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DrumBeat: May 7, 2007
Posted by Leanan on May 7, 2007 - 9:10am
Topic: Miscellaneous
China’s 7 billion barrel oil bonanza
PetroChina, Asia’s largest oil and gas producer, sent Hong Kong’s stock market into a frenzy last week with news that it has discovered 7.5 billion barrels of new crude oil in an undersea field in Bohai Bay, just off China’s northeast coast. It is a stunning windfall. The oilfield, called Jindong Nanpu, is Asia’s largest petroleum find in three decades and is expected to boost China’s known oil reserves by a fifth. News of the bonanza sent shares of PetroChina (PTR) soaring 14% on Hong Kong’s stock exchange Friday to more than US$1.30, vaulting the company past BP (BP) and Gazprom to become the world’s third most valuable oil producer.But the Bohai discovery also underscores just how rapidly China’s addiction to oil is rising. PetroChina says that when the new field begins production, probably in 2008 or 2009, it will likely pump out about 180,000 to 200,000 barrels per day. That’s a lot of new crude. And yet it isn’t nearly enough to keep pace with the voracious appetite of China’s booming economy. At those levels the Bohai bounty would be roughly equal to just the growth in China’s foreign oil imports last year.
The Complete User's Guide to T. Boone Pickens
Pickens believes that Peak Oil, the point after world oil production reaches maximum output, will occur sooner than later. In his fund, BP Capital -- which tripled in 2005 and rose 30% in 2006 -- he picks stocks that he feels will rise dramatically due to higher oil. He likes offshore drillers, alternative energy, nuclear power, natural gas, and oil. At Stockpickr.com we keep track of all of Pickens's holdings (see link on the right).
With prices at record high, demand and refining problems could push them much higher. Any relief in sight?
Blast cuts Russia-EU gas pipeline
An explosion in Ukraine has knocked out of service one of the main pipelines exporting Russian natural gas to the European Union, the Ukrainian emergency situations ministry told AFP on Monday.A "large explosion" cut the pipeline, which carries Siberian gas through Ukraine to Germany and other EU clients, ministry spokeswoman Viktoria Ruban said.
...There was no immediate information regarding the effect of the incident on deliveries to the European Union, the biggest foreign gas market for Russia, the world's leading natural gas producer.
Obama: More fuel-efficient cars needed
Democratic presidential candidate Barack Obama (news, bio, voting record) said Monday that U.S. energy policy must change in order to help domestic automakers answer the rising global demand for fuel-efficient vehicles.
Average pump price hits record $3.07 a gallon
Gasoline prices have surged to a record nationwide average of $3.07 per gallon, nearly 20 cents higher than two weeks earlier, oil industry analyst Trilby Lundberg said Sunday.The previous record was $3.03 per gallon on Aug. 11, 2006.
Iraq: Explosives found under pipeline
Four Iraqis were arrested early Monday after soldiers found a load of explosives planted under an oil pipeline in northern Iraq that carries crude oil to Turkey, the Iraqi Army said.
Malaysia to build 7 billion dollar oil pipeline project: Abdullah
Malaysia will build a seven billion dollar pipeline to transport Middle East oil across the north of its peninsula to East Asian countries, Prime Minister Abdullah Ahmad Badawi said Monday.
India: 'Govt trying best not to increase petrol and diesel prices'
Petroleum Minister Murli Deora on Monday said the Centre was trying its best not to increase the prices of petroleum products like petrol and diesel even though the international oil prices had registered an upward trend in the past few months."The international prices of oil have increased from 40 dollars to about 62 dollars a barrrel so there is no question of reducing the prices of petrol and diesel," he told reporters here.
India's crude oil import bill jumps 24% to $48.1 billion
India's crude oil import bill jumped over 24 per cent to $48.1 billion in 2006-07 on back of rise in international prices.The country imported 110.85 million tonnes of crude oil in 2006-07, which is 11.5 per cent up from 99.4 million tonnes bought in 2005-06, petroleum ministry officials said.
Saudi assures Philippines of oil supplies
Saudi Arabia, the world’s largest oil producer, has reaffirmed its commitment to help plug any disruption or shortfall the Philippines may encounter on its oil supply.
Philippines: Fake power crisis?
President Arroyo, along with Department of Energy Secretary Raphael Lotilla, ceremonially switched on the electrification of 128 rural barangays in Masbate in rites held at Malacañang Palace last Friday. Masbate is dependent on the 8-MW oil-based power plant owned and run by the state-owned National Power Corp.
Hawaii, get ready for 2010 ConCon
It's been nearly 30 years since Hawaii held its last state Constitutional Convention and re-examined in a holistic way how our government could be reorganized to better meet the many challenges facing the islands today. Hawaii is a different place from the one it was in 1978, the date of the last ConCon. The number of people residing on Hawaii Island, Kauai and Maui has doubled. Oahu has grown by 230,000 -- nearly a 50 percent increase. Sugar and pineapple plantations, once the defining industries of the islands, have practically disappeared, and our economy is still dependent on mass tourism, whose future looks shaky as we approach an era of Peak Oil raising costs of airfares and all our imported goods.
Getting the trains to run on time
NO POLITICIAN has spent more bedside time at the MacArthur Maze collapse site than Gov. Arnold Schwarzenegger. San Francisco Mayor Gavin Newsom likewise has poured on the attention to solve Muni's spotty performance.Transit, it turns out, is job No. 1 when it flops and fails.
Yergin Sees Clear Road Ahead For More Fuel-Efficient Cars
The road is getting much clearer.This week, legislation will emerge from committee, and almost certainly soon head to the floor of the U.S. Senate. It might not get that much notice in itself, but it ought to, because it tells you how much has changed on energy issues. And, given its probable passage (or that of something along its lines), the new legislation will have a big impact on the automobile industry, on gasoline consumption, and on what people drive.
Mesa could pull plug on utility customers
For years, Mesa has relied on millions in profits from its 16,000-customer electric utility to keep its libraries and city offices open and to pay its police officers and firefighters.As a result, Mesa has invested little to maintain its electrical infrastructure, leading to an aging network of transmission lines, transformers and substations. Some of the technology dates backs to the 1950s.
After thousands of years of human history, it seemed we are now at or just a couple of years away from the all-time peak in energy available to humanity. What a time to be alive! What a truly awe-inspiring event to actually be living through! We should have a party to celebrate the end of the 150 year Oil Party.
Why one-day gasoline 'boycott' won't work
With gasoline prices topping $3 a gallon again, a number of readers, including Greg in Louisiana, are wondering about a proposed one-day "gas boycott" that has a goal of taking $2.3 billion in oil company profits. Aside from circulating some questionable math, organizers of this event stand exactly zero chance of having an impact on gas prices.
Spike in gas prices puts E85 back in spotlight
The E85 pump at the Bellmart gas station in La Porte has gotten a workout since gasoline prices spiked, cashier Pam Angeledes said.Motorists are pumping the gasoline alternative into as many as 40 vehicles a day, double the number of a few months earlier, she added.
Go Green With Buffett, Lynch and O'Shaughnessy
The U.S. Environmental Protection Agency recently unveiled its quarterly list of the top 25 "Green Power Partners," highlighting companies, institutions and government agencies that are spending the most on renewable energy sources such as wind and solar power.
Poll: Current price of oil is not justified
Canada's business leaders believe the current price of oil is not justified, but argue the situation is in much better shape compared to the oil crisis in the mid-to-late 1970s.
Big blip ahead on the market radar
A third hit will come on the Pacific, where the most lucrative of all Qantas routes, Sydney-Los Angeles, will see the arrival of Virgin and probably Air Canada next year. And then there is peak oil. Oil prices will be much higher in four years. Turbulent times lie ahead for Qantas, not just this week.
For my next mission: save the world
EDF chief Vincent de Rivaz believes nuclear power is the answer to stopping climate change.
Citigroup Rates Rio Tinto, BHP as Ripe For Private Equity Takeover
China’s PetroChina discovered 7 billion barrels of oil in Bohai Bay in Northeast China. It’s the largest oil find in that part of the world in 30 years. And no, it is not proof that peak oil is wrong. It is proof that oil is more expensive to find and produce than ever before.
While I am no economist, I have strong feelings about offshoring / outsourcing. While it’s great for the corporation in the short-term, it disenfranchises the American worker and leads to a squeeze on the once-healthy middle class. You only need look at the manufacturing sector to see how a whole sector of jobs has left the country … and if, as some theorize, global warming and peak oil lead to a time where importing of virtually all our manufactured goods is no longer viable, we may regret having dismantled our manufacturing infrastructure.
AUSTRALIA is falling behind the rest of the world on biofuels due to sluggish government policy and inaction by oil companies, according to the Australian Renewable Fuels Association.
Questions loom as auto industry vows to boost 'flex-fuel' vehicles
The auto industry's ability to successfully bring the so-called "flex-fuel" vehicles to market faces a number of obstacles, from a distribution system that remains limited to a small number of gas stations to consumer awareness and acceptance of the alternatives.
Question marks over China's climate commitment
Huge questions remain over China's commitment and ability to combat global warming after the surging Asian power bruised and cajoled but also charmed delegates at a UN conference, observers said.
Kurt Cobb: The point of despair
I recently gave a talk to a college audience on what I called the hidden role of energy in every environmental problem. As part of my presentation I went through a depressing list of environmental problems and showed their connection to our energy use. The next day I received a message from an audience member who clearly understood the implications of my talk, but who bemoaned my failure to provide practical solutions. He said I had left the students feeling hopeless.
Heat on parents to have fewer kids to cool planet
A LOWER birthrate would help cut carbon dioxide emissions, according to a British report.The Optimum Population Trust warns that each Briton uses nearly 750 tonnes of carbon dioxide in a lifetime, an effect equivalent to 620 return flights between London and New York.
A couple of things in the news that seemed noteworthy...
Delaware Energy Debate Could Turn on the Wind
Offshore Turbines Among 3 Proposals
Hampton Roads-to-Richmond barge service floated
Artist/Band: Old Crow Medicine Show
Lyrics for Song: James River Blues
Lyrics for Album: Big Iron World
I just heard the awful news
I could steer around the rocks
But theyre bustin down the docks
James river blues
That train came on through
And the worlds gotten slow
So wheres a boat man to go
I think Ill float on down
To Richmond town
They dont need us anymore
hauling freight from shore to shore
That big iron hauls much more
than we ever could before
Ive see good men going wrong
Ive seen bad ones get it right
As that river rolls along
Ill be steppin out tonight
On the cool flow
floatin down down below
the bridge till the waters edge
From the ridge to the ledge
From the hills to the sea
Ill become a memory
James River blues
James River blues
James River blues
Another Old Crow fan! Great! :-)
Here's one of their songs that just rings of the old leftie social justice union days, you gotta' love it, I don't care who ya' are.....
Old Crow Medicine
Show I Hear Them All
I hear the crying of the hungry in the deserts where they're wandering.
Hear them crying out for heaven's own benevolence upon them.
Hear destructive power prevailing, I hear fools falsely hailing.
To the crooked wits of tyrants when they call.
I hear them all
I hear them all
I hear them all
I hear the sounds of tearing pages and the roar of burning paper.
All the crimes in acquisitions turn to air and ash and vapor.
And the rattle of the shackle far beyond emancipators.
And the loneliest who gather in their stalls.
I hear them all
I hear them all
I hear them all
So while you sit and whistle Dixie with your money and your power.
I can hear the flowers a-growin in the rubble of the towers.
I hear leaders quit their lying
I hear babies quit their crying.
I hear soldiers quit their dying, one and all.
I hear them all
I hear them all
I hear them all
I hear the tender words from Zion, I hear Noah's waterfall.
Hear the gentle lamb of Judah sleeping at the feet of Buddha.
And the prophets from Elija to the old Paiute Wovoka.
Take their places at the table when they're called.
I hear them all
I hear them all
I hear them all
RC
Remember, we are only one cubic mile from freedom
I like their take on Dylan's rock me
Yes, the gentlemen played the Victoria theatre in Dayton, Ohio and encored with Dylan. I would love for Dylan to take this group on as his backup band, for a tour. I will see them again at Bonnaroo in June.
I saw them in Acton, Maine several years ago.
what can I say? Cutest boys that play banjos and fiddles.
to
die
for.
Interesting reading.
http://www.wecnmagazine.com/2007issues/may/may07.html
So is Dave Hoopman misquoting the Guy, or should he be dismissed for his age as possibly senile?
I am sure the future lies somewhere between his opinion and Al Gore.
http://www.alumnifriends.mines.edu/photo_gallery/2003/hon_degree_medal_2...
http://www.motherearthnews.com/Livestock-and-Farming/1976-03-01/The-Plow...
It is a 31 year difference between articles... anything could have happened.
The problem with the May 2007 article is that the inteviewer isn't asking informed questions so much as just rambling along. The interviewer really needed to ask specific questions regarding CO2 levels, etc.
I'm not sure what to think, his statements about the fundamentals of Climate Change are quite wrong. He is quoted favourably by GW deniers, which is not a good sign.
He does have a point though, climate change of the glacial sort is currently driven by Milankovitch cycles. Manmade global warming may delay the onset of the next glacial period, but is unlikly to prevent it.
William Ruddiman has published some theories in area, worth reading. However, global warming, by definition, will not lead us into a glaciation. It will be a few thousand years before that happens.
You heard it here first....
http://www.realtechnews.com/posts/4365
Hmmm....seems plausible at minimum and I've been telling people the rise of CHINDIA will come at the expense of America. It's a zero sum game.
The question I always ask is once the outsourcing happens, who's going to be left with jobs to buy the products?
I have asked the same question to my professors and I have yet to get an honest answer. They are so into the fact that comparitive advantage works, that the only answer I ever got was the gov't is suppose to retrain displaced workers. Well that's grand and all, but what about the jobs left?
here's my opinion. We've got roughly 330 million people. I would surmise we only need about half that. The middle class is a social engine for control. Everyone hopes to get there and hardly anyone makes it out. There are fewer ways to make it into the middle class and they are being wiped out by inflation and debt. The lower classes are doomed as they are in a global labor arbitrage game they can not win since the costs of living are so much higher.
Meanwhile the middle class is getting squeezed like an orange between looking upper class and servicing the debt to do so. In the meantime they are mostly oblivious to the coming disasters. The upper class will always be this way and they are not worried about labor issues as they are now truly global in that many US companies now derive a majority of their revenues from outside this country.
The only snowball in hell's chance is to gain an edge in information and utilize skills that are locally specific. It's hard to say what will happen but planning for what could happen like reduced globalization but you've got to keep in mind paradigmes are resistance to change and we'll find every way to maintain the status quo.
The "Great Education Myth" as Sirota calls it.
cfm in Gray, ME
I keep reading posts about the lack of skilled workers in the energy industry in the US. We have spent the last 30 years telling kids the future lays in computer software. What I'm reading tells me all those kids should have learned welding, mechanics, and construction skills instead. There is even a lack of drivers for 18-wheelers. My brother paid for college by working at McDonald's. He worked for 15 years as a systems analyst. His job was outsourced. He's back working at McDonald's.
There's a great 90 day course to learn the skills to work on a land drilling rig through the Midland, Texas community college. I'd bet money that with a little hands-on experience and his computer skills he could get an extremely good job with any number of oil service companies in domestic exploration and production.
The thing that is really scary is that huge numbers of empty shipping containers are piling up in the ports because the US no longer makes much of anything that the rest of the world wants to buy.
Empty shipping containers?????
One of the most accurate measures of the activity of the US economy and consumer/industry spending is rail freight traffic. The first four months of the year show railroad carload traffic down over four percent and intermodal traffic (containers and trailers) down about the same. Those goods from China are not flowing nearly as fast as they were a year ago. Go to www.progressiverailroading.com and hit the news bar and look at May 4th rail news about rail freight traffic.
On Another Note:
Several posters recently made statements that India did not increase its oil consumption and oil imports last year. WRONG! The above article states that India's oil imports were up over 11 percent year over year for 2006. They are on course for more of the same this year.
Shawnott: Not a problem for the companies. The middle class (consumers) are growing rapidly in Chindia. I am always shocked how most Americans are unable to visualize a world economy that is not dependent upon the American middle class consumer.
The one "good" thing I see coming from this is, as the upper middle class and middle class become devalued down closer to lower class, the political majority will swing from corporate / capitalist to liberal / socialist.
I fear the lag time between elections and lag time for americans to realize they are now lower class will be far too long.
Good insight. I argue with some socialist bent friends about this sometimes. I honestly believe at some point taxes will go up to maintain the regime but it will be cast as a necessity against the acsencion of China which is currently fueled by American and other foreign firms investing. When the engine gets started so to speak, does anyone think the Chinese might not take control of their domestic industries once they are built? They will do it in the name of their citizens who will by then reached a middle class status en mass and would be demanding social change...look at this it's starting already....
http://www.breitbart.com/article.php?id=070507090936.m37a86dd&show_artic...
I didnt know that one child policy children could have TWO! Guess that was the compromise. Point is...these people will react like humans do and demand a larger share. So the state will either dissolve into something new and more open or it goes the other way once the power is accumulated on a world scale. I've got a whole idea how they could be working on a big plan to take America financially, but this is finals week so I can't put my effort into yet. Hopefully following graduation I'll have some time to put some effort into it.
I Have NO simpathy for automakers.
Imagine how many EV1's they would be selling today.
If your industry is based building machines that run on fossil fuels, and you dont have the common sense to research the future supply of the fuel for the machines you build, then you deserve to become extinct. Every other dam country's automakers caught on YEARS ago.
for some reason this posted in the wrong spot...sorry
Not to mention their role in deliberately killing off urban mass transit in numerous cities to FORCE people to buy and drive their #%%$# cars .
"I Have NO simpathy for automakers."
I assume you mean American automakers. Thats too bad considering how many Americans are employed by them. And not all of those employed have a say in what vehicles actually see production.
As for the EV1, which was designed to address Californias' assinine "zero emmission" policy not fuel savings, it FAILED in the market. And cost billions to produce.
"If your industry is based building machines that run on fossil fuels, and you dont have the common sense to research the future supply of the fuel for the machines you build, then you deserve to become extinct. Every other dam country's automakers caught on YEARS ago."
As for researching alternatives to fossil fuels GM and others are spending billions on automotive applications using alternatives as fuel. Unfortunately there are NO suitable alternatives for fossil fuels, each having MAJOR drawbacks.
Also the last time I looked EVERY automaker produces vehicles that run EXCLUSIVELY on fossil fuels. Can you name me one that does not?
Daimler Chyrseler makes the GEM.
http://www.gemcar.com
And Honda makes a compressed natural gas Civic that could be converted (by the owner) to bio-methane.
BTW: GM spends billions on PR and advertising, NOT on "researching alternative fuels". And demand exceeded supply for the EV-!.
Best Wishes for the survival of responsible auto companies,
Alan
<"Daimler Chyrseler makes the GEM.">
The GEM runs off of fossil fuel generated electricty stored in batteries. The sources and ratio of electricity can be found here: http://en.wikipedia.org/wiki/Electricity_generation
<"And Honda makes a compressed natural gas Civic that could be converted (by the owner) to bio-methane.">
Compressed natural gas is a fossil fuel. I haven't found bio-methane at my local gas station yet.
<"BTW: GM spends billions on PR and advertising, NOT on "researching alternative fuels".">
I have no doubt that marketing and advertisings' budget outweighs Larry Burns', here is a list of just a few of the vehicles GM made in their search for alternative fuel applications. And they weren't done on the cheap either!
http://www.gm.com/company/gmability/adv_tech/400_fcv/fact_sheets.html
<"And demand exceeded supply for the EV-!.">
Not in the North! Having one die on you on the test track certainly gives one time to ponder that particular vehicles shortcomings. "GM's internal research showed very clearly that the EV1's already perilously low range would be reduced by as much as 50% for use in cold-weather states." See here for more: http://en.wikipedia.org/wiki/EV-1
A Very large market exists where cold weather is rarely or never a problem (and many/most US households have two cars).
US West Coast + Coastal BC
Desert SW
Mexico
US Gulf Coast
Florida
Personally, a majority of my trips are less than 15 miles round trip and it gets below 32 F about twice a year on average.
I see GM research as an extension of their PR department. They are not serious about developing anything (except hiring psychologists to design Hummers for the reptile brain). Small Daimler Benz had their own wind tunnel DECADES BEFORE GM did. Their VOLT has been shown to have just been a publicity stunt (used off the shelf golf cart drive train).
To paraphrase "Engine Charlie", GMs President and Eisenhower's Secretary of Defense; "Wfat is good for GM is bad for the United States".
My first car was ALMOST a Vega (some high school friends did buy that hand grenade of a car). If I had bought it, the financial disaster would have destroyed my working through college and changed the course of my life.
Worst Hopes for GM,
Alan
"A Very large market exists where cold weather is rarely or never a problem (and many/most US households have two cars)."
An automotive company cannot make a car that functions exclusively in those areas and climes. Imagine the headlines (not to mention lawsuits) "Family of four perishes driving an EV1 through Rocky mountain snowstorm"
"Personally, a majority of my trips are less than 15 miles round trip and it gets below 32 F about twice a year on average."
That puts you in the front of the line to qualify as an ideal Volt customer!
"Small Daimler Benz" also suffered the same strange malady as did the rest of the Fatherland. NO DOMESTIC SUPPLY OF OIL! WWII ring a bell? I'll bet, back then, they wished they didn't HAVE to have their own windtunnel.
"design Hummers for the reptile brain)."
No argument.
"My first car was ALMOST a Vega"
No comment (see below) :-P
"Worst Hopes for GM"
That wasn't a very smart comment and it belies the error in your thinking. As if you would be untouched should GM go under! But I was thinking more about the two big flaws in your proposing of light rail systems you coveniently overlook:
1. Light rail had a shot in this country and it FAILED.
2. Train stations are excellent targets for terrorists. Try the Madrid bombing and the Tokyo subway gas attack for example. A couple of successful high profile attacks would put the whammy on ridership.
Around the Detroit area a popular bumper sticker reads "Out of a job yet? Keep buying foreign".
Incidentally GM's Bob Lutz was on a local show AUTOLINE DETROIT
http://www.autolinedetroit.tv/# (warning long load time)
calling for a "Manhattan type project" to address both fuel economy and global warming. Sounds like he's getting the "word". I wonder if he's read "Twilight" or TOD?
As I said last year, assume that your income drops by 50% and assume that gasoline goes to at least $8 per gallon. How would you change your lifestyle?
If I am wrong about where we are headed, you will have less or no debt, more money in the bank, and a lower stress way of life.
For those who believed, or believe, in borrowing their way to prosperity, we are going to see the emergence of an interesting new voting bloc--the Formerly Well Off (FWO's), who used to own nice debt financed cars and homes. The FWO's who believed ExxonMobil and CERA's pronouncements that Peak Oil was decades away are going to in a very, very pissed off mood.
Hell hath no fury like a FWO who has had his SUV repossessed and his McMansion foreclosed upon.
The last time anything at all like this happened - the 1970s - the thrifty people with "money in the bank" were looted by means of both rampant inflation and the Savings and Loan taxpayer bailout, in order to provide a free ride for the "FWO"s of that day. In the end the FWOs weren't - instead, they made out like bandits by eventually paying off their debts in grossly inflated dollars.
Maybe it will be Different This Time Around. But it's not clear how much to bet on it. So far, the discussion seems to center on the government just giving the potential FWOs the houses they never paid for, and balancing the books by yet again looting the thrifty. So precedent and politics, at least since the mid 20th century, do not particularly endorse thrift. Instead, they say that "money in the bank" is simply flushed down the drain.
You hit on something important. Until recently, being thrifty has not really paid off. Yes, a lot of people are probably going to finally get burned as the music stops, but there are a lot people who have made a lot of money or, at least, have enjoyed a lot of assets during the era of no limits debt.
Presumably, a bunch of people are losing their homes that they couldn't afford in the first place. They will have to make other arrangements, as it were. On the flip side, however, a radical reduction in housing prices will be beneficial for those who are just now getting into the market.
Arguably, if you are going to have trouble paying your mortage, this is the best of times. Since you are now part of a crowd, there is an incentive for lenders to be "creative" in keeping you and everyone else in their homes.
I must admit I have trouble wrapping my mind around this, probably because of my somewhat puritan perspective on debt. I have no debts other than a small mortgage, and that is very much less than I can afford.
Maybe I am the one that is the sucker.
Yes it's how the old saying goes, if you owe the bank a thousand pounds, you have a problem, if you owe the bank a million pounds the bank is the one with the problem. Well, together their mortgage lenders owe the bank a lot more than a million, and if they break some they might break a lot more.
It's an interesting question that we have debated at length. Clearly, at the present time, we are see deflationary effects in the housing/auto/finance sectors and inflationary effects in food and energy.
Regardless of whether we end up with Weimar Republic style inflation or Thirties style deflation, or both sequentially, or more likely some combination of the two, reducing your cost of living and energy consumption, IMO, is a very good idea.
The US is going to be forced, whether we like it or not, to reduce our overall consumption, especially our energy consumption, in much the same way that forced energy conservation came knocking on Africa's door last year.
Itulip has it nailed....disinflationary forces just like you describe WT, followed by inflationary hell.
http://www.itulip.com/forums/showthread.php?t=417
He has some clout in the past since he did manage to muster the strength to call the tech boom, but everyone claims to have done so now. I think on the back end (5 years maybe or more) we see massive deflation as this whole thing pops especially when oil scarcity becomes front and center as opposed to the sidelines it still sits on.
Though interesting, the argument has a certain flaw - the assumption that the Fed can lower interest rates as it pleases, without concern of broader consequences.
As America is in need of constant international capital inflows at this point, the Fed can cut interest rates as it wishes - at the cost of destroying that balancing act.
Deflation is not exactly something that can be avoided - no one can be forced to take credit. And if a speculative bubble stops growing, it collapses.