resource would not be economically attractive to develop at the reference case prices.”

What about ANWR? (Arctic National Wildlife Refuge) How much oil is there?

 95% Probability 5.7 billion bbls = .5 mbpd
 Mean (Expected)10.3 billion bbls = .9 mbpd
 5% Probability 16.0 billion bbls = 1.9 mbpd

 Seven to 12 years are estimated to be required from the time of approval to explore and develop ANWR to the first production of oil.

 From first production to peak will take 3 to 4 more years where the production rate peaks at .9 million barrels per day.

 EIA estimates that if Alaska's Arctic National Wildlife Refuge were opened for drilling tomorrow, oil wouldn't flow at full tilt at .9 mbpd until 2025.


By 2030, the US is projected to consume 22.8 mbpd. Today, we consume 21 mbpd.
22.8 mbpd divided by 24 hours = .95 mbph

 .9 mbpd is 95% of one daily hour US demand

 Conclusion: ANWR would power the US for 57 minutes/day, the rest would have to be imported.
 EIA, best case scenario would reduce oil prices by $.30 to $.50 per barrel

 Reduce oil imports from 68% to 65%. Today, we import 60% of our oil.

Not to mention, 2 million barrels a day would need to be balanced against steep production declines expected in many non-OPEC areas like Russia, Mexico and the North Sea over the next several years.

US oil production has been in terminal decline since 1971 from a height of 9.6 mbpd to barely 5 mbpd in 2008. Even the discovery of oil in Alaska in the 1980’s was unable to reverse this decline.

We cannot drill our way out of this oil crisis. Since 2000, oil companies working in the U.S. have doubled the number of wells drilled per year.

Although increased drilling has added new oil to the nation's supply, it has not done so fast enough to offset the terminal decline of existing fields.

We are going to have to import more of our oil. Period.

Source

Walking the TightRope

2008-05-19T08:51:00.000-05:00

So a funny thing happened to me yesterday, and I just had to share it with several thousand of my closest friends.

You guys.

I had just finished breakfast at a local restaurant with some friends and as we were walking to the car, a man walked up to our group, obviously in some sort of distress. He stammered a bit, then finally managed to croak out, "I'm choking".

So we are standing there, watching this guy expire right there in the parking lot, and it hits me just how fragile our lives really are. It made me think of so called "intelligent design" theory. Like, "Ok people, here is something you must do everyday, or you will die... oh yeah, and every once in a while... it'll kill you.

Kinda reminded me of that old joke:

If Mama Cass had shared half her sandwich with Karen Carpenter, they would both be alive today."

Anyhow, all that took about 1 second in real-time, then I hopped behind this guy and Heimliched him. (That didn't sound right)

Never done it before, or even been trained in it's use. But it was just like they say... pop! Then a great whoosh of air as this guy took a desperate breath.

We just stared each other for the longest time... he said thanks & I said no problem, or something else lame like that, and we left.

After some thought about this brief demonstration in mortality and the human condition, it occurred to me that what we do here on this website, is kinda like a larger version of the same thing that happened to this guy yesterday. We just need allot more arms to wrap around the collective human torso, and expel the blockage which is strangling our species.

Never caught his name.

Hope he makes good use of this new life he has... same wish I have for us all.

What we do in our lives, echoes through time,
with hilarious & unexpected consequences. Who can say what my arrogant meddling will result in down the line, as I causally exercise my god-like power over life & death?

Interesting day... went sailing the rest of the day, which was less dramatic, but just as excellent.

Funny ole' world huh?

(I guess the take-away" message here is, if you're choking, you wanna be standin' next to me.)

:)

Mainstream?

2008-05-12T07:32:00.018-05:00

What does mainstream mean anyway?

From wikipedia:

Mass media is a term used to denote a section of the media specifically envisioned and designed to reach a very large audience such as the population of a nation state. It was coined in the 1920s with the advent of nationwide radio networks, mass-circulation newspapers and magazines, although mass media was present centuries before the term became common. The term public media has a similar meaning: it is the sum of the public mass distributors of news and entertainment across mediums such as newspapers, television, radio, broadcasting, which require union membership in large markets such as Newspaper Guild and AFTRA, & text publishers. The concept of mass media is complicated in some internet media as now individuals have a means of potential exposure on a scale comparable to what was previously restricted to select group of mass media producers. These internet media can include television, personal web pages, podcasts and blogs.

The communications audience has been viewed by some commentators as forming a mass society with special characteristics, notably atomization or lack of social connections, which render it especially susceptible to the influence of modern mass-media techniques such as advertising and propaganda. The term "MSM" or "mainstream media" has been widely used in the blogosphere in discussion of the mass media and media bias.

From Money Week:

Matt Drudge has just taken Peak Oil mainstream.

Up until today, you could randomly ask 10 people on the street what “Peak Oil” is and you’d get a blank stare from at least nine of them. I’d wager that as of yesterday, Drudge himself would have been among that vast majority.

Up until today, the idea that there’s only a finite amount of oil in the world that can be recovered, and that once you reach the halfway point there begins an irreversible decline, simply hasn’t been in most people’s awareness.

Of course, geologists and oil industry insiders have been familiar with it. Whiskey & Gunpowder readers are certainly familiar with it. And so is a subset of Lexus liberals who like Peak Oil because it dovetails nicely with their Malthusian and anti-capitalist worldview.

But all of a sudden, awareness of Peak Oil is spreading exponentially. It started today, and will only grow from here.

wikipedia

Scientific American

Wall Street Journal

CBC

Telegraph

National Geographic

World Oil

US Army

Forbes

Shell Oil

Washington Monthly

New York times

CNN

MoneyWeek

Popular Mechanics

MSNBC

USA Today

Financial Sense

Christian Science Monitor

Huffington Post

Exxon

So... has Peak oil gone mainstream?

Ummm... yeah... it has.

'Nuff said.

Positive feedback for oil prices

2008-05-07T07:38:00.002-05:00

Often overlooked in the grand scheme of things, is the dependency of oil producers on their own products.

We tend to look at the downstream effect of higher oil prices on the various markets which are dependent on the products refined from oil. If this logic is correct, that as oil's price soars higher the price of these products which depend on oil also rise, then the same logic must hold true for oil production itself.

This feedback loop means that as oil becomes more expensive it becomes even more expensive to locate, extract & produce that oil. Which in turn, causes even higher oil prices, which again raises the cost of oil production.

You get the idea...

This compounding effect becomes more & more pronounced the higher the relative price of oil climbs, creating a cascading effect which will eventually lead to price "super-spikes" where large jumps in price may happen very quickly compared to traditional inflation.

Because markets can't adjust quickly to these super-spikes, the potential for collapse of markets becomes a realistic fear as oil continues it's meteoric climb skyward.

Your dog wants blissful ignorance.

China Becomes A BP Shareholder

2008-04-15T08:56:00.000-05:00

HONG KONG -

China has quietly accumulated nearly a 1% stake in BP to help secure its oil supply to fuel rapid economic growth. The silent investment from China has come to the attention of Downing Street, which has been monitoring the situation carefully.

A Chinese sovereign wealth fund has purchased about 1 billion pounds ($2 billion) worth of BP (nyse: BP - news - people ) over a period of time, accounting for just less than 1% of the U.K.'s biggest enterprise. "We are aware of the Chinese holding and we welcome all shareholders," a spokesperson for BP said, confirming the investment without identifying which Chinese state fund had bought the stake, the Daily Telegraph reported Tuesday. Although the British government may publicly welcome the Chinese state fund's investment, the newspaper noted that all parties on Downing Street are keeping a close eye on developments.

U.K. Chancellor Alistair Darling is in Beijing this week for talks to tighten Sino-British economic links. He is speaking with Chinese government officials including Lou Jiwei, chairman of the China Investment Corp., the sovereign wealth fund that manages $200 billion, about 12% of China’s foreign exchange reserves. China Investment Corp., which invested $3 billion in Blackstone (nyse: BX - news - people ) last summer before the U.S. investment firm listed its shares on Wall Street, is not the company buying into BP, according to the Daily Telegraph.

Xinhua Financial Network News in Beijing said Tuesday that the buyer is actually SAFE Investment Co., a Hong Kong-registered investment vehicle of the State Administration of Foreign Exchange, which had already bought a 1.6% stake, worth around 1.8 billion euros ($2.9 billion), in France's Total (nyse: TOT - news - people ), the third-largest oil company in Europe. (See: "China Takes A Piece Of Total")

China's foreign exchange reserves hit $1.68 trillion at the end of March, the People's Bank of China, reported last week. In an effort to keep its rapidly expanding economy humming along, China boosted its crude oil production to 30.8 million metric tons during the first two months of this year, the National Development and Reform Commission disclosed earlier this month. But that constituted just a 1.2% rise from 2007; China will not achieve energy independence any time soon. Meanwhile, crude oil imports rose 9.5%, to 28.23 million metric tons, according to the agency. Still, shortages of gasoline and diesel fuel caused public discontent in some areas of the country.

To secure stable import supplies, China has been granting loans to oil-exporting countries in Africa such as Nigeria over the past few years. Investing in BP and other Western oil companies is seen as another way to raise China's bargaining power as a big importer.

News!

2008-04-14T13:45:00.001-05:00

Running With the Bulls: EIA Says $100 Oil “New Norm”

2008-04-09T09:49:00.001-05:00

Posted by Keith Johnson

Chalk up another convert from the oil bear camp: The U.S. Energy Information Administration has given up on seeing double-digit oil prices this year, and says $100 oil—and loads of volatility in crude markets—is the “new norm.” That’s a sudden shift from the $87 barrel of oil the EIA was forecasting in January.

They’ve got company. (Associated Press)

What gives? For the U.S. energy agency, sustained high oil prices can’t be solely attributed to financial speculation, as many analysts insist. But it’s not entirely a supply shortfall either, though excess capacity is tight. Rather, it’s a double-whammy of increasing oil consumption in developing economies and greater domestic consumption in oil-exporting countries that offsets U.S. belt-tightening during the slowdown. Notes Neil King in the WSJ (sub reqd.):

Oil demand continues to grow briskly in China, India and Russia, where fuel prices are heavily subsidized. In the Middle East, soaring energy needs and shortfalls in natural-gas supplies mean major exporters such as Saudi Arabia and the United Arab Emirates must use more oil at home. The EIA predicts that even with falling consumption in the U.S., oil demand world-wide will jump by 1.2 million barrels a day this year.

Sleepily eyeing a peak in world oil output

2008-04-09T09:05:00.001-05:00

Last week the price of crude oil broke new records, running about $110 a barrel. That's well above the previous record (in inflation-adjusted dollars) reached in 1980 after the revolution in Iran resulted in the nationalization of its oil.

Since tanks of crude are full to brimming, many traders in oil markets suspect that $110 could be the top price for now. But a growing number of oil-market analysts reckon the supply of oil to the world economy has reached a peak or is about to. The discoveries of new oil are now exceeded by the output of old oil. At some point, global oil output will start to decline, as happened in the United States in 1971.

If that is the case, before long $100-a-barrel oil will be regarded as "the good old days," says Robert Hirsch, a senior energy analyst at Management Information Services, Inc., a Washington, D.C., research and consulting firm.

The price of oil in the New York futures market, a financial market that promises the delivery of oil in the future, has already climbed more than $20 in the past two months.

Global oil production has been on a plateau at around 85 million barrels per day (b.p.d.) for about 3-1/2 years. It is widely debated whether that output level could be pushed much higher to reach demand in the future, which, according to the International Energy Agency (IEA) in Paris, could reach 98.5 million b.p.d. in 2015 and 116.3 million b.p.d. in 2030.

What greatly concerns Mr. Hirsch is that the US and most of the world has not prepared seriously for a "peak" in world oil output.

"If we wait until the problem hits us, we are in for very serious economic problems worldwide for at least 20 years," he says. "There is no good news. Nobody is really doing anything."

The peak for production of conventional liquid crude has or will occur sometime between 2005 to 2016, says Roger Bentley, an advocate of the peak-oil view at Reading University in Britain.

That same time span holds for nonconventional oil sources, such as the Canadian oil sands or the Venezuelan oil tars, he maintains.

A few years back, Hirsch and two other experts wrote a report for Science Applications International Corporation on the impact of the peak. It concluded that the price volatility of oil will increase dramatically and, "without timely mitigation, the economic, social, and political costs will be unprecedented … extremely damaging."

The biggest problem for the US is the supply of liquid fuel. Its more than 210 million automobiles and light trucks run on mostly gasoline.

The average age of the cars is nine years. So replacement of only half the automobile fleet will require 10 to 15 years.

Peak Oil Review -- April 7th, 2008

2008-04-09T08:58:00.000-05:00

Tom Whipple

07 April 2008 @ 05:20 pm EST

1. Prices, Production and Exports

2. Electricity Shortages and Diesel

3. Rice, Inflation and Oil

4. Massachusetts Hosts a Meeting

5. Energy Briefs

1. Prices, Production and Exports

It was another week of volatility for oil prices as a potpourri of fundamentals, financial crisis, hearings, unemployment and a looming recession drove oil prices one way and then another. After losing $4 a barrel on Monday as speculators closed positions, prices recovered on Wednesday after the EIA reported that US gasoline stockpiles had fallen by 4.5 million barrels the previous week, twice what analysts had expected. On Friday, prices rose again to close out the week at $106 a barrel after the report that US jobs had declined for the third straight month, confirming fears that the US was headed for a recession. This time oil prices rose on bad economic news in expectation that there will be more interest rate cuts, a weaker dollar, and a flight to safe assets such as oil.

