DrumBeat: December 19, 2007
Posted by Leanan on December 19, 2007 - 1:39pm
One in Five Expect to Borrow to Heat Homes This Winter
For perhaps as many as 27 million American adults, keeping warm this winter will mean borrowing money and 20 million will use credit cards to be able to afford their heating bills, according to a CreditCards.com poll.Nearly 12 percent of Americans say they will need to borrow money to pay winter heating bills; 9 percent will need to use credit cards to be able to afford their heating bills. The poll, commissioned by CreditCards.com and conducted by GfK Roper Public Affairs & Media, surveyed 1,004 randomly selected American adults by telephone Dec. 7-9, 2007 to gauge their attitudes about energy costs in 2008. A majority say they expect oil and gasoline prices to get worse in 2008.
57 mpg? That's so 20 years ago
Car makers are confident they can meet new government rules calling for a national fleet average of 35 miles per gallon. But it will take a big technological push, they say.You might wonder why, since twenty years ago the car that got the best mileage in the nation was a real techno-wimp compared to what's on the road today. It wasn't even a hybrid. But it got better fuel economy than any car sold now - even the Toyota Prius.
Alaska oil spill may signal wider problems-state
Alaska officials are investigating the cause of a pipeline rupture on the North Slope earlier this week that they say could be a sign of more widespread corrosion problems at the state's aging fields.The 4,284-gallon spill from the ConocoPhillips line on the Kuparuk field was caused by rare rust on the outside of the pipe beneath a layer of insulation, according to preliminary findings by the company and the Alaska Department of Environmental Conservation.
BP delays crude unit restart at Texas City
BP has delayed the restart of a crude unit at its Texas City, Texas, refinery by about a month until mid-February, trade sources said on Wednesday.The refinery, which was shut ahead of Hurricane Rita in September 2005, has a nameplate capacity of 460,000 barrels per day.
A second jury lost a chance to render a verdict in a trial stemming from the deadly 2005 explosion at BP's Texas City refinery when a civil trial ended early Tuesday with a settlement.
Food and Fuel Compete for Land
For years, cheap food and feed were taken for granted in the United States.But now the price of some foods is rising sharply, and from the corridors of Washington to the aisles of neighborhood supermarkets, a blame alert is under way.
Analysis: Venezuela helps Cuban refinery
A Soviet-era oil refinery in Cuba is getting back online with the help of the communist island's close regional ally and petroleum benefactor, Venezuela.
China's crude oil output to reach 186 million tons in 2007
China Petroleum and Chemical Industry Association (CPCIA) forecast on Wednesday that the country's crude oil output would reach 186 million tons in 2007, up 1.5 percent year-on-year.
Nevada study group pushing for private toll roads
Advocates for privatization say the tool is a good option in the state because of the shortage of funds available to build the roads needed. They cite rising costs for construction materials, including asphalt. Also, the governor is opposed to increasing taxes to pay for such projects.
Nepal: Want petrol? Buy bonds first
The government is planning to issue bonds to raise funds to pay off the Indian Oil Corporation (IOC) and sort out the long-running shortage of gasoline in the market.
Some gas stations in Toronto area run out of fuel: weekend storm partly to blame (Gasoline-Shortage)
Some out-of-gas signs have been appearing at service stations in the Toronto area, while others have stopped selling regular gas.Liberal MP Dan McTeague, a longtime monitor of gas prices, says the weekend snow storm is party to blame for some of the shortages.
He says another factor could be that refiners have to increase their ethanol content to 10 per cent by the end of the year.
Energy crisis just as bad now as it was three decades ago
I came across a speech today by the president of the United States. I found this portion of his speech to be particularly interesting:"In little more than two decades, we've gone from a position of energy independence to one in which almost half the oil we use comes from foreign countries, at prices that are going through the roof. Our excessive dependence on OPEC has already taken a tremendous toll on our economy and our people. This is the direct cause of the long lines which have made millions of you spend aggravating hours waiting for gasoline. It's a cause of the increased inflation and unemployment that we now face. This intolerable dependence on foreign oil threatens our economic independence and the very security of our nation."
Jimmy Carter gave this speech on July 15, 1979.
Illinois lands clean-coal plant, but White House warns of rising costs
Illinois won a battle with Texas on Tuesday for a showcase clean-coal research project, but within hours the Bush administration waved a caution flag about rising costs and said it wasn't ready to sign off on the $1.8 billion FutureGen power plant.
Mexico, US Suffer as Rio Grande Sucked Dry
Springs across southern Texas have run dry as aquifers are pumped for water. Most could be exhausted within two decades.Historically, the Rio Grande, the fifth-longest river in the United States, flowed continuously from Colorado to the Gulf of Mexico. But since the 1900s, dams, channelization and overexploitation have endangered its survival.
The Last Empire: China's Pollution Problem Goes Global
Can the world survive China's headlong rush to emulate the American way of life?
Hansen points out something I didn't know. Per head of its current population, the UK is responsible for more carbon dioxide in the atmosphere than any other nation.How come? After all, our current per-capita emissions are only half those in the US, Canada and some of the more profligate Gulf states – and about level with Germany, Japan and Russia.
The trouble is that us Brits – whose dogged desire to mine coal and burn it to power dark satanic mills kick-started the Industrial Revolution over 200 years ago – have been at the business of filling the atmosphere with CO2 longer than anyone else. And, as we have all been told countless times, once the dreaded greenhouse gas gets into the air, it sticks around – often for centuries.
Bali climate deal marks a geopolitical shift
Developing countries flexed their muscles in unprecedented ways at the climate talks, suggesting the old north-south power equation is changing.
Can We Use Wood to Beat the Gasoline Shortage?
Under ordinary driving conditions, wood is added to the gas producer every 50 to 60 miles. Hardwood, cut into chips less than 4" in length to prevent arching or pocketing in the generator, is used in preference to softwood such as pine because it leaves fewer tars and gummy residues. Even so, the cooling tanks and filters on the vehicle must be cleaned every 900 miles, and motor overhauls are in order every 5,000 to 8,000 miles.
Energy bill to save 'billions'
"If you drive a car or if you use a toaster or heat your home, this bill is going to save you money," says Brendan Bell, Washington representative of the Union of Concerned Scientists. The environmental lobbying group estimates the vehicle fuel economy changes will save consumers $22 billion a year starting in 2020. In the home, the energy efficiency provisions could save $400 billion in electricity and gas bills by 2030, the group says."This is billions and billions of dollars for consumers," Bell says.
Is Chevron a savvy market player picking up assets in a long-term oil boom, or are they a loose cannon overpaying at the top?Here in the Taipan HQ, high on the second floor of the 808 building, there is a constant debate as to whether the market is at the top of the oil cycle, or are we using up the last of our precious hydrocarbons in a peak-oil frenzy of waste.
Oilfield Hacks and Future Oil Prices
While a cult of Peak Oil adherents fret about the end of the hydrocarbon age, we’ve been focusing on trends that will provide buffering to the upcoming declines in oil production. Don’t get me wrong, I’m not saying that Peak Oil won’t happen. However, the dreaded peak may turn into a downward sloping plateau supported by higher prices. This high price plateau should buy the planet enough time to start thinking about conservation and using alternate energy sources.
New Zealand: Oil reserves secure for 2008
New Zealand has secured contracts for additional oil reserves in Australia, Japan and the Netherlands for 2008, the Ministry of Economic Development announced today.Secured through a global tender, the contracts ensure that New Zealand is able to meet its obligations as a member of the International Energy Agency (IEA). One of the main obligations of membership is to hold minimum oil stocks equivalent to 90 days of the previous year’s net imports.
Cashing In on the Global Economic Boom
Global oil supply is an increasing important issue, he said, but he and fellow co-manager Evan Smith said they are “agnostic” about the idea of peak oil.“We think the real issue is access to proven reserves,” Hicks said. “We think that’s the major restraint in respect to bringing about more oil supply.”
But the tight market - compounded by the possibility that OPEC could reduce output - is bullish for crude, especially since global emerging market demand will likely offset lower consumption in developed countries.
“Production is going to be capped at around 85 million barrels a day,” according to Hicks. “We’re still very constructive going forward.”
Newt Gingrich explains why red staters must turn green
Newt Gingrich, the fierce and incendiary conservative speaker of the US House of Representatives in the 1990s, has co-written a small book that aims to gently coax his fellow conservatives into the environmental camp. It's OK to be green, argues Gingrich and his coauthor, Terry L. Maple, a former president and CEO of Zoo Atlanta and professor of conservation at Georgia Tech University.
Time magazine Person of the Year 2007: A Tsar Is Born
Although few Russians seem to think Putin himself is corrupt, it is commonly believed that he is surrounded by business and political heavies who are amassing millions in payoffs. Indeed, if anything can bring him down, it may well be graft. As long as living standards rise, people are more likely to forgive the perception that officials are getting obscenely rich by demanding illicit payoffs. But if the economy stops growing—if the price of oil falls back to earth—Putin will face a challenge, whether from the masses in the streets or from military and civilian challengers.
Where have all the oil optimists gone
There used to be a group of happy-go-lucky folks who thought the price of oil was always on the verge of collapsing.Steve Forbes seemed to be their chief. He preached that the benefits of exploration would soon kick in, that all the peak oilers were nutty, and that the return of $35 a barrel was just a matter of time.
Now those voices have quieted down a bit (maybe even a lot). So why the chastening? Perhaps it's because we've had some genuinely big discovery news in recent months, and crude oil has stayed expensive anyway.
Michael Lynch: A Hard Rain is Gonna Fall on Oil Prices (Probably)
Since I am renowned (perhaps infamous) as an oil market bear, it is somewhat daunting to write about next year’s price declining when everyone is now waiting for $100 oil. In the past few years, my price forecasts have been undone (in my opinion) by events ranging from Katrina to the ethnic unrest in Nigeria.At the same time, it is hard to credit the argument that the oil market has experienced a “paradigm shift” in which oil is harder to discover and produce than before, demand is growing much faster, and prices have little effect on demand. Many argue that non-OPEC has peaked, or is near it, and that OPEC’s market share will grow rapidly from now on, so that even if so-called “peak oil” is not here, ever higher prices will be. Thus, many forecasts put long-term prices at or above $60, but it is worth remembering that only three years ago most predicted much lower prices.
Michael J. Economides - $100 Oil: It’s a New Beginning
In August 2004 when oil was about $40 per barrel, I predicted outrageously in an op-ed piece that oil would hit “$60 by next winter.” The newspaper editor changed that to $50, saying it was to “protect my reputation.” Well, oil didn’t stop at $60 – just two months ago it hit $80. With the toothpaste out of the tube the market became desensitized, and there’s really no end in sight.
Could OPEC drop dollar for euro?
Could oil producing countries drop the dollar for a more stable currency? Iran's recent announcement that it would stop using the dollar in its oil transactions made that question a plausible scenario for other oil producers to follow with a weakening US economy and a declining dollar. The depreciating US currency worries oil exporting countries as it means a reduction in the value of their dollar reserves and a loss in revenues with the spiraling oil prices. So could Iran's decision signal a trend for other oil producing countries to follow?
China starts first national oil reserve base
China said Wednesday its first national oil reserve base has been filled with crude oil, one day after it announced the setting up of a national oil reserve center.Located in Zhenhai, Zhejiang Province, east China, the base has a planned storage space of 5.2 million cubic meters, said the National Development and Reform Commission, China's top economic planning agency.
China proposes 10 pct tax on crude, urges fuel tax
China's Finance Ministry said on Tuesday it has proposed introducing a 10 percent tax on crude oil production, which would be phased in at a 5 percent rate initially.This tax would help compensate local governments for the extraction of crude oil and would benefit the environment, Vice Minister Zhu Zhigang said in a statement published on the ministry's Web site www.mof.gov.cn.
Part II: The Price of Biofuels
Despite years of research and recent investment in scaling up production processes, no commercial facility yet makes cellulosic ethanol. The economic explanation is simple: it costs far too much to build such a facility. Cellulose, a long-chain polysaccharide that makes up much of the mass of woody plants and crop residues such as cornstalks, is difficult - and thus expensive - to break down.
Energy bill a boon for ethanol, and a challenge
By mandating a boom in ethanol output from sources other than corn, the energy bill President Bush is expected to sign presents a huge opportunity for the fledgling biofuels market — and considerable uncertainty.The commercial viability of making ethanol from grasses and agricultural waste is unproven, and if industry can’t meet the challenge, consumers could end up paying the price.
Thirsting for answers in dry Georgia
The sharply contrasting ways that normally rainy metropolitan Atlanta and semi-arid San Diego County have dealt with growth and water consumption are an instructive tale that might offer clues to Georgia legislators as they try again in January to divvy up the region's precarious water supply.
UK family visits hit by petrol price rises
Family reunions in the UK could be hit by fuel-price fears this Christmas, a leading motoring organization said here Wednesday.With average petrol prices now at more than one pound a litre, 58 percent of drivers say they are less likely to travel this festive season compared with last year, the Royal Automobile Club (RAC) said.
An international network organisation working in solidarity with the Sahrawi people, Western Sahara Resource Watch, has swiftly reacted to reports that a subsidiary of the Libyan state oil company [Tamoil] is on the verge of investing between US $100 and $150 million in the occupied Western Sahara."If this is true, it would mean a serious betrayal of the Sahrawi people's legitimate struggle against occupation," Western Sahara Resource Watch protested.
Vested interests, not people, oppose clean energy
AMONG the myths of the energy debate is that renewable, non-fossil energy costs more and so is unpopular.Policy dinosaurs like the US government then argue that to represent the people’s wishes they have to reject international standards like those in the Kyoto Protocol. This alienates them from other nations as well as from their own people.
Order DVDs of the 2007 Houston World Oil Conference
DVDs of the ASPO-USA (Association for the Study of Peak Oil - USA) 2007 Houston World Oil Conference can now be ordered. The professionally recorded and edited set of 12 DVDs covers over 20 hours of the conference. All of the main sessions are included along with several of the auxiliary ones including Saturday morning's Smart Money and Peak Oil with Charles Maxwell and others.The presentations have the power points integrated into the DVDs for easy viewing rather than just the camera view. Cost is $85.00 US, including shipping and handling to most countries. Shipping will commence in late December or early January.
Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
A new Finance Round-Up by ilargi has been posted at TOD:Canada.
I was about to post a link to this essay. This is the clearest analysis I have yet seen of the mess we are in.
A question to West Texas: Dr. Duncan in his Olduvai Valley theory predicts a "crossover point" when OPEC supplies over 50% of the world's production. He was focused on total production, and not necessarily on what was actually available for export. So, when will OPEC exports represent 50% or more of the world's exportable crude oil?
We are probably about there right now in terms of their share of total net exports, but I think that OPEC as an organization is pretty much irrelevant.
Regarding oil supplies, I suspect that Richard Duncan is actually on the optimistic side, because of the ELM effects. See my post down the thread.
As several people have noted, we appear to be facing a triple play threat next year--Peak Debt; Peak Food and Peak Exports.
Some good thoughts at the end of this article:
Gold/Silver are good, but I would suggest stocking up on food while it's still relatively cheap. You'll need food no matter what, and for now, the grocery stores still don't take gold/silver bullion or coins. With the recent energy bill pushing more ethanol production along with production drops due to weather disruptions such as drought, I think the best place to put my money is in food.
~Durandal(http://www.wtdwtshtf.com)
What kinds of food do you suggest stocking up on?
2 categories
'lifeboat' stock - preferably long term storage that you don't use but rotate out when expiration is near. google walton foods .for ex. wheat kernals for instance keeps several years.
buying food in larger supply that you actively use. for instance in stuart's recent thread a couple of
days ago meats are expected to shoot up later in 08. the thread has good comments re suggestions.
I would make sure there's a bunch of
-Grains (Rice, Oats (rolled or cut), Wheat, Millet, Spelt
Wheat, etc)
-Pasta
-Root Vegetables (Beets, Potatoes, Carrots)
-Canned Goods, but watch the dates and rotate stock
-Jars of Sauce, Pickles
-Yeast, Baking Soda
-Jugs of WATER.. very important, very easy to do. ..Very easy to put off for tomorrow. Water supply rarely gives you a day's notice before it shuts down. Always seems to happen 'just a few minutes ago.. do the neighbors have water?'
Basically long-term storage items.. but make sure you create a system for 'Maintenance'.. where you cycle out older foods and eat them up, replacing with new stock.. Otherwise, you'll be wasting a lot of money.
(Put DATES on EVERYTHING. Date Placed in storage, and DATE to REMOVE by..)
We also have a freezer full of beef from a local, grass-fed cow. I have a few ways to keep a freezer cold if we go dark, but it's still one of the more dicey sides of our "IceStorm Preparations"
We keep a couple Camping Stoves handy, too, with a stock of White-Gas for them.
Finally, for electricity, I have about 300watts of Solar and a small about (2kwh) worth of battery storage. We also have a cheap, second-hand 1500w Gas Generator, with a few gallons of fuel onsite. (Can't live on Bread alone..)
Best,
Bob Fiske
One more thing I would add to this:
You're going to have grow at least some of your own food sooner or later, most likely. Might as well make the transition sooner.
Thus, when it comes to canned goods, I'd suggest trying to raise a garden and can as much of your own produce as possible, rather than buying store-bought cans. Once you've made the investment in a canner and mason jars, you will be able to reuse them over and over again (only needing new lids, which would be a good item to stock up on); store-bought cans should be recycled too, but it isn't in a way that benefits you so directly.
While you are ramping up production, and even once you've maxed out if you don't have enough space to grow all your produce, you might consider buying in bulk in season at the farmer's markets, and then canning a big batch. In the past, I've considered it to not be particularly worthwhile to do this, but these are not ordinary times.
You'll also want to garden with open polenated seeds, and get into seed storage (most packets will remain viable for several years if stored properly) if not seed saving. What you want to do is to bring the entire cycle home: seed to garden to produce to preservation to consumption to compost & seed.
Don't use F1 hybrid seeds if you are saving them, They won't grow true to type
I would suggest adding some Textured Vegetable Protein, aka meat extender, and buying it in bulk from a reputable health food store. Whole Foods Market price in Dallas is cheaper than web prices, for instance. If you have spare room in the freezer, store it there, and it will keep virtually forever, as it is made from defatted soy. Try some before you have to use it. It could make you a little gassy, but with meats and with most carbohydrates makes for a reasonably complete protein. It does not have to be stored frozen, but it does make for a long term alternative.
I should add, my own opinion is that after the initial hoarding, we will see some semblance of order return and then we will have a slow decline in availability of necessities. But, just in case....
And, you might add a solar cooking alternative, which can be fun anyway and it takes the heat of cooking outdoors.
Good points.
I'm not a fan of TVP per se (we're only using fermented soy products, like tempeh now), but some form of stored dry protiens, absolutely. Beans, Lentils, Garbonzos etc.. and of course, if you're just trying to survive.. I'm not absolutely fanatical about TVP or tofu or soymilk..
Solar Cooking, definitely!
One of my stockpile items that I rarely pass up when dumpster-diving is any sizable Glass, or Mirror materials.. Another Glass Item that can be invaluable as well is large storage Jars, like the 1 gallon pickle jars from delis. These can store almost any food, not be affected by moisture, acidity, mice, etc..
Bob
You might want to encourage your immediate neighbors to make preparations too. This is the hard part. But if they aren't prepared and you are, you can bet they'll come knocking on your door when trouble hits.
I'm really concerned that answers are being given prior to answering the prime question: What am I preparing for? Is it for a week? A few months? A year? Forever? There are many similar questions that also have to be asked before taking action but TOD isn't the place to go into a disertation on survival. But, FWIW, here is what the LDS Church suggests for two people fo a year (I'm not Mormon BTW but they have some excellent information at http://www.providentliving.org .) I don't agree with every part of their list but that's how it goes.
Group 1: Grains
wheat - 305#
Enriched white flour - 31#
Corn Meal - 57#
Rolled oats - 77#
Enriched white rice - 135#
Pearled barley - 7#
Spaghetti - 67#
Group 2: Legumes
Dry beans - 90#
Dry lima beans - 4#
Dry split peas - 4#
Dry lentils - 4#
Dry soup mix - 14#
Group 3: Fats ans oils
Cooking oil - 10 quarts
Shortening - 4q
Mayonnaise - 2q
Salad dressing (mayo type) - 2q
Peanut butter - 2q
Group 4: Milk Group
Nonfat dry milk - 28#
Evaporated milk - 24 - 12oz cans
Group 5: Sugars
Granulated sugar - 80#
Brown sugar - 6#
Molasses - 2#
Homsy - 6#
Corn syrup - 6#
Jams/preserves - 10#
Powdered fruit drink - 12#
Flavored gelatin - 2#
Group 6: Miscellaneous
Salt - 16#
Dry yeast - 1#
Baking soda - 2#
Baking powder - 2#
Water - 28 gallons (This is one of the items I simply can't believe!)
Personally, I'd suggest buying a copy of Making the Best of Basics. It has lots of lists and ideas.
As far as crops go, I've grown stuff for 40 years and one thing I have learned is that you have to test varieties; you can't trust the blurb in the catalog. During this time we have probably tested 30 varieties of tomatoes, 18 of sweet corn, 6 of field corn, 12 of canteloupe, 12 of water melons, etc. People who simply buy a pack of seed and expect to see a miracle are likely to be disapointed.
That's enough for now or I'll turn this into a survival forum.
Todd
#1 is sort of undifferentiated grey goo.
Since the US will monetize the US debt through inflation, if you pay low-rate debt now you're losing money.
I've looked at paying off the house and I just don't see why - with a 5.25% interest rate 15 year loan.
On the other hand if you have significant credit card debt or other debts at 23% rates you need to get some ramen noodles and maybe credit counseling and pay off the card now.
For people with low-interest rate home loans it seems to me that buying emergency supplies, fixing critical home infrastructure (and insulating/changing to low energy appliances) is a much better way to go. Take the money left over and buy gold.
You'll be better prepared for many outcomes than if you are broke, without supplies, and have no debt.
You can keep paying off your low-rate debts with dollars whose intrinsic value decreases monotonically.
Just a thought.
Pay off the credit card debt first.
But pay off the house ASAP.
You can negotiate with the credit card people.
Get they're best offer and shop it around.
If you have no debt you're wealthier than 80% of
Americans.
Had a thought or two on this also.
I just saw a diminutive watermelon being offered in an urban WalMart for $5. How many of the millions of people around there could grow a watermelon today if their lives depended on it? $5 will look cheap someday soon.
Several here have made a case for deflation. I doubt it. The essentials are food and energy and their value can become almost limitless (like oxygen) dwarfing all other expenses. Really most everything else is discretionary.
Would going into debt for a decent small (talking a few acres with solar, in a good growing area, bikable, with rail close) be warranted?
Otherwise better free up what limited resources one has for responding to the unfolding situation.
Only if you're 110% sure you can keep making the payments. Is your job peak oil proof?
Fixed payments fixed income.
But where does the fixed income come from?
Everyone should ask themselves that question, especially those who feel they are safe.
Prepare for losing at least a large part of your income. Don't think that pensions will save the day when you get to that age. Pension funds are set to become the biggest losers of all as the credit morgana unwinds.
Then, when banks start holding back on loans to businesses, expect many of them to go belly-up, taking jobs down with them. 99% of firms need a rolling credit line to function. And of course customers with spending power.
'Guaranteed' government jobs are very much at risk. All levels of government face a potential triple strike. First, decreasing tax revenue, second, loss of funds that were invested in shady paper, and third, no buyers for the bonds that kept the ship going.
All these things need to be considered when you feel your job and/or income is fixed or guaranteed.
And a lot of local governments, e.g. San Diego, have promised pension payouts to their current and former workers that are far in excess of what can they can actually provide (even at current stock/bond values). And then we have Social Security/Medicare . . .
I suspect that the US government will continue mailing out social security checks for as long as there continues to be a US government. Eventually, one of those checks and twenty five trillion dollars might be enough to buy a cup of coffee.
Certain that nothing is certain.
Present contracts and pensions can evaporate.
Securing land through short term debt perhaps better than paper. Sharecropping, victory gardening, co-operative buys possible.
Unproductive areas and people caught in unproductive situations can be given alternative to taking, vegetating.(WT)
Immigrants worked their way across US under produce or perish, innovate or die, no retreat, no safety net circumstances. (Modern day China) Our immediate future.
Actually, some local governments may not do too badly, at least those without large debt burdens to service and that have at least some property owners still able to pay property taxes. Such local governments will probably find themselves getting into the landlord business in a big way, whether they want to or not. For those property owners not able to pay property taxes (and that may include banks owning foreclosed properties), the local governments will end up holding the properties themselves. At a certain point it will occur to everyone that rather than selling them for pennies and driving local property values down to almost zero, holding on to the properties and renting them out would actually be a better way to go. It would provide the local government with at least some cash flow to make up for the lost property tax revenues, and it would provide what would otherwise be a massive homeless population with housing. This strategy would be a good foundation toward getting a local economy on its feet again.
For towns with a large debt burden however, and without many financially well-off homeowners, forget it. Such local governments probably will go bankrupt.
I've never seen a municipality cut back on spending. In fact, property taxes seem to consistently rise faster than inflation. True of government at all levels, I suppose.
At what point would you envision a municipality actually "getting it" and seriously cutting services? Or will they just raise property taxes higher and higher until everyone is homeless?
You will see it soon. Many municipalities will simply become insolvent.
First to go are many jobs, along with services like road maintenance, schools etc. People will elect to keep the most essential services, drinking water over roads. And they will have to make that choice.
Raising taxes on a population that gets ever poorer is not politically smart, and may get you into far more serious trouble too, certainly if you live in the same town. A popular threat in the Dutch Antilles: 'Ey man, I know where your house lives'.
All levels of government will feel the same tax revenue squeezes, and all will try to raise taxes. Good luck with that as people lose their homes and jobs.
You will see it soon. Many municipalities will simply become insolvent.
That's the base of my reply to people worrying about big brother, police state, etc. I don't know if it will happen. THAT's why Kunstler said "They'll be lucky to be able to answer the phone".
How about fuel for all those nifty helicopters local police have now or squad cars and their gas and maint.
Budget problems just might relegate those things of the past.
We've already seen some of that happen this summer in Central Texas. Had 6 weeks of large summer rains that were really hell on our dirt roads. When the county commissioners were asked about bringing in a few load of gravel to fill in the low spots we were told there was less than $100.00 left in the road fund for the rest of the year, and this was in July! We ain't seen nothing yet as to the breakdown of basic services and community needs given the current financial shenanagins that are going on. John
Tomorrow at 12:00 I go to see a man about a design job - integrating a wireless ISP with city and county services so their stuff can pass transparently. I looked right at him, told him about Florida and the other places, and suggested maybe he not overextend himself. I know the sound waves reached his ears, but I got no sign it made any impression.
I'm breaking the job into four pieces spread out over three months with just a few hours in each increment. I'm grateful for work, but I hate to take his money for something that might evaporate, so we'll go slow and steady. Finding customers is hard for me, so I try to treat 'em nice once I do catch them.
I've asked myself this question, and my job is not POproof at the moment. Shipping however, is likely to persist, and the small company I work for should be able to shift to a more local mode of operations, though not painless.
I feel safe now, but know how fragile this is.
A better idea is to use equity. If you can't pay cash, put a business plan together, and try to get an option to buy or outright buy some land (perhaps with debt at first), and then sell the thing to three people, with each of them paying for one third of the cost of getting the small scale gardening/farming operation up and going, carrying you for 25%. This is a variation on a typical oil deal. The basic premise is that you trade sweat equity for real equity, with no debt in the project.
I freely acknowledge that I know zilch about organic gardening and farming, but I what I think I do know is that we are rapidly headed toward a situation where you have two choices: produce or perish. I guess technically there is a third option that many will pursue: theft.
In any case, small scale food Victory Gardens are certainly possible:
http://www.energybulletin.net/5673.html
Published on 22 Jul 2004 by San Francisco Chronicle. Archived on 25 Apr 2005.
Berkeley: Urban farmers produce nearly all their food with a sustainable garden in their backyard
I got my "PO" Garden and composter going last spring.
I went the raised bed route and successfully grew some of my favorite veggies and some mini-watermelons. They were SOOOooo much better tasting than the store-bought, imported from corp farms stuff.
Exactly. Just came back from China. I saw a bunch of sustainable small scale agriculture there. I think their model ,however flawed, will be much better at providing individuals with food post peak post recession. The means of growing food is in the hands of a much higher percentage of the population. Skills and knowledge abound. Yes I know they are urbanizing but much closer to the land and not as car-dependent.
Your suggestion seems to be to be a mechanism by which we might attempt to do the same here.
Two additional considerations for Baby Boomers, especially those with children:
(1) I put food as the #1 requirement for successful retirement, so ownership of a food producing facility probably makes sense as part of your retirement planning (or would you rather have your money in some solid financial stocks?);
(2) Millions of college graduates, many of them with large student loans, are going to be headed back home to mom and dad because they can't find a job, or they can't find a job that will pay their living expenses and pay their student loan overlords. If you own a garden/farm, you can put them to work producing food, rather than having them consume your food, while watching cable TV all day long. If you don't have children of your own, there will probably be lots of parents of unemployed college graduates that would love to loan one to you. The key point is to convert a liability--a resource consuming unemployed college grad--into a productive asset.
BTW, an even scarier thought than millions of unemployed college graduates coming back home is--brace yourselves, this is grim--millions of unemployed brothers-in-law showing up on on people's doorsteps. This may be an even better reason to own a garden/farm, perhaps with tiny houses for workers?
"unemployed brothers-in-law showing up on on people's doorsteps"
Ha...this made me laugh a bit. I have a brother-in-law that is a comedy writer and TV producer. He lives in a 2.5 million dollar house in Pacific Palisades and has a nanny for his kids.
He is currently unemployed due to the Writer's Strike.
I just had a flash of him showing up on my doorstep...hat in hand.
OMG I hadn't thought about THAT!!
Sharon Astyk called it The Brother in Law on Your Couch Vision of the Apocalypse:
Yes yes the mutants ANYDAY!
Approaching people about something so innocuous as carpooling, biking or going in on grocery runs should be child's play. It's that or TBILOYC!
Dear Leanan,
Thank you for turning me on to Sharon Astyk, she rocks! ( And so do you : )
PLAN, PLANt, PLANet
Errol in Miami
Thank you for turning me on to Sharon Astyk
Hang out at
http://groups.yahoo.com/group/RunningOnEmpty2/messages
and read the posts from Sharondownonthefarm.
Her and Linda Graves ROCK.
Go back over the previous posts and read theirs. Some great practical knowledge.
For me it is potentially far, far worse.
Not only does my brother in law (a city lawyer who I like a lot) talk about heading to our place in case of trouble, but so do many of the other relatives! And some of our good friends too.
Of course, none of them are actually helping me acquire the sort of land base that could feed them.
Right, uncle Jason will feed us, no problem.
Turn it into a business opportunity by implementing the quarter pays a third idea. If your friends/family turn you down, you have an ethical basis for telling them to find their own lifeboat. I would enclose a copy of "The Little Red Hen" with the proposal
In the mean time, it's a win/win/win proposition. You can start growing more food, put more teenagers to work--training them in useful skills--and be prepared to meet the increasing demand for locally grown food.
Me too. Im'a move to Willits when TSHTF. :)
I'm moved in with an old-old friend, old because I've been friends with the guy for 20 years and counting, and old because well, he's old.
Right now he's getting a damned decent amount of money each month, and my income's nada. But this may change, inflation may eat up his buying power, and I plan to see how far I can get toward being a farming fool around here, as well as being relatively young and pliable and willing to draw folks, play guitar and crack jokes on the street for tips, trap small animals and too-complacent dogs, etc.
And I don't forget a friend. I'm weird and perverse that way.
somebody already posted this link
http://www.spinfarming.com/
check it out
here's an mp3
http://www.spinfarming.com/common/media/audio/CBC_Radio_Interview.mp3
LOL.
My internet famiy has plans to set up teepees at my pond.
Keeping with your alliterative scheme: produce, pilfer, or perish.
ELM, ELP & PPP
Another good strategy that will open up for a lot of people once food prices rise high enough: Garden sharecropping.
There are going to be plenty of people out there with yards, but with no gardening tools or know-how or time or energy, but who are going to find their food budgets stretched to the breaking point. You could probably line up several such people up and down your street, and arrange the same deal with each: you raise a garden on their land in exchange for 1/2 of the crop. One person could stay busy enough on this scheme to raise several times more than the amount of produce they need for their own household; this surplus could be sold at the local farmer's tailgate market.
This would work best for someone that had their own place paid for free and clear and had no other debts. You are unlikely to generate enough money under such a venture to pay off a typical modern mortgage, let alone any other debts. However, it might work if you just need a way to earn enough money to cover whatever food you can't grow yourself, plus whatever energy you need to buy, plus property taxes and a few other essentials. Supplement it with some hand crafts that you produce indoors during the winter slow months, and you could set yourself up pretty well.
Sounds a bit like what these guys have come up with:
http://www.spinfarming.com/
The creators of this have a stall here at the Saskatoon Farmer's market that I occasionally buy stuff from.
http://www.spinfarming.com/creators/
How about this idea?
SEATTLE URBAN FARM COMPANY
Owning is not enough, if you have to pay a yearly/monthly tax on something even if it's paid off it's not yours it's the government's and that deffiently goes for land. expect good crop producing land to be taken with 'eminent domain' by the government to set up work camps to try to stabilize the situation. or to be taken if you refuse to pay the ever increasing 'tax'. maybe both.
Ouch, that rings all too true.
Hi Jeffrey,
re: "equity". A great suggestion - I'd sure like more "how to" advice. Here are some of my questions about this:
1) I can see a huge potential - for example, in the category of "land slated for development":
There must be many properties already purchased by developers - people "caught unawares" in the housing collapse.
Q: Is it necessary they be convinced about "peak oil"? How long will they "just wait" for the market to "turn around" and/or "pick up again"? (See what I mean?) People usually make boku bucks going from farm use to subdivision - that's why they do it (I mean, historically speaking, of course.) It's especially true - something I've seen a lot - the heirs will sell off to developers. There's just so much money to be made (in times past)...
To convince the owners, or even the new owner/developers that the conversion (farm-to-suburb) is *over* - this seems unlikely.
Or, do you see it otherwise?
2) Do you actually know of anyone who has done this, and if so, may I correspond with him/her/them?
3) If farms/large farm/agribusiness are already in business as farmers - then, it's a matter of "convincing" them of the wisdom of turning to organic and/or more sustainable methods? But in this case, I don't see how they'd be willing to sell.
4) If working farms - do you actually think that many are on the market?
5) Where to find investors (potential investors) who want to buy farmland - and then are you saying this would only be of interest to "peak aware" type of folks? Or, would this involve more "evangalizing" - spreading the TOD/EB word, which I do a lot of already...
Or, do you "make a list" of people w. means and *then* convince them about "peak"? (I want to laugh, but...you know...how unpredictable the reaction to "peak" is...you must know how deep that denial "river" runs...we've all experienced it, in many forms...)
6) And then there's...where to find that energetic young organic farmer...? (able and willing to re-locate? eager to set up a new organic farm? needing labor...from...?etc.)
7) In other words...this would be a nice project (like, say for me) - it's just...hard for me to picture how one might begin.
In general, the organizer gets "paid" (in equity) for doing all the work. The "investors" get a ready-made product that doesn't take a lot of thinking. So, go find yourself a good piece of land for four families. This would probably mean at least 10 acres of farmable land, plus another ten or so of woodland would be nice. In upstate New York, you could get this for about $40,000.
In many rural areas, houses are more plentiful than people, and you might find a nice deal on something with a building there already. If you're going to go live there yourself right away, that might be nice. With a three- or four-bedroom house (one bedroom per family), you might find something like this for as little as $100,000 or so.
You might be able to lock up the land. Make an offer contingent on getting three investors within three months or so.
Then, once you've picked out your spot, make up a little document with pictures that describes the spot in detail, and why it is good for "bugout" purposes. Describe the holding costs of the property (primarily taxes and insurance on the house). Then find three others who want a bedroom in your bugout house, for a third of the cost (eg $33,000 each, which is a good deal -- where else are you going to find a tended house and land for that kind of price?)
The point is, you do the legwork and present them with a ready-to-eat solution.
Econguy is right. The question to ask potential investors is the following: What is your #1 requirement for retirement? I always put food at the top of the list.
A variation of this is that some developers have started building homes on the periphery of working farms.
As I implied elsewhere, I can barely keep an office plant alive, and I'm not trying to downplay the difficulties involved in trying to become a small food producer, but like growing old, it probably beats the alternative.
Another variation is to set up small farm learning centers, where people stay for a weekend and begin to learn small scale gardening/farming practices.
Because of rising fuel costs, local farms are going to increasingly have a cost advantage over more remote food sources.
Hi WT/Jeffrey and everyone who commented,
I appreciate your responses.
At the same time, I asked some specific questions - did anyone see those?
I'd be so happy to have specific responses to each question!
If you are talking about first convincing people about "peak oil" (etc.) and *then* attempting to "sell them" the concept of a big move...?
Or, are you talking about people who know nothing about "peak" and are planning retirement, as you (Jeffrey) say in this post above?
And what about the example I gave - developers holding farms just "waiting" for "the market" to once again start up (like it should :))!?
My point is:
From a business point of view, I can see that - for example - farms as potential subdivisions will cease, and farmland use once again be the most value.
In fact, know of - developers "on hold" just waiting for "the market" to pick up.
I've tried for three years to convince someone I know - to not go ahead with trying to get a "subdivision profit" from the "family farm" - and even now, I still hear "Oh, the market will pick up in a couple of years".
In other words - I agree it's a fantastic concept. Be ahead of the curve. I'm just saying...
Who are the potential buyers? for such an idea.
In addition to my other questions.
For example try this:
215 acres dairy farm
classic 5br house plus barn
$215,000
http://www.allcountryfarms.com/listings/listingview.php?listingID=237
Don't you run into complications of land sub-division, minimum lot sizes, or otherwise resolving title, or associated problems of multiple occupancy and building restrictions?
In Australia there is a long history of disputes with conservative shire councils over these types of cooperative farming / communal ventures. Plus in many cases banks won't lend against a share of the title, whatever the body corporate structure.
You need some kind of business structure, and I would try to do it without debt.
Would going into debt for a decent small (talking a few acres with solar, in a good growing area, bikable, with rail close) be warranted?
It depends on Everything, life and the Universe.
Are you young? Old? Do you have super non-discretionary skills (let's say petroleum geologists rank 1.0 and subprime or Alt-A brokers get a 0.0 :-)
Non-discretionary Job? Credit OK? Healthy?
If you have no savings try to change that first, before going for a ninja loan on a house (if you can even get one now, it's doubtful). Everything will be harder with bad credit.
I really like SacredCowTipper's approach to integrating into a community, it's what we did. And WestTexas' advice is prophetic and solid: get thee to the non-discretionary side of the equation.
Good luck!
NR
Yes thanks. The question is rhetorical and real ..
I don't fear the lack of solutions as much as what people will do when they have no clue as how to proceed.
To have considered some good alternatives along with all the 'givens' like age, health, finances will mean people will be less prone to take up the 'pilfer' side of the triangle and of course (no matter what good remedies we institute personally) it has to matter to us how many are 'forced' to take that path.
9:30 C
In politics there are no accidents-FDR paraphrased.
Crude Inventory down 7.6 million.
DC signing ceremony begins, televised on Bloomberg/CNBC
And here is another one, cited by a couple of weblogs- CR and SuddenDebt-
As I've noted-IMHO-the counterparties in these derivatives must remain solvent for the "game" to work, even as they try to bring us back to Status Quo Ante.
http://biz.yahoo.com/nytimes/071219/1194728062427.html?.v=3
"The demise of ACA would embarrass its roster of institutional owners, including Bear Stearns' Merchant Bank, hedge fund Perry Capital and the Third Avenue mutual-fund concern.
ACA has long been a convenient dumping ground in which major subprime securitizers like Bear Stearns (BSC), Citigroup (C), Merrill Lynch (MER) and some 25 other prominent dealers could pitch billions of dollars of risky obligations for modest premiums. That let them gussy up their balance sheets and shift any potential mark-to-market hits to ACA.
If ACA Capital were to founder, more than $69 billion worth of CDOs, including the $25 billion in subprime paper, would come rumbling back to the Wall Street banks, and likely with heavy attendant losses.
That's why Wall Street has continued to do a brisk business with the beleaguered firm. In the third quarter, ACA insured some $7 billion of subprime collateralized-debt obligations. Even if the company survives for only another couple of quarters, that would stave off the recognition of billions of dollars of losses.
For the time being."
This story about the problems of ACA looks like a big one. I see that S&P downgraded its rating from A to CCC for ACA, and also changed its outlook to negative for other bond insurers.
The WSJ also has an article.
Bear Sterns & Merrill are going to look at bailing out ACA. If ACA goes under, they might follow, so it is a matter of survival for them. However, it seems to me that if they don't have enough equity to survive if ACA goes under, they don't have enough to bail it out. I seem to remember something about sending "good money after bad." Of course, it is a leap of faith to say that this is "good money" that's going into the bailout.
I look at this situation each morning, ponder it a bit each day, and more and more it looks like a smoke screen that could be hiding that "black swan" we sometimes discuss.
There is a scramble on now to dodge responsibility and/or be the last man standing. We won't outlaw banks. Some of them will continue to operate, harmed or not, because we still want to make deposits, write checks, send/receive wire transfers, and use debit cards. Who are the unlucky winners?
What if the banks apply their political influence and drag the government into the whirlpool? Local, state, and federal is already a mess before taking one giant step back on revenues. We see the Fed (private, but bailouts courtesy of taxpayers, no?) offering up credit that doesn't get used. We see the municipalities offered the chance to get involved in the "mortgage boom" with tax free bonds. The banks don't take the Fed's bait, the municipalities don't take the banks' bait, so here we sit. Who cans drag us in? Taxpayers (about to lose their homes) who will back things that should not be done - a final hurrah for the Bush administraton, perhaps the crowning achievement in poor government.
I've been through one large public company bankruptcy and the parallels between the situations are many. We see the newly disempowered executives(bankers) still in their offices, making decisions that will never be implemented. We see employees(mortgage holders?) who, realizing the end is near, beginning to do things that would have averted the catastrophe had they commenced two years prior. Skeptical creditors (China, OPEC nations) begin to try to wiggle free from debt, not quite wanting to believe such a large entity is finished. Customers (mortgage writers to foreign investors) who depended on the products offered scramble to find alternatives.
The end game is ugly for a public company in liquidation. I recall being quite surprised at the number of twenty five year plus severance packages that showed up when I created the program to calculate such things for 4,000 employees. Some parts went here, some parts went there, but three hundred franchisees saw their balance sheets pillaged and their businesses slaughtered.
What happens when an empire is bankrupt? We know sovereign default in Argentina was Not Very Awesome(tm) for the residents. We know that the convulsions of the Ottoman empire, beginning around 1804, still echo today. The British were more graceful and more stately in their progression, aided by the miles between colonies.
Is the unwinding of the United States' empire going to parallel the British or the Ottoman decline? We're geographically isolated, like the British. We've lost our reserve currency (oil) just like the Ottomans saw their silver devalued by Spanish gold. We've got a vocal minority in the disloyal Christian Right who might very well go to terror and guerilla warfare in the face of a secular government, behaving a bit like Northern Ireland. We've gone from a volunteer(willing and drafted) army to one that was paid citizens and is now a 50/50 mix of citizens and mercenaries, at least in Iraq, paralleling almost exactly the descent of the Ottoman military.
The big picture is for the history books. The little guy won't be able to tell if we're coming apart like the Ottomans or coming apart like the British; FerFAL's chronicle of post collapse Argentina is the playbook on the ground for both modes of failure.
Food, then fuel, then ammunition, then community resources, and you had ought to be doing this in a place that actually has a community.
And do we have our own Ataturk rising now through the ranks of the US military -- or something worse?
We've got retired military officers suggesting its the constitutional duty of those still serving to arrest Bush, Cheney, etc. I like the sound of that, as long as its a nice, tidy process that returns us to the rule of the law.
We might have a member of the disloyal Christian Right rising, but can they actually pull off a coup? Our military has never had to face an illegitimate regime in control ... I'd say those who've been to Iraq, which is pretty much everyone ... at least twice ... will take a long, hard look at such a beast. Lets not forget they left a fairly good economy and they're coming home to an absolute disaster. Do you engage in the definition of insanity, which is doing the same thing and expecting different results, or do you get back to the roots of what made the United States a superpower in the first place?
The USSR to Russia transition is also a possibility.
Note the frequency of replaced rulers as 1989
approached.
And all religions fade before power.
The CR label would only be just that.
http://www.247wallst.com/2007/07/aca-capital-dee.html
“It’s a zero-sum game,” he said, noting that the gains at the investment banks buying the protection have to eventually result in losses for the firms they hedged with. “If you put trades on that worked so well that you bankrupt your counterparty, you will not collect on those trades.”
Last week, the New York Stock Exchange delisted ACA Capital after its stock price had collapsed and the company declined to offer a plan to bring itself back into compliance with listing standards. The stock was trading at about 40 cents over the counter on Tuesday; it traded as high as $15 in the summer."
Bear Stearns is lying. Watch Merril-it's been pushing this
solvency crisis since July.
"the roots of what made the United States a superpower in the first place"
Access to unlimited natural resources, energy, and land, and the means and willingness to wipe out those already here? OK, we certainly were good at capitalizing on those advantages, but really, with all that land and undepleted soil, game, wood, coal, oil, water - how do you fail?
As for getting it back - I think it was a one-shot deal, and we shot.
Why do we need to be a superpower? All we really need is to live sustainably in peace on what is still very good land. We could still do it, but we're going to have to accept the fact that we are all going to be a lot poorer than we are right now.
I didn't imply we need to be a superpower, what I meant was that we used to be a nation that rested on the foundation of the rule of law, and such peoples are always industrious and responsible. We discovered the concept of something for nothing and now we have just that - nothing.
I agree entirely!
We shall see how many Tim McVeigh's come out of the New Iraq.
McVeigh was a boy scout compared to what some of those guys are going to do when they get back. The real injustice? Some people are born to snap, but those don't often qualify for the armed services. The ones who do those things will be perfectly normal men and women who were pushed beyond their limit and then held there far longer than history shows is good for combat troops, and then they get sent back without enough rest.
In Britain they haven't felt as much of the brunt but I argue that in some of the former British colonies, things aren't so great. Two examples: India and Pakistan have come to the brink of nuclear war and the area formerly known as Palestine is a never ending source of belligerence. Certainly all of these things are not completely due to the British collapse, but some of it is, especially the arbitrary borders that ignored ethnicities/resource division that were drawn as the British pulled out.
Mogambo is a tad more worried about inflation lately than usual.
Brave new Mogambo
http://www.atimes.com/atimes/Global_Economy/IL19Dj01.html
Lots of inflationary numbers tossed around.
But its the last line I like the best.
Hard-hitting effects of oil prices
Helicopter Ben is firing up the choppers:
Fed to lend $20 billion to banks
Japan is keeping their helicopters grounded:
Japan banks will not support supbrime fund
This is one of those articles you can read for free if you go in via Google News.
From Barron's: Crude-Oil Prices Seen Surging
Since Russia is in the news, an updated version of my post on the Oil Watch Monthly thread:
http://uk.reuters.com/article/oilRpt/idUKL149148020071218
ANALYSIS-Europe refiners look to Russia as N.Sea oil fades
Tue Dec 18, 2007 1:19pm GMT
By Ikuko Kao
Our middle case shows both Norway and Russia approaching zero net oil exports by 2024. I have acknowledged that the Russian outlook may be too pessimistic because of frontier basins, but my WAG is that the new basins are to Russia as Alaska was to the US--very helpful, but it doesn't fundamentally change the long term picture.
As I have previously described, these net export declines tend to show a linear decline pattern, approximating a fixed volume per year, which is an accelerating annual decline rate. Our current data suggest that net exports from the top five are going to drop at about one mbpd per year for 2006 and 2007. We shall see if the pattern holds for 2008. But this linear decline would bring them to about zero around 2029. Khebab's detailed mathematical model basically gives us the same answer, a middle case of 2031.
BTW, a new analogy. Two ways to eat a pizza:
(1) You take a bite. The next bite is 95% the size of the first. The third bite is 95% the size of the second one, and so one. This is an exponential decline rate. You technically never reach zero. The limiting factor is the cost of producing small amounts of oil.
(2) You divide the pizza into 8, 16, or 32 slices, and proceed to eat. This is the linear decline pattern, which is an accelerating annual decline rate. Whether it takes 8 years (Indonesia), 16 years (Norway) or 32 years (Saudi Arabia) to reach zero net exports is a function of consumption at peak production, the production decline rate and the rate of change in consumption.
"1) You take a bite. ..."
Doesn't quite work the way you suppose. Suppose first bite is 95% of the pizza. Second is 95%*95% which is 90.025% of pizza, except that there is only 5% left after first bite. ;-)
I think that a more realistic first bite is 5% of 100%, unless you have a very small pizza.
If the first bite of the pizza is 95% of the pizza, the second bite is (1-.95)*.95 = 4.75% of the original pizza.
Here's an interesting time-lapse video of the construction of the tramway in Nice. Thirty-six months from start to finish.
http://www.youtube.com/watch?v=Z_6FbUMxhrs
Here's my attempt at translating the filmmaker's commentary:
From bonddad.blogspot.com:
Will $100/Oil Be the Norm?
Interesting. I used to read BondDad's stuff at dKos. I remember him as a peak oil denier.
Bonddad completely, totally rocks in his areas of expertise. He is quite skeptical of anything outside his realm, especially when its connected with dramatic pronouncements. He doesn't have PO in his analysis of things, but what he does cover is top notch. I always read his stuff when I notice it on DailyKos ...
If he is mentioning TOD that means more readers today :-) If they heed, given his readership ... BANK RUN!!!!
... BANK RUN!!!!
SCT, I'll post this once. believe me when I say that Sovereign Default and Argentina's banks runs have been studied by the Boyz.
I would believe that Sovereign default is in our future, and most certainly bank runs. notice the law changes behind the scenes regarding how much money you can move around and in what time periods.
If you have electronic money in the future, you may not have it when you want it.
A tip FWIW.
George Ure sort of addresses the bank-run issue in this article we posted in the Finance Round-Up:
Lovely verbiage. A page right out of the Alan Greenspin cookbook of economic obfuscatory linguistics.
I'm hearing hints of this stuff already - for example, go look for a gold fund and try to buy into it. The first few we checked the other day weren't accepting new investments.
The first things they switched off at Northern Rock were the web servers. Watch and learn from the UK nightmare, as far as we can tell every UK citizen is now owed about $3600 by that lot!
The Government can find the money to buy a bankrupt bank in a flash - but money for adequate health service or schools? - not likely any time soon.
It went to £2000 per citizen today.
More than the UK armed forces operating budget (that was last week)
Now more than the UK Education budget.
And there will be more to come.
Northern Wreck is now de-facto Nationalised.
No bank run yet. Almost no one can
hear or heed a warning yet. When they
start to wake up, they will wake to
something completely unknown.
A simple story.
A VW Beetle in 1973 on the exact date that the oil embargo was unleashed as news by the then MSM(tv and radio) , pulled out of Dago Hill in midtown St. Louis and headed north to pickup the I-70 interstate then to the huge north county suburbs of Florissant, Mo..about 14 miles in length. At 10:30 PM should usually be about a 45 minute drive easily.
The trip took most of 3 hours and when I pulled in my driveway the VW was almost wrecked. The whole front steering was totally shot. I wouldn't have made it home if I was not inebribated. The next day I couldn't even back it out of the driveway.
What I saw along that long long trip was a totally blocked interstate, totally block suburban roads and gas stations filled with huge lines and people just filling up and pulling off,not even paying and the attendant was cowering by the front door asking people to not hurt him but just go ahead and take the gas.
Next morning I realized just how bad it was..all these years later I realized just how bad the future can get and just how fast it can come about...in less that 2 hours.
And I might add that we were far more civilized folks back then.
End of story.
Damn.
Funniest story since I drove home in a pickup that like all good ol' boy trucks has a cab that fogs up if you close the windows..... so windows open, in a snowstorm, was driving In and OUT of snow clouds ..... get home, park it, chock the wheels (don't ask) and march to the fridge, get out large bottle of gin, and take a few swallows....
Thereupon I vowed to not drive home in snowstorms and not guzzle gin, WHEW. Like paint thinner, it tasted! But did warm me up.
When evacuating for Rita on I-10, average 5mph for 12 hours, gas stations were loaded. People in line with handfulls of small water bottles, open 5 gallon buckets, anything which could be found- it reeked of gas. No port-o-potties between stations, had to do business in empty water bottles on the side of the road in the car.
Looked to the left, idiots with A/C blasting, stereo bumping, brights on, rims spinning...
Cash was almost worthless with all stores/restaurants closed/boarded up.
Strangest part, not much violence, probably didn't get desperate enough. After going on for a week it would've been different.
"I can't speak for or against the veracity of this argument because I'm not a geologist. "
And as others would/will likely point out, geologists
can't speak for or against the veracity of this argument because they're not petroleum engineers. ;}
One of the little ironies of the Peak Oil debate is that Petroleum Engineers, by nature, tend to be pessimists (most geologists would call them extreme pessimists who in prior centuries would be flat earth believers, but I digress) about recoverable reserves in specific fields, but they tend to be optimists about global reserves, while geologists tend to be more optimistic (I would say realistic) about individual fields, but more pessimistic about global reserves, e.g. Economides versus Deffeyes. Go figure.
Summary of Weekly Petroleum Data for the Week Ending December 14, 2007
They were expecting a drop of only 1.5 million barrels.
OTOH, the Cushing number looks good this week.
Yeah...doesn't seem the market is terribly interested anymore. Too busy putting out other fires probably.
Small uptick. Guess we will see if it turns into more overnite, as the Asian markets last week had a bigger reaction than the US ones. (Again, they may be a little busy)
Cushing looks good because the ice storm knocked out the power there. Back on now, or at least 'officially' back on. There will probably be intermittent outages in power there as everything gets checked out. Should be normal by the report week after next, which will be for (about) 12/28 inventories.
Wow!
Another 7.6 Million barrels down (Crude)!
Overall, down 8.3 Million more barrels of total stocks.
Gasoline stocks up 3.0 Million barrels, Demand STEADY at 9.3 MMBPD (0.3% up over 2006). Refinery utilization was 87.8%. Gasoline imports up over last week, back at 1.1 MMBPD.
Propane/propylene inventories decreased by 1.7 million
barrels last week. 11.7% lower than 2006.
Distillate fuel inventories decreased by 2.1 million barrels, and are in the lower half of the average range
for this time of year.
Doesn't look like 2007 is going to end well. BTW, what happened to all those nasty speculators.
Two weeks in a row of big drops in propane inventories. Anything to worry about yet?
Propane, like natural gas, is seasonal. It always drops in the winter and builds in the summer. Propane inventories started dropping when cold weather set in. That is normal, nothing to worry about. However inventories are right on the lower edge of their five year average. But nothing to worry about....yet.
Check it out here:
http://tonto.eia.doe.gov/oog/info/twip/twip_propane.html
Ron Patterson
Yes, the seasonal drop does happen. This year, however, the drop started from an already low level. The stocks are about 12% below last years level and have been running below the 5 year average since summer.
From your EIA link, notice that last spring, there was a jump in demand (see the figure at the bottom of the page). This year, people may have put off buying propane as the residential price is about 25% higher than last season. While I don't have any data to offer, my guess is that there's been some increase in the use of propane as a motor fuel, after gasoline prices spiked upwards toward $3 per gallon. If we experience colder weather than last year, I would expect to see an even larger drop later after the winter heating season winds down. Any idea what the MOL is for propane?
E. Swanson
It is something I need to keep an eye on. If my supplier is not going to be able to refill my tank, I need to know that BEFORE it is on empty!
We got two tanks.
1) We get to buy propane at the cheapest times of the year
2) We don't worry about cost jumps in < 1 yr increments
(which we hedge in other ways).
I was miffed that the one tank really didn't hold the rated load (it's obvious why, now, but I want my gallons).
The interconnection was rock-simple and was done by the tank leasing people.
When I filled my 2 tanks back in November, one local supplier wanted about $2.79 a gallon. I just ordered 100 gallons for my usually broke tenant and the supplier charged $3.10 a gallon. They made me pay up front for the 100 gallons, even they don't yet know how much propane will be put in the tank. If I had known the guy was going to fracture his arm and thus have some extra medical bills, I might have filled it earlier at lower cost...
E. Swanson
If I had known the guy was going to fracture his arm and thus have some extra medical bills, I might have filled it earlier at lower cost...
E.,
If you can bypass causality I'd like to go to the horse races with you :-)
Actually, perhaps you already did, and already made the money. Or something. Rare.
Propane overall looks OK here. For now. The midwest seems a bit better off for supply than last year. I was shocked at our price (I think it was $2.7X in the early fall, +30%/yr). According to the EIA table we're getting ripped off.
The other thing around here is that we don't seem to have a lot of spot independent propane dealers anyways. So the price paid is the price named by one of two companies who are always very close.
I picked propane because it comes from two almost different processes, and figured that would keep the cost low. It did for a while, but now we're starting to use solar thermal to cut back on propane use.
NR
Listen to the rationale for this drop in inventories:
Now it seems like experts are always good at explaining these things after they happen. However, everyone who wanted to know whether or not it was foggy over the Houston Ship Channel last week could have known that before the report. Likewise, an expert would also know about the end-of-year accounting thing before the report came out. So if they knew about those things, why were the forecasts so far off?
As I understand it...the "experts" they survey base their predictions only on the previous years' inventories. They don't take into account things like weather-related delays, platforms shut down for maintenance, refinery accidents, etc.
P.S. The inventory geeks at PO.com claim the fog isn't enough to explain the drop. It was fogged in a couple of weeks ago, too, and inventories didn't drop that much.
They also wonder where the OPEC increase is. That should have started arriving around Dec. 1.
Going to the high bidders in Asia?
Also, I wonder how much product is being shipped back to exporting countries--ships passing in the night?
Yeah, that was my first thought: it's all going to Asia.
The big drop is in PADD I - the northeast. It's been dropping pretty steadily, perhaps because of the various problems in the North Sea?
If anyone gets a chance to see I am Legend, check the price of a gallon of gas in the movie. The virus hits the population in 2009, and the price on the sign is 6.69 per gallon.
The virus hits the population in 2009, and the price on the sign is 6.69 per gallon
It would be my guess that BOTH will be true.
"And we believe and are sure that thou art that Christ, the Son of the living God."
John 6:69
Interesting. So, that is probably a deliberate reference on their part then?
Does Hollywood have an agency directors go to where they say "hey i have some numbers to put in a movie, I need a relevant/obscure bible quote"?
LOL, maybe so.
I was thinking, 6+6+9 = 21. Add two for the colon, and you get the number 23.
If it was 6+6+8, would you add 3 for the colon? I mean, puhleeze. And what is so special about 23? Prime number, sure, but so are 17 and 29.
It was a joke based on the Jim Carrey movie The Number 23. Please save your indignation for something that really matters :)
Interestingly, I believe a not-unlikely scenario for resource wars and loss of US hegemony IS the release of something nasty by the US (does anybody believe Cheney for example is not capable of doing such a thing?) - that will wipe out a big chunk of the rest of the world population - with US troops inoculated against it (and perhaps a late-arriving "cure" for US population), the US would be in pretty good shape to pick up the pieces after...
not something I WANT btw, just one possible response by TPTB to what's coming
If US soldiers are not dropping at the same rate as everyone else, it won't take others very long to notice. It won't take very long at all after that before the nukes start flying.
I seem to recall something about SARS being more deadly to Asians than other populations.
Can't seem to find a link about though.
Regarding Jimmy Carters Speech -I have a link to it on my Megatrends2020 website at the bottom under Further links and resources > "A call to action":
http://www.megatrends2020.com/html/chapter1.html
-I valuable resource for Mrs. Clinton?... :o)
Regards, Nick.
Re hanson's comment about British emisions, it is all nonsence. Even by the 1930's, when other nations were ahead of us emisions wern't much above pre industrial levels. hanson's forebears wern't Irish were they?
NEW ENERGY ACT - What happened to existing solar / wind credits from the 2005 Energy Act? Are they gone or is it that new solar/wind credits are not there? I am thinking of putting solar panels on my roof in NY state.
Note to Leanan, Prof G, etc:
A summary of all the provisions would be a good item to post as its own article.
Has there been a discussion of the energy bill? I'm surprised there hasn't been a thread about it.
I have a comment. The bill mandates an increase in the production of biofuels to 36 billion gallons in 2022 from 7.5 billion in 2012. That mainly means ethanol, I think, and sounds like a terrible mistake. Where are we going to get that much ethanol? If we try to get it from corn it will drive food costs through the roof. Maybe someone more familiar with the biofuel/ethanol subject can address this.
I was surprised that congress and the Bush administration got together on an energy bill. Sometimes we're better off when the government can't get anything done than when they can.
In the runup to the election of the captain and officers of the Titanic next year, they want to be able to say that they have "done something" about energy.
I read in an news article that 2/3 of the increase in ethanol was supposed to come from cellulose, not corn. I don't know what happens if that ends up to be technically unachievable though.
Neither do they.
They are just trying to rest easy, knowing that their Heinies are now covered.. by the fumes that remain in the tank!
I'm really starting to get the idea that ethanol is just flat bad. I talked with the fellow at Iowa State's BECON (biomass energy conversion research facility) and he was all warmed up about methane and ammonia. You can continuously feed cow shit, corn stalks, yard waste, and even little bits of AGW denialist troll, just as long as you chop 'em fine, and you get methane or ammonia out depending on which bugs you use, how hot you run it, etc.
The ethanol, in contrast, has very fussy yeast, needs to be sterile, only works on sugars, etc, etc.
Here hoping there is a lot of stuff in an ethanol plant that can be salvaged for doing methane/ammonia work ...
Methane production has other problems, such as managing a very small temperature window, Humidity\moisture levels and PH level. Otherwise the Bugs either crock, or don't produce Methane. Also the Methane bugs produces lots of CO2, which need to be seperated from the Methane. Moisture also has to be removed from the Methane to prevent Pipe and storage tank corrosion.
Issues with Ammonium is that its water soluble and high contrations need for economically recovery, kill off the bugs.
FWIW: If a researcher specializes in Methane, he is going to say Methane is the best, If the research specializes in Ethanol, then Ethanol is the solution. Ultimately these folks are biased and are interested in promoting thier expertise in order to get a paycheck.
None of the BioFuels, whether its Ethanol, Biodiesel or BioMethane, is a solution. They all have huge problems and at the very best, combined they could produce a very small fraction of energy currently consumed using Fossil Fuels.
The bottom line is that there are simply too many people on the planet, Since we failed to manage our numbers, nature will take care of the problem for us, whether we like it or not.
Look through the past posts.
Here is one, House to Vote Today on Energy Bill, and there was another one on ethanol.
WNC Observer summed it up best though with the title for it being "U.S. To Barely Ease Off Gas Pedal Prior To Driving Over Cliff."
While I think we need a proper dedicated thread for discussion, here is the text for H.R. 6 [edited, Thomas link did not work].
There is also a pretty good summary from CNBC.
DEFEAT FOR WIND POWER IN DELAWARE
Yesterday the Delaware State legislature pulled the rug out at the eleventh hour on a wind power initiative that had been building for well over a year.
The following synopsis of this whole affair is an excellent example of how the real obstacles to alternative energy are not so much technical but rather the power of people with a strong vested interest in the status quo.
The main electricity supplier in Delaware is Delmarva Power, which was once a venerable and highly respected utility. Subsequent to deregulation, Delmarva split off it electrical generating function as a seperate company, Connectiv. As a result, Delmarva Power became strictly a marketing and retail companying, buying power both from Connectiv and on the open market.
Several years ago, Delmarva customers experienced an almost 60% increase in their electric bills. There was a huge public outcry that resulted in the Delaware legislature passing a law requiring that Delaware increase its in-state generating capacity by a certain amount, the idea being to make Delaware rate-payers less dependent on the vagaries of the spot power market.
Delmarva has opposed this initiative from the very start, because it is quite happy buying power, marking it up, and then selling it to Delaware customers. No capital investment required.
The law required that Delmarva consider proposals for new in-state generating capacity. There were three proposals under consideration: a combined-cycle coal gasification power plant, a conventional gas-fired plant, and an offshore wind farm, the latter being proposed by Bluewater Wind LLC.
Bluewater's proposal consisted of a wind farm comprised of 150 turbines and would have been located 11 miles off the southern shore of Delaware. It's proposal was favorably reviewed by the PSC and the three other state agencies having say over it, despite the fact that Delmarva and its chums in the Delaware legislature having been trying to scuttle it from the very beginning. The consultants have been consulting, the lawyers have been lawyering, and the lobbyists have been lobbying.
Well, the final vote among the four agencies was to be yesterday, but the Delaware legislature pulled the plug on the whole thing just prior to the voting sesssion and put it on indefinite hold, citing concerns of how the cost of the wind farm would be spread out. It will probably stay in limbo until next spring, while in the mean time further efforts will be made in Dover by legislators beholding to Delmarva to slowly strangle the whole thing.
The wind farm is not completely dead, but its prospects for ever becoming a reality do not look particularly good. Delaware residents in favor of wind power will make a lot of noise, but it will probably be for naught. The fix is in.
Take this example and mulitply it a thousand fold, and you will have a good idea of what alternative energy is up against.
I get irritated at all the “experts” who continually miss the big picture. Every day I run across the following statement somewhere;
“We need to concern ourselves with switching too many acres from food to fuel.” I heard it personally come from the mouth of SDSU’s marketing expert. He said, “We cannot allow people to go hungry.” He then got very angry when I told him that we have no say in that matter, energy prices have the say in that matter.
Please tell me how much sense the “Not too many acres for fuel” crowd makes after reading the following;
In the 40,000 year history of mankind, we’ve never had a smaller portion of crops go to fuel.
Most of humanity throughout history converted nearly one-third of all crops to FUEL.
Consider the following facts;
In 1910, America had 26 million horses.
To feed these horses farmers rose;
36 million acres of oats
70 million acres of hay
That’s over 100 million acres going to FUEL! (More acres than we currently put to any single crop)
It took until 1956 before tractors outnumbered horses on American farms. To this day, it STILL takes over FIVE acres to feed one horse!
When farms switched from horses to tractors, Rural America entered a long slow die-off, due to horrible prices. Was it due to higher grain yields? Nope. Grains became practically free because it became senseless to plant oats and hay. Cheap petroleum eliminated a market for 100 million acres of agricultural production.
Cheap energy, the ENEMY of rural towns, created an enormous population boom, and allowed people to trade a small amount of work for lots of food.
Throughout the 20th century, a BTU of corn bought 1.5 to 2.5 BTUs of crude oil. This means that a corn burning stove made absolutely ZERO sense. Because energy prices doubled many times in the last few years, a corn burning stove currently breaks even at $6.50 per bushel against crude oil. (Corn is only $4/bu)
This means that corn is very undervalued on a historic level to crude. Farmers today deliver a cheaper BTU than does the oil industry. This fact is as inverse as it is historic in my opinion.
I think it’s CRAZY that so many intellectuals are up in arms about using acres to grow fuel instead of food, when that is exactly what all their ancestors did before the era of cheap energy, and that is exactly what their grandkids are going to do in the future.
I found it HILLARIOUS that President Bush gave a speech on the new Energy Bill while Bloomberg posted the numbers. I actually heard him say something about “woodchips” while I gawked at the enormous draw in crude stockpiles. Huh? Woodchips? We’re going to run the Interstate Highway system on woodchips? OOKKKAAYYYY.
Your post had a lot of valuable data, and I heartily agree with this:
I told him that we have no say in that matter, energy prices have the say in that matter.
But I think you missed an important point.
High staple costs impact the lowest income people the most.
In many places it's the only external monetary transaction people make.
High fuel costs are driven (at the margin) by the weathiest people on the planet, the ones who can afford it the most.
The dystopia biofuels help set up is that we're sacrificing third world people for first world lifestyle.
It's not a choice I want to keep making.
And just as an aside, criticizing "CRAZY INTELLECTUALS" for the content of a debate about food-fuel is indefensible.
The argument is made by people of all intellects.
This proclamation is correct, though it is too limited in scope.
The dystopia of the first world is that we're sacrificing third world people for first world lifestyle.
There cannot be a privileged class without a commensurate (and much larger) group of slaves.
NervousRex,
The linkage that you so clearly make that
'we're sacrificing third world people for first world lifestyle'
is very well put. However, I think that dynamics of capitalism is unfortunately so powerful and inherently amoral that however dystopic biofