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DrumBeat: January 5, 2007
Posted by threadbot on January 5, 2007 - 9:05am
Topic: Miscellaneous
Europe lays out plan to tackle energy dilemma — but will governments and consumers balk?
An energy crunch that chokes fuel supplies, dims the lights at homes and workplaces, and ravages Western economies may no longer be the stuff of 1970s history books. It could be a vision of the near future.The 1970s oil crisis gave Western countries a glimpse of what life is like when the energy supply isn't enough to go around. Worried that an even bigger crisis lies in wait, the European Commission is presenting an energy "roadmap" on Jan. 10 that aims to steer the bloc's 490 million people in a different direction.
Oil and tensions bubble beneath the surface
"The production of natural resources is liable to give rise to various types of political frustrations within a country." That is the view of such leading economists as Jeffrey D. Sachs, and Nobel Prize winner Joseph E. Stiglitz, writing in the introduction to 'Escaping the Resource Curse' a book to be released by Columbia University Press in June 2007, which cites Principe and Sao Tome as one country at risk.The authors warn that, "resource-rich countries grew less rapidly than resource-poor countries during the last quarter of the twentieth century." Plus, they said, "[research suggests] a strong association between resource wealth and the likelihood of weak democratic development, corruption, and civil war."
Fort Lewis College to Host Lecture on the Future of Oil and Natural Gas
On Tuesday, January 9, at Fort Lewis College, Noble Hall Room 125 from 7-9pm, Southwest Colorado Renewable Energy Society and Fort Lewis College Environmental Center will present a free talk by Steve Andrews entitled “ Peak Oil and Natural Gas Update.”Andrews will present the most current information about the evolving peak oil and natural gas challenges and intelligent responses to those challenges. Andrews is co-founder of the Association for the Study of Peak Oil and Gas (www.aspo-usa.com) and a Denver based energy consultant. ASPO is a nonprofit, nonpartisan education outreach organization.
Independence Day: Toward Energy Self-Sufficiency
As our energy supplies decline and environmental challenges escalate, we can expect that our energy networks - our fueling stations, electrical grid, and natural gas pipes - may become less reliable than they are today. Currently, our buildings and transportation systems are extremely brittle and susceptible to energy instability.
Shortage of Oil Rigs Triples Prices in India
Reliance Industries and Oil & Natural Gas are among Indian explorers that expect to pay more for deepwater rigs this year as shortages caused prices to triple in the world's second-biggest market for the rigs."This is the tightest rig market I have seen in my entire career," U.N. Bose, a director at Oil & Natural Gas, who has spent 31 years in exploration, said in a telephone interview from New Delhi last Thursday.
India against bringing oil assets under state control
New Delhi: India today said it would not follow the Russian model of 'Resource Nationalisation' as confining oil and gas reserves to public sector can breed inefficiencies through sub-optimal utilisation of resources.
Russia, Belarus say oil row won't hit Europe supply
MOSCOW/MINSK - Russia and Belarus promised on Thursday to keep pumping oil to Europe, after Minsk slapped a duty on transit shipments of Russian crude in a trade dispute that has shaken the ex-Soviet states' strategic alliance.
World's Largest Gas Pipeline Proposed to Run Through Amazon
Plans to build the world's largest natural gas pipeline through 5,000 miles (8,047 kilometers) of South American wilderness are prompting warnings of environmental calamity.
Energy corridor designation falls behind schedule
The designation of thousands of miles of “energy corridors” through 11 states, mandated by Congress in 2005 and meant to be implemented by August 2007, is proving to be more difficult than anticipated.
GM Picks Hybrid Battery Partners
GM wants to double the fuel efficiency of the SUV and has committed to lithium ion batteries as the technology of choice.
Southern Africa: 2007 a Watershed Year for Region
The next 12 months are set to be a watershed period for southern Africa as it marks the dawn of a potential energy crisis as well as the official start of the home-stretch towards a unified regional economic bloc.