US gasoline prices rose to a record $3.30 on Friday and most analysts believe they will continue rising. The EIA is holding that average gasoline prices will peak at $3.50 later this spring, but many are predicting a spike to the vacinity of $4 a gallon.

In the wake of the inconclusive attack on Basra, Shiite cleric al-Sadr is calling for a million-man demonstration against the US "occupation" on Wednesday, the 5th anniversary of the fall of Baghdad. Some fear the demonstration could set off events destabilizing the government. In the meantime Iraq is still exporting oil from Basra at slightly below pre-attack levels.

OPEC reports March shipments were down about 85,000 b/d from February due to extensive maintenance and other problems in Nigeria that cut exports there to the lowest in five years. Of more interest was the report that Russia failed to increase its oil production for the third month in a row and the first quarter production was down by one percent from a year earlier. Moscow, however, is still predicting that production will grow by 1.7 percent this year, well below the 11 percent increase in 2003. Russin pipeline exports to Europe recovered to 4.23 million b/d in March, but many believe the surge was in anticipation of forrthcoming export taxs and that Moscows exports will soon drop.

2. Electricity Shortages and Diesel

Stories of current and imminent shortages of electric power are becoming more frequent each day. A combination of inadequate rain for hydro power, unaffordable oil and coal for thermal power, and rapidly increasing demand is leaving country after country with inadequate power for national grids.

It is becoming apparent that one of the unforeseen consequences of globalization is that there is simply not enough power being produced in the world to run the flood of inexpensive electric consumer goods TVs, kitchen appliances, air conditioners -- that are pouring from the factories of Asia onto the world.

The increasingly frequent "rolling blackouts" that are appearing around the world unfortunately are killing "essential" systems water pumps, hospitals, banking computers, factories, TV stations, and telephone exchanges as well as the less-essential consumer devices.

While electric companies may eventually be able to make special arrangements to exempt organizations that are vital to the economy from blackouts, there are massive numbers of organizations around the world that are completely dependent on electricity to keep functioning. For these, the choice is generate their own electricity with their own generators or shut down.

What is developing is a new and potentially very large demand for gasoline and particularly diesel fuel as the national power grids fall further and further behind in their ability to keep up with demand for electricity. Higher prices and shortages are clearly in store as more and more Chinese-made small and medium sized electric generators come into service around the world.

3. Rice, Inflation and Oil

Rice prices increased by 50 percent in the last two weeks to an all-time high as importing countries scrambled to hold off social unrest by securing supplies from the few exporters still willing to sell. As the staple food for 3 billion people, 33 countries are facing unrest as the price of food and energy becomes unaffordable.

There are multiple reasons behind the sudden price increase ranging from weather-related poor harvests, hoarding, and world-wide inflationary pressures resulting from high energy costs to the financial crisis. Major rice exporters such as India, China, and Vietnam have already curtailed or stopped exports to hold down domestic prices.

Among the hardest hit countries so far have been Bangladesh, the Philippines, and Pakistan where millions now face seriously restricted diets.

Even rich oil states are facing problems. Nigeria is one of the worlds largest importers of rice and Kuwait is now shut off from the Indian rice that is the staple food for most of the 1.3 million foreigners working in the country. Even the Saudis have removed the import duties on imported food. In Pakistan 80 million people are estimated to be at risk of not receiving sufficient food.

This situation is too complex to foresee future developments. If it gets worse, widespread food riots could topple governments. If millions are faced with starvation, pressure to stop production of biofuels will increase. Leverage of food exporting nations in world affairs will increase.

4. Massachusetts Hosts a Meeting

Last week Chairman of the Committee on the Environment of the Massachusetts legislature hosted a meeting on Peak Oil. The standing-room-only meeting heard presentations from Dick Lawrence, co-founder of ASPO-USA; economist Roger Bezdek one of the co-authors of the Hirsch Report on Peak Oil; John Kaufman, member of the Portland (OR) Energy Task Force; and Sen. Bob Duff and Rep. Terry Backer from the Connecticut General Assembly.

The material covered in the presentations should be familiar to readers of this publication. The meetings purpose was to provide background for the establishment of a Peak Oil Caucus in the Massachusetts legislature. The US Congress and the Connecticut legislature already have caucuses and other states are close to establishing bodies or legislation to deal with peak oil.

There is clearly a massive educational job ahead. As one speaker at the meeting pointed out, peak oil has not yet made it into the Presidential campaign. The various energy plans that have been proposed are directed at lowering gasoline prices or have little appreciation for the urgency or seriousness of the problem.

5. Energy Briefs

(clips from recent Peak Oil News dailies are indicated by date and item #)

Shell CEO van der Veer said easy-to-produce oil and gas would likely peak in the next 10 years. Van der Veer said while depletion of maturing conventional resources would certainly play a key role in peak production, lack of access to remaining large reserves, such as in Saudi Arabia, was also a central component in his forecast. (4/2, #2)

Diesel shortages are appearing across China from southern Guangdong to the northern Tianjian. Long queues of trucks and cars stretching over one kilometer have appeared at some gas stations; and at one point, diesel was rationed to 300 yuan. (4/2, #8)

In South Africa, year-over-year mining production for January was down 10.7 percent owing largely to the electricity supply crisis that led to mine closures, with gold production in particular feeling the effects. (4/4, #3)

Aloha, ATA and Skybus airlines halted passenger service last week, casualties of fierce competition and rising fuel prices. (3/31, #17)

Ecuador wants to increase its participation in oil projects to more than 50 percent following contract negotiations with private firms. (4/4, #5)

A court-appointed expert in Ecuador has recommended that Chevron pay $7 billion to $16 billion if it loses a marathon lawsuit over oil-field contamination in the Amazon. (4/4/, #6)

Venezuelas lawmakers approved the first reading of a new tax on oil companies that will take as much as 60% of their gains from sudden increases in world oil prices. (4/4, #7)

ConocoPhillips said on Thursday its first-quarter oil and natural gas production, just below 1.8 million barrels/day, was down more than 2 percent from fourth-quarter levels, hurt by an unplanned shutdown of a natural gas processing plant. (4/4, #11)

BP America announced a new significant oil discovery at their Kodiak well in the deepwater Gulf of Mexico in 5000 feet of water. Further appraisal will be required to determine the size and commercial potential of the discovery. (4/4, #13)

In Alberta, TransAlta Corp., facing rising unease over greenhouse-gas emissions from their coal-fired generating plants, has announced a deal with Alstom to develop a large carbon capture and storage facility (4/4, #14)

India's Oil and Natural Gas Corp ONGC.BO plans to invest $450 million over three years in exploration and production at San Cristobal oilfield in Venezuela, a senior government official said on Saturday. (4/5, #6)

Indias oil imports increased to 2.48 million b/d in February, 8.1 percent more than a year earlier to meet a demand that surged 10.9 percent. (4/2, #11)

Pressure from the Kremlin on BP's joint venture in Russia, TNK-BP, may before long lead the British oil company to cede control to either Rosneft or Gazprom, the Russian stateowned energy companies. (4/5, #17)

Russia failed to grow its oil output for a third month in a row in March and closed the first quarter with a one percent production decline year-on-year. Energy Ministry data showed on March oil production edged down to 9.76 million barrels per day from 9.79 million bpd in February, and well below the post Soviet high of 9.93 million bpd reached in October last year. (4/3, #16)

Libya says it will review all future contracts with oil companies in a bid to reap more benefit for the country, a senior Libyan government official told Dow Jones Newswires. (4/1, #4)

The American Trucking Associations is calling for the return of a uniform national speed limit of 65 mph for all cars and trucks to help cope with the soaring price of diesel. (6/4, #21)

Europe's refineries are shutting around 900,000 barrels per day of capacity for maintenance in April, more than many expected at a time when diesel supply in Europe is running low. Even at 900,000 bpd, or about 5.5 percent of Europe's total capacity, the schedule is lighter than it was in April 2007, when well over 1 million bpd was shut.

US lawmakers scolded oil industry executives for booking huge profits on record gasoline prices while not investing more in renewable energy. Executives were asked to explain why they should not forfeit $18 billion in tax breaks after posting profits of $123 billion. (4/2, #6)

Oil peak theorist warns of chaos, war

2008-04-08T13:58:00.001-05:00

Veteran oil industry financier paints grim picture of resource scarcity, derailed global growth; others disagree

WASHINGTON -- Matt Simmons sounds the alarm like the Cassandra of the oil industry, warning that crude production has peaked and that looming energy shortages could derail global growth and even spark armed conflict.

As a prominent "peak oil" theorist, the veteran oil industry financier paints a grim picture of a world facing resource scarcity. Still, it doesn't take a "peak-ist" to conclude that the global oil producers will find it increasingly difficult to keep up with growing demand.

He squared off yesterday against other experts who argue that the world has yet to reach the physical limits of oil production. But while they disagreed on the extent of the problem, the panelists at a U.S. Department of Energy conference in Washington concurred that future crude production will be constrained by physical, economic and political factors that add up to tight markets and higher oil prices.

Despite oil prices that have topped $100 (U.S.) a barrel, there was little sense at yesterday's conference, put on by the Department of Energy's Energy Information Administration, that high prices would spark either a boost in oil output or a sharp fall in global demand.

Global demand for oil will continue to grow, analysts forecast, even as the developed world reduces consumption in the face of high prices and environmental concerns. Economic growth and rising living standards in developing countries like China, India and the Middle East will more than offset reduced energy consumption in the mature economies of North America and Europe.

The views of Mr. Simmons, who runs Houston-based Simmons & Assoc. investment bank, bordered on apocalyptic.

Oil shortages "could lead to social chaos and war," he warned. "The issue is the most serious risk to sustaining the 21st century. Peak oil is real, and we have to take it seriously." He argued that production of conventional crude peaked in May, 2005, at 74 million barrels a day.

Since then, the world has met rising consumption - now at about 88-million barrels a day - by cutting inventories, tapping natural gas liquids that typically are included in crude production figures and using better refinery efficiencies.

Peter Jackson, a director at the Cambridge Energy Research Assoc., said Mr. Simmons was overstating decline rates of existing fields, was not taking into account the prospect for new discoveries, and played down the importance of unconventional resources such as Canada's oil sands.

Still, he said the industry faced "above ground" problems that would make it difficult to keep production growing fast enough to meet rising demand. About 90 per cent of existing conventional reserves are controlled by state-owned oil companies, many of which are not investing enough in capacity expansion, he said.

At the same time, the industry worldwide has seen construction costs explode, even as oil companies are forced to exploit smaller, more remote and more geologically complex reserves. The average cost of producing a barrel of oil has more than doubled in the past eight years, with most of that increase occurring in the past four, he said.

James Schlesinger, who was the United States' first energy secretary 30 years ago during the oil shock of the late 1970s, warned of a new crisis looming.

That 1970s shock was the result of supply disruptions caused by the 1973 Arab embargo and then the Iranian revolution. The current runup in prices reflects a more fundamental disconnect between constrained supplies and rising demand in the developing world, he said.

"At some point during the decade immediately ahead, we will hit a plateau, and this will have a tremendous shock both economically and politically," Mr. Schlesinger said.

The writing on the wall

2008-04-07T12:06:00.003-05:00

Resource scarcity puts tremendous pressure on markets around the globe by forcing the relative value of currency used to trade these commodity resources lower. Or more simply put, inflation causes your money to be worth less as prices increase.

This basic tenet of economic behavior set me to researching methods to avoid losing my money's value as inflation builds. As many readers will already understand, I believe that the inflationary pressure from global peak production of oil and it's subsequent decline, will be the major factor which drives economic trends world-wide in the years to come. As conventional oil becomes ever more expensive because of depletion, not only will oil and it's refined components (Diesel gasoline etc...) become more & more expensive as time passes, but so will all those products & services which rely heavily on transport fuels.

So that's the puzzle... how to protect your money from this predatory inflation?

In my research I have explored various investment vehicles as potential candidates for sheltering money including of course, oil futures. And while I still feel that oil (& gas) futures are excellent investment opportunities for the long trade, leveraging the volatility of the markets during inflationary expansion & contraction seemed prudent. By investing a certain percentage of the total investment package on assets which can benefit from inflationary volatility, I could provide shelter for longer-term investments which might be vulnerable to those same inflationary pressures.

That's what finally brought me to the Foreign Currency investment market.

Because a disciplined forex trader can use this inflationary instability to earn money trading on the relative value of currency pairs, it makes perfect sense to leverage what I consider to be a virtual certainty... (oil which gets more expensive every year), in the same way that oil futures offer excellent prices for what I also believe will be... very expensive oil.

And that's how I found my forex broker.

I looked for someone who didn't mince words, & understood without being told the importance of being highly disciplined and not getting greedy investing in the forex markets. That's the trick to making forex work... a trader who will protect investors even if an opportunity opens up which might be even more profitable, but violates the pre-set stops beyond which the risk is simply too high.

I was right... this fund has a very healthy growth rate and is performing well.

There are always risks in investing of course, but a real forex trader with a large, established firm absorbs these losses over time with discipline in their trades, which compound quite nicely thank you.

Anyway, I'm happy to share my research and contacts with anyone interested.

Going to be on heck of a ride if you ask me.

Top 6 Most Traded Currencies

2008-04-07T11:33:00.001-05:00


Rank	Currency	ISO 4217 Code	Symbol
1	United States dollar	USD	$
2	euro	EUR	€
3	Japanese yen	JPY	¥
4	British pound sterling	GBP	£
5/6	Swiss franc	CHF	-
5/6	Australian dollar	AUD	$

How to Spot Forex Scammers

2008-04-07T11:27:00.001-05:00

From: U.S. Commodity Futures Trading Commission (CFTC)

COMMISSION ADVISORY

BEWARE OF

FOREIGN CURRENCY TRADING FRAUDS

Have you been solicited to trade foreign currency contracts (also known as "forex")?
If so, you need to know how to spot foreign currency trading frauds.

The United States Commodity Futures Trading Commission (CFTC), the federal agency that regulates commodity futures and options markets in the United States, warns consumers to take special care to protect themselves from the various kinds of frauds being perpetrated in today's financial markets, including those involving so-called "foreign currency trading."

A new federal law, the Commodity Futures Modernization Act of 2000, makes clear that the CFTC has the jurisdiction and authority to investigate and take legal action to close down a wide assortment of unregulated firms offering or selling foreign currency futures and options contracts to the general public. In addition, the CFTC has jurisdiction to investigate and prosecute foreign currency fraud occurring in its registered firms and their affiliates.

The CFTC has witnessed the increasing numbers and growing complexity of financial investment opportunities in recent years, including a sharp rise in foreign currency trading scams. While much foreign currency trading is legitimate, various forms of foreign currency trading have been touted in recent years to defraud members of the public.

Currency trading scams often attract customers through advertisements in local newspapers, radio promotions or attractive Internet sites. These advertisements may tout high-return, low-risk investment opportunities in foreign currency trading, or even highly-paid currency-trading employment opportunities. The CFTC urges you to be skeptical when promoters of foreign currency trading claim that their services or account management will earn high profits with minimal risks, or that employment as a currency trader will make you wealthy quickly.

Understanding Legitimate Foreign Currency Operations

Generally speaking, foreign currency futures and options contracts may be traded legally on an exchange or board of trade that has been approved by the CFTC.

Even where currency trading does not occur on a Commission-approved exchange or board of trade, the trading can be conducted legally where, generally speaking, one or both parties to the trading is (or is a regulated affiliate of) a bank, insurance company, registered securities broker-dealer, futures commission merchant or other financial institution, or is an individual or entity with a high net worth.

Where forex firms do not fall into the categories of regulated entities outlined above and engage in foreign currency futures and options transactions with or for retail customers who do not have high net worths, the CFTC has jurisdiction over those firms and their transactions.

Warning Signs of Fraud

If you are solicited by a company that claims to trade foreign currencies and asks you to commit funds for those purposes, you should be very careful. Watch for the warning signs listed below, and take the following precautions before placing your funds with any currency trading company.

1. Stay Away From Opportunities That Sound Too Good to Be True

Get-rich-quick schemes, including those involving foreign currency trading, tend to be frauds.

Always remember that there is no such thing as a "free lunch." Be especially cautious if you have acquired a large sum of cash recently and are looking for a safe investment vehicle. In particular, retirees with access to their retirement funds may be attractive targets for fraudulent operators. Getting your money back once it is gone can be difficult or impossible.

2. Avoid Any Company that Predicts or Guarantees Large Profits

Be extremely wary of companies that guarantee profits, or that tout extremely high performance. In many cases, those claims are false.

The following are examples of statements that either are or most likely are fraudulent:

"Whether the market moves up or down, in the currency market you will make a profit."
"Make $1000 per week, every week"
"We are out-performing 90% of domestic investments."
"The main advantage of the forex markets is that there is no bear market."
"We guarantee you will make at least a 30-40% rate of return within two months."

3. Stay Away From Companies That Promise Little or No Financial Risk

Be suspicious of companies that downplay risks or state that written risk disclosure statements are routine formalities imposed by the government.

The currency futures and options markets are volatile and contain substantial risks for unsophisticated customers. The currency futures and options markets are not the place to put any funds that you cannot afford to lose. For example, retirement funds should not be used for currency trading. You can lose most or all of those funds very quickly trading foreign currency futures or options contracts. Therefore, beware of companies that make the following types of statements:

"With a $10,000 deposit, the maximum you can lose is $200 to $250 per day."
"We promise to recover any losses you have."
"Your investment is secure."

4. Don't Trade on Margin Unless You Understand What It Means

Margin trading can make you responsible for losses that greatly exceed the dollar amount you deposited.

Many currency traders ask customers to give them money, which they sometimes refer to as "margin," often sums in the range of $1,000 to $5,000. However, those amounts, which are relatively small in the currency markets, actually control far larger dollar amounts of trading, a fact that often is poorly explained to customers.

Don't trade on margin unless you fully understand what you are doing and are prepared to accept losses that exceed the margin amounts you paid.

5. Question Firms That Claim To Trade in the "Interbank Market"

Be wary of firms that claim that you can or should trade in the "interbank market," or that they will do so on your behalf.

Unregulated, fraudulent currency trading firms often tell retail customers that their funds are traded in the "interbank market," where good prices can be obtained. Firms that trade currencies in the interbank market, however, are most likely to be banks, investment banks and large corporations, since the term "interbank market" refers simply to a loose network of currency transactions negotiated between financial institutions and other large companies.

6. Be Wary of Sending or Transferring Cash on the Internet, By Mail or Otherwise

Be especially alert to the dangers of trading on-line; it is very easy to transfer funds on-line, but often can be impossible to get a refund.

It costs an Internet advertiser just pennies per day to reach a potential audience of millions of persons, and phony currency trading firms have seized upon the Internet as an inexpensive and effective way of reaching a large pool of potential customers.

Many companies offering currency trading on-line are not located within the United States and may not display an address or any other information identifying their nationality on their Web site. Be aware that if you transfer funds to those foreign firms, it may be very difficult or impossible to recover your funds.

7. Currency Scams Often Target Members of Ethnic Minorities

Some currency trading scams target potential customers in ethnic communities, particularly persons in the Russian, Chinese and Indian immigrant communities, through advertisements in ethnic newspapers and television "infomercials."

Sometimes those advertisements offer so-called "job opportunities" for "account executives" to trade foreign currencies. Be aware that "account executives" that are hired might be expected to use their own money for currency trading, as well as to recruit their family and friends to do likewise. What appears to be a promising job opportunity often is another way many of these companies lure customers into parting with their cash.

8. Be Sure You Get the Company's Performance Track Record

Get as much information as possible about the firm's or individual's performance record on behalf of other clients. You should be aware, however, that It may be difficult or impossible to do so, or to verify the information you receive. While firms and individuals are not required to provide this information, you should be wary of any person who is not willing to do so or who provides you with incomplete information. However, keep in mind, even if you do receive a glossy brochure or sophisticated-looking charts, that the information they contain might be false.

9. Don't Deal With Anyone Who Won't Give You Their Background

Plan to do a lot of checking of any information you receive to be sure that the company is and does exactly what it says.

Get the background of the persons running or promoting the company, if possible. Do not rely solely on oral statements or promises from the firm's employees. Ask for all information in written form.

If you cannot satisfy yourself that the persons with whom you are dealing are completely legitimate and above-board, the wisest course of action is to avoid trading foreign currencies through those companies.

10. Warning Signs Of Commodity "Come-Ons"

If you are solicited by a company to purchase commodities, watch for the warning signs listed below:

Avoid any company that predicts or guarantees large profits with little or no financial risk.
Be wary of high-pressure tactics to convince you to send or transfer cash immediately to the firm, via overnight delivery companies, the internet, by mail, or otherwise.
Be skeptical about unsolicited phone calls about investments from offshore salespersons or companies with which you are unfamiliar.
Prior to purchasing:
- Contact the CFTC.
- Visit the CFTC's forex fraud web page.
- Contact the National Futures Association to see whether the company is registered with the CFTC or is a members of the National Futures Association (NFA). You can do this easily by calling the NFA (800-621-3570 or 800-676-4NFA) or by checking the NFA's registration and membership information on its website at www.nfa.futures.org/basicnet/. While registration may not be required, you might want to confirm the status and disciplinary record of a particular company or salesperson.
- Get in touch with other authorities, including your state's securities commissioner (www.nasaa.org), Attorney General's consumer protection bureau (www.naag.org/), the Better Business Bureau (www.bbb.org) and the National Futures Association (www.nfa.futures.org).
- Be sure you get all information about the company and verify that data, if possible. If you can, check the company's materials with someone whose financial advice you trust.
- Learn all possible information about fees charged, and the basis for each of these charges.
- If in doubt, don't invest. If you can't get solid information about the company, the salesperson, and the investment, you may not want to risk your money.

11. More Information and Contacts

Questions concerning this advisory may be addressed to the CFTC's Office of Public Affairs at (202) 418-5080.

Commodity Futures Trading Commission
Three LaFayette Centre
1155 21^st Street, N.W.
Washington, D.C. 20581

The Commodity Futures Modernization Act is available in our Law and Regulation page.
(requires an Adobe Acrobat reader, which can be downloaded for free from www.adobe.com and numerous other sites on the Internet)

For other consumer advisories concerning possible fraudulent activity in the commodity futures and options industry, click on the Customer Protection page.
Contact the National Fraud Information Center (www.fraud.org).

The CFTC's website also offers general information about trading in the commodity futures and options markets. You may wish to visit our Before You Trade page.

To find out whether firms or counterparties with whom you plan to trade are registered or regulated institutions or entities that are outside the CFTC's jurisdiction, you can check the lists of regulated institutions on the following websites. Some institutions outside the CFTC's jurisdiction do not appear on any of these lists or in other readily-available places:
- Federal Reserve Board (www.federalreserve.gov)
- Federal Financial Institutions Examination Council (www.ffiec.gov)
- Federal Deposit Insurance Corporation (www.fdic.gov)
- U.S. Securities and Exchange Commission (www.sec.gov)
- The Office of the Comptroller of the Currency (www.occ.treas.gov)
- Office of Thrift Supervision (www.ots.treas.gov)
- National Credit Union Association (www.ncua.gov)
- National Association of Securities Dealers Regulation, Inc. (www.nasdr.com)
- All U.S. Government web sites can be located through links at www.firstgov.gov
- Your state Attorney General's office and state banking, insurance and securities regulators (which often have their own web sites).

Wiki on Forex

2008-03-19T17:07:00.001-05:00

The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets currently is over US$ 3 trillion.^[1]

More

And what rough beast, its hour come round at last...

2007-06-12T14:29:00.000-05:00

China poured a gigaton (billion tons) of concrete last year & is building 500 coal-fired power plants (many unlicensed with no scrubbing at all). You cannot legislate intent.

Can you say Jevon?

I knew you could... Your dog wants chopsticks.

Quote:

BEIJING (Reuters) - Nearly two-thirds of Chinese cities suffered from air pollution last year and had no centralized sewage treatment facilities, state media reported on Tuesday. Only 37.6 percent of 585 cities surveyed had air quality "indicating a clean and healthy environment," down 7.3 percentage points from 2005, the China Daily said, citing a report by the State Environmental Protection Agency (SEPA). Thirty-nine cities, many scattered across the northern coal-rich province of Shanxi and China's northeastern rustbelt province of Liaoning, suffered "severe" air pollution, the paper said.

linky

Common Sense

2007-06-12T06:03:00.000-05:00

The USGS, CERA - Lynch, Yergin etc... all contend that oil discovery is going to follow that green line in this graph. That's the basis for them predicting Peak Oil at 2030 or later.

Now I understand that most of you are not Petrologists, (although of course some of you are), but do you really need to be to question the wisdom of this prediction?

Does anybody really still believe that oil discovery is going to magically reverse it's 40 year trend, & rebound to new heights as this graph implies?

It seems impossible to me that any reasonable person could actually believe such nonsense, so I conclude that they in fact, do not actually believe it, despite their public commentary.

Of course that's just my opinion... I could be wrong.

http://www.peakoil.com/fortopic28623.html+repeating

daileymail.co.uk (Censoring the News?)

2007-05-14T08:37:00.000-05:00

Well, well, well...

Yesterday sure was a banner day for free speech & human dignity.

At least @ daileymail.co.uk it was.

They ran the following story early yesterday US time, then quickly removed it from their website. Ok... fair enough... they pulled an OP ED.... fine.

But I posted a question asking why the story was pulled on their public forum... & my question was pulled as well!

Again, it's their forum, & they can pull whatever they choose.

But deleting a question about a story they ran, smacks of coercion, in my opinion.

Even if BP officials didn't ask daileymail.co.uk to remove the story, removing my question about it seems a little unreasonable to me. Won't people assume they did it because BP told them to?

Surely some PR guy reading this @ BP today realizes how this must appear to the world.

Now I wouldn't like having a story like this published about me of course, so I understand their consternation, but then again I'm not out there doing sick, twisted weirdo stuff either so...

The biggest error daileymail.co.uk has made in this fiasco is not understanding the nature of today's web technology enough to realize that you can't put the genie back in the bottle... once he's out... that's it.

I'll happily remove this article from this website if they ask me to... but that won't wash with Prisonplanet.com or Google's Cache for that matter.

It's out there, & I'm afraid the time to reconsider publishing it, was yesterday morning.

All that aside, if this article is correct... some of you BP folks are very naughty people.

You guys are rich for God's sake. There are literally millions of American women who will sport-fuck you on request.

What the hell are you thinking?

Anyway, as always, let the reader decide what's what.

I'm just another voice in the blogosphere...

BP executives working for Lord Browne spent millions of pounds on
champagne-fuelled sex parties to help secure lucrative international oil
contracts. The company also worked with MI6 to help bring about changes in
foreign governments, according to an astonishing account of life inside the oil
giant. Les Abrahams, who led BP's successful bid for a multi-million-pound deal
with one of the former Soviet republics, today claims that Browne - who was
forced to resign as chief executive last month after the collapse of legal
proceedings against The Mail on Sunday - presided over an "anything goes" regime
of sexual licence, spying and financial sweeteners. High life: Mr Abrahams,
left, and another BP executive not linked to any impropriety with local girls in
Azerbaijan He also claims that Home Secretary John Reid was arrested at gunpoint
on a BP-funded foreign trip for being out on the streets after a military curfew
had been imposed. Mr Abrahams tells how he spent £45 million in expenses over
just four months of negotiations with Azerbaijan's state oil company. Armed with
a no-limit company credit card, he ordered supplies of champagne and caviar to
be flown on company jets into the boomtown capital, Baku, to be consumed at the
"sex parties". Ex-BP boss Lord Browne The hospitality continued in London, where
prostitutes were hired on the BP credit card to entertain visiting Azerbaijanis.
Mr Abrahams, an engineer by training, joined BP in 1991, just as the
disintegration of the Soviet Union had triggered a "new gold rush" by oil
multi-nationals seeking a share of the 200 billion barrels of oil reserves
beneath the Caspian Sea. While employed by BP, Mr Abrahams says he was persuaded
to work for MI6 by John Scarlett, now head of the service but then its head of
station in Moscow. He says he was passing information to Scarlett in faxes and
at one-to-one meetings in the Russian capital. He also claims that BP was
working closely with MI6 at the highest levels to help it to win business in the
region and influence the political complexion of governments. Mr Abrahams worked
for BP's XFI unit - Exploring Frontiers International - which specialises in
opening new markets in often unstable parts of the world. He said Lord Browne,
then BP's head of exploration, allocated a budget of £45 million to cover the
first year's costs of the Baku operation. "The order came from Browne's aides to
'get them anything they want'. "By 'them', they meant local officials in
Azerbaijan," Mr Abrahams said. "There were 20 or 30 people working on it at BP
head office, and we soon had a steady stream of executives coming over as
negotiators. We got through the money in just four months - after which it was
simply increased without question." He described a Wild West world in which oil
executives with briefcases full of dollars rubbed shoulders with mafia members,
prostitutes and fixers and cut their deals in smoke-filled back rooms. "The BP
officials would come out to Baku in groups of five or six, every week," he said.
"Sometimes I would charter an entire Boeing 757 to carry as few as seven staff.
Their main base was the hard currency bar of the old Intourist hotel - so named
because it accepted only dollars and was only open to foreigners. "It was full
of prostitutes and many of us, including me, used them on a regular basis,
although we quickly established they all worked for the KGB. "If we went back to
the rooms, not only were they bugged, but the girls would quiz us closely about
what we were doing and where we were going, and reported straight back to their
handlers. "Everywhere was bugged, and all the phones were tapped. One of our
executives was recorded saying unflattering things about the president, and his
comments were played back to us in a meeting with local state oil company
officials. "We were then told clearly that he was no longer welcome in the
country." Mr Abrahams helped to forge links with the local officials by throwing
lavish parties. He said the Azerbaijani girls who worked in the BP office, which
occupied a floor of the Sovietskaya hotel, would attend the parties and
routinely provide "sexual favours". They were also presumed to work for the
local intelligence services. "There was one girl, called Natasha, assigned to
teach us Russian, but it usually ended up as more that that. She would use the
intimate opportunity to ask us questions about what we were up to. "Caviar and
champagne were consumed at the parties, which would start in the bars but
inevitably end with the girls in the rooms. "We had a company American Express
card with no name on it which we could use to draw out $10,000 a time to pay for
entertaining without ever having to account for it. "Our local fixer was called
'Zulfie', who would help find girls, drink and occasionally hashish. We always
suspected he worked for the KGB, because he was so well connected. "A lot of the
BP men's marriages went wrong. Either they ended up with the local girls, or the
wives would find out - often because the girls would ring their home numbers "by
accident". "I don't believe that Browne didn't know everything that was going
on. He came out to Baku on five or six occasions." Mr Abrahams, who left BP in
1994, said his first marriage buckled because of his work in Baku. He has since
remarried and lives in West London with his new wife Lana and six-year-old
daughter Anastasia. He now works as an adviser to the EU. He said BP applied the
same laissez-faire attitude to hospitality when Azerbaijani officials came to
the UK during the negotiations. "I was given a hotline number which connected to
a desk in the Foreign Office. It meant visas could be granted instantly for the
Azerbaijanis and collected on arrival at the airport, rather than taking the
usual several weeks. "We had bundles of cash to spend on them when they got
here, and could again use the corporate card without restraint. "We would
typically have a dinner at which Lord Browne would be present, then he would go
home and we would head off to somewhere like the Gaslight Club in Piccadilly -
where girls would dance topless and you would get charged £250 for your drink.
"Our guests would usually want girls to go back with afterwards. Sometimes we
could persuade the girls in the clubs, but more often we would just phone up an
escort agency. "We could charge them straight to the BP Amex card. But it
sometimes became problematic. One group of Khazak Oil officials stripped their
hotel rooms in Aberdeen bare, including the sheets and pillowcases, and they
would usually clear out the minibars wherever they were staying." All the
entertaining paid off in September 1992 when BP signed a £300 million deal to
exploit the Shah Deniz oilfields. Mr Abrahams says that a key factor in securing
the deal was an £8 million payment BP made that year to SOCAR, the state-owned
oil company in Azerbaijan, for the right to use a construction yard on the edge
of the Caspian Sea. "It was effectively a sweetener to help to secure the deal -
and it worked," he said. Among the guests at a dinner and ceremony at Baku's
Gulistan Palace to celebrate the Shah Deniz deal were Lord Browne and Baroness
Thatcher. Mr Abrahams says he was told to ensure that everything ran smoothly
for the event, including meeting Browne's fastidious requirements. "I had his
favourite brand of water, Hildon, and his preferred foods flown out in advance,
and I made sure money was paid for police escorts and to circumvent immigration
procedures at the airport for Browne and his entourage. "That evening, he
personally handed me a briefcase containing a cheque for $30 million
(£15million), to close the deal. "He was so keen to wear a particular shirt,
which he had left at the airport, that I persuaded the chief of police to close
off the roads so his cavalcade could go via the airport to collect it." In 1993,
Mr Abrahams played host to a group of MPs who visited Baku as guests of BP,
including Harold Elletson - then a Tory MP but now an adviser to the Liberal
Democrats - and Home Secretary John Reid, a Shadow Defence Minister at the time.
"John flew out in the BP Gulfstream jet," he recalls. "After dinner, we went
drinking in the hard currency bar. He was drinking a lot - this was a year
before he gave up for good - and I grew worried as it got closer to the time of
the curfew imposed because of the tense political situation at the time. "I
said, 'Come on John, we have to get back to the hotel.' But as we left, he was
swaying around and being very noisy. "I urged him not to draw attention to us
because we weren't meant to be still on the streets. But then a van load of
police armed with Kalashnikovs pulled up and asked us what we were doing. "He
said, 'I am a British politician...' I urged him to be quiet, but then he said
to one of the policemen, 'If you don't take that f***ing Kalashnikov out of my
face I'm going to stick it up your f***ing a***.' "With that, we were arrested
and shoved at gunpoint into the back of the van. "It was only after I persuaded
the driver to go to the hotel to speak to the intelligence officer there that
they released us. John had only about two hours' sleep, then was up at 5.30am to
fly to the nearby war zone of Nagorno Karabakh. He was completely hung over."
Some of Mr Abrahams' most intriguing claims surround the alleged co-operation
between BP and the British intelligence services to secure a more pro-Western,
pro-business regime in the country. He says the operation, masterminded by
Scarlett in Moscow, contributed to the coup in May 1992 which saw President Ayaz
Mutalibov toppled by Abulfaz Elchibey, and then to a second change a year later
which saw Haydar Aliyev take power. Just months after Aliyev was installed, BP
signed the so-called 'contract of the century', a £5 billion deal which placed
BP at the head of an oil exporting consortium. John Scarlett, says Mr Abrahams,
"approached me very subtly and asked me to help to gather information for him.
"Because my daily route to the construction yard passed the supply routes for
Nagorno Karabakh, he asked me to report on troop and weapons movements. And BP's
deputy representative in Russia seemed very close to the embassy, too. "BP
supported both coups, both through discreet moves and open political support.
Our progress on the oil contracts improved considerably after the coups."
Subsequently released Turkish secret service documents claimed BP had discussed
an 'arms for oil' deal with the assistance of MI6, under which the company would
use intermediaries to supply weapons to Aliyev's supporters in return for the
contract. When the documents emerged in 2000, BP denied supplying arms -
although sources admitted its representatives had "discussed the possibility". A
BP spokesman said last night of Mr Abrahams' claims: "There are some facts in
his account that are accurate, but we don't recognise most of it. We regard it
as fantasy." A spokeswoman for John Reid said she had no comment and the Foreign
Office said of Mr Abrahams' claims: "We neither confirm nor deny anyone's
allegations in relation to intelligence matters."
Yuk...

Oil Alternatives Aren't

2007-05-10T05:43:00.000-05:00

Why?
Because if any known energy sources compared favorably with convention oil, or even equalled oil's qualities as an energy source, we would see massive implementations of these technologies today. It's what the cornucopians are always saying... the market is the most efficient way to bring new technology "online".

I agree completely.

If it's potentially profitable, business pursues it. Legal or not... many businesses accept incredible barriers to entry as part of the normal operating cost of doing business in pursuit of profits. Even risking death in many cases. If these alternatives were profitable, we would see aggressive, large-scale efforts from companies to enter these markets. But we don't see this. Investments in oil alternative technologies have risen dramatically as the price of oil has soared in recent years, but remain a tiny portion of total energy spending.

This demonstrates nicely that conventional oil will need to be more expensive before alternatives will become truly competitive... much more expensive.

Which is, of course, the whole point.

So we are again left with Occam's Razor.

What's more likely?

Some conspiracy of influence has artificially squashed oil alternative technologies & made them non-competitive?

or

None are actually competitive?

Arguments about advanced technical solutions always fail to understand the basic issue. Name any oil alternative tech you can think of... then compare it Prima Facia with pokin a straw into the ground. Pokin holes into a pressurized fuel-tank (Oil Well), is a safe, simple way to produce tons of useful, profitable energy.

How expensive does oil need to be for these alternatives to be as profitable as oil? And more importantly, why would you consider that an "alternative'?

If you replace an energy source with a better one... that's progress.
If you replace an energy source with a worse one... that's desperation.
If you replace an energy source with one of equal quality... that's an alternative.

Even worse is the direct & indirect subsidy oil provides to all these alternatives, which skews the perception of how valuable a given alternative is.

Sorry techno-fixers... No soup for you.

Love Cats?

2007-04-29T19:37:00.000-05:00

The funnist Cat Pics you will see.

Intended to Mislead? (NYT)

2007-04-24T06:30:00.000-05:00

“It’s the fifth time to my count that we’ve gone through a period when it
seemed the end of oil was near and people were talking about the exhaustion of
resources,” said Daniel Yergin, the chairman of Cambridge Energy and author of a Pulitzer Prize-winning history of oil, who cited similar concerns in the 1880s, after
both world wars and in the 1970s. “Back then we were going to fly off the oil
mountain. Instead we had a boom and oil went to $10 instead of $100.”
http://www.nytimes.com/2007/03/05/business/05oil1.html?ex=1330750800en=0aad823a36df489fei=5088partner=rssnytemc=rss
In my opinion this isn't journalism... it's an obvious & embarrassing attempt to obscure the truth in pursuit of short-term profits.
The argument over when peak oil occurs is a legitimate question which is by no means resolved.
But repeating the "End of Oil" red-herring, seems to intentionally misstate the peak oil argument.
Mike, CERA, Yergin & The NYT Staff listen up.
Peak Oil is about the mid-point of global oil production... NOT about running out of oil.
All four are well aware of this fact... especially Mr. Lynch, since he is a peakoil.com member, with hundreds of posts to date.
In my opinion Mr. Lynch, CERA, Yergin & the NYT's intentionally use this false description to deceive their readers into dismissing peak oil as a serious concern.
I am continually amazed that the NYT's & others allow these kinds of disingenuous statements to embarrass them publicly.
Arguments about URR and when the production mid-point occurs are valid & at the core of meaningful arguments concerning hydrocarbon depletion...
But republishing the "End of Oil" idea seems to be a "straw-man" argument specifically included to obscure the topic.
And is therefore not only quite lame, but seems like a self-serving, disinformation campaign specifically designed to separate you from your money.
Yergin seems to be a corporate puppet who's opinions are for sale to the highest bidder.
Same appearance for Lynch.
While both may indeed have valuable observations to make concerning our energy future, the "End of Oil" straw-man tactic discredits anything else they may say or publish.
How can you trust a source which knowingly misrepresents the facts?
Simple... you can't.
Shame on all of you for this apparent continued tactic.
Your mom's would not approve.
Greed is an ugly thing... so is lying to exploit others.
We will all pay for the kind of hubris we see here... & the cost will be measured in our children's blood & tears.
I'd wish people like this would burn in hell... but that's awfully unfair to the folks already there.
At least that's my opinion, of what seems to be, an allegedly intentional tactic, to lie for profit... apparently... in my opinion.
Seems...

April 18 Rice University

2007-04-04T09:05:00.000-05:00

CleanHouston is hosting a screening for End of Suburbia @ Rice University in Houston Texas.

Date: Wednesday, April 18, 2007 @ 7pm- 9pm Location: Rice Media Center, Rice University, 6100 Main St. , Houston, TX 77006 (Rice Cinema is located on the Rice University campus, inside of Entrance No. 8 University Blvd. at Stockton Dr., 2nd building on the right hand side. )

So if you are in the area please stop in & join your fellow Peakers for an evening of Hydrocarbon Depletion discussions.

Yours truly will be speaking briefly & holding a Q&A session after the film.

But don't let that keep you from coming... :)

Corporate Disinformation Trolling on the Rise

2007-03-24T09:37:00.000-05:00

Anecdotal evidence is generally speaking a poor measure of reality, since it involves extrapolating from individual pieces of evidence.

That said, here's my anecdotal observation. Peakoil.com seems to be the target of an increased corporate troll presence.

As part of our normal procedures we "look the other way" & tolerate a certain level of this kind of posting. It's impossible to eliminate anyway, & often has the opposite effect than was intended by the troller. But lately, we have been seeing a rash of these disinformation posts & so it hit my radar.

Now I can't share with you specifically how I know who's trolling & who's just misinformed... or where these messages originate. But I can tell you that some of these folks use some pretty elaborate techniques to prevent techs like me from tracing them.

Newsflash... I'm better at this than you are... (Anon proxy all you like... not how I'm finding you anyway. MAC Spoofers should beware though)

Anyway, I just thought it was interesting & wanted to share my observations with the community.

It's kinda funny, in a deadly serious sort of way, & is the biggest compliment I can think of to bestow on the Peak Oil movement. I promise not to do any tech evil against your trolling butts... but I'm just a guy & don't speak for the entire community. Lota pissed-off folks out there ya know?

What really amazes me is that these people don't seem to realize that the Peak Oil message puts the energy industry at the front of the line & all but guarantees massive profits for these companies... for a while anyway.

Troll on morons... troll on.

http://www.peakoil.com/fortopic27597.html

Our Energy Challenge

2007-03-22T09:41:00.000-05:00

I had the distinct honor of spending time with the late Dr. Richard Smalley at his office on Rice University's campus in 2004 (Bad Audio Recording of Interview). Smalley & his team are credited with discovering Bucky Balls & Nano Tubes, for which he won the Nobel Prize in Physics.

The linked video is a presentation he gave which outlines his understanding of the challenges we face as humanity journeys into this strange new world of the future.

Basically he says that Man's biggest problem is our energy profile, & how we will meet the demands of future generations. He speculates that the difficulties expected as conventional oil peaks in production & begins declining could be met by harvesting the Terra watts of energy which fall on our Planet everyday... if only we understood the science behind this energy in greater detail.

His argument is that our technologies are so inefficient, that all of our planet's energy needs could be met through harvesting sunlight by reclaiming this wasted energy.

The central difficulty is our ability to control materials at the micron-level.

Without the technology to manufacture to this micron standard, we lose most of the energy we harvest to the inefficient nature of how the materials conduct & distribute this energy.

Dr. Smalley noted that we still use the same technology to transmit electricity as we have for 150 years... & it's terribly inefficient as a carrier. Around half the electric power we generate from any source is wasted in "leakage" from these poorly constructed materials. (Copper wire)

But if we could figure out how to manipulate these materials, we could build new systems which would be many times more efficient than today's materials.

There is plenty of primary science which lays ahead of such developments, with no clear guarantee of success. But this line of research may well represent our best hope of meeting our energy challenge.

So without further adieu, take a peek at Dr. Smalley as he explains his thoughts about our future.

* We miss you sir.

http://128.42.10.107/media/Smalley_OEF_20031101_300k.wmv

Shooting an Elephant

2007-03-20T08:22:00.000-05:00

The man whose work inspired the recent Billary 1984 video wrote the following short story which speaks directly to our "modern" social condition.

It's about his favorite topic... groupthink.

What's most interesting of course, is the fact that we don't yet know who produced the controversial video which simultaneously makes Billary look like Hitler, & makes Obamma look like a Dyed-in-the-wool, gun-toting, tin-foil hat wearin freak for making the video.

Now who could possibly have a motive for slamming both these Democratic frontrunner's for the 08 Presidential election?

Inquiring minds want to know... & so do I.

That said, take a journey into the real world with Mr. Blair, where you have no real choice or free will, & your decisions are provided to you... by the mob.

George Orwell 1936

In Moulmein, in lower Burma, I was hated by large numbers of people – the only time in my life that I have been important enough for this to happen to me. I was sub-divisional police officer of the town, and in an aimless, petty kind of way anti-European feeling was very bitter. No one had the guts to raise a riot, but if a European woman went through the bazaars alone somebody would probably spit betel juice over her dress. As a police officer I was an obvious target and was baited whenever it seemed safe to do so. When a nimble Burman tripped me up on the football field and the referee (another Burman) looked the other way, the crowd yelled with hideous laughter.

This happened more than once. In the end the sneering yellow faces of young men that met me everywhere, the insults hooted after me when I was at a safe distance, got badly on my nerves. The young Buddhist priests were the worst of all. There were several thousands of them in the town and none of them seemed to have anything to do except stand on street corners and jeer at Europeans.All this was perplexing and upsetting. For at that time I had already made up my mind that imperialism was an evil thing and the sooner I chucked up my job and got out of it the better.

Theoretically – and secretly, of course – I was all for the Burmese and all against their oppressors, the British. As for the job I was doing, I hated it more bitterly than I can perhaps make clear. In a job like that you see the dirty work of Empire at close quarters. The wretched prisoners huddling in the stinking cages of the lock-ups, the grey, cowed faces of the long-term convicts, the scarred buttocks of the men who had been Bogged with bamboos – all these oppressed me with an intolerable sense of guilt. But I could get nothing into perspective. I was young and ill-educated and I had had to think out my problems in the utter silence that is imposed on every Englishman in the East. I did not even know that the British Empire is dying, still less did I know that it is a great deal better than the younger empires that are going to supplant it.

All I knew was that I was stuck between my hatred of the empire I served and my rage against the evil-spirited little beasts who tried to make my job impossible. With one part of my mind I thought of the British Raj as an unbreakable tyranny, as something clamped down, in saecula saeculorum, upon the will of prostrate peoples; with another part I thought that the greatest joy in the world would be to drive a bayonet into a Buddhist priest's guts. Feelings like these are the normal by-products of imperialism; ask any Anglo-Indian official, if you can catch him off duty.One day something happened which in a roundabout way was enlightening. It was a tiny incident in itself, but it gave me a better glimpse than I had had before of the real nature of imperialism – the real motives for which despotic governments act.

Early one morning the sub-inspector at a police station the other end of the town rang me up on the phone and said that an elephant was ravaging the bazaar. Would I please come and do something about it? I did not know what I could do, but I wanted to see what was happening and I got on to a pony and started out. I took my rifle, an old 44 Winchester and much too small to kill an elephant, but I thought the noise might be useful in terrorem. Various Burmans stopped me on the way and told me about the elephant's doings.

It was not, of course, a wild elephant, but a tame one which had gone "must." It had been chained up, as tame elephants always are when their attack of "must" is due, but on the previous night it had broken its chain and escaped. Its mahout, the only person who could manage it when it was in that state, had set out in pursuit, but had taken the wrong direction and was now twelve hours' journey away, and in the morning the elephant had suddenly reappeared in the town.

The Burmese population had no weapons and were quite helpless against it. It had already destroyed somebody's bamboo hut, killed a cow and raided some fruit-stalls and devoured the stock; also it had met the municipal rubbish van and, when the driver jumped out and took to his heels, had turned the van over and inflicted violences upon it.

The Burmese sub-inspector and some Indian constables were waiting for me in the quarter where the elephant had been seen. It was a very poor quarter, a labyrinth of squalid bamboo huts, thatched with palmleaf, winding all over a steep hillside. I remember that it was a cloudy, stuffy morning at the beginning of the rains. We began questioning the people as to where the elephant had gone and, as usual, failed to get any definite information.

That is invariably the case in the East; a story always sounds clear enough at a distance, but the nearer you get to the scene of events the vaguer it becomes. Some of the people said that the elephant had gone in one direction, some said that he had gone in another, some professed not even to have heard of any elephant. I had almost made up my mind that the whole story was a pack of lies, when we heard yells a little distance away.

There was a loud, scandalized cry of "Go away, child! Go away this instant!" and an old woman with a switch in her hand came round the corner of a hut, violently shooing away a crowd of naked children. Some more women followed, clicking their tongues and exclaiming; evidently there was something that the children ought not to have seen.

I rounded the hut and saw a man's dead body sprawling in the mud. He was an Indian, a black Dravidian coolie, almost naked, and he could not have been dead many minutes. The people said that the elephant had come suddenly upon him round the corner of the hut, caught him with its trunk, put its foot on his back and ground him into the earth.

This was the rainy season and the ground was soft, and his face had scored a trench a foot deep and a couple of yards long. He was lying on his belly with arms crucified and head sharply twisted to one side. His face was coated with mud, the eyes wide open, the teeth bared and grinning with an expression of unendurable agony. (Never tell me, by the way, that the dead look peaceful. Most of the corpses I have seen looked devilish.) The friction of the great beast's foot had stripped the skin from his back as neatly as one skins a rabbit. As soon as I saw the dead man I sent an orderly to a friend's house nearby to borrow an elephant rifle.

I had already sent back the pony, not wanting it to go mad with fright and throw me if it smelt the elephant.The orderly came back in a few minutes with a rifle and five cartridges, and meanwhile some Burmans had arrived and told us that the elephant was in the paddy fields below, only a few hundred yards away.

As I started forward practically the whole population of the quarter flocked out of the houses and followed me. They had seen the rifle and were all shouting excitedly that I was going to shoot the elephant. They had not shown much interest in the elephant when he was merely ravaging their homes, but it was different now that he was going to be shot. It was a bit of fun to them, as it would be to an English crowd; besides they wanted the meat. It made me vaguely uneasy.

I had no intention of shooting the elephant – I had merely sent for the rifle to defend myself if necessary – and it is always unnerving to have a crowd following you. I marched down the hill, looking and feeling a fool, with the rifle over my shoulder and an ever-growing army of people jostling at my heels. At the bottom, when you got away from the huts, there was a metalled road and beyond that a miry waste of paddy fields a thousand yards across, not yet ploughed but soggy from the first rains and dotted with coarse grass.

The elephant was standing eight yards from the road, his left side towards us. He took not the slightest notice of the crowd's approach. He was tearing up bunches of grass, beating them against his knees to clean them and stuffing them into his mouth.I had halted on the road. As soon as I saw the elephant I knew with perfect certainty that I ought not to shoot him. It is a serious matter to shoot a working elephant – it is comparable to destroying a huge and costly piece of machinery – and obviously one ought not to do it if it can possibly be avoided. And at that distance, peacefully eating, the elephant looked no more dangerous than a cow.

I thought then and I think now that his attack of "must" was already passing off; in which case he would merely wander harmlessly about until the mahout came back and caught him. Moreover, I did not in the least want to shoot him. I decided that I would watch him for a little while to make sure that he did not turn savage again, and then go home.But at that moment I glanced round at the crowd that had followed me.

It was an immense crowd, two thousand at the least and growing every minute. It blocked the road for a long distance on either side. I looked at the sea of yellow faces above the garish clothes-faces all happy and excited over this bit of fun, all certain that the elephant was going to be shot. They were watching me as they would watch a conjurer about to perform a trick. They did not like me, but with the magical rifle in my hands I was momentarily worth watching. And suddenly I realized that I should have to shoot the elephant after all.

The people expected it of me and I had got to do it; I could feel their two thousand wills pressing me forward, irresistibly. And it was at this moment, as I stood there with the rifle in my hands, that I first grasped the hollowness, the futility of the white man's dominion in the East. Here was I, the white man with his gun, standing in front of the unarmed native crowd – seemingly the leading actor of the piece; but in reality I was only an absurd puppet pushed to and fro by the will of those yellow faces behind. I perceived in this moment that when the white man turns tyrant it is his own freedom that he destroys. He becomes a sort of hollow, posing dummy, the conventionalized figure of a sahib.

For it is the condition of his rule that he shall spend his life in trying to impress the "natives," and so in every crisis he has got to do what the "natives" expect of him. He wears a mask, and his face grows to fit it. I had got to shoot the elephant. I had committed myself to doing it when I sent for the rifle. A sahib has got to act like a sahib; he has got to appear resolute, to know his own mind and do definite things. To come all that way, rifle in hand, with two thousand people marching at my heels, and then to trail feebly away, having done nothing – no, that was impossible. The crowd would laugh at me. And my whole life, every white man's life in the East, was one long struggle not to be laughed at.

But I did not want to shoot the elephant.

I watched him beating his bunch of grass against his knees, with that preoccupied grandmotherly air that elephants have. It seemed to me that it would be murder to shoot him. At that age I was not squeamish about killing animals, but I had never shot an elephant and never wanted to. (Somehow it always seems worse to kill a large animal.) Besides, there was the beast's owner to be considered. Alive, the elephant was worth at least a hundred pounds; dead, he would only be worth the value of his tusks, five pounds, possibly. But I had got to act quickly. I turned to some experienced-looking Burmans who had been there when we arrived, and asked them how the elephant had been behaving. They all said the same thing: he took no notice of you if you left him alone, but he might charge if you went too close to him.It was perfectly clear to me what I ought to do. I ought to walk up to within, say, twenty-five yards of the elephant and test his behavior.

If he charged, I could shoot; if he took no notice of me, it would be safe to leave him until the mahout came back. But also I knew that I was going to do no such thing. I was a poor shot with a rifle and the ground was soft mud into which one would sink at every step.

If the elephant charged and I missed him, I should have about as much chance as a toad under a steam-roller. But even then I was not thinking particularly of my own skin, only of the watchful yellow faces behind. For at that moment, with the crowd watching me, I was not afraid in the ordinary sense, as I would have been if I had been alone. A white man mustn't be frightened in front of "natives"; and so, in general, he isn't frightened.

The sole thought in my mind was that if anything went wrong those two thousand Burmans would see me pursued, caught, trampled on and reduced to a grinning corpse like that Indian up the hill. And if that happened it was quite probable that some of them would laugh. That would never do.There was only one alternative. I shoved the cartridges into the magazine and lay down on the road to get a better aim.

The crowd grew very still, and a deep, low, happy sigh, as of people who see the theatre curtain go up at last, breathed from innumerable throats. They were going to have their bit of fun after all. The rifle was a beautiful German thing with cross-hair sights. I did not then know that in shooting an elephant one would shoot to cut an imaginary bar running from ear-hole to ear-hole. I ought, therefore, as the elephant was sideways on, to have aimed straight at his ear-hole, actually I aimed several inches in front of this, thinking the brain would be further forward.

When I pulled the trigger I did not hear the bang or feel the kick – one never does when a shot goes home – but I heard the devilish roar of glee that went up from the crowd. In that instant, in too short a time, one would have thought, even for the bullet to get there, a mysterious, terrible change had come over the elephant. He neither stirred nor fell, but every line of his body had altered. He looked suddenly stricken, shrunken, immensely old, as though the frightful impact of the bullet had paralysed him without knocking him down.

At last, after what seemed a long time – it might have been five seconds, I dare say – he sagged flabbily to his knees. His mouth slobbered. An enormous senility seemed to have settled upon him. One could have imagined him thousands of years old.

I fired again into the same spot.

At the second shot he did not collapse but climbed with desperate slowness to his feet and stood weakly upright, with legs sagging and head drooping. I fired a third time. That was the shot that did for him. You could see the agony of it jolt his whole body and knock the last remnant of strength from his legs. But in falling he seemed for a moment to rise, for as his hind legs collapsed beneath him he seemed to tower upward like a huge rock toppling, his trunk reaching skyward like a tree. He trumpeted, for the first and only time. And then down he came, his belly towards me, with a crash that seemed to shake the ground even where I lay.

I got up.

The Burmans were already racing past me across the mud. It was obvious that the elephant would never rise again, but he was not dead. He was breathing very rhythmically with long rattling gasps, his great mound of a side painfully rising and falling. His mouth was wide open – I could see far down into caverns of pale pink throat. I waited a long time for him to die, but his breathing did not weaken.

Finally I fired my two remaining shots into the spot where I thought his heart must be. The thick blood welled out of him like red velvet, but still he did not die. His body did not even jerk when the shots hit him, the tortured breathing continued without a pause. He was dying, very slowly and in great agony, but in some world remote from me where not even a bullet could damage him further.

I felt that I had got to put an end to that dreadful noise. It seemed dreadful to see the great beast Lying there, powerless to move and yet powerless to die, and not even to be able to finish him. I sent back for my small rifle and poured shot after shot into his heart and down his throat. They seemed to make no impression. The tortured gasps continued as steadily as the ticking of a clock.In the end I could not stand it any longer and went away. I heard later that it took him half an hour to die. Burmans were bringing dash and baskets even before I left, and I was told they had stripped his body almost to the bones by the afternoon.Afterwards, of course, there were endless discussions about the shooting of the elephant.

The owner was furious, but he was only an Indian and could do nothing. Besides, legally I had done the right thing, for a mad elephant has to be killed, like a mad dog, if its owner fails to control it. Among the Europeans opinion was divided. The older men said I was right, the younger men said it was a damn shame to shoot an elephant for killing a coolie, because an elephant was worth more than any damn Coringhee coolie. And afterwards I was very glad that the coolie had been killed; it put me legally in the right and it gave me a sufficient pretext for shooting the elephant.

I often wondered whether any of the others grasped that I had done it solely to avoid looking a fool.

Corn Ethanol is Food

2007-03-19T16:43:00.000-05:00

The World According to Bakhtiari

2007-03-14T12:39:00.000-05:00

coverstory

Dr Ali Morteza Samsam Bakhtiari, the recently retired senior adviser for the National Iranian Oil Company.

Photograph: Michelle Ward

Peak oil. Two words to strike fear in the heart of our oil-addicted globe. But how real is the risk that oil production is in decline, outstripped by demand and our inability to discover new deposits? Are we on the slippery slope to oil oblivion?

Bruce Madden explores the peak oil phenomenon and its potential implications for the global economy, markets and investors.
If you believe a number of growing voices on the subject, our industrialised, oil based global economy teeters precariously on the verge of a spectacular crisis. If you believe the peak oil theorists, 2006 marks the year of peak oil, the global peak of crude oil production.

For the peak oil set, the theory is simple. For six generations, the world has gorged on a ready supply of cheap oil. This fundamental commodity has proven to be in abundant supply – augmented in times of high demand by the seemingly endless supply of sweet light crude pumped effortlessly from the mega oil fields like the Saudi Arabian Ghawar field. Those days are gone, the theory contests. A new era with a different set of rules means there will be nothing like business as usual.

Such views belong to a small but growing league of global oil experts like the Tehran based Dr Ali Morteza Samsam Bakhtiari.

Dr Bakhtiari’s analysis paints a bleak shopping list of potentially catastrophic threats and impacts: ageing oil wells; over-estimated reserves; limited new discoveries; growing demand and dwindling supply; soaring prices; underinvestment; poor alternatives; geopolitical tensions; suburbia in turmoil and a disbelieving world watching and waiting rather than reacting and planning.

“We are a couple of hurricanes or some geopolitical problems or a war away from having a worse problem than we have today,” says Dr Bakhtiari, the recently retired senior adviser for the National Iranian Oil Company and author of several books and more than 65 papers on the oil and gas industry. His current analysis forecasts periods of high volatility with oil prices rocketing up to $300 a barrel. Then, once the price explodes, it will become a question of availability countries may be desperate enough to pay any price, but there will not be any oil.

Certain experts believe the situation is so dire that petrol may hit five dollars a litre within five years. But society’s addiction goes beyond the petrol bowser. Computers, televisions, telephones, pens, deodorants, shampoos, razors, toothbrushes and painkillers, to name a few, are all made with oil. As are food storage systems, farm equipment and pesticides.

According to the experts, aircraft will be the first casualty because, unlike petrol which has hidden subsidies the price of jet fuel is directly proportional to increases in crude oil.

Dr Bakhtiari says the decline of global oil production appears irreversible and will occur over a number of transitions, the first of which he labels Transition One (T1) a benign, barely noticeable gradient of decline which began this year, 2006.

However, in Dr Bakhtiari’s peak oil vision it is Transition Two which will deliver a far steeper and more pronounced impact. Worse, neither investment nor new technology will have any significant impact.

coverstory

During Transition One, mega projects should not be undertaken because they may take up to 25 years and “we do not know exactly where we are going,” he says, citing the 2,600km European freight train line from Barcelona to Kiev. The idea is fine, but simply too late.

“I do not think such a project will ever be finished, because the high oil prices will trigger price rises in prices for all other commodities,” Dr Bakhtiari told the Australian Senate’s rural and regional affairs and transport references committee in July this year.

“You already see that steel is way above usual prices. Copper has hit between $7,000 and $8,000 and it will go much higher than that. Nickel is $22,000.

“All these commodities and all these metals will go very much higher, because it is the crude oil price which dictates the prices. Sugar is going up, orange juice is going up – everything is going up – because the price of crude oil is going up.”

In other words, as a base commodity, crude oil is a fundamental price input to all other commodity prices, which can reasonably be expected to rise.

The world would never see US$30 a barrel again unless a bird flu epidemic wiped out millions of people or something hit the planet that disrupted all calculations, Dr Bakhtiari told the committee. He cannot foresee anything below even US$50 a barrel.

“That in my opinion would be very bad news because if it goes back to, say, US$50 per barrel for some reason and for a short period of time, people will think, ‘Ah! So US$75 was just a spike and now we are back to the good old days and we can begin consuming again. Let’s go and buy that big SUV that we were looking at.’ You then lose two or three years at least. So US$30 in my opinion is absolutely impossible.” In the future, expect up to $300 a barrel. Political tension and the threat of terrorist activity in Saudi Arabia, Nigeria, Iraq and Iran will only add to the fragile supply.

Based on his bottom-up analysis of world oil supply over the next 14 years, he believes present global production of 81 million barrels a day will decrease to 79 million by 2009 and to about 55 million barrels a day by 2020.

“Thus, in the face of peak oil and its multiple consequences, which are bound to impact upon almost all aspects of our human standards of life, it seems imperative to get prepared to face all the inevitable shockwaves resulting from that. Preparation should be carried out on individual, familial, societal and national levels as soon as possible. Every preparative step taken today will prove far cheaper than any step taken tomorrow.”

The optimists
Dr Bakhtiari’s estimates vary widely from those of other leading international oil advisers, Cambridge Energy Research Associates (CERA) and the International Energy Agency, which foresee production levels of more than 100 million barrels a day and up to 120 million in 2020-25.

Some of the views on the peak oil theory are blunt – for example a recent report in BusinessWeek quoted a senior CERA executive denouncing the peak oil theory as “garbage”. Robert W Esser, a director of CERA, told BusinessWeek: “peak oil theory is garbage as far as we are concerned.”

BusinessWeek also reported CERA as predicting world oil and natural gas liquids capacity to increase by as much as 25% by 2015.

Dr Bakhtiari says he is stunned by such bullish forward predictions, saying there is no doubt “one of us is totally wrong. I am quite sure of my prediction… because I have added every single oilfield that I believe could come on stream…”

Most of the super giant oilfields, which supply 40% of world production, are ageing, with some entering terminal decline. The last super giant to be discovered was the Kashagan oilfield in the north Caspian Sea in 1999. The three largest, Saudi Arabia’s Ghawar, Mexico’s Cantarell and Kuwait’s Greater Burgan, are declining steadily.

Dr Bakhtiari was proved right when in August the Kuwait Oil Company declared that the Burgan field was past its peak output (ref: kuwaittimes.net, Thursday, 24 August). The revelation also gave credence to claims by energy investment banker Matthew R Simmons, author of the seminal book Twilight in the Desert, that the world may have passed peak oil. Simmons asserts that sudden, sharp oil-production declines, especially at ageing Saudi fields, may happen at any time.

Even more disturbing, oilfields such as Ghawar, Cantarell and Samotlor in Russia appear to have been pushed unadvisedly rather than rested. “There is nothing worse for an oilfield than to be pushed,” Dr Bakhtiari adds. If Cantarell collapses, it would be a catastrophe for Mexico, which would lose its income, and also for the United States, “because what they lose from Cantarell, they will have to make up from somewhere else”.

Annual oil finds have plunged to between four and six billion barrels a year and only five major fields started up this year, he says. “There is little hope that this trend will be reversed in the near future because most of the planet’s petroleum provinces have been explored and there is only one last frontier area remaining – that of Antarctica, with its pristine wilderness and its population of some 20 million penguins.”

Environmental issues aside, Antarctica may not be the solution because conditions may simply be too difficult. It is dark for seven months of the year, it is tough to drill in ice and there is an icecap of at least 2,000m before you get to the lower tectonics. But when the price of oil goes to $300 a barrel, some oil companies may try their hand. “I hope it will not happen. But some governments will have their backs to the wall and in suburbia there will be unrest over petrol.”

Then there is the matter of over-estimation of supply. Dr Bakhtiari has studied oil reserves for the past 40 years and bases his modelling on the reserves of specialist Dr Colin Campbell, who has researched almost all the oil provinces on the planet. “Most reviews of the reserves of the major Middle East countries today, especially the BP Statistical Review of World Energy, mention reserves amounting to between 600 billion and 700 billion barrels,” he told the Senate committee. “These are official figures – in other words, the countries involved say that they have so much oil reserves available. The Oil and Gas Journal and BP take these reserves at face value.”

In the 1980s, gas reserves were revised upwards. Saudi Arabia, which has reserves of 160 billion barrels, suddenly had 260 billion barrels. “Since 1989, it has kept this number of 260 billion barrels; there has been no change to it up to this day. So, for 17 years, it’s as if they have not produced anything.” He shares Dr Campbell’s view that the reserves of the Middle East are about half of the official figures: 300 billion to 350 billion barrels of oil.

“Every institution gives its own numbers, and we can only compare theirs to ours. You can see that the reserves given by the USGS (United States Geological Survey) for the world of over 3,200 billion barrels of reserves, is much higher than the numbers we are using, of only 1,900 billion. Of course, we cannot accept such reserves as realistic, as we cannot accept the projections of certain institutions like the International Energy Agency in Paris, which predicts that the world will be consuming 118 million barrels per day in the year 2030 as realistic because I cannot see how the world can get over 81 or 82 [m/bd] per day right now, let alone in the future.” At the 25th CERA energy conference in Houston earlier this year, it was revealed that virtually all oil basins in the world had gone through one round of exploration and were delivering fewer reserves than in the past. From 1999-2002, Russia contributed 47% of world oil production growth. In 2003, it was 14%; in 2004, 13%; and in 2005, a modest 2.4%. The conference was also told that a lost generation of petroleum engineers needed to be filled. Only 300 petroleum engineers, compared with 44,000 law graduates, graduated in the US last year.

Asia offers further challenges. Experts agree that the most
dramatic event in post-peak oil will be when the effects hit
China, the second-largest consumer (after the US) of oil.
In the past ten years, China’s gross domestic product has tripled.
India is also entering a serious growth phase. Jane Henderson,
portfolio manager, North America, Walter Scott & Partners,
says if history repeats itself, consumption for China and India
is headed one way as individuals seek to better their livelihoods
and discard bikes for cars.

coverstory

Are there alternatives?
Shale oil is touted as a saviour. But while it may be plentiful, it is a messy, difficult industry, Dr Bakhtiari says. In Canada, about

1.1 million barrels a day of synthetic crude oil is produced; 3 million will be the limit.

“About two tonnes of shale oil is needed to make one barrel of synthetic crude oil, which takes its toll on the environment. Already, Canadian rivers are so polluted that fish are dying and it will soon be impossible to clean all the rivers. There is heavy oil in Venezuela, with 600,000 barrels of capacity and potential for up to about 1.2 million, but the difficulty is in transforming its potential into production,” Dr Bakhtiari says.

In Dr Bakhtiari’s opinion, there is no panacea, no alternative to crude oil. Gas to liquid (GTL) is not a consideration because capacity is just 85,000 barrels a day, a drop in the ocean. Coal to liquid (CTL) is messy and inefficient energy-wise. The world’s only CTL plant in Secunda, South Africa, produces 150,000 barrels a day. China is trying to produce up to one million barrels a day of CTL, a target it will take time to achieve.

Ethanol and biodiesel are simply not sustainable. For every litre of ethanol, between three and four litres of water is needed to produce it. Sugar cane is the best option. “That is what the Brazilians are doing today. With sugar cane, you need one square kilometre of cane to produce 3,800 barrels of ethanol a year. It is not easy and it is inefficient.”

Solar power will have a small role to play, especially in Australia where there is plenty of sun and land to develop it. Ditto for wind power. But their roles will amount to 2-4% of oil consumption over the next 15 to 20 years.

Gas is another option but peak gas is not too far away, based on Dr Bakhtiari’s prediction for 2008-09. Peak gas and peak oil are two totally different things because oil is such a special commodity. For example, you cannot just put gas in a ship. “You either have to consume it locally, pipe it to some other country or put it in a LNG tanker.”

Australia’s huge reserves of gas will be a bonus. “I think that Russia does not have much gas anymore, although it is the

“A decline in the Saudi Arabian field Ghawar may not be sudden and sharp but gentle and prolonged, allowing the Saudis to develop new fields.”
largest producer in the world. I am worried for the Europeans… if this winter is harsh, you will have thousands of people dying because the Russians simply do not have enough gas to provide to Europe. According to my statistics, at least 900 people in eastern European countries froze to death last year. This year it is going to be double or triple that amount. When there is a real crisis, how are they going to react?

“For one week in March this year, the British did not have enough gas and the price of gas shot up to $258 per barrel oil equivalent. And we are in a very normal situation now; we are not at peak yet. So you can imagine how it is going to be when it is at peak, with the panic in all those countries because of the winter months.”

Still time to act
Not everyone shares Dr Bakhtiari’s view. CERA’s Peter Jackson said in The Economist in April (20 April 2006) the price signals that would foreshadow any ‘peak’ would encourage efficiency, promote discovery and speed investment in alternatives. The metaphor of peak was therefore misleading. “The right picture is of an undulating plateau,” he said.

A decline in the Saudi Arabian field Ghawar may not be sudden and sharp but gentle and prolonged, allowing the Saudis to develop new fields. Saudi Arabia’s oil minister, Ali Naimi, outlined in the same issue of The Economist (20 April 2006) an unexplored area on the Iraqi-Saudi border the size of California.

Even Dr Bakhtiari believes there is time to be prepared, to avoid costly panic, because the world is not too far down the T1 slope. Free public transport, improved rail, and steering committees packed with bright young things to set up priorities for the use of petrol are crucial. In this arena, Western Australia has been at the forefront, with Perth’s free rounding bus transport system carrying people from their homes to train stations. Its light rail services about 140km of coastline, linking all suburbs.

But he warned the Senate committee: “Get prepared for any eventuality. Have a special committee for that now… so that when the crisis really hits, you have something to fall back on; you have a team that is already prepared and who has thought these problems through.”

Best addresses
www.samsambakhtiari.com www.simmonsco-intl.com www.suncor.com www.hubbertpeak.com

Copyright 2006. Macquarie Bank Limited and/or their subsidiary/group companies (“Macquarie”). Used with permission. Macquarie is the owner of the copyright material in this article unless otherwise specified. Macquarie accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this article.

verdict:

The equity investor
One way financial advisers can prepare clients for the arrival (or not) of peak oil is to stay close to fund managers that scrutinise the interplay between commodity supply and markets. Managers like Jane Henderson, portfolio manager with Edinburgh based Walter Scott & Partners.

For the first time, she says, the opportunity to continue to supply cheap oil to meet demand is being questioned.

“We’ve assumed that Saudi Arabia can turn the taps on and be the swing producer and use this light, sweet crude at five dollars a barrel in infinite supply, and clearly that’s not the case anymore,” she says.

“I personally don’t think we’re going to run out of oil. However, I think the days of cheap and easy access are being challenged.”
One of the biggest problems has been low investment in the oil industry for the past 30 years and the resultant side effects are being experienced today. “Countries cannot start imposing heavy taxation on this system. If you look back at the history and times when countries have imposed windfall taxes on the industry, it just does one thing: it stifles investment.”

Volatility is another factor. If the world was calm, Iran, Iraq and Nigeria could be relied on to be pumping at full capacity, easing the tight excess supply situation. While the geopolitical perspective adds another dimension to investments, underpinning the Walter Scott & Partners Limited investment rationale has to be a good, solid, well managed company with great growth assets that have strong production profiles or that have the necessary technology to improve profitability.

A recent addition to the portfolio is Suncor, the Canadian company outfitting the Athabasca Tar Sands. “There actually isn’t any exploration risk in the Athabasca Tar Sands,” Henderson says. “The stuff is there. It’s difficult to quantify the exact amount, but many people have it at multiples of Saudi Arabia in terms of total potential supply. I believe the Chinese are constantly in Calgary, trying to work out some deals with the current incumbents to get just that regular and consistent source of supply.”

The commodities investor
For Robert Holroyd, Director of Commodity Strategies Limited, the notion of peak oil is problematic. In simple terms, nothing is certain. He says there will always be claim and counter claim regarding world energy resources.

His job, running CSL investment management strategy, is to keep an eye out for immediate market risk and to respond accordingly.

Thus, one thing he does know is that commodity prices have fallen, with the exception of metals, in recent times by some 20%. For financial advisers, this may provide a brief period of reflection to look at the totality of commodities which, in Holroyd’s words, have “come off the boil”.

“And they’ll be saying, ‘okay, well, it looks like this bull run’s over, we can relax a little bit.’”

“And what we’ve seen

is basically quite a lot of

speculative money coming

into this market, and

some people have had

their fingers burnt. The

volatility of these markets

has been pretty high, and

there have been a number

of commodity funds that

have actually closed down

because of the volatility that

we’ve seen in the last few

months,” Holroyd says.
Holroyd’s fund has remained overweight cash (just 26% exposure to markets, September 2006) during this period of market volatility, a position he regards as prudent for the times.

On oil, he regards pricing risk as erring on the upside due to supply/demand imbalances.

Is peak oil really a threat? “The first thing you must do as an investor is to look at the probability factor: can this peak oil theory eventuate?

“I guess there are a number of things at play. One is that the argument is that the bulk of the readily available oil that has been found in the world has basically been found, and there isn’t a great deal more of it that’s easily or readily accessible. So that’s the first issue.

“And then the second one is, when we’ve got the easily accessible oilfields out there that are producing currently enough oil to be able to supply the world what is the chance that these things are going to start running out and creating a real problem?

“The other thing we do know though is, that if the oil price starts to go up, various different oilfields that have previously been uneconomic to extract oil out of, all of a sudden become economic again.”

A Function of Price and Technology

2007-03-11T08:53:00.000-05:00

On March 5, 2007, The New York Times published an article entitled “Oil Innovations Pump New Life Into Old Wells,” by Times correspondent Jad Mouawad.

The title of the article referred to recent increases in oil extraction from older oil fields, noting: “Within the last decade, technology advances have made it possible to unlock more oil from old fields, and, at the same time, higher oil prices have made it economical for companies to go after reserves that are harder to reach. With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil can be found than ever before.” As is the case with much of what gets published in The New York Times, some of the information in the article is true. But then again, to the well-trained and highly polished Peak Oil mind, the article has a lot of disinformation in it about what is the long-term state of the oil patch. In a not-so-subtle manner, the Times article appears to diminish the credibility of the Peak Oil argument. Specifically, the Times article focuses on allaying any Manhattanite fears of future scarcity of conventional oil by suggesting that “new technology” will locate and extract immense volumes of oil with which mankind will, to all intents and purposes, power its way into a brighter future.

It is as if we can now all kick back, pop a beer, wipe the sweat from our collective brow, and say, “Whew, we dodged that Peak Oil bullet.” Porosity, Permeability, Rocks, and Reserves The “world’s reserves are drying out,” states the article. I would not put it quite that way. Oil reserve estimates are a complex mixture of science and art, but the aggregate number depends in large measure on price. Reserve estimates do not really “dry out.” Estimates or volumes or quantities may rise or fall, but there is nothing dry about them, except for the Securities and Exchange Commission rules that govern how publicly traded oil companies have to do the underlying engineering-based accounting.

And is it true that, as the article states, “more oil can be found than ever before”?

No, not exactly.

The oil in older oil fields has, of course, by definition, already been found. The oil may or may not have been extracted and recovered, but it has been found. Getting it out is the problem, and for that we have to drill holes into the rocks. Always have, and always will. Oil, and associated natural gas and water, accumulates in what are known as “reservoir” rocks over periods of geologic time, meaning very long time periods often as not measured in millions of years. Reservoir rocks are almost always sedimentary rocks that have a fortuitous combination of what is called “porosity” and “permeability.” (In rare locales, such as offshore Vietnam, metamorphic, and even igneous, rocks serve as reservoir rocks. The oil originated elsewhere, and has migrated into porous, permeable metamorphic or igneous rocks. We will address the migration process shortly.)

The porosity of a rock is a measurement of the volume of the (usually) microscopic “pore” spaces between the mineral grains that make up the bulk of the rock. And the permeability of a rock is a measurement of the ability of a fluid to flow through these small pore spaces. (Just to be clear, oil is not located in big, empty voids deep within the earth. There are no natural “pools” of oil, like gigantic underground swimming pools, waiting for someone to drill and pump the oil out.) But a reservoir rock also needs some sort of “cap,” or trapping mechanism, to hold the oil inside its pore spaces. Over geologic time, even very minor leaks (along, say, fractures or faults) can allow essentially all of the fluids, and certainly the valuable ones like petroleum, to drain out of a rock formation. Rock formations such as salt beds or tight, very impermeable shales often serve as cap rocks, keeping the petroleum fluids sealed within the reservoir rock. And all of this assumes that somewhere nearby is a “source” rock, from which the oil and natural gas originated.

Usually, the source rocks are located in close proximity to the reservoir, but not always. In some of the conventional oil fields of Western Canada, for example, the source rocks are as much as 100 miles from the reservoir rocks, indicating quite a long migration to their ultimate resting place. So the oil that lubricates and powers the world originated during various geological periods of the past and came to be formed in source rocks. Eventually, and subject to a multitude of geologic forces and phenomena acting over relatively long periods of time, the oil migrated from the source rocks into permeable reservoir rocks. As the oil flowed through these reservoir rocks, it came to occupy the pore spaces within the grains that make up the underground oil reservoir. Some sort of cap, or other lithologic seal, kept the oil in the reservoir rocks, awaiting discovery in the years since Col. Drake ushered in the modern Age of Petroleum, starting in 1859 at Titusville, Pa. This oil in the ground is usually called the “original oil in place” (OOIP). Gushers and Blowouts While we are on the subject of oil in the reservoir (or OOIP), I should mention that in order for the oil to be able to migrate into a drill hole, there is a requirement for “reservoir energy.” That is, some form of energy has to be present within the reservoir rock to cause the OOIP to move from the pore spaces where it has resided for these many years into a hole in the ground. Reservoir energy can be present due to the fact that most oil contains dissolved natural gas, usually under pressure, and in some locales under great pressure. (I write from personal experience on this one.) So the oil, with the “higher pressure” gas dissolved within, tends to flow, via that above-noted permeability, through the pores of a rock formation and into the “lower pressure” hole that the drillers have put down into the ground. The aboveground analogy would be the carbon dioxide (CO2) gas dissolved in a bottle of soda pop. When you remove the cap from the bottle, the dissolved gas starts to fizz towards the low-pressure open end of the bottle.

