Golly, thanks Uncle Goose!

Just for educational purposes, how much of our daily petroleum consumption is represented by the following graphic? Does a supertanker like this carry about a million barrells of oil?

http://maps.google.com/maps?q=Gibraltar&ll=36.109484,-5.405627&spn=0.005...

Tangents anyone?
I live in rural Vermont. I've already contracted/ordered my oil for the winter, though it hasn't been delivered yet. In July, I got a price of 1.99/gal for fuel oil. Even at the time I ordered it, I was concerned that the oil company was poised for fiscal ruin.
Depending on supplies, they may not even be able to bring oil at any price.
My previous supplier totally nixed prebuy and fixed price contracts for this year. Their spot price was in the 2.30s a few weeks ago.

I'm in good shape though, I have wood heat in addition to oil, and gravity fed water from a well uphill from my house.

This is going to be a long cold winter for a lot of people. Some of the heating assistance programs are level funded for this year and with the increase in heating costs, life is not going to be easy.

Regards,

Whats up with the inventory report this week? It didn't look very optimistic to me, yet prices are down. It almost sounds like the markets have decided to disregard this weeks report. Gasoline down 5 milion barrels and Natural gas down 6.5 %. More denial?

I'm no analyst, but my guess on the reaction to the inventory report might have to do with the jump in wholesale inflation. Demand destruction ahead?

I haven't been able to print out the main blog posts. Is that intentional, or am I doing something wrong? I have been able to print the comments.

Rana,
I dont know about your tanker, but for your reference: the T.T. Jahre Viking, the largest ship ever built, held nearly 4.1 million barrels of crude oil. When fully loaded, she was too big to fit through the English Channel. Sunk by Iraqi missiles in the first Gulf War, she was raised and converted to a floating storage facility.
The Exxon Valdez had a 1.48 mb capacity.

With PPI finished goods up by 1% officially, and crude goods up by 6+% officially, even the government is being forced to finally admit that prices for most everything are rising.

http://www.bls.gov/news.release/ppi.nr0.htm

If this trend continues, we are looking at easily making an OFFICIAL increase of nearly 10% by year end, and that equals around 12-13% actually hitting everyones pockets. Even Wallymart is groaning at lower sales and higher transport costs. This has got to presage some consumption changes for most people, which may be the bleeding edge of the economic crunch coming.

All we need is some kind of supply incident and things are set to go nuts.

I am in the sunbelt - we don't do much heating in winter, but our electricity is mostly from NG, and bills are up by 50% over 2003...

JLA: well, you do deserve it! the comments have been great, especially this week. :)

Diane_a: no, there's nothing intentional there. have you tried just copying and pasting to word?

I have a great comment from the sheeple this week. I discussed peak oil with a couple of guys I hired and their answers were typical: "they will think of something" concerning oil depletion but the next thing he stated took me by surprise. He stated "they" probably KNOW about peak oil and are doing something right now... I just shook my head in wonderment. The invisible hand is everywhere.. I then ask him who he thought "they" were. I didn't get a response.. Its going to be an uphill battle for sure..

But the news is helping a bit.. Still chipping away at the edges of oil depletion without really mentioning it to the sheeple..

Diane_a: You are not the first person to draw our attention to the printing problem. It is a consequence of using absolute positioning to layout the blog. In the new site, we will offer an alternative stylesheet that will make printing possible.

Looks like easy Al may have raise interest rates more. That'll make the home ATM'ers really happy.

There are lots of people who never went through the 1960's or the oil embargo in the 1970's who read and participate in this blog. If you have never been involved in a protest or a riot or anything similar, it is likely that your POV with respect to your neighbors is a tad optimistic.

This is what happened recently without any type of shortage, just s little high demand for a good price:

http://www.timesdispatch.com/servlet/Satellite?pagename=RTD/MGArticle/RT...

Now, imagine these same people trying to buy gas to get to work but unable to afford it...

It really doesn't take too much for people to turn nasty.

This may interest you:

A Challenge to Peak Oilers, by Charles H. Featherstone, "a Washington, D.C.-based journalist specializing in energy, the Middle East, and Islam".

Basically, he wonders why nobody picks the 100$ bill in the floor... some parallels also with the discussion at Econbrowser...

So, here's what's been bugging me:

Over the last 30 years, wages have been relatively stagnant (except for the top 1%), while prices have been kept artificially low thanks to subsidies, tax breaks, and cheap energy, and for some goods through outsourcing of labor and manufacturing. Thus, many people have not been earning as much money, but were paying less overall and didn't notice. Now, costs that are already heavily subsidized, or unable to be outsourced to developing nations, are beginning to grow at a much faster pace than inflation where they can. These would be housing, energy, and medical care. Rapid increases in energy costs, chiefly oil, are going to compound costs associated with goods with artificially low prices.