BISSAU, Guinea-Bissau — China paid for the marble and tile parliament building soaring above the crumbling homes of this former Portuguese colony, and is also promising a dam and a military hospital — all with none of the political strings Western donors might attach.Intent on cementing ties across Africa, China is active even in impoverished Guinea-Bissau, a small nation with little industry, no oil and few exports.
China Turns Mekong Into Oil-Shipping Route
BANGKOK - As energy hungry China turns the ecologically fragile Mekong river into an oil-shipping route, green activists and environmentalists in South-east Asia worry that spillages could destroy the livelihoods of millions of people residing along the lower reaches of the region's largest waterway.
UK: Calls for more spending on renewable energy
LONDON - The government must put more money into renewable energy if it is to stand any chance of meeting its target of getting 20 percent of its energy from those sources by 2020, industry associations said on Friday.
Texas: Environmentalists Want To Slow Push For Coal Plants
Legislators returning to Austin next week will be met with a growing controversy. A plan by TXU to build up to 19 new coal-burning power plants across the state continues to stir up debate.A coalition of environmental groups will ask legislators to stop the plan for these coal plants. They want more time to figure out the best way to handle the state's looming energy crisis.
SANTA MONICA, Calif. (MarketWatch) -- Polar bears may be put on the endangered species list because of global warming. What else may become extinct? How about oil, water, trees, fish and food?The way in which we buy and consume -- create our economy -- is going to have to change; we are running out of the resources to support it. And that means more ethical choices will have to be made with regard the products we buy and the companies in which we invest.
Another interesting feature of the crude markets last year was continued robust global economic growth. However, this was not matched by corresponding growth in oil demand. Conservation finally seemed to be playing its role. A particularly mild winter, rising prices and the removal of subsidies in some developing countries, dampened oil demand growth, resulting in progressive downward revisions in demand forecasts as the year unfolded.
IEA's New Head Says He Will 'Avoid Confrontation,' Help OPEC
The International Energy Agency will avoid confrontation with OPEC and help oil-rich nations cut dependence on earnings from crude, the agency's next executive director said."Confrontation won't resolve anything," said Nobuo Tanaka, 56, a former Japanese diplomat who has been chosen to replace Frenchman Claude Mandil in September 2007. "Dialogue will help the two sides get mutual benefits."
UK Oil Sector Had Bumper Year in 2006, Despite Pressure on Costs
"We've never had it so good," was the refrain from Aberdeen's oil and gas sector when businesses reflected on 2006. Operators, service companies and industry employees all enjoyed one of the busiest years the industry has seen.
Profit from alternative energy
The world's economy can't afford to keep growing by using old fossil fuels and old ways of burning them for energy.
ComEd is behind 'consumer' warning
The commercial, in a foreboding tone, suggests that the lights may go out in Illinois if an electricity rate freeze is extended."We don't need a California-style energy crisis in Illinois," cautions a voice representing Consumers Organized for Reliable Electricity.
It may sound like the campaign of a grass-roots consumer group, but it is not.
Poor face bigger disservice than higher taxes on autos
Washington -- My liberal friends have asked me to consider the poor. Their request comes in response to my proposals for increased taxes on gasoline, a tax on engine horsepower, and higher fees on other automotive items and services that would make American consumers pay closer attention to the kinds of vehicles they are buying and the amount of energy they are using....To paraphrase my late father: Use your brains. The nation that is ignoring the poor now, when there is fuel to be had, will be even less inclined to pay attention to them if there is too little fuel available for everybody's transportation and life-support needs.
Wisconsin poised for new growth in biodiesel fuel
GREEN BAY — Municipal vehicles in Barron County in northern Wisconsin use 10,000 gallons of fuel a week, much of it diesel oil for dump trucks, snowplows and machinery.Until recently, all money spent on fuel left the area. But the county recently switched 10 percent of its fleet to run on biodiesel fuel, which is produced from renewable crops by local farmers.
Norway 2007 Oil Output to Drop 5.6 Percent, Directorate Says
Norway's oil output will drop by about 5.6 percent this year as companies such as Statoil ASA and Norsk Hydro ASA struggle to make up for dwindling North Sea output, the nation's petroleum directorate said.
Democrats Hope to Take From Oil, Give To Green Energy
WASHINGTON - House Democrats are crafting an energy package that would roll back billions of dollars worth of oil drilling incentives, raise billions more by boosting federal royalties paid by oil and gas companies for offshore production, and plow the money into new tax breaks for renewable energy sources, congressional sources said yesterday.
Not surprisingly, the API isn't pleased: Oil Group Blasts US Democrats' Tax Agenda
U.S. House Democrats' plan to snatch back billions of dollars worth of tax incentives from Big Oil will reduce domestic production and make the nation more dependent on foreign oil, industry officials say.
Crude settles at lowest level since 2005
NEW YORK - Oil prices shed more than $2 Thursday to settle at their lowest level since June 2005, after the U.S. government reported higher-than-expected inventories of gasoline, heating oil and diesel fuel amid warm winter temperatures.
EU to call for a ‘new industrial revolution’
BRUSSELS - The European Commission will call next week for “a new industrial revolution” in the energy sector to boost competition, protect the climate and ensure security of supply, a draft paper from the EU executive showed.
Pearson accuses airlines of failing to take climate change seriously
LONDON - Environment minister Ian Pearson has accused British, Irish and US airlines of failing to take global warming seriously, branding Ryanair "the irresponsible face of capitalism".
Nuclear agency head dismissed for lapses
WASHINGTON - Tens of millions of dollars and repeated security reviews haven't stopped embarrassing security breakdowns in the government's nuclear weapons program — and now the man in charge has been sent packing.Samuel Bodman on Thursday ousted the head of the National Nuclear Security Administration, which maintains the nuclear weapons stockpile and oversees the nation's weapons research laboratories.
"I have decided it is time for new leadership at the NNSA," Bodman said in announcing that the agency's chief, Linton Brooks, would resign within the month.
India leftists to campaign against U.S. nuclear deal
NEW DELHI - India's main communist party, which shores up the federal coalition, said on Thursday it would launch a campaign against a controversial nuclear deal with the United States, saying it was not in the country's interests.
Zimbabwe: ZESA Workers Strike, Cut Off Power Supplies
ZESA Holdings workers yesterday downed tools demanding a salary increase of more than 1 000 percent and expressed their anger by disconnecting consumers in the central business district, mostly shops and takeaways.The workers reported for duty yesterday but did not work arguing that the 144 percent increment offered by management was "too little".
Peak oil isn't bad for everyone
While some energy companies are worried about dwindling reserves, Schlumberger Ltd (NYSE: SLB) stands to gain enormously as oil and gas become harder to find.
One thing stands in the way of secure and abundant supplies of oil: Government.
Collapse of civilisations linked to climate change
The downfall of the one of the greatest Chinese dynasties may have been catalysed by severe changes in climate. The same climate changes may have simultaneously led to the end of the Maya civilisation depicted in Mel Gibson's new film Apocalypto.
OK, this one goes out to Freddy and Hothie:
December U.S. Payrolls Increase 167,000; Incomes Grow (Update2)
http://www.bloomberg.com/apps/news?pid=20601087&sid=apYZ3QT.P5W0&refer=h...
Odd NFP report considering the ADP report earlier in the week said a -40,000 jobs. Wonder which one is more accurate?
Ya...it's been frustrating because lately the industry statistics that have been released have been confusing and contradictory. Some are adjusted/corrected weeks after their release. Hard to make business plans based upon them.
Since 1958, the usa economy has averaged a four year business cycle as determined by Monetary Policy via the Fed. Six years since 1970. And now almost undetectible, as the Fed masters the art of soft landings.
The usa is likely within 120 days of the current biz cycle peak which commenced in 2001Q3 with 911. As with other downslopes from the crest, there will be very many contradictory signals as different sectors enter and leave their natural cycles.
The most misunderstood are the housing and automotive sectors. The Fed (and central bankers in most of the g-20) use low short term interest rates to fuel these two industries, both heavy in labour intensity and prompting the purchase of durable goods. But they are also the sacrificial lambs at the end of the cycle when it comes time to dampen overheated economies and the critical mass in play. Ever cognizant of the evils of Inflation, most central bankers strive for a Real GDP of 3.5% and Inflation of 2%. Concern for Unemployment is merely a sideshow to these metrics.
Over the coming 24 months, the Fed will attempt to match its superb soft landing of the late 90's and the cycle renews.
Unfortunately, this good news is not translating into a DOW surge today for some reason.
Hello Dragonfly -
Do you figure these numbers include or exclude the boost from malls, restaurants etc. hiring extra help for the holidays ?
Those are the kind of details that often get conveniently left out of the discussion by some (MSM mostly)...
Well, it's a mixed bag and I am not sure how temporary workers are factored into these reports. I do know, anectdotally, that during the holidays, the lines at Target moved quite well. Immediately afterwards, the number of cashiers dropped dramatically and there were much longer lines. Did Target reduce their staff/shifts right after Christmas?
Here's another article discussing the data in more detail:
U.S. Economy: Job Growth, Wage Gains Beat Forecasts (Update1)
http://www.bloomberg.com/apps/news?pid=20601087&sid=avepX6htpoX8&refer=h...
NOTE: Retailers cut 9,200 jobs (not geared up for Xmas?)
And, of course, like it says above, these numbers could be revised down at a later time.
Payroll growth in December? - Santas in the Malls.
Incomes growth? - Christmas Bonuses
The bloomberg one leaves out some things.
I agree with Peter Schiff's take take on this in one of his 1 page summary's.
More Consumption Less Production
http://www.safehaven.com/article-6644.htm
and his great analogy,
The result of the above truth is this reality.
That's a better look at it.
I don't believe the jobs report was good news.
Now if the media delineated the Breakdown of the jobs with these kind of summaries:
What percent of the new hires is being paid less than the last job.
What percentage of the new jobs did the person get a (say) 15% raise in the new job.
What percent of the new jobs were for 40 Hrs ave. work week.
and things like that.
What KIND of jobs were gained/lossed
John
Proof for TOD gloomers that manufacturing jobs are down the toilet:
Hold on Tootie Fruddy,
They did teach me to read in grade school.
Assuming the graph is for real, it says
"Per cent change from year ago"
all the way over there in the fine print on the left.
So let's see if I got this right.
In the year 2000, "growth" of jobs was barely over 0%. Let's say we have 1000 workers that year.
So in 2001 we're at -2% right? 980 workers left.
And in 2002 were at -7% relative to that right?
93% x 980= 911 workers left
And in 2003 were at -4% relative to that right?
96% x 911= 875 workers left
And in 2004 were at -2% relative to that right?
98% x 875= 858 workers left
And in 2005, 2006 were starting at that lower base number and barely climbing above 1% . Whooptie Do!
Gee, I wonder why the Dept. of Labor would create such a deceptive graph and why you would flaunt it as if it proves something?
Lester Brown had a news release yesterday. Some excerpts:
The New York Times covers the study, and says that over 50% of all corn in 2008 may be used for ethanol production. Brown calls for a moratorium on ethanol plants. (By 2008 Iowa will have facilities to handle 100% of its harvest, and Michigan 80%.)
Another example that it's time to change the name of our planet to "Bizarro World".
Those 11 billion bushel. Is that estimate based on 2008 not being drought year?
Hello Hurin,
If farmers stop growing the ingredients for beer to grow corn instead---> the beer drinkers of the world attacking ethanol plants will make the Jihadists look like cookie-selling Girl Scouts. =)
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Drought in Australia has already hit barley crop. One of the few things that may cause global warming awareness.
Hello OldHippie,
One of the cultural traditions I am trying to spread is people shouting out Peakoil when their 'Nectar of the Gods' beermug reaches half-empty. Sadly, that will be very difficult to do if there is insufficient hops, barley, etc to even fill the mug in the first place. =(
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
How will they feed all the cattle and hogs in Iowa?? Not to mention the cost of feeding all our hogs and cattle.. Boy do we have a mess on our hands..
Guess it's time we start feeding people, and stop torturing animals ;)
or continue feeding animals and start torturing people?
Like putting them in tiny rooms with a flickering light source in front of them, and forcing them to make small pointless movements the whole day, on pain of losing their means of subsistence?
Great idea!
The Tsunami washing across crop and livestock agriculture
Here's how - from Distillers Grains for Beef Cattle
Distillers Grains Byproducts in Livestock and Poultry Feeds "Your one stop site for the most current information related to using DDGS in dairy, beef, swine and poultry feeds"
For much more, a start is Googling "Livestock distillers grains"
(Oops, broke the resolution about blog posting. Again)
JMG3Y,
Please read this interview with Pimentel at the following link:
Biofuel Skeptic Extraordinaire
Cherenkov:
Thanks for your suggestion. Over the past 3 years I've read a considerable amount of Pimentel's and others work on this topic, preferably from the scientific literature when I can find it. My response above was to the question about how the livestock in Iowa were going to be fed, not whether I thought this shift was a good idea or not.
What might be the result of very high corn prices?
The farmers will rape the land. Cutting all the fence lines and border trees. Hogging out new land to cultivate. Letting soybeans go by the wayside. Planting the CRP land and grassy erosion strips. Even the HEL land(highly erodable land). That is if the government controls come off and even then it might not matter because who needs price supports IF the price is high enough.
This is called 'wildcatting' when you put new land into production that does not have a existing 'crop basis' and ignore the FSA(USDA et.al.) You just go to the 'spot market' price and be damned with all the rest or contract it and don't worry about the government loans and the rest.
Farmers want the dollars. They will do what they can do and they have the heavy earth moving equipment to do as they like. Most big farmers are way into that aspect already with trackhoes and dozers in their inventory and have been for some time.
I already see a lot of trees dozed down and burned on the spot(no one cuts the wood for heating nor gets a chance to).
The market will dicate their practices IM-very humble-O.
They sense that 'their time has come around at last' and they will jolly well take it as they can.
Many do not realize the value of the foodstuffs that corn imparts its value to. How much ADM squeezes out the very essence and markets it.
I pity 3rd world countries who might depend on corn exports from the USA. Corn is a very very big food staple, is my understanding.
As someone said earlier on TOD:
"A new(not better) world starts to unfold right before our very eyes."
The $30 / boe ethanol subsidy reminds me of Jimmy Carter's tax breaks for synthetic fuel. There are plants operating today which reap tax credits for spraying coal with a thin layer of oil. The government is adept at making a few wealthy at the expense of the majority
According to my calculations 60 Million tons will produce 363,000 Brl’s/D. Currently US production is 333,000 Brl’s/D, 60MM tons equals 20% of the 2007 corn crop.
According to my calculations 60 Million tons will produce 363,000 Brl’s/D.
Your calculation is correct. I get 350,000 BPD, but I used 2.5 gallons per bushel, which was the average across the entire country. Many use 2.7 or 2.8 gallons per bushel, but this is not the overall average, and that 2.7 gallons often includes the gasoline used to denature the alcohol.
The Cosmic Log Blog covers the story:
Food vs. Fuel?
Judging from the comments, we're doomed.
My response to Mr. Brown.
First off, the reader is left with the impression that the USDA, RFA, BBI and other industry participants are somehow involved in some vast conspiracy to obfuscate the ‘true’ number of ethanol plants in the various stages of operation/construction/ground breaking. This is an absurd assertion.
If one visits the RFA website, he would note that as of Dec 29, 2006, a total of 110 plants are in operation, 73 under construction and 8 are under expansion. EP magazine meanwhile, goes so far as to break down every new ethanol project at every stage i.e. ‘dirt work’, ‘concrete work’, ‘tank construction’, ‘energy center enclosure’ etc. all the way down to ‘ribbon cutting’. For a fledging industry that has doubled capacity *twice* in the last 6 years, I don’t know just how much more expedient or detailed Mr. Brown would like the ethanol industry to report back to him aside from data being streamed in real time.
Next up is the following line, “... easily 200 ethanol plants were in the planning stage at the end of 2006. If these translate into construction starts between January 1 and June 30, 2007...”.
Drummers, this is an absolute huge ‘IF’. Mr. Brown is talking about possible construction starts that equate to a doubling of the entire North American operational plant base within a 6 month window. The likelihood of this coming to pass is slim for a number of reasons, namely, the price of corn, the price of ethanol, concrete and steel costs, environmental assessments, construction, equipment and labor backlogs, rail switch development, tank car capacity and a host of other elements brought on by the boom that can easily delay if not outright cancel any project before it even leaves the drawing board.
“With corn supplies tightening fast, rising prices will affect not only products made directly from corn, such as breakfast cereals, but also those produced using corn, including milk, eggs, cheese, butter, poultry, pork, beef, yogurt, and ice cream.”
Here we go again with the scare tactics. Just how much corn goes into a box of corn flakes? About 4 cents worth. From to coke to cheezie poofs and all the other pre-processed, pre-packaged bonanza of generic convenience foods we eat, corn counts for pennies in the total price. And for those of you who think that if only ethanol production were stopped our food prices would stay what they are… guess again. At 10 calories of fossil fuel per calorie of food, it’s the price of the hydrocarbon inputs (not corn) that has and will continue to have the greatest impact on future food prices by a long shot.
Oh and in case Mr. Brown didn’t notice, according to AgCanada and the Canola Council of Canada, North America is soon to be facing a glut -that's right- A GLUT of protein feed on the market thanks to DDGS - the high-protein byproduct of American ethanol production. Expect prices for feed to be heading south folks… not up as Mr. Brown and some here at TOD have unfortunately pined.
Mr. Brown would also have us believe that there is a ‘epic’ battle brewing over food vs. fuel in the developing world – an assertion that could not be further from the truth as I have oft pointed out here at TOD.
First world trade policies are far and away the primary protagonist of 3rd world agro-economies while biofuel production is aptly suited for most developing nations that almost all feature tropical climes and abundant labor. Ethanol production from sugar cane for example, can be one of the very best crops to grow in these environments and it provides farmers with not one but two markets for their products.
The above notwithstanding, there are 2 elements where I agree with Mr. Brown. The first, being the need to hybridize our auto fleets (although I propose bio-hybrids with carburetors that take advantage of ethanol's superior combustion point, horsepower and torque advantages). The second, being the need to put much more emphasis on developing 2nd and 3rd generation biofuel production paths that can both complement and overtake commodity-based feedstock usage.
Drummers… keep in mind that anyone can quote how much food would be utilized if ‘x’ were used instead or if ‘x’ policy was fostered in lieu of some other. In fact, I’ll give you one from 1961.
“We pay for a single fighter with a half million bushels of wheat.” – Dwight D. Eisenhower.
Edited your post to fix the open tag. Please leave the HTML to those who know how to use it.
That's a bit harsh and unnecessary, isn't it? Especially coming from one of the site's editors.
I think it is necessary. Our new software apparently can't deal with open tags. One open tag makes the whole page a mess.
And it's not necessary to use HTML. Your post will be perfectly understandable without it.
I'm serious - I'm discouraging people from using HTML unless they know what they're doing. At least until SuperG gets this fixed.