In the olden days, when people who drilled for oil did not quite understand the process, they would drill down into a rock formation and the reservoir energy would overwhelm the hole in the ground. This ofttime led to a rapid explosion of pressurized oil from the ground, famously known as a “gusher.” The old movies and photos show people acting happy, and even dancing with joy when a well “gushed.” But unbeknownst to the early oil pioneers, this was a disastrous waste of the reservoir energy of the oil field, because it caused the dissolved gas rapidly to exit from the reservoir rock and leave much of the otherwise recoverable oil behind. Thus, much of modern petroleum engineering has to do with monitoring and maintaining reservoir pressures as high as possible for as long as possible during drilling and producing operations, so as to recover as much of the OOIP as is possible. And yes, things like gushers can still happen in today’s highly engineered world, but we call them “blowouts.” They are not happy occasions. Neglected Resources: 2 out of 3 Barrels The New York Times article further discussed the process of oil recovery, stating: “Typically, oil companies can only produce one barrel for every three they find. Two usually are left behind, either because they are too hard to pump out or because it would be too expensive to do so. Going after these neglected resources, energy experts say, represents a tremendous opportunity. “‘Ironically, most of the oil we will discover is from oil we’ve already found,’ said Lawrence Goldstein, an energy analyst at the Energy Policy Research Foundation, an industry-funded group.

‘What has been missing is the technology and the threshold price that will lead to a revolution in lifting that oil.’” This description makes it seem like oil companies have always had more control over what happens than is actually the case. “Too hard to pump out,” states The New York Times article. Well, sort of. What the article is attempting to describe is the process whereby, over time, about one-third of the conventional oil in a given reservoir migrates from its geological location to the drill hole. The reason that it migrates is because of that above-noted reservoir energy. Think of the high pressure oil (or at least, the “higher” pressure oil) moving towards the low-pressure drill hole. This migrating oil is that one barrel out of three, on average. (Some oil fields yield higher percentages of the original oil in place. Other oil fields yield far lower percentages.) By the time that the one barrel makes its way to the borehole, the reservoir energy has diminished to the point that it is not sufficient to mobilize the other two barrels. So that oil remains behind, in the reservoir rock formation.

For most of the history of the oil industry, oilmen have been at the mercy of the reservoir energy in the rock formations deep beneath their feet. If you were fortunate enough to locate low viscosity oil with a high measure of reservoir energy, then you could extract a high percentage of the OOIP. Col. Drake’s first well at Titusville, for example, produced a “Pennsylvania” grade of crude oil that was exceedingly slippery (i.e., low viscosity, such that it feels smooth like hand lotion) from a thin, porous sandstone with excellent permeability, and the reservoir energy that benefited Col. Drake was what is called “water drive.” That is, ground water was essentially pushing the oil from the rock formation into Drake’s 69-foot-deep hole in the ground. Under these circumstances, recovery of OOIP from the sandstones beneath the Titusville region was relatively high over the years.

Enhancing the Reservoir Energy At the other end of the oil patch spectrum, however, the Kern River oil field, discovered in 1899 near Bakersfield, Calif., yields a highly viscous sort of oil, loosely described as “heavy oil.” There was never all that much reservoir energy to begin with, so the original rates of recovery of OOIP were in the range of perhaps 10%. In other words, nine out of 10 barrels of OOIP were left in the rock formation. But in recent years, as The New York Times notes in its article, Chevron has been using steam-flood technology and computerized 3-D reservoir modeling to boost the output of the Kern River field’s heavy oil reserves.

For something over two decades, Chevron engineers have injected high-pressured steam into the oil reservoirs, to enhance the reservoir energy and to mobilize the oil. This has allowed Chevron to pump out more oil. Production from the Kern River field had slumped to about 10,000 barrels a day in the 1960s, but with the steam flood, it now has a daily output of about 85,000 barrels. And even after a century of production, Chevron engineers say there are many more years of productive life left in the field, and much more oil to be pumped from Kern River, although all the steam in the world will not prevent the inevitable phase of irreversible decline in production over time.

According to The New York Times article: “At the Kern River field…millions of gallons of steam are injected into the field to melt [sic] the oil, which has the unusually dense consistency of very thick molasses. The steamed liquid is then drained through underground reservoirs and pumped out by about 8,500 production wells scattered around the field, which covers 20 square miles. “Initially, engineers expected to recover only 10% of the field’s oil. Now, thanks to decades of trial and error, Chevron believes it will be able to recover up to 80% of the oil from the field, more than twice the industry’s average recovery rate, which is typically around 35%. Each well produces about 10 barrels a day at a cost of $16 each. That compares with production costs of only $1 or $2 a barrel in the Persian Gulf, home to the world’s lowest-cost producers.” While there is nothing objectionable about what The New York Times article states, the article misses an important point with those “millions of gallons of steam.”

There are immense amounts of energy involved in generating the steam that goes into the ground, and this is one of the reasons why Kern River oil is up to 16 times more costly to produce than Persian Gulf oil. And not to quibble, but pumping steam is not exactly new or revolutionary technology. Oil well drillers near Titusville were documented as pumping steam down well bores as early as 1862, at first in an effort to remove the paraffin wax that built up inside the well casings. Then, over time, people noticed that a “steam bath” tended to give a kick to subsequent production. These old drillers may not have understood the engineering aspects in any detail, but they knew what worked out in the field.

Then as now, making steam required boiling water, which required more capital investment, equipment, energy, and labor, so it drove up costs. Plus, making and pumping steam added to the danger of working in the oil patch, and it was dangerous enough to work just around oil wells with no hot steam pipes crisscrossing the landscape. So the steam-pumping process added even more potential for leaks, sparks, and explosions. Thus, for many years steam pumping was used only in exceptional circumstances. As long as oil was cheap and relatively available from other oil fields in other locales, there was no particular incentive to add more layers of complexity to a process that was difficult enough on good days. But above a certain price for a barrel of oil, the extra cost of steam, or other methods of enhanced oil recovery, can pay for itself.

The New York Times article noted that the Kern River is… “Littered with a forest of wells, with gleaming pipes running along dusty roads. Seismic technology and satellites are now used to monitor operations, while sensors inside the wells record slight changes in temperature or pressure. Each year, [Chevron] drills some 850 new wells there… “There are very few workers in the field. Engineers in air-conditioned control rooms can get an accurate picture of the field’s underground reservoir and pinpoint with accuracy the areas they want to explore. None of that technology was available just a decade ago.” What a Difference a Decade Makes No, a decade ago, oil was selling for as little as $10 per barrel. And the Kern River field was a high cost outpost of marginal wells that produced viscous oil that was (and still is) hard to handle and refine. But things have changed, and now the place is booming. Worldwide, reserves of conventional oil, also known as the “easy” oil, are declining and not being replaced. Oil companies, from the likes of large majors like Chevron to the national oil companies (NOCs) of many nations, are looking further afield for oil supplies, and are also looking at older areas to attempt to recover what they left behind the first time around.

In some areas, old oil fields that were long ago abandoned and plugged with concrete are being drilled again. “There are finite resources in the ground, but you never get to that point,” states Jeff Hatlen, an Chevron engineer, in a discussion with the reporter from The New York Times. “Peak Oil is a moving target,” Mr. Hatlen said. “Oil is always a function of price and technology.” Price, Technology, Time, and Depletion Yes, oil is a function of price and technology. But oil is also a function of time and depletion. So over the long term, and as existing reserves deplete, we have to ask the question, “What price and what technology?” That is, how much are people willing to pay, and for what kinds of equipment, to recover oil from the ground? Of course, every good business student learns early to ask, “What is the return on investment?” But the next question, that far fewer people even understand how to ask, is “What is the energy return on energy investment (EROEI)?” How much can anyone pay, and what measure of resources is it worth to get to that last marginal barrel? And the ultimate question is, “Can price and technology move the marketplace for energy faster than oil reserves are declining in the face of depletion?” We are, of course, all going to find out, should we live so long.

Until we meet again… Byron W. King

The Fall of the House of Usher

2007-03-10T11:01:00.000-06:00

Corn Ethanol is bad enough... corn is used to produce an avalanche of products... all of which will rise in cost as corn prices escalate.

"Ethanol is just lighting the [corn] market on fire," Flynn said.

Fuel alcohol (ethanol) Penicillin production Instant food and beverage mixes Recycled paper Intravenous solutions Soft drinks Bedding Film wrap for tapes and CDs Carpeting Foam packaging Clothing Fresh food packaging Cord and rope Mattresses Cups Serving utensils Adhesives, Cardboard, Construction Materials, Detergents, Paper, Textiles, Plasterboard Adhesives, Animal Feed, Bookbinding, Laminated Building Products, Enzymes, Leather Tanning, Lubricating Agents, Metal Plating Antibiotics, Enzymes, Coatings, Insecticides, Organic Solvents, Plasticizers, Shampoo Antibiotics, Aspirin, Baked Goods, Candies, Condiments, Mixes & Instant Preparations, Processed Meats, Puddings Baby Food, Bologna and Hot Dogs, Chewing Gum, Cookies & Crackers, Dessert Mixes, Fruit Drinks, Canned Foods, Cereals, Medicinal Syrups, Pickles, Salad Dressings, Seasoning Mixes Brownies & Baked Goods, Canned Fruits, Cheese Spreads, Cured Meats (such as bacon), Dessert Mixes, Intravenous Solutions, Jams & Jellies, Soda Fountain Preparations, Marshmallows, Soups Carbonated Beverages, Fruit Fillings, Cereals, Frosting, Ice Cream & Frozen Desserts, Pancakes, Pastries, Relishes & Sauces, Syrups & Dessert Toppings Ethanol, Citric Acid, Lactic Acid, Essential Amino Acids, Sugar Alcohols

Even worse... as farmers switch to corn crops because of growing profits & government subsidies, other crops they were growing become less available & therefore more expensive.

Brilliant!

Think Illegal immigration is a problem for the US today? Just wait till we make Mexico's staple food item too expensive for millions of Mexicans to afford.

I personally welcome our new impoverished Mexican Overlords, despite the fact that these new visitors will drain billions out of America's tax-base in education & health-care alone. And all of this is subsidized by your tax dollars America.

You are literally paying companies to harvest the flesh from poor folks, to fuel your Hummer obsession. It's obviously immoral & wicked... but worse... it's very stupid.

Since Ethanol & other Bio-Fuels are an EROEI joke compared to conventional oil, the only beneficial impact of all this bio-misery will be to boost some rich guy's stock portfolio a quarter of a percent. The kicker is... there isn't a damn thing we can do about this evolving tragedy.

A politician or business executive's shelf-life could be measured with an egg timer after proposing any actual solutions to rising energy costs, because those solutions will necessarily involve making do with less. How much wood can a woodchuck chuck?

The answer is obvious... All of it.

Warlarity ensues. The Dude abides.

Reflections on Thanksgiving morning, 2006

2006-11-23T10:26:00.000-06:00

For many – perhaps most – Americans, the last twelve months have been pleasant, prosperous, and abundant. We had a brief excursion to $3.00 per gallon gasoline, but the lack of hurricanes and the prospect of a mild winter let us enjoy a respite from high energy costs. The housing industry is having its trouble – perhaps due to the spike in energy mentioned above – but few care to believe the downward move will continue. Now, the Christmas shopping season will begin in earnest as we celebrate our religious or secular convictions with increased consumption.

I found myself on the expressway one recent evening at 6:00 PM. There were three lanes of cars in front of me, and the traffic had no gaps but was moving well. On the opposite side, a similar stream existed, moving less quickly. On either side of the road countless business of every description plied their wares and services. Within those businesses, employees waited on customers from the cars that filled the highway; owners depended on the profits generated by those same motorists.

Every one of those motorists was generating economic activity. Even if one was going to the library, or to visit a friend, they were burning fuel – fuel that cost money, fuel that generated jobs for the gasoline station attendant. Most would do more, purchasing meals, toys, tools, are amusements. This generated a realization; there can be no gentle powering down, no humane transition to a lower energy future. Our society depends on the activities fueled by cheap energy as surely as a living body depends on blood. Our economic body cannot survive on a reduced flow of energy.

Some argue that a silver bullet will be found to solve the incipient energy crises. More contend that some combination of silver bb’s will fill that role. We might reframe these as the great miracle camp, and the family of small miracles camp. In either instance, we must depend on a miraculous and unprecedented event. The faith of the proponents of such events is as devout as any religious zealot’s. The angry reaction to questions directed at their faith is equivalent to the fanatic’s. Neither camp is prepared to address the possibility that the miracle will not occur.

Different analysts project a variety of dates for global peak oil. Some like Thanksgiving of 2005; others prefer 2007 or 2008. Some project the event for 2010, and a few expect it to occur shortly thereafter. In any case, we are doing little to mitigate the problem. As a society, we hardly mention it. Perhaps our leaders know that they and we are powerless to change the awaiting destiny. That destiny will be upon us soon. Perhaps in the upcoming twelve months.

Of this I am certain – shortly after peak oil occurs, economic activity will begin a sharp, protracted, and irreversible decline. The economic suffering will be profound; it will segue into still deeper trouble that will end with the death of billions. Some of those will be our neighbors. Some will be readers of this posting. And there is nothing that can stop it.

So, on this Thanksgiving Day, slow down a bit. Savor the day. Taste – really, truly, taste – the food. If you’re with people you care about, enjoy their companionship. Focus on the present, on the now. Commit the day to memory.

Because, good reader – the time grows short.