Does anyone else see this as a problem for families on restricted, or tight incomes? Especially with the energy cost increases and relatively sticky costs associated with automobiles (Yes, one may want to get rid of the $30,000 truck they purchased two years ago, but can't because of the financial penalties associated with the 6 year loan) and homes. For an economy that is kept afloat through consumer spending, this could add a 1-2 punch.

Peaknik:  Oil shortages don't necessarily mean a monotonic increase in prices.  High prices could just as easily lead to demand destruction via collapse of regional economies, causing sags in the world price (even as production was discouraged).  This would be temporary but very real.

Featherstone knows that speculating in the futures markets is just that:  speculating.  Getting the exact details wrong is just as certain to produce huge losses as getting the details right would produce huge gains, and the people who refuse to take the bet are not ipso facto either hypocrites or cowards.

Peaknik -

Some of us are making money as we speak. I admit, I have not been unrewarded for placing my funds in oil stocks 2 years ago - all of them. They have much more than doubled.

But since we are talking about this piece, and even Featherstone puts great faith in futures traders knowing their business, let's just say that there might be a few reasons that his chart looks the way it does. I'll give you 2:

1) No oil trader knows how much oil is truly available from the Saudi's. I am skeptical that the ARAMCO people truly know, based on what has been said over the last year or so.

2) Nobody believes that the current economic "expansion" (this is a FedReserve term, not mine) will continue very far into the future. There are myriad interdependent instabilities in all markets, and it only takes one single issue coming to a head to elicit a massive market response.

Accepting either of these as an axiom, any trader worth his salt would bet that prices will remain where they have already been, and not much more than that. There is too much risk of retrenchment by the world economy and world currency markets to venture long term gains in oil. The safest way to bet that things will not go down very much is to bet the current price into the future, which leaves you able to cushion the fall should demand cool. You might lose, but you will not be ruined.

Just a thought, but maybe Oil Trader or others can weigh in...

"He stated "they" probably KNOW about peak oil and are doing something right now... I just shook my head in wonderment."

Reno: Actually, Kuntsler and Savinar both write that the powers-that-be are already engaged in a deadly earnest contest over the world's remaining energy. But even if "they" do KNOW and *are* doing something about it, you, your employee and I may not be on the short list of those who will ultimately benefit.

With regard to the graphic, where are good sources of basic info on supertankers and that aspect of the supply system? How many tankers are there, what is their capacity, how much crude oil is "in play" (being transported) at any time (apparently considerable volumes of refined products are also transported by tankers?) and so on? What are the major terminals associated with the major suppliers? How much supply disruption does hiting a major port or the near-port tankers represent?

An aside: a very knowledgeable Muslim said terrorism involving tankers and the Ocean is of a lower likelihood because of the status of the Ocean and its life in the Muslim religion.

With regard to Reno's comment, I recently met a chemical and a mechanical engineer that graduated just this spring. During the social session I asked them what training they had received in things such as the external costs of alternative power and energy sources (e.g., coal vs. natural gas), potential future scarcity problems for energy sources, global climate change impacts of alternatives and so on. They admitted superficial knowledge of the topic from the press but did not recall covering the issues in any of their coursework or taking any specific courses focused on the environment, environmental services and so on. When I asked how they might take these factors into account when presenting engineering alternatives and making design between alternatives if they didn't have this knowledge and awarenss, one's response was that the business people would tell them. My immediate thoughts were why did these newly minted engineers think that their recently graduated equivalents on the business side would know any better and don't these issues fall within the expected knowledge base of the engineering profession, particularly given society's expectations that technological innovation is the answer. If not the designers of production systems and devices, then who?

I'm an environmental scientist and I learned about peak oil and energy consumption from this guy. His course is actually required for freshmen and it includes guest lectures from Dr. David Pimental and Dr. Albert Bartlett. Even the engineers are required to take it. So, some schools do provide training in energetics and ecological economics, but you've got to look for 'em.

reno,
Keep up the good work with the out in-the-field observations.
The point is not to instantly convert those you contact, but to listen carefully to their "sound" logic.
That will help us to understand what noises "resonate" for them and what don't.

So if I understand correctly, the hired help believe:
(1) There exists an invisible "them" in our society;
(2) The invisible "Them" are up there in the main steering wheel house of our Titanic civilization and the "Them" are prudently steering our great ship towards safe waters without alarming the "happy cruise liner guests" onboard regarding any dangers that "They" already know about; and
(3) The hired-help subconsciously believe they, the help were consigned at birth to a lower caste group, which consignment absolves them of the responsibility to increase their knowledge base and learn about hard hard stuff like how the hydraulic fluid of our Titanic vessel (a.k.a. oil) flows through the bulkworks.

Interesting.
Scary.
And before you limit the phenomenon to the "Them Who are Hired Help," I make the in-field observation regarding family members who are college educated, employed in high-responsibility positions, and believe that the noninvisible "Them" who appear on the television news (cough cough) programs are to be trusted because "they" are the most trusted names in journalism. When I ask "Who are those guys?" --Butch Cassidy style-- there is no response. I get stared at like I'm nuts.

So the phenomenon you scientifaiclly observed in the field is not limited to the "hired help". We are no better than them. The phenomenon is universal.

Something is going on here on the happy "The Island" Earth. You and the rest of us at TOD have spotted "a bug" in the system while the majority of the sheeple go on grazing as if everything is normal. They are awaiting their turn to win The Lottery (go see the movie --The Island--just for the laugh about that one coded pattern: winning The Lottery).

... For those who do not want to blow away $10+ (and I don't blame you, it is far far better to burn it at the gas station and not fatten up on popcorn) here is a plot-spoiling site: http://www.pluggedinonline.com/movies/movies/a0002227.cfm

Donal,

"They who know it all" (cough cough) also know that the "them who hate our freedoms" are in the "last throes" of insurgency. That clearly proves They know it all.

Sad note: 47 more human critters had their lives irrationally snuffed out in Baghdad this morning and who knows how many uncounted more were permanently crippled and will live miserable and short lives in that brutal battlefield. Very sad. We are a sick bunch of cruel critters.

Re: Oil futures trading and transparency in the market

I just read Featherstone's piece. I am wondering what kind of "information bubble" oil futures traders live in? What are they considering when there is a "settle" price of $67.20 for May, 2006?

1) Are they tracking new production? For example, they know that Sakhalin I is scheduled to come online this fall, right?

2) Are they tracking depletion numbers in existing fields? Do they know anything about how depletion works (as outlined here by HO)? Do they know what EOR methods are?

3) Are they tracking supply disruptions like that described for Indonesia today in the NY Times? (Indonesia (OPEC) is currently importing and is having trouble developing new fields).

4) Are they tracking overall production numbers month-to-month country-by-country?

5) Have they read the Hirsch report? Have they read the ODAC report? Have they read the CERA report?

6) Do they know what EROEI is for various types of sources (e.g. ethanol, tar sands)?

This is merely a subset of the questions we could ask.

Because, if they've got some chrystal ball, I'd like to know about it. One of the main points that Simmons and others make is the transparency problem. There are problems with production and depletion data. For example, yesterday I was trying to figure out where Nigeria fit in. I could not come to a conclusion. They were anywhere from the 7th to the 14th largest producer in the world based on export numbers measured in mbd. Not to mention reserve numbers which it appears most supplier countries just make up to encourage new investment and keep their credit ratings high. Simmons believes producers should be held accountable for informing the world community about their current numbers. If they do not offer up their numbers and how they arrived at them, they should be labeled as "unreliable suppliers" in Simmons' view.

So, we're all groping around in the dark. Now, let's assume that they are doing all of 1) through 6) and more. Then surely it would be the case that some significant percentage of them would be projecting a peak in the 2006 to 2009 timeframe.

If you're reading Oil Trader, give us your take on what calculations these guys are doing when they speculate about futures prices.

FishEpid
You make a wonderful observation about our Adam Smith world.
The invisible waving hand grants to everyone the power to say that somebody else will take care of it.

Ah, The Wealth of Tunnel Visions !!!

Are you starting to have a vision of your own about what is happening here?

BTW, I guarantee you that the "business boys" ass-u-me that the "engineering nerds" are taking care of it. I have personally seen this Keystone Cops comedy played out in real life way too many times. Highly recommend that you read one of the Enron books which documents this very phenomenon. The one I'm reading, Conspiracy of Fools, is not a page turner, so I don't recommend it. It does not go out of its way to make clear the different mindsets of the "finance guys" and the "engineering experts". They clash in the Board rooms, and the "smartest guys in the room" always succeed in bullying everyone else into submission. After all, we are lemmings. Easily herded. Sad.

...

I'm probably jinxing it by posting now (it's 2:00 PM here), but the gas station across the street from my office has NOT raised prices on their sign today.

10 cents yesterday, six cents the day before that, a dime over the weekend. But nothing today.

We're saved!

(that's sarcasm, just in case it isn't clear)

Amazing what well-fed people will do:

http://www.timesdispatch.com/servlet/Satellite?pagename=RTD%2FMGArticle%2FRTD_BasicArticle&c=MGArticle&cid=1031784478914&path=!news&s=1045855934842

Imagine what cold, hungry people will do.

stepback wrote:
"They who know it all" (cough cough) also know that the "them who hate our freedoms" are in the "last throes" of insurgency.

Well, that's what they *claim*. I doubt they really believe it anymore.

Donal,
I was thinking exactly the same thing as I watched the video on the most-trusted-name channel. How many were trampled? Scary what a herd will do once they get agitated and start their stampede.

(Of course, stampedes at sports stadiums and so forth are purely imaginary. It does not happen in real life. We humans are "rational". To believe anything else is, well, irrational. --tongue is yes, in the cheek position)

Being an old guy, I remember sit-ins and protest marches for many things. It didn't take much to get us moving in any direction due to so many things being wrong with the status quo. I hope the current generation is getting a bellyfull of this right now... I'll be the old guy with the paunch and beard with his index finger in the air!!

I've been reading The Sling and the Stone by Col Thomas X Hammes USMC. Hammes mostly describes how Fourth Generation Warfare (4GW), the evolved Maoist insurgency, has defeated 3GW military powers over and over. Maoists d Nationalists, Viets d France, Viets d USA, Sandinistas d Somoza, etc. and now in Iraq.
But imagine a world with only dwindling oil-powered military machinery. No air support, no tanks, no battleships, etc. just animal-drawn field pieces and small vehicles. Will there be any 3GW forces left, or will all armies be 4GW-type militias scrapping against each other? I imagine that would lead to warlords and city-states being the dominant type of government.

Donal -

You are now an oficial card-carrying Anarchist!!

Welcome to the ranks of TEOTWAWKI!!

;)

I often see musings online about whether Bush or "the gov't" or whomever in a position of power knows about peak oil. I find this amazing--OF COURSE they know about it. In fact, I would contend that the lack of oil industry infrastructure spending in recent years and the war in Iraq are as close to a smoking gun as one could expect.

I'm working on a longish essay on this that I'll post on my site in a couple of days. Some people will probably accuse me of modeling the latest fashion in tinfoil top hats, but if it gets people thinking about energy and the corner we've painted ourselves into, let 'em say what they want.

But don't rule out air power...Viva Montgolfier!

:)

Lou Grinzo

This is the same bunch that don't want our kids learning about evolution in science class. I'm not so sure they know about peak oil, or climate change, or...

Bush has illustrated very clearly that he will not let any facts get in the way of his agenda.

I am not smiling either...

Just cause they want us to be stupid doesn't mean they're stupid.

BTW, my boss was just reading the Onion's piece on the theory of Gravity being replaced by Intelliegent Falling.

http://www.theonion.com/news/index.php?issue=4133&n=2

did I miss it -- what happened to the posts and links for The Oil Drum? You know, the side columns?

Or is my computer getting wonky on me? Maybe it's peaked... :)

Another POTP* article:

CNN suggests cars for college kids

With an eye on efficiency? Yeah right, the Wrangler made the list (a vehicle I wouldn't wish on one of my enemies)

*part of the problem

Stories like this one from my local paper just make me shake my head:

http://www.thedailytimes.com/sited/story/html/215110

Frequent flier - Maryville-Atlanta commute saves time, stress

2005-08-17
by Jennifer Hodson
of The Daily Times Staff
Next time you find yourself cursing the traffic on Alcoa Highway and swearing you travel farther to get to work than anyone else in Blount County, think again. You're wrong.

Maryville resident Chris Leonard's commute totals nearly 200 miles each way -- sometimes much more.

Leonard, a patent attorney, lives here and mostly, works in Atlanta. Sometimes his duties managing the Atlanta office of law firm Merchant & Gould take him to Minneapolis or Seattle, and he's learned to turn an airplane seat into a traveling office.

But what's more surprising than the long commute is Leonard's assertion that it actually gives him more time to spend with his family.

Before moving to Maryville in 2003, Leonard and his wife Fran -- both Sweetwater natives -- lived with their two children just north of Alpharetta, Ga., about 35 miles from downtown Atlanta.

``On a normal day my commute would be at least an hour each way, sometimes an hour and a half,'' he said.

Throw a fender bender into the mix and that time span could easily double.

Then add the stress of even an incident-free commute in Atlanta traffic, and Leonard said, ``It takes a few minutes (once you arrive at the office) just to come to terms with you got there in one piece. ...

``To get into the city every day becomes a nightmare. ... I'm much more productive now,'' he added.

Also, it is not uncommon for him to travel from his house in Maryville to McGhee Tyson Airport, hop on a plane, fly to Atlanta and catch a cab to his office in less time than it would take him drive there from the Atlanta suburbs, he said.

In 2003, Leonard brought his children to Tennessee to visit their grandparents in Sweetwater. One day when the grandparents were looking after the kids, he and his wife were driving around Blount County and saw a house they loved.

They decided to buy it as a vacation house. That summer, while the kids were out of school, they came here to stay in their second home.

Leonard would commute to and from Atlanta via plane, or occasionally, by car. He did as much work as possible by telecommuting and found he could usually spend two weekdays -- in addition to the weekends -- with his family in Maryville.

``The bottom line is we couldn't leave,'' he recalled. ``The good news is there are tons of flights between here and Atlanta.''

The Leonards sold the vacation home and bought a permanent residence.

Since the move, Leonard has started volunteering with his son's Little League team and regularly makes his daughter's dance performances with Appalachian Ballet Company.

``You would shy away from committing to things like that'' in Atlanta, he said, citing the unpredictable nature of Atlanta traffic.

While Leonard admits his long commute is unusual for Maryville, he said, ``New Yorkers have been doing this forever.''

As Atlanta continues to grow, he said he thinks more people may follow his lead.

``I'm quite happy to be a pioneer in this,'' he said.

My conspiracy theory --if you care-- is that He who thinks we are in the "last throes" is controlled by a back bulge of his own, one of foreign origin --not sure which foreign power it is that pulls his puppet strings, but it is not one that cares about the welfare of the American people. If they did, they wouldn't be letting our herd march ever faster toward the cliff. It will be business-wise expedient for the "them" if we go over. Too many suspects to pick one out. Well that's my mad max theory. Nuff said.

For some reason, your site side bars are not showing on the explorer browser. They do show up on Firefox.?????????? FYI

guys, that's just weird, because everything seems fine on mine.

hmmm...SG? any ideas?

"So the phenomenon you scientifaiclly observed in the field is not limited to the "hired help". We are no better than them.

Step back, I hope I didn't imply that somehow my hired help was on the lower end of the intellectual chain, but quite the opposite. Both were college bound and just working the summer lumping furniture(the pay is not too bad). But I just like to see their responses and hopefully start the thinking process. I tell them to watch the price a gas over the next year or so.

I already tried the peak oil with my college educated family members and got the same "they" with one expection.. My brother shot back with "Winning the Oil Endgame" by Amory B. Lovins. He also believes the world will be covered with nuclear power plants and everybody will drive electric cars with no apparent consequences after the oil is depleted...

Next week I get to visit the east coast for a couple of weeks. This ought to be good..

Lou's "I find this amazing--OF COURSE they [Bush & Company] know about it."

Damn right. They all know, Dick "Dick" Cheney knows, Condy "Oil Tanker" Rice knows ... how could they not? Their Big Oil friends are like pigs in shit right now. No backlash yet but it's coming. Spooky is making money, good for him. I mean that, not being sarcastic -- if I'd had any money to invest, I would have put it all in oil stocks a couple years back myself.

These kind of greedy political assholes always fall down in the end. Unfortunately, so will most of the rest of us.

By the way Spooky, I am 52 and I remember the late 60's and 70's and early 80's. But this time, it's different I think....

Re the missing sidebars --isn't there a MS worm floating around hitting Windows 2000 systems? just a thought.

reno--
Yep, it's that time of the year. I too will be on the East coast shortly for purpose of installing one of my college bound kids into a dorm. Getting too old to lug the furniture up those stairs. Will be hiring a moving company to do it. The young fellas that work in these companies are too young and unsaddled with obligations to worry about peak oil or stuff. They are just having fun. Life is an endless stream of night clubs and what comes after at that age.
On the other hand, most people in the office I work in (paper shuffling) are too saddled with work and other obligations to have time to step back and see the tsunami that's coming at us. So the sheeple are either too unencumbered and care-free or too encumbered to have time to pay attention. Damned one way and damned the other way too.

Dave --ditto --- I'm in the same age bracket and same at-home situation, too deep under to have spare cash or time for playing the markets. The 60's were a care free time if you somehow managed to stay out of the draft.

And Dave, yeh the early 70's --that's when we should have been investing in that fruit company like Forest Gump was doing :-)

reno
--About your brother, a little knowledge is a dangeous thing.
A while back, I got to "dabble" in some of the technology involved in rechargeable batteries. It's complicated stuff. It's not as easy as the lay public thinks it is. Why is it, do you think, that your laptop battery never lasts as long as "they" promise it will? --we don't have the technology and no one is coming up with some huge breakthrough as far as I know. One nice thing I saw on a recent plane trip is that some seats on AA airlines have power boxes under them. If you buy the right cable you can plug in and keep your laptop going all the way across an East-West flight.

i'm an Oil Trader and a boeing engineer.

i have no idea how to estimate oil flow rates, reserves, etc etc.

i just know that Peak oil, if not upon us already, will be upon us very shortly.

i know that the world, as of today, consumes 84.38mbd adn supplies 84.12mbd. (http://energybulletin.net/7855.html) This, in my definition, is Peak Oil. So it really doesn't matter that OPEC raised demand outlook for 2006, and today's EIA shows -5mb draw in gasoline, and inflation numbers are too high and will threaten growth.

and when PO arrives, those with their cash in the NYMEX Crude Light will be paid.

I also want to switch topics. I also have problems convincing (via "telling them about it") my friends/family/co-workers about the impending Peak Oil, End Game scenario, there is no alternative fuel solution, etc.....

I remember that i gave the same "they" response when my friend first told me about it. Because this is such an overwhelming problem that borderlines somebody telling you that Earth is Flat not round.

You must SHOW them and let them do the analysis and draw their own conclusions. Telling them will only 1.) frighten them, 2.) intimidate them, 3.) corner them into denial. I have adopted a method where I show them Peak Oil by emailing them articles, editing out the unimportant stuff, add some commentary to clarify, raise questions. Get them to think. treat them like 1st graders and pretend that you're trying to teach them calculus.

this approach, over time and after lots of emails, has gotten some positive responses. Couple that with rising gasoline prices, which they have to live through daily; and news reports with they read daily, slowly becomes effective.

I am struggling to think of any historical events where the leaders knew ahead of time and planned accordingly. In all cases I can think of, the leaders were overtaken by events and had to react on the spur. Plans that leaders do make invariably don't pan out, a look at US foreign policy shows idelogically driven policies consistently backfiring.

Leaders come to office with an ideology, and a heap of crisis management. It really is a myth that they know what "is really going on". Bush/Chaneys actions only reveal their predefined neo-con ideology, and reactions to events while in office.

It is hard for people to believe their is no omniscient deity directing the Universe. It seems equally hard for some people to believe there is no omniscient human(s) directing events. Science has shown in both cases that complex behaviour can arise spontaneously, and such behaviour is merely the result of lots of dumb things following simple rules. From that, it actually becomes very unlikely that a small group can access information no one else has, or that such a group is even capable of influencing events in a way that they desire.

Yo, Bob Cousins

Apparently then, you assume our leaders our shortsighted and stupid. This would then account for the apparent lack foresight regarding a pending peak oil situation which changes all the rules. On the other hand, I assume they know something since they have been briefed on the situiation by Matt Simmons and others.

Re: "It is hard for people to believe their is no omniscient deity directing the Universe. It seems equally hard for some people to believe there is no omniscient human(s) directing events."

The two cases are completely different. For the former, I have no problem whatsoever believing that there is no all-knowing deity directing all this crap. For the latter, nobody is "directing" oil depletion and shortfalls in new supply over time. They are just profiting by it.

My concern is that the general population just doesn't understand science and technology.

They think that an engineer or scientist can just solve a problem tomorrow once it is identified as a problem. But it takes TIME and a lot of brainpower to solve complex problems. Real research is slow and methodical and makes gain over years and decades not quarters.

The U.S. has abdicated a lot of the discovery to someone else recently. Most companies only do development. It is too expensive and too long term to do real discovery research.

But corporate heads, politicians and most non science people still think we will be able to innovate our way out of peak oil once it arrives. We will invent..., we will switch to... we can just....fill in the blank and people just expect it to be accomplished by next month.

To me there is this big disconnect between what not technical people think can be accomplished in 1 year and what business people think can be accomplished in 1 year in any area of science or manufacturing.

I am having a hard time conveying this but most people at this site understand that real change will take a long time but the economists think the market will correct things with money in a few months. Those two perspectives are just not working on the same time frames.

previous post Should've read-

To me there is this big disconnect between WHAT TECHNICAL PEOPL think can be accomplished in 1 year and what business people think can be accomplished in 1 year in any area of science or manufacturing.

It is inconceivable to me that Cheney and Bush, as industry insiders, do not know. It is also inconceivable to me that the timing of the ticket was entirely coincidental. Cheney was speaking around this issue prior to taking office. The Bush ideology and Bush/Cheney ticket would require a tremendous cosmic coincidence to come together at this point in time otherwise. Frankly, I interpreted Kerry's classification of the last election as the most important of our time to be a veiled reference to peak oil (along with his tractionless attempt to raise energy policy as an election issue). Maybe it was wishful thinking on my part.

I also don't buy that telling people about peak oil is like telling them the Earth is flat. I know they do tend to react that way, but the message is in-fact intuitive. We all now that "nothing" lasts forever. We simply believe that oil must be still available in quantities because a) the media is not talking about it, b) the president is not talking about it, c) nobody seems to be doing anything about it, and d) our nation is understandably comfortable with the status-quo. Once the door is open, the intuitive aspect of so many people with so many cars and so many luxuries really does click for many.

That fact that we are at war over oil is just starting to sink in at the fringes and almost anything Bush is likely to do will reinforce the realization. It is going to take longer to connect the dots. Sadly, not everyone will fault the administrations tactics (resource aquisition in keeping with Jarod Diamond's observations of successful cultures).

I would like to relate an encounter with an acquantance about 20 years ago. I was finishing my BA at Berkeley (history and poly sci., on the GI Bill), and he was finishing his PhD in economics, with a dissertation on German hyperinflation in the 1920s.

I was fascinated. I asked him his opinion of the effects of the Versailles Treaty (which ended World war I, while saddlingd Germany with tremendous war reparations debts to the English and French, who used it to pay off their war debts to the US. The Germans borrowed money from the US to pay the Allies, and tried to inflate their way out of the debt by running the presses 24/7, until the Deutsche mark was worthless. Meanwhile, the US thought it was rich (getting war debt repayments from their allies, as well as interest from the German loans.)

German hyperinflation was a lead up to the crash of 1929 and the Great Depresson.

My new friend looked at me blankly. Even though he was doing his PhD dissertation on this phenomena, he had absolutely no knowledge of the historical or political underpinnings. It was simply a matter of math games with charts, graphs and equations.

Ever since then I've been suspicious of economists. There are exceptions (such as the editors of the Economist magazine), but all too many of them are in a historical void, divorced from reality.

NC,
There are huge disconnects between all parts of our Titanic society. Everyone assumes that the system will take care of itself, that Adam Smith's invisible hand is intelligently managing everything. It is just by dumb luck that things have worked out well for America so far. But then, as an engineer, you probably know about Corollary 10 to Murphy's Law.

For nonengineers, Murphy's Law says: Whatever can go wrong, eventually will go wrong. It is the thing that professional engineers sweat over and why they build large margins of safety into everything. And despite this, things still go wrong ... think space shuttle.

So what is corollary #10? (I made up the number)
That things won't go wrong ...
they won't go wrong for a very long time ...
and then when they finally do go wrong ...
it will be at the worst possible moment ...
and everything will go wrong all at once.

Are we mindlessly marching into a corollary 10 scenario?
Concerned lemmings want to know.

On getting the message out:

It is easier to communicate to others about peak oil when the price is rising. It's a simple association, and it makes the message seem credible. Unfortunately, it may get harder to get the message across, not easier.

It appears at the moment that supply is just barely meeting demand. Under these conditions, with normal fluctuations in supply and demand, it seems reasonable to expect prices to fall back at least a bit over the short to medium term. In the past year we've seen fallbacks from roughly $55 to $40, then $57 to $47, now $66 to ? Longer term, the price trend will be sharply higher, but we should see some fallbacks unless a full-blown crisis appears.

Let's say that Skrebneski is right, and we see a bit of respite in supply over the next couple of years. Prices will moderate for awhile. Everyone (OK, maybe not everyone) relaxes. Under those conditions, peak oil talk sounds like the boy who cried wolf.

This will be a really dangerous time. Public policy makers have successfully ignored the issue to date, and when the pressure is off, they will probably ignore it again. The natural inclination will be to continue business as usual, the "consensus trance."

If we do get an easing for a period:
1) It will be even harder to communicate the peak oil message effectively
2) The little time we have left to prepare for the full-blown crisis will be wasted
3) The calm before the storm will make it all the more cruel when it comes.

A great bluff call by http://mobjectivist.blogspot.com/ to those journalists who claim Technolgy will save us:

"Listen Mr. Featherweight journalist, since you know how to write, I assume you know how to read. So why don't you go out and buy yourself the CRC Handbook of Chemistry and Physics, Feynman's Lectures on Physics, O'Hanlon's A User's Guide to Vacuum Technology, Kittel's Introduction To Solid State Physics, Reif's Fundamentals of Statistical and Thermal Physics and a good nuclear engineering handbook. If you can't find the answers in there, you evidently didn't try hard enough. In other words, don't wait for us to follow blindly behind your rah-rah sermonizing. Go ahead and knock yourself out. Save us the trouble."

On the economists...

I've been reading a fair bit on this from both the basic science / engineering and from the economics end and it seems to me that the key thing that the economists are missing is this:

Yes, increased prices will reduce demand so that it matches supply and yes, human ingenuity will no doubt come up with new ways of getting energy when oil gets too expensive, BUT...

...at what social cost? There is a real danger here that the free market response will not be early enough to avoid massive, possibly terminal, social trauma.

Nature 21 July 2005, regarding the international fusion experiment ITER, (hydrogen fusion into helium). ITER is designed to heat hydrogen to hundreds of millions of degrees centigrade, and then squeeze energy from the resulting plasma, while holding it stable for minutes at a time." "ITER is not just any scientific experiment. With construction costs of US$5.5 billion, it will be one of the most expensive scientific facilities ever built on Earth."

http://fire.pppl.gov/iter_nature_072005.pdf

An old tennis buddy was a nuclear physicist for DOE, and from talking with him it seemed that they were making no headway, but maybe ITER is near something that will work. That would be a serious hydrogen economy. Even so, I wonder how many decades it would take to build a productive rather than experimental facility.

The issue I have with the "on the margin" calculation of an economist is that it basically assumes a linear respons. (Not static in time, responses get better on longer timeframes): someting like: 1% increase in price will reduce 0.5% demand.

I think it's not correct.

I think in case of gas, it has been too cheap. I think people don't care if they spend 1$, 2$, 3$ or 4$ to get to work.

Maybe there is some sort of threshold-zone where people take action.

Also something that popped into my head: the long term response on prices is also rather strange: Suppose now gas stays the same (in real $) for years and years. Conventional economics say that responses get better over time. So that we sould see people use less gas every year right? (apart from economic growth etc)

I think responses to price increases are significantly more difficult than just a number on a piece of paper.

Just my 2c's, delete it if it makes you laugh ;-)

Jim Burke,

A bit off topic, but about the cause for the hyper inflation in 1923 in Germany, there are some other factors which are considered to be more important than the repayments. I'm not a historian, so I quote a bit from memory (always a reliable source LOL):
- The build up of an enormous debt during the war. I believe some 180 billion reichsmarks
- The Ruhr was taken away from Germany (so no more German heavy industry)
- Some 20% of the German budget went to 'war victims' (ex-soldiers, widows, orphans, ...)
- And a fourth one, but for the life of me, I can't remember. ;-)

Thanks

richard -

I think what you would se is that responses get MODERATED over time, allowing growth rate to re-normalize. Once we adapt to higher gas prices, then the economy can grow again. Unfortunately, this growth would require increased consumption of energy (oil), which would accelerate depletion again. So while higher prices elicit a response, until prices become so unbearable that other alternatives are not just attractive, but required, oil will continue to be the energy of choice. We need oil to be, as J says, priced like gold, to get people to switch horses and end the problem.

richard, that is more or less what happened after the 70's oil shocks; vehicle choices changed, and average fuel economy rose steadily.

The US government has been promoting non-solutions like ethanol, while both federal and state governments have ignored alternatives like plug-in hybrids (auto mfgr's are required to accomodate ethanol fuel but not electricity).  Electricity is currently a fraction of the per-kWh price of gasoline; if we had a proper incentive structure for true alternatives, current oil prices would be sufficient to get users to migrate away from petroleum.

I think that this article:

http://www.safehaven.com/article-3634.htm

may very well lend some support to this article, which we all talked about awhile back:

http://www.depression2.tv/nwo-2/archives/000139.html

As our congress passes laws more or less at will concerning international trade measures, have we inj effect fired the first volley? Or did China?

Here’s a question about the potential impact of widespread telecommuting including an attempt at a rough calculation (feel free to knock down any bad data points and all the bad math):

114 million commuters by car or light truck (2003) (x) average commute of approx. 10 miles (x) 240 days (/) 17mpg average mileage (/) 20 gallons per barrel = 804 million barrels per year (this seems small if cars and light trucks are responsible for 2.8 (40%) of 7 billion barrels of annual consumption). But, assuming that commuting is only about a third of car and light truck energy use and we could telecommute 15-25% of car commuters, if we could pull 120-200 million barrels (about 1.5-3%) from annual consumption through telecommuting, would it matter?

Average fuel economy is more like 22 MPG.
There are 42 gallons per barrel of oil.
Vehicle mileage data is available at the Bureau of Transportation Statistics: http://www.bts.gov/publications/national_transportation_statistics/2005/...

Tough talk in Venezuela:

Venezuela's energy minister, Rafael Ramirez, has said in recent reports that if the U.S. shows any signs of aggression toward his country, Caracas is "ready and willing" to cut off its oil supply to the United States. Ramirez went on to say that "the US market is not indispensable to us" and that Caracas, the only Latin American member of the Organization of the Petroleum Exporting Countries, had other clients to court, including China.

Apologies if this has been discussed recently, I just spotted the article.