DrumBeat: May 25, 2007
Posted by Stoneleigh on May 25, 2007 - 7:00am
Topic: Miscellaneous
Gut Check America: Share your stories
Are you worried or outraged by something in your neighborhood, in our government or across the nation? What gnaws at you but seems to go unmentioned in the national political campaigns?
This is your chance to drive the conversation about what really matters in America.
Here’s how it works: You tell us about the specific issues that are most important to you and explain how they affect your daily life. We also want to hear how you would solve the problem.
Why not tell them about The Oil Drum while you're at it!
In their haste to shut down a leak of information they didn't control, the federal Tories may be slamming the door on the only option that could keep the Mackenzie Gas Project from being mothballed.
Yet there's a strong case to be made that the option is sound from a market, consumer, public policy and political perspective: an Arctic pipeline built by a pipeline company such as TransCanada Corp., perhaps with one or more partners, perhaps with a degree of temporary government backing including loan guarantees, that would be open to everyone producing natural gas in the Northwest Territories.
The main and obvious option, of course, is the one that has been before us for seven years, a pipeline built by a partnership of oil companies headed by Imperial Oil Ltd.
Yet it's becoming increasingly apparent that this option is unrealistic on the oil companies' terms, which includes heavy government subsidies as a way to reduce their risk.
Oil prices forecast to hit $80
Global oil prices could easily rally to record levels above $80 a barrel this summer, analysts forecast on Thursday, due to Middle East tensions, red hot Chinese growth and a reluctant OPEC.
But record high prices will not have the same impact on oil demand as in the past few years since consumers have grown accustomed to it.
Gas station shuts down pumps to protest oil prices; motorists cheer
Motorists pulled in to Harvey Pollack’s gas station today, honked and gave him a thumbs-up — because he wasn’t selling any fuel.
The owner of Towne Market Mobil in this suburb north of Milwaukee shut down his pumps for 24 hours, hoping to start a movement aimed at convincing oil companies to lower their prices.
“Somebody out there is making money at these prices, but not me,” said Pollack, 57. “So I just thought: What can I do to help the consumer?”
Weak gasoline inventories send oil prices higher
The market has been preoccupied with gasoline prices ahead of the peak demand season from the end of this month when Americans take to the roads on holiday.
"The report was very weak for crude oil and very bullish for gasoline. Even though gasoline inventories have increased, demand is very strong and the situation is not really improving much," Mitsui Bussan Futures chief commodities strategist, Tetsu Emori, said from Tokyo.
Global Insight analyst Simon Wardell said gasoline stocks should be rising more sharply in May and June but refinery outages in the United States have hit inventories.
US lawmaker queries BP on US refinery outages
A senior U.S. senator on Thursday asked BP Plc's (BP.L: Quote, Profile , Research) top U.S. executive to explain why two of the oil company's biggest refineries were operating at half capacity right before the start of the peak U.S. summer driving season.
Sen. Pete Domenici of New Mexico, top Republican on the Senate Energy Committee, asked BP America Chief Executive Bob Malone to explain why two giant BP refineries -- one in Texas City, Texas, and the other in Whiting, Indiana - were running at half capacity.
The peak oil crisis: The minimum operating level
As gasoline is largely delivered by pipeline, barge and coastal tankers these days, a lot of gasoline is tied up in transit. Thus the amount of gasoline “trapped” in transport is substantial. This “trapped” gasoline is known as the “minimum operating level.”
The Department of Energy used to publish this number, but stopped doing so a few years ago on the grounds they were not confident that it was accurate. This week, however, the old number for the minimum operating level surfaced in a 3-year-old government report and it turned out to be 185 million barrels – very close to the 197 million in the inventory. It really does not matter what the actual minimum level is, for any figure remotely close to 197 million is cause for concern. If stockpiles – on either coast – drop much more, we are going to find out, the hard way, exactly where the minimal operating level is, for that will be the day the shortages develop.
Oil executive responds to outcry
The country is short of refining capacity. That is a direct outflow of a business that, say, in 2003 and 2004 had an average return of 6 percent or lower.
So there has not been a lot of margin in refining over the years, and there hasn't been a huge incentive for refiners to invest. Now, all of the sudden, you find yourself in a situation where demand has caught up with production capacity, and the pressure is on.
For a while we were able to compensate with imports from Europe, and that is still happening. But obviously we're in a different world right now ... With refineries running close to 100 percent capacity, any little thing that happens has an impact. It is a matter of enough capacity. In order to build that capacity, you need four to five years. So we'll have to wait till that catches up.
Even with high gas prices causing financial hardship for many Americans, most motorists still plan to stick to the roads at least until pump prices climb another dollar, according to a new Washington Post-ABC News poll.
The poll found that nearly six in 10 Americans say that near-record gasoline prices are a hardship, but only 11 percent said that soaring prices would curtail their driving habits in the coming weeks. Three in 10 said they might skip a summer road trip.
The average price that drivers said would compel them to significantly cut back on their driving was $4.38 a gallon. In the western United States, where gasoline prices are typically higher than in the rest of the country, the average respondent said the price would have to hit $5.12 a gallon.
Refinery's impact assessment won't look at emissions
The proposed new Irving oil refinery for Saint John will not undergo a full environmental impact assessment, and one New Brunswick environmental group is shocked.
The Canadian Environmental Assessment Agency announced Thursday the proposed scope of the EIA would be restricted to the environmental impact of constructing a pier and breakwater on the site.
A spokesperson for the agency said an examination of air emissions as part of the EIA is unnecessary, because the refinery project would already be subject to strict federal law on greenhouse gas emissions.
U.S. lawmakers weigh using coal as transport fuel
A U.S. Senate panel on Thursday weighed plans to turn plentiful U.S. coal supplies into transport fuels, but some experts warned that building "coal-to-liquids" plants will boost greenhouse gas emissions.
Policymakers are looking at America's 250-year supply of coal as a way to fuel vehicles while reducing dependence on crude oil imports, which meet about 60 percent of daily needs.
Countries like South Africa already use a process commercialized by Germany in World War II to turn coal into fuel for use in cars, trucks and airplanes. China also is eyeing ways to boost its coal-conversion capacity.
Iran's decision to raise gas prices exposes economic vulnerability
Experts warn of the popular backlash that other countries have faced when dealing with the same need to raise long-subsidized staple prices. At the same time, they doubt the 25 percent price hike imposed this week on Iran's gasoline will do very much, on its own, to solve the country's underlying economic problems.
Even after Tuesday's decision to raise gasoline prices from 800 rials per liter to 1,000 rials per liter (0.059 euros/liter to 0.074 euros/liter, 30 cents/gallon to 38 U.S. cents/gallon), Iran has some of the lowest gas prices in the world. Those rock-bottom prices have led to unnaturally high demand and have saddled the government with fuel subsidies that cost billions of dollars a year.
The demand also forces Iran to import more than 50 percent of the gasoline it consumes because it lacks the refinery capacity to keep up — a glaring vulnerability as the U.S. and its allies look for ways to pressure Tehran to give up its nuclear program.
East China Sea talks test warming China-Japan ties
Today's resumption of China and Japan's attempts to resolve their dispute over gas exploration rights in the East China Sea will test the two countries' dramatic ice-thawing talks in Tokyo last month.
The Beijing meeting to draw up a joint development proposal is rich with potential for the newly minted "strategic relationship of mutual benefit".
Pakistan seeks foreign, private investment to resolve power crisis
Pakistani President General Pervez Musharraf on Thursday invited the private sector and foreign investors to set up power plants in the country to help meet its energy requirements.
Pakistan was facing serious shortage in energy sector, and offered lucrative returns to investors as the power needs were going up at the rate of 10 percent per annum, said Musharraf at a power plant foundation-laying ceremony near southern city Karachi, quoted by state media.
Musharraf said Pakistani government was working on a short, medium and long-term strategy to meet power shortage and said he was looking for all sorts of sources for power generation including water, gas, coal, alternative and nuclear energy.
The government was removing all bottlenecks to facilitate investors in the power sector, and had created investor-friendly policies by implementing liberalization and deregulation, Associated Press of Pakistan quoted the president as saying.
Latin America: Beating The Oil Curse
Pemex is Mexico's piñata. Politicians are so accustomed to the steady flow of cash from the company that they've never mustered the discipline to cut government spending or carry out major tax reform. Now, after years of underinvesting in exploration, Pemex is watching helplessly as output from its biggest oil field, Cantarell, declines by 20% a year. At current production rates, Mexico's oil reserves will last less than 10 years, meaning the world's sixth-largest oil-producing country runs the risk of becoming an oil importer.
Contrast Pemex's woes with the situation in Brazil. At the time of the price shocks of the 1970s, Brazil imported all its crude and the economy nearly collapsed. Since then, state oil company Petróleo Brásileiro (PBR ) (Petrobras) has been driven with a missionary zeal that led the country to become self-sufficient in oil last year. The richest deposits were offshore, at depths that hadn't been attempted even by Big Oil multinationals. But Petrobras' engineers developed innovative techniques and equipment that allowed them to pump crude in more than 6,000 feet of water—a record at the time and still among the deepest operations worldwide.
Brazil's Petrobras to build ethanol export pipeline
Brazil's state-owned oil and gas company Petrobras announced on Tuesday that it would begin building ethanol export pipelines following the completion of a feasibility study.
Construction of the pipelines, known as the Ethanol Export Corridor, will begin within a few months and the network will be ready for use in 2010 or 2011, said Marcelino Guedes Gomes, director of ducts and terminals at Petrobras transportation subsidiary Transpetro.
The project will build pipelines linking the western central regions that produce sugar, the main ethanol ingredient in Brazil,to the ports of Santos and Paranagua, in the coastal states of SaoPaulo and Parana.
BP's Russian gas licence 'to be revoked'
TNK-BP's subsidiary working the field, Rusia Petroleum, has gone to the courts to clarify the terms of its Kovytka licence, a process that could take several weeks. But yesterday, Oleg Mitvol, deputy head of environmental watchdog Rosprirodnadzor, said "the likelihood" of TNK-BP's licence being revoked was "100pc".
The relatively under-developed Kovytka field has the potential to be a massive revenue-earner for BP, but the company's Russian operation is accused of breaching its licence by not extracting gas fast enough. TNK-BP was expected to produce 9bn cubic metres of gas annually, but Mr Mitvol says only 33.9m came out of the ground last year.
TNK-BP says that the government's failure to invest in infrastructure means that even if more gas was produced it could not be transported to customers.
Anti-trust body suspends $4 bln deal to sell Yukos offices
Russia's anti-monopoly service has postponed until August 2 a deal worth nearly $4 billion to sell former Yukos offices to Prana, saying it needs more information on the company's owners, a Russian business daily said Wednesday.
Kommersant said the delay could reflect Russian authorities' uncertainty over who stood to benefit from the May 11 deal, when the previously unknown company offered nearly five times more than the opening price for the bankrupt oil firm's 22-story office building in Moscow, outstripping state-backed oil giant Rosneft.
Originally, the Federal Anti-monopoly Service (FAS) threatened to block the deal if Prana failed to clarify its ownership structure within 14 days following the auction, and refused to approve the purchase of other Yukos assets by a company apparently affiliated with independent oil giant LUKoil two weeks ago over "lack of transparency," the daily said.
Austrian deal will extend Gazprom grip on European energy market
Gazprom is poised to strengthen its grip over the European energy market with the purchase of a stake in a strategic Austrian gas hub that would give it a powerful lever over an EU project to bring in non-Russian supplies of fuel from Central Asia and the Middle East.
The mystery over the shortage of petrol and diesel at filling stations across Qatar is deepening.
Suppliers say there are no production or distribution glitches. But many filling stations told The Peninsula that diesel and ‘Super’ petrol were in short supply as Woqod (Qatar Fuel) distribution had been infrequent.
GE invests in renewable energy in British Columbia
General Electric Co.'s GE Energy Financial Services unit announced three renewable energy projects Thursday including investments in a wind farm in Texas and a hydropower project in British Columbia.
GE Energy Financial Services said it would double its renewable energy investments by 2010 as part of GE's "ecomagination" program.
Costa Rica Aims to Win "Carbon Neutral" Nation Race
Green trail-blazer Costa Rica is drawing up plans to cut its net greenhouse gas emissions to zero before 2030, the government said on Thursday, and aims to be the first nation to offset all its carbon.
Environment Minister Roberto Dobles said the tiny, jungle-cloaked Central American nation would clean up its fossil fuel-fired power plants, promote hybrid vehicles and increase tree planting to balance its emissions.
"The goal is to be carbon neutral," Dobles told Reuters. "We'd like to do it in the next 20 years." He said Costa Rica would also eliminate net emissions of other greenhouse gases.
Hassan Jumaa Awad, president of the Iraqi Federation of Oil Unions, an umbrella group representing more than 26,000 workers, said their complaints with the law rest primarily on the fear foreign companies will have too much access to -- and possibly ownership of -- Iraq's oil.
"First of all, we are against the production sharing agreements," Awad said.PSAs are deals whereby a company provides capital investment in the project, sells enough of the first oil produced to recoup its costs, and then splits the rest of the oil with the government. Companies can "book" their reserves, bolstering their portfolios.
"These kinds of contracts ... we don't like it at all," Awad, speaking via a translator, told United Press International from a mobile phone in Rome. He's on a speaking tour to generate support and spread information about the law.
Partnership courts Gazprom for Quebec LNG plant
Rabaska is a partnership of Montreal's Gaz Métro LP, Alberta-based Enbridge Inc. and the French energy company Gaz de France. It is one of dozens of energy companies that are planning to build LNG terminals around North America to offset expected declines in conventional natural gas production in both the United States and Canada. But there are more buyers of liquefied natural gas in the world than there are sellers, and the analysts have raised doubts about the viability of many of the projects, based on lack of assured gas supply.
Petrocan and its partner, TransCanada Corp., are planning to build an LNG terminal farther down the St. Lawrence at Gros-Cacouna, Que., and Petrocan has been engaged in long-running negotiations with Gazprom to participate in the Baltic project in order to secure a steady supply of gas.
In return, Gazprom is demanding a stake in the Gros-Cacouna plant; Gazprom executives have said any partner in the Baltic should expect to either sell it downstream assets or allow it to become a partner in projects.
Miller to announce hybrid-conversion project
Fresh off an international meeting of mayors that focused on municipal climate change initiatives, Mayor David Miller is set to announce a plan to convert hybrid vehicles to plug-in models that can be charged at any wall socket and are powered primarily by electricity.
Conventional hybrids are powered by gasoline engines assisted by an electric motor. But Miller is out to prove that when equipped with larger batteries that can be plugged in and recharged, hybrids can operate in a city setting on a single charge for more than 50 kilometres, while using little or no gasoline.
The initiative -- as reported Thursday by The Toronto Star -- is called the Toronto Plug-In Hybrid Vehicle Pilot Project and is set to be announced by Miller on Thursday.
Bank of Montreal has engaged a top New York law firm to unravel "irregularities" related to two of the bank's former commodity traders and a brokerage firm that are at the centre of the $680-million the bank lost betting on the natural-gas market.
Lawyers at Sullivan and Cromwell LLP have been asked to investigate the losses that were covered up because the bank's book of natural-gas trades was valued wrongly based on data provided by New York-based Optionable Inc.
Peace talks on the brink of trade war
The issues are the same as they have been for several years. China's industrial revolution has turned it into a low-cost manufacturing centre and flooded the world with low-cost goods, in the process creating a $232bn (£118bn) trade deficit for the US with China. Defenders of US manufacturing say an artificially low currency gives Chinese companies an unfair cost advantage that is turfing thousands of Americans out of their jobs. Meanwhile, US businesses are under huge restrictions if they want to operate in China, and all the while China is refusing to respect intellectual property rights and - in the shrillest commentators words - stealing overseas designs to further their own economic progress. The Bush administration has already referred China to the World Trade Organisation for alleged breaches of WTO rules and imposed unilateral tariffs to punish the country for DVD counterfeiting.
China, for its part, is trying to move to something akin to a market economy, without provoking instability. As recently as last week it offered new concessions, allowing the yuan to float and appreciate a little more quickly against the dollar and promising it would invest increasing amounts of its government reserves in US assets. In a particularly dramatic gesture, it paid $3bn for a stake in the US private equity firm Blackstone.
Yangtze flood alert as Tibetan glaciers melt
Melting Tibetan glaciers could cause the worst flooding on the Yangtze since 1998, when more than 3,000 people were killed as China's longest river overflowed, state media said Thursday.
"Meteorological and hydrological features in the Yangtze River valley this year are similar to those in 1998," said Cai Qihua, deputy chief of the Yangtze River Flood Control Headquarters, according to the China Daily.
"We should be vigilant for a comparatively big flood on the Yangtze," she was quoted as saying.Vast amounts of snow have melted on the Qinghai-Tibet plateau, where the Yangtze originates, the paper said, attributing the unusually warm winter to El Nino, the abnormal warming of surface ocean waters in the eastern Pacific.
From the high mountains to the vast polar ice sheets, the world is losing its ice faster than anyone thought possible. Even scientists who had monitored Chacaltaya since 1991 thought it would hold out for a few more years. It's no surprise that glaciers are melting as emissions from cars and industry warm the climate. But lately, the ice loss has outstripped the upward creep of global temperatures.
Scientists are finding that glaciers and ice sheets are surprisingly touchy. Instead of melting steadily, like an ice cube on a summer day, they are prone to feedbacks, when melting begets more melting and the ice shrinks precipitously. At Chacaltaya, for instance, the shrinking glacier exposed dark rocks, which sped up its demise by soaking up heat from the sun. Other feedbacks are shriveling bigger mountain glaciers ahead of schedule and sending polar ice sheets slipping into the ocean.
Report says cities, towns can fight climate change better than feds
Canadians eager to push the government for action on the environment and climate change should stop wasting their time on federal and provincial politicians - who are delivering little more than "green rhetoric" - and focus on local leaders who have the power to get things done, says a new report obtained by The Canadian Press.
The report, by the environmental organization Sierra Legal, cites Calgary, East Hawkesbury, Ont., Hudson, Que., Montreal, Okotoks, Alta., Richmond, B.C., Toronto, Vancouver, and Whitehorse as examples of municipalities that took the initiative to address concerns about the environment rather than wait for help from federal or provincial officials.
Why a Chinese monetary tightening could be followed by a global depression
As the worlds largest holder of dollars, the Peoples Bank of China is now the worlds de facto central bank. Thats a scary thought because China is a nouveau riche nation that is not ready for a principal role in global economy. But in 1929, the United States was similarly a parvenu, a country that held 50% of the worlds monetary reserves (in the form of gold) even though its central bank, the Federal Reserve Bank of the United States (or Fed for short), was all of sixteen years old; this adolescent outfit had been created only in 1913 after the passage of the 16th Amendment to the Constitution.
More carry-trade unwind possible
The OECD said it was difficult to gauge the extent of the carry-trade from statistics on cross-border flows, which generally do not point to a recent upturn of outflows from Japan.
It added that most carry-trades were undertaken through fast growing over-the-counter derivatives markets. Outstanding notional positions that involved one half of the trade in yen and Swiss franc amounted to roughly US$4 trillion and US$1trillion respectively in June 2006, the OECD said.
It said there was some evidence pointing to large short positions in yen put options, reflecting insurance sold to those engaged in the carry-trade, with many market participants assuming these short positions are held by Japanese banks. The need to cover these short positions in the event of a sharp yen appreciation could strongly amplify such currency moves, it said.
Still, it warned of the potential fallout from a more sudden unwind of the global carry-trade.
A large amount of outstanding carry-trades implies that any shift in expectations could lead to fairly large, and potentially disruptive, exchange rate swings, with increased volatility feeding into higher interest rates and reduced liquidity, it said.
Regional currency to replace dollar in Argentina-Brazil trade
Argentina and Brazil, South America's two largest economies, will drop the U.S. dollar in favor of a regional currency in their bilateral trade starting in October 2007, Argentine Economics Minister Felisa Miceli said.
The countries' transition to a new currency, as yet unnamed, is part of a pilot project by the South American continent's major trade alliance, Mercosur, to replace the U.S. currency in internal transactions with money of its own, Miceli said.
World Population Becomes More Urban Than Rural
Cities refine and process rural goods for urban and rural consumers. But if either cities or rural areas had to sustain themselves without the other, Wimberley says, few would bet on the cities.
“As long as cities exist, they will need rural resources – including the rural people and communities that help provide urban necessities,” he said. “Clean air, water, food, fiber, forest products and minerals all have their sources in rural areas. Cities cannot stand alone; rural natural resources can. Cities must depend on rural resources.”
Change the Rules, Change the Future
But times change. Ten years later, it's increasingly clear that it will be more costly not to act on global warming than to act. Clean, renewable, efficient energy will not be a burden but a boon -- the next in a series of revolutions, beginning with telecom and digital that have invigorated our economy with new ideas, new industries, and new jobs.
Voters, investors, activists, business leaders, and policy experts are pushing for clean energy to create jobs, limit climate change, and reduce America's dependence on foreign oil. And yet, progress is slow: oil imports and carbon emissions continue to rise. Why?
Because the rules of the game -- the laws, regulations, subsidies, and tax credits that shape the energy market and the way it acts -- continue to make fossil fuels a less expensive, more convenient choice for consumers.
Coal subsidies maintained until 2010
Europe's coal industry has been declining since the 1950s, as prices for imported coal decreased and local extraction costs increased. With the expiry of the European Coal and Steel treaty in 2002, the EU adopted the Coal Regulation in order "to allow for the continued restructuring of the coal industry". Under the regulation, continued state aid is allowed on the condition that it follows a "downward trend".
Coal subsidies are a controversial issue, and the EU has been criticised for continuing to subsidise what is widely considered a "dirty" source of energy. Environment Commissioner Stavros Dimas and Enterprise and Industry Commissioner Günter Verheugen have been at odds over how to balance environmental concerns with competitiveness, particularly with respect to the allocation of funds to traditional industries such as coal.
European Commission proposes to keep coal subsidies intact
The EU coal industry has been subject to special state aid rules since the European Coal and Steel treaty, which established the EU's predecessor the European Coal and Steel Community in 1952, expired in 2002.
The rules provide an exception to the general prohibition of state aid in order to allow for the continued restructuring of the coal industry, which has been unprofitable for many years in most member states. But the special arrangement will end by 2010. There are important differences in the competitive situation of coal mines in Europe. Mines in Germany, Spain, and Hungary have production costs of more than twice the world market price for coal, and are therefore dependent on operating aid, while mines in the Czech Republic, Poland, Britain and Slovakia are more or less competitive on the world market, which receive either no subsidies at all or limited subsidies.
(OK, I will throw 1 story in there - RR)
Oil Industry Says Biofuel Push May Hurt at Pump
“If the national policy of the country is to push for dramatic increases in the biofuels industry, this is a disincentive for those making investment decisions on expanding capacity in oil products and refining,” said John D. Hofmeister, the president of the Shell Oil Company. “Industrywide, this will have an impact.”
Very nice mix in the Drumbeat today. I was going to add to it, but I think you have it covered.
One thing I will say: It is, without a doubt, going to be a monster quarter for oil companies. Refining is going to have a big quarter due to gasoline prices, and upstream is going to have a big quarter because oil is still at $60 and natural gas - due to high demand from ethanol plants - is at $7.50.
Note that I do not point this out as in "Woo-hoo, we are rolling in cash!" I am just making the observation, because I think this will put the public and the politicians in a frenzy. I think when profits do start to get released, the pressure on congress to do something is going to be intense. This quarter may tip them over the edge.
As I wrote on my blog this morning:
But what congress will undoubtedly do is pass laws that attempt to extend those days of cheap gasoline. Dealing with the issue in this way will only make things worse for consumers.
If you have political power you use it to get what you want. That's been going on for decades. If enough voters can get their representatives to legislate cheap gas, that's the way it is.
Corporations use the exact same process to get tax breaks and subsidies all the time.
Basic common sense. If more of us had some, we would all be libertarian.
Err, I think I have heard pretty much the same from everybody who is totally convinced their ideology is "the correct one"! :)
One thing I find confusing is how different terms are used for ideologies here in Europe and over there in America. For instance, the French word "libertaire" is, or at least was until recently, pretty much synonymous with "anarchiste", and if I'm not totally mistaken most anarchists have historically considered themselves socialist and very much part of the working class movement. As for socialist, very few people use that in America; there the usual word would appear to be "progressive". In Europe, on the other hand, socialists are very much in the mainstream and "progressive" doesn't really mean anything at all.
So my question is: what exactly do you mean by libertarian? Is Ron Paul, for instance, a libertarian? To me he seems like an honest and intelligent person, but from a European perspective, I think if he ran the US the gap between the rich and the poor would certainly not be any smaller than it is today. Am I mistaken if I think that the sort of libertarianism you buy into wouldn't involve any redistribution of wealth, other than perhaps through the charity of the well-off?
Here in Scandinavia (I'm Finnish) it is pretty much taken for granted that the government has a duty to look after those in need; that is a requisite for social peace. There is not a single party in Finland that openly opposes this sort of redistribution of wealth, the right and the left just disagree on how it should be done, basically.
I, with probably the vast majority of Scandinavians, am quite fond of John Rawls' Theory of Justice, and if I were put in the situation he hypothesized (that you should choose a political system into which you would prefer to be born if you had no chance of knowing the social position of your parents) I would certainly prefer the Scandinavian model to a "libertarian" model. To me it makes sense, that basic common sense...
Post PO, this sort of system may become impossible, but I personally will never vote for anybody who would be willing to give it up.
AIUI,
Liberals want more restrictions on business and less on individuals.
Conservatives want more restrictions on individuals and less on business.
Libertarians want less restrictions on business and individuals.
Authoritarians want more restriction on business and individuals.
Those are excellent definitions in the abstract.
But hiding behind all those labels are the interests of the individual. The real battle over the last 27 years has been between those who believe that more inequality is a good thing and those who believe that more equality is a good thing. The former group does not dare speak this view in public, but since it naturally gravitates towards business & property, it is full of people who are skilled in advertising, so it lies its ass off. And it's won overwhelmingly.
Sometimes a crack shows in the anti-equality armor. During the early Reagan era I found a book by a Christian conservative backing far-right policies, but also arguing that taxes should be LOWER on rich people than poor people because the rich are clearly superior decision-makers and thus their spending is good for the economy and the spending of inferiors is bad for the economy. Now that is grotesque. But look at the subsequent effort by the Right, both "conservative" and "libertarian", to bring about exactly this state of affairs. They have moved heaven and earth to convince the ordinary American that his well-being entirely depends on the upper several % of citizens getting power over everything that matters.
Now to me the interesting division is between those who feel that capitalism is properly concentrating wealth and power in the hands of the "right" people, and those supporters of inequality who are shocked to discover that capitalism concentrates wealth and power in the hands of those they consider subhuman: Jewish bankers, black rappers, gay actors, etc, etc. That latter group is the dirty secret of American politics. They worship property as long as they have enough that they can piss on some lower caste. They assume that God is the Invisible Hand of the marketplace, ergo if they worship Him and persecute His enemies they will magically get nicer houses than Jews. And when they find that they are on the wrong end of the wealth-polarization process, they have no rational place to turn their wrath.
Yeah, Germany had 'em too.
Since many of these bullies are natural cops, prison guards and soldiers, it's natural that their version of capitalism supports gigantic military budgets, Patriot Acts and Duke Cunninghams. How else do they elevate themselves to their proper place over those faggy Harvard MBAs?
So yeah, Bush's less-affluent supporters are authoritarians, but it's important to see why. And why they're pouring their spare cash into an institution that violates all separation between Church, State and Business: the evangelical Protestant movement. The Falwells and Robertsons can re-define the failure of capitalism to raise the incomes of "good" Americans as actually being caused by a moral perversion of urban liberal elites - exactly Hitler's tack. Since a religion does not have to reward its average follower with rewards in this lifetime, these holy bastards can continue the polarization of American wealth, make fortunes on Wall Street, and then turn the rage of their impoverished followers on scapegoats, first at home, then abroad. You can make your own guess on how peak oil will amplify this.
This will not end in 2008.
It's way more complex than that. [US Only] Consider, why is Tom Friedman a liberal? Why is Hillary a liberal? Saying they want more restrictions on business and less on individuals is just wrong. And obviously so. "Liberalism" is a free market creed based on growth - in particular, that a rising tide (economic growth) will improve everyone's lot so there is no need to address distribution. There are those who think liberalism means pluralism; that's about the same as having Wal-Mart in your *local* Chamber of Commerce, and somehow thinking that, gee, what a nice ally....
Conservatives are either close to extinct or co-opted by the thugs ala Wal-Mart above. Given the triumph of economic liberalism and its adoption by what most people consider the conservative movement, it's hard to find a distinct thread. I'd hazard a guess that the Green Party, as in the sense of the European Greens, is probable the heir to this. But that will take the die-off of a generation that still thinks the Republicans represent their cause. John Dean writes about conservatives in several books - quite good books. Lakoff discusses the conservative personality in his fat book, Moral Politics; that's a good resource too, not his poppy shorter books.
There are analyses that show that libertarians aren't a true species. After all, what does one make of an anarchist that submits to authority when it make sense? They are really authoritarians in disguise.
Nor do authoritarians want more restrictions on business and individuals. It depends on the WHO gets restricted and on who gets to decide - chain of command, class, "the best people". A better distinction might be "rule of law" or "rule of man". A little story: I'm one of the people on the complaint list in Maine taking Verizon to court for wiretapping illegally with NSA - something President Bush has admitted is illegal but says he will continue anyway. The defense, by the US DOJ, is nothing but an affidavit from General Alexander, head of NSA, that there is nothing illegal. Never mind that the President admits it is illegal, the DOJ advanced that defense and the court - also a Bush appointee - accepted it. Authoritarianism.
Authoritarianism is much more than that. Dostoevsky's Grand Inquisitor is a good place to start. Or Catch-22 if you want to go at it from the other side. Just remember, when people are fearful, they seek authority.
cfm in Gray, ME
On issues of Justice:
A Liberal is a Conservative who has been arrested.
A Conservative is a Liberal who has been mugged.
On issues of taxation and profit:
As George Will once said, "America is a system that privatizes gains but socializes risk". If I hit it big, I keep the money. If I lose big, the public shares the loss.
"In America, everyone wants lower taxes, but everyone wants the benefits of government spending and programs. In this respect, all Americans are half Conservative." George Will.
Roger Conner jr.
Remember we are only one cubic mile from freedom
That's just bollox posing as political analysis
--
When no-one around you understands
start your own revolution
and cut out the middle man
Americans have long been sold on the Horatio Alger myth, "As long as you work hard, anyone can rise up from poverty and become rich and successful." This makes it easy to not worry about the less fortunate. If they would just work harder, they could be rich too!
Socialism in this country is associated with the "losers" of the cold war. Since the US prevailed in the cold war, it is obvious to many Americans that unbridled capitalism is the best economic system around and we have the largest economy in the world to prove it!
The fact that we spend 15% of our GDP on health care, have the most overweight people in the world, use (or waste) the most natural resources per capita, and carry a huge amount of debt is something we'd rather not think about.
USA!USA!USA!USA!USA!USA!
... for the convenience of TV, you can only be one of two kinds of human beings, either a liberal or a conservative. -- Kurt Vonnegut
Two of my favorite Vonnegut quotes:
"And I tell you, we are here on earth to fart around, and don't let anybody tell you any different."
I have never found anyone that can come up with an argument to that, certainly not me.
And:
"Electronic communities build nothing. You wind up with nothing. We're dancing animals. How beautiful it is to get up and go do something."
[Gets up and dances a jig.]
-- Kurt Vonnegut, Jr., interview in Inc. Technology January 1996, Vol.17, No. 17
Just let me get into my asbestos suit.
Ron Paul? Opposes the income tax, any traces of the "welfare state", advocates hard currency (gold). Apparently, like for many glibertarians, the US circa 1890 is the gold standard here. No Federal control of anything except an imperialist military. Paul may be honest and even intelligent, but I would not want live in his world.
Libertarianism is an ideology where the building block of society is the private family, living in a fenced compound somewhere in the hills. That's also the extent of society - anybody coming close to My Private Property risks lead poisoning. Like Somalia, only without the positive social cohesion of the clan system.
Somehow libertarians think all the rest of the hard won fruits of civilization (public roads, sanitation) are superfluous. They also think they themselves would magically be the ones making decisions in such a society, that somehow they would not be the unfortunate ones under the heel of the local warlord. Funny how that works.
"Progressive" has a long history in the States: think Theodore Roosevelt. It has been reclaimed on the left, partly for the ideological lineage, and partly because "liberal" has been turned into an epithet by the Right.
In general, when faced with catastrophe (peak oil, year 2000), the American Doomer tends to run for the hills with his rifle and his pony and his sack of beans, not engage in local community building. Which is why I don't have high hopes for post-oil civilization in America - except for spots where people like Alan from Big Easy hold sway. Lesson from human history: the nomads and the villagers fought for centuries - the villagers won.
("Scotty, can you please keep us on topic?" "Aye Aye Sir, back on topic, sir!")
Apparently, like for many glibertarians, the US circa 1890 is the gold standard here.
Considering that peak oil and dealing with global warming at the same time are susposed to push us back to 1890 (at least) isn't it appropriate to have a leader that is stuck in that time?
You touched a nerve. You framed the left / right issue to portray the left leaning totalitarian light types [liberals or "progressives"] as being on a higher moral plain than the right leaning totalitarian light types [big business Republicans and policitally militant Bible Thumpers.] The pest on both groups.
A whole lot of what the U.S. Government does isn't Constitutional. Read the Tenth Amendment. Tell me where progressives line up the Constitution. Show me someone who believes in a "living breathing constitution" and I'll show you an advocate for their version of authoritarianism based on their unwritten rules [that more like guidelines] which they believe they have the right to change as their moods change.
Do the same thing with the right except for the libertarians. You will find that there are a few "conservatives" who believe in the Constitution ... but not many.
BTW, as I see it, Ron Paul is unique. 534 "nays" for Constitutional Government [some profoundly so -- some almost tolerable] with one "yea" -- Ron Paul.
Libertarianism is an ideology where the building block of society is the private family, living in a fenced compound somewhere in the hills. That's also the extent of society - anybody coming close to My Private Property risks lead poisoning. Like Somalia, only without the positive social cohesion of the clan system.
An interesting description with no basis. Casually inflicting "lead poisoning" as a libertarian ideal? BTW, the family is IMO the basis for a healthy society. If kids don't get the right guidance and the appropriate social interaction, the odds aren't good. [Full disclosure: I am single which is not a good thing for the society as a whole -- but it seems to work for me -- and to best of my knowledge I have fathered no children.]
Somehow libertarians think all the rest of the hard won fruits of civilization (public roads, sanitation) are superfluous. They also think they themselves would magically be the ones making decisions in such a society, that somehow they would not be the unfortunate ones under the heel of the local warlord. Funny how that works.
Hardly, the states and local Government can handle local infrastructure and the Commerce Clause as origninally intended can pretty much handle the rest. Note that there are references to "post roads" and perhap other public works in the Constitution. Warlords? Where did that come from?
Privatize all public works? I honestly don't see the point, but if you do don't let the Government stand behind them with rules that guarantee monoply status and a lack of accountability.
BTW, imperialism isn't in the Constitution either ... and Ron Paul is an outspoken critic of U.S. involvement in Iraq in particular and foreing military adventures in general unlike progressive like Teddy Roosevelt, Woodrow Wilson, LBJ and [your are going to hate this] George W. Bush [a proponent of the Medicare drug benefit, the current illegal immigration amnesty in lockstep with Ted Kennedy, and all maner of political pork.]
Finally, Ron Paul may oppose the income tax, but it is Constitutional ... explictly so as an amemndent to the U.S. Constituion [leaving aside some ratification controversies that probably don't have much merit].
Very well put!
I sometimes wish that Libertarians would get their way and establish their own state. It wouldn't take long for them to realise that "the government thingy" might be a good idea after all...
Incidentally, there's a hacker proverb that says "Those who don't know Unix are doomed to reinvent it; poorly". Substitute "Unix" by "government" and you get equally wise words.
I happen to live in Ron Paul's Congressional district, curtosey of that great American Tom Delay (thats sarcasm, you humorless SOB's). So I follow his politics closely.
In the redistricting Delay coveted the Clear Lake area and wanted to torpedo Paul, so he gave the island nation of Galveston to Ron Paul. We have a lesbian mayor and vote democratic.
I seriously considered voting for Paul, but ended up voting for his opponent, an old-fashioned conservative democrat. Paul had the courage of his convictions on a lot of things, but he caucused with the Neocon Republicans, and therefore is responsible for their rough treatment of our civil liberties.
The guy is nuts. He's the Dennis Kucinich of the Republican Party-sounds great but has no influence. An abortionist in their caucus?
Get real.
Dennis Kucinich has a huge influence. The short vegan with the big ears and that weird history of being right to support a muni utility vs the banks. He carries the flag for at least 25% of the activists in the Democratic party right now and for a bunch of others that have abandoned it. He brings up the Iraqi oil law and an amendment to strip it from the benchmarks that the powers that be don't allow on the floor. Impeachment, because if we don't, we might as well elect a criminal. Yeah, a nut case. What are you going to tell me, that he's not presenting the case so that it will be accessible to the mainstream? Ayuh.
cfm in Gray, ME
There's an article on Ron Paul's republican opposition in his congressional district at galvnews.com, the Galveston Daily News website. A Friendswood City Councilman has announced against him for the Republican primary next year because "he doesn't reflect our values".
American socialists call themselves progressives because socialist has come to mean pedophile rapist alien.
Libertarian does not mean anything specific. Perhaps it means you smoke a pipe. More often it means you abhor the socialistic side of Adolf Hitler. But most often it means nothing at all.
No - the conservatives would still be conservative, justifying their prejudices by torturing their beliefs, liberals would still be liberals doing the same, as do libertarians...
...such labels are meaningless, but they do lend a certain smug self-satisfaction to those of us that think our self-appointed label to be virtuous.
--
When no-one around you understands
start your own revolution
and cut out the middle man
Ah Yes-- There is no left-right-libertarian, it is meaningless---
When ever I hear this, I look for the sharp right turn (it always happens)----
As in, slow people keep to the right----
RR: Question: Wasn't it less than a year ago that Vinod Khosla was debating you re ethanol? As a non-expert, it seemed to me that his argument was that corn ethanol would become more competitive as gasoline prices rose. Now that US gasoline prices have risen dramatically, one would expect to see the likes of Khosla trumpeting the advantages of ethanol (now more than ever). The ethanol prices appear to be rising in lockstep with the gasoline prices. Where is the TRAJECTORY?
He did make that argument. And I showed him this graph:
http://www.neo.ne.gov/statshtml/images/66.jpg
Never in the past 25 years, with all the ups and downs of the gasoline markets, has the annual spot price of ethanol been cheaper than gasoline. Those familiar with the EROI problem understand why this is. Khosla did not (and this graph was news to him).
Its hardly a surprise that the price of ethanol stays roughly $0.50 above that of gasoline. As long as the blender can sell it at the same price as gasoline it will stay that way. His income from selling ethanol is determined by the price of gasoline. His costs are the price of ethanol - $0.50.
Assuming the same profit you get this equation:
Price(gasoline) = Price(ethanol) - $0.50
Rearrange and you have
Price(ethanol) = Price(gasoline) + $0.50
I suspect this is why ethanol producers want the the credit to go to the producer instead of the blender, the way things are currently set up provides their opponents with free ammunition.
I refute your point by indicating that the subsidy was started in $yearwhatever and the indication is that for 25 years ethanol has been more expensive. I postulate that ethanol is more expensive because the EROEI is less than gas.
Well then it might be a surprise to you that ethanol prices are NOT currently $0.51 higher than gasoline prices. Check the numbers - CBOT ethanol price $2.20/gal, NYH gasoline $2.40/gal. Thats, uh, -$.20 versus your 'hardly a surprise ' +$.51
"The future is bright. There's plenty of oil. No peak for at least 15 years"
--EIA, IEA, Exxon et. al.
Sounds like it is a good time for the oil companies to load up on "one-time" charges. Even though earnings are usually stated both with and without one-time charges, it would help them to get the public to believe that it isn't as excessive as it appears (even if it is).
I'm not sure what charges they could take care of now. Many times these are due to payout packages for early retirement. Given the skilled labor shortage in the oil industry, that one is probably out. Perhaps restructuring charges, if they do provide some sort of structural improvement in the company.
No matter how you look at it, regardless of if the oil companies make record profits or losses, the public is still going to be enraged over losing their perceived right to cheap petro.
"one-time" charges
With oil going from $20 to over $50 why haven't profit margins *already* gone nuts? Hedging? Cost inflation?
They could buyout one of the big 3 auto makers, plenty of writeoffs they could find there. That would be a marriage made somewhere, though probably not in heaven.
Sounds like it is a good time for the oil companies to load up on "one-time" charges.
I actually suggesting something like that (internally) following Katrina. In that quarter, I knew that our profits would be big, and that there would be a lot of venom spewed our way. So, I wanted to accelerate debt payments and go ahead and buy some things that we knew were coming. But, we didn't.
Robert,
If the refineries need to use Sweet NG for cracking the sour crude. What effect will that have on the draw of supplies in the US. How much more NG will they need to produce from the lower grades of crude to make gasoline. This will make the costs go up because of that price it seems, not counting on drawing down the dwindling supplies in the US of NG.
From reading the descriptions here about the process, it appears to me from that basic info, this could have an impact on price. Any idea the amounts needed to process. Of course power plants use huge quantities, but how much more volume of NG will all the refineries need as they start producing more sour grades.
Quid Clarius Astris
Ubi Bene ibi patria
The demand for natural gas is going up due to the need to process heavy oil (when a hydrocracker is used), sour oil (in a hydrotreater), and for ethanol production (natural gas for fertilizer and the distillation process).
Thanks Robert, but what about the volume needed to do this if you know. Just curious. As NG goes up how will this effect the price of the refined product. With NG on a cliff for depletion could the amount needed for gasoline production become an above ground event.
From the brief read on a another thread, it seems like a good deal of NG is needed. Then it is either burned off or frozen. What about reclamation of this for other uses, what is left after the process.
What happens when NG goes back to 14bucks.
Im not looking to hammer the oil industry Robert. I understand about the other industries, Fertilizer needs NG, but other methods could be used to make Ethanol if needed. But Crude needs the NG from my read.
Robert et all. Im not a newbie to PO. I've been on to this for a very long time. An example. When I started you could search Peak oil and maybe get a few hits. I started doing my own research and was about to put up a website for reference. After about a year or so I went back and did my google and a new site had popped up I hadn't seen. That site was LATOC. Matt had put up everything I had a found and some more. Then it really started to take off. I don't know the industry, put the problem and the "science". I know.
I wrote Matt an email after viewing his site asking if he would consider toning it down a bit. Heck I knew most of this stuff and the way he presented it, I knew it was going to scare people and perhaps panic, which I am sure it did in some cases. Matt didn't LOL, and I still send people to it, but advice them to visit all the others too. Though like most, I don't talk to many anymore. Even now, they just don't want to hear it. Why some of us get PO and 99 percent of population doesn't, it is an interesting question.
Quid Clarius Astris
Ubi Bene ibi patria
Thanks Robert, but what about the volume needed to do this if you know. Just curious. As NG goes up how will this effect the price of the refined product. With NG on a cliff for depletion could the amount needed for gasoline production become an above ground event.
The hydrogen feed rate varies greatly, but a rough number would be 500-1,000 scf/bbl of processed crude for a hydrotreater, and twice that for a hydrocracker (however, if you have a coker, you actually produce natural gas). From there, you can back out the natural gas (used to make the hydrogen in a reformer). The natural gas usage for ethanol is equivalent to about 75% of the BTU value in the ethanol.
I forgot to mention that ULSD and ULSG are also consuming natural gas. Those specs are new, but they require more hydrogen to get the sulfur down to those very low levels.
What happens when NG goes back to 14bucks.
I will give you a hint without coming right out and revealing too much. The idea that natural gas was going to be much more expensive was the reason behind this transaction:
http://www.usatoday.com/money/industries/energy/2005-12-12-conoco-burlin...
The analysts thought it was a bad deal. Natural gas at $7.50 has had them reconsidering. I think the handwriting is on the wall for natural gas. The oil companies' actions suggest that they believe the price is going much higher.
Thanks for the info. Jeez, the govt says NG is going to be 5 bucks in the future, and even in the face of that powerful forecast they decided to still buy them. So far the weather is not a factor. Hurricanes in the Gulf, and lots of AC use in the NE and Winter will be more than interesting. Someone from Boston either here or another board posted that a TV news show said Black outs could happen, of course the reason was "vague".
Squeeze play, all around (baseball ref)
Quid Clarius Astris
Ubi Bene ibi patria
Hello PrisonerX,
Your Quote: "Why some of us get PO and 99 percent of population doesn't, it is an interesting question."
My very simplified theory is that we have an inherited genetic component that elevates our 'predator and habitat awareness' compared to most other people. When our ancestors were out foraging, they were the ones to first spot and possibly warn others where bears, wolves, and tigers might attack from. They were the first to become aware of drought and seasonal changes, then use this info for advantage.
So our noticing today's dangerous changes is a logical survival result of our ancestors' greater ability to elude the sabertooth and longer timeframe habitat disruptions. But we are mostly genetic mutants compared to the 99% that no longer have this orientation or instantly suppress these incoming sensations with denial. Overshooters wildly outnumber those urging caution.
Thus, successful PO + GW Outreach will be an enormous task. It is akin to asking every human to wiggle their ancient vestigial tailbone like a dog, cat, or monkey. That is why the scientists say we can expect a dieoff.
We would have been much better off as a species if we always wanted numerous predators to improve Darwinian fitness. If we always had only a 60% chance of a successful sprint from vehicle to grocery store and back: then our grossly inflated Overshoot would have been much harder to occur.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
I think another part of this is that humans are very poor at evaluating threats correctly. Sensational news stories about shark attacks make people scared to go to the beach. The fact that they are more likely to die from an auto accident on the way to the beach, drowning in the water or skin cancer doesn't sink in for most folks.
After 9/11, people were afraid to fly because of the terrorism threat so they chose to drive instead. The fact that you only need to drive about 11 miles to run the same risk of death as flying never seems to catch on.
... for the convenience of TV, you can only be one of two kinds of human beings, either a liberal or a conservative. -- Kurt Vonnegut
Hmmm, maybe thats why I drive a Tracker LOL>
Quid Clarius Astris
Ubi Bene ibi patria
Mr. Rapier,
Don't know what oil company you work for, but I thought you might find this interesting....suppression of large format NiMH batteries as used in the EV1 and RAV, by Chevron, who owns the patents.
http://www.ev1.org/chevron.htm
This is the kind of crap that gives oil companies a bad name, not to mention record profits, monopoly power, and 400 milliion dollar retirement packages, and 3rd world environmental devastation.
The good news is that patents are only valid for 20 years, so the ones that apply to these batteries should have run out or will do soon ... so you are saved! ... that is if there's enough nickel in the world !!!
Xeroid.
Ah, but then you've lost many many years of a crucial stepping stone technology. They may not be the solution, but they could have provided a pathway. As it is now, we've been standing on the first stepping stone waiting (too long) for the next one to appear. In the meantime basically no infrastructure has been built and very little knowledge or acceptance garnered of electric automobiles. Imagine how much closer we'd be to mass production EV's if we'd built 150,000 practical and desirable ones by now.
In the meantime basically no infrastructure has been built...
And imagine if we had built new Urban and Electrified Inter-City Rail systems at the same rate as the French.
In 2006, Mulhouse France (pop 110,359) got the first of 3 tram lines (all by 2012). That is how far down the list France has gotten for new Urban Rail systems.
With the completion of TGV East (first 300 km of 406 km scheduled to open in two weeks), the high speed inter-city rail network will be essentially complete except for some cross-border connections.
Best Hopes for making up for lost time,
Alan
The average price that drivers said would compel them to significantly cut back on their driving was $4.38 a gallon. In the western United States, where gasoline prices are typically higher than in the rest of the country, the average respondent said the price would have to hit $5.12 a gallon.
Well, that gives some indication of where prices are headed if the inventory situation doesn't improve soon.
That's just talk, I'm inclined to discount that a bit. My gut feeling is that $5 is a magic number. At that point people on minimum wage need to work around an hour to come up with the after tax $5 for one gallon. At that point, a gallon of gas costs more than lunch at a fast food joint. At that point, a single tank refill starts to exceed the cost of a week's groceries for some people. At that point, most SUV, truck & van owners are looking at >$100 tank refills. $5 is halfway to $10, and I suspect most people subconsciously view double digit gas prices as apocalyptic.
At $5, it is not just driving behaviors that really start to change -- moods and attitudes and rhetoric start to change too.
Naw, Law of Receeding Horizons, the price of the fast food lunch will increase.
cfm in Gray, ME
No, people will stop super-sizing first.
Just need to remind people that they can super-size a pair of pants for free.
I suspect when resturants (fast food or other) record lower sales then we'll start to see the an early sign of a recession/collapse beginning. I continue to see people paying exhorbant prices for food at the airports all the time, including dropping the change in to the tip jar. So far, (as much as I can see) the tip jar has not been running low! This is just an observation!
I'll keep you posted, if I detect changes in the tip jar.
>My gut feeling is that $5 is a magic number. At that point people on minimum wage need to work around an hour to come up with the after tax $5 for one gallon. At that point, a gallon of gas costs more than lunch at a fast food joint.
When gas costs $5/gallon, the price of a fast food meal will also be much higher. Since the economy is dependent upon energy to operate, prices of goods and services rise to adjust to rising energy prices. If the rise is slow, wages usually have time to adjust to rising energy prices, as long as supply does not decline.
>At $5, it is not just driving behaviors that really start to change -- moods and attitudes and rhetoric start to change too.
I would speculate that other economic factors will chime in before the price reaches $5. For instance the US GDP for Q1 2007 rose a mere 1.3%. There is a very high chance that the US economy will fall into a recession this fall, unless something significant occurs such as the fed dropping rates. Its obvious that a significant of americans are whinning about high gas prices, which probably means its affecting the way the spend thier discretionary income. Credit Card debt is rising which could mean consumers are financing higher energy prices using CC debt. I have personally noticed that most people these days are using Credit cards at the pump instead of Debt cards.
Even if I am wrong and the US avoids a recession this fall, eventually higher energy prices will take a toll on economic activity.
The question remaining, is whether energy prices continue to rise despite declining consumption caused by a recession. There is a chance that oil and gas production declines could outpace declining consumption.
Most likely people are using CC's for the rewards/miles. Also some debit cards charge per transaction fees. My discover card gives me 5% on the first $1200 in gas i buy each year.
I doubt demand will drop off enough at lower than $5 to significantly affect consumption. Just my opinion.
Matt
Robert, as I said yesterday, these poll numbers signify nothing, merely reflecting cheap sentiment. Pollsters are intruders, so if one talks to them at all, the thing to do is to blow them off as quickly as possible.
The quickest answer here is to name a price one doesn't expect to be reached really soon. Otherwise one might be tempted to stop and think, slowing down the process of getting the damned pollster off the phone. Which may be a reason why we've passed umpteen of these magic numbers with little effect.
The opera will be over when the fat lady sings. When there is a sustained statistically significant drop in driving, then we will know the price. To count, the drop will need to be somewhat major, as the numbers are noisy. After all, DOT statistics on VMT seem to be somewhat wild guesses based in part on polling samples, which suffer from the problems I just griped about. In addition, people randomly underestimate time and distance - when somebody tells me it takes an hour to get somewhere, I often need to allow an hour and a half. Meanwhile, gasoline statistics are contaminated by ethanol, which causes ever more retail gallons to be sold for the same number of miles driven.
When it is finally reached, the actual price will shock everyone, simply because the alternatives to driving are hideously expensive. Vide the monumental traffic jams of London and Paris. In the USA at least, decades of government policy designed to prop up "property values" artificially have made city housing completely unaffordable. Bus transit is utter rubbish, slow, unreliable, and tardy, hugely time-consuming, often slower than walking - and often serving only the weekday day-shift. Rail transit is better but hardly ever happens to go where and when one needs to go, and hardly ever serves anything but the weekday day-shift. Cycling is often socially unacceptable because of the sweat-and-odor factor, and because of problems storing the bicycle, or with bringing expensive items like headlights inside, at the destination, given today's mindless hysteria over "security".
[rant] Alternatively, Congress will please The Great Shiftless Moron Mass by meddling in ways that cause serious physical shortages, as per the MoveOn petition. But no, on second thought that's not an alternative, just an addition, since the demand inelasticity and the percentage of imports are such that the price is not set domestically any longer. Anyway, once the shortages occur, I don't know how the morons who are rooting for them expect to get to work! [/rant]
One thing that will certainly happen is a great reshuffling of jobs. Right now there are lots of people that are driving an extra 10-20 miles per day just to work at a job that pays an extra $0.25-$1.00/hour more than what they could get closer to home. A lot of those people will eventually figure out that they can take lower paid employment without the commute and come out ahead.
This suggests that we are about to enter a transitional period when a lot of our standard economic statistics are going to become suspect. For example, if someone that has been working in a $10/hr job shifts to a $9/hr job closer to home, the statistics would suggest that this is a 10% drop in earnings. Repeat this pattern a millionfold, and red lights and sirens should go off! However, the worker might actually be better off, after taxes and commuting costs, than if they had stayed in their old job. Our standard statistics presently fail to capture that nuance. Thus, expect the government to make some wrong moves based upon incomplete and misleading information.
The good news is that a lot of the necessary demand destruction (over the next few years at least) will happen, thanks to the above. Better for people to just have to accept a downsized paycheck than to be out of work altogether.
A long term Peak Oil aware friend is going to still be a bind (just not as tight as others).
He has a sustainable mini-farm (sort of) outside Searcy AR. He is increasing his plantings of fruit & nut trees (after earlier trial plantings a decade ago, he now knows what works well). Small garden that he is preparing to expand as needed.
He drives a 40 mpg Yaris (every other week, he carpools) down to Little Rock for a high paying job as a computerized numerical machine tool programmer at Falcon Jet.
He built an extremely well insulated house with an efficient wood stove for heat.
He is saving and investing in his property bit by bit. He sees the tidal wave coming but is still "unprepared" in his mind. He does not see his neighbors as being useful or helpful but a potential problem that is TOO close since they are rural commuters in gas guzzlers that live an exurban lifestyle.(he is often asked why, with a good paying job, he drives such a small car. He answers that it is one step to prepare for the coming energy crisis. This has branded him an oddball).
I have suggested doing what the Mormons do, store enough food to last a year and rotate it. And buy two almost identical bicycles (for spares and his wife) and some common spares (tires, chains) and a bike trailer (or make one).
Any other suggestions for him ?
Best Hopes for Friends,
Alan
If I am not mistaken, His electricity is from a Nuclear plant isn't it. Anyway you didn't mention solar or anything for electricity. When the grid starts to fail, and lay offs etc happen, you have to wonder how an above ground system is going to be economical with natural disasters (usual) etc. Ice storms in that neck of the woods would not be uncommon.
I don't know if he wants to be prepared, what he wants is to know what is coming so he can be prepared. That no one seems to have a handle on. Cover the bases, heat, food, shelter, which he has done. Everything else is comfort.
Quid Clarius Astris
Ubi Bene ibi patria
You may find this strange but it makes sense from a tactical point of view.
Even if you friend lives in a relatively closed/isolated community and despite his efforts can not convince anyone else, then he has a big problem.
When TSHTF there are no neutral people, they either with you or against you.
In a rural setting they may not cut his head off, but he will be forced to share with everyone, so in fact he is taking on the financial burden for the whole community.
You either convince a good number of people to work with you on a common goal, or do it in such a way that no one has any effing idea of what you are doing.
I think you are absolutely correct. "Reasonable" behavior will be situational. Starving people will not think twice fighting with you. I think you friend should become armed and trained in how to use the weapons he chooses.
Hi musashi,
re: "so in fact he is taking on the financial burden for the whole community."
Which might be a reason to think about whether it's possible to form more of a community there, (time to mention http://www.ashland.or.us/Page.asp?NavID=541), or perhaps moving to a place where he finds people he can relate to? (Slightly different version of what you're saying.)
Any high-paying jobs for someone w. his background in Alan's neighborhood?
Way I see it that's one of the options, in other words one either convinces a significant majority of ones immediate community, goes totally underground or relocates to a viable community.
Since most civilians wouldn't do very well underground, there are only two options left.
I have already convinced two of my three daughters to move to Oregon and they are happy there, and at this point I think the third will also go up there as soon as she finishes her internship.
As far as his commuting problem is concerned (as long as his employer stays in business & he has a job), the obvious answer is to not commute daily, but weekly. Find a cheap place to rent near the employer. If absolute worse comes to worse, he should be able to pick up a used RV REAL CHEAP once gasoline doubles in price, and then he just needs to find a cheap place to park it with electric, water & sewer hookups. Whichever way he goes, he needs to be able to bring food with him and fix his own meals while away at home, eating 15 restaurant meals/week will be too expensive.
Not an ideal situation, I know, but if he really needs the money, that is one way to keep the cash flow up for a while. Hundreds of thousands of people are going to have to be doing the same thing, so he had best line up his options early. I am assuming that his wife would be able to tend to the essential daily mini-farm chores while he is at work.
He might also start talking with his employer about telecommuting. It is likely that he won't be the only employee with a problem, employers everywhere are going to have to start getting more realistic and flexible or they will soon find that they are already past "peak skilled employees".
I have little advice with regard to the security problem. I have given this a lot of of thought and realized that all of us are pretty much surrounded by fifty million Bubbas with guns. If things collapse beyond a certain point, I cannot come up with any strategy that assures survivability. I can't figure out how to survive thermonuclear wars or asteroid impacts either, so I have just decided to not worry about them. I fully realize that the worst might happen, but I also realize that my odds of dying of something are 100% anyway. Better to concentrate attention on scenarios that are bad but possibly survivable.
I would suggest that your friend pretty much adopt a low profile and forget about peak oil outreach. By all means be engaged in the community in a constructive way, and be friendly with the neighbors. But "prophet" is usually a pretty unrewarding career path, especially when your message is "Bad News For Modern Man". They'll find out soon enough, in their own way. Better your friend just be seen as a quiet, friendly, useful, hard-working member of the community -- just like them - that has happened to make some good, sensible lifestyle decisions, rather than being seen as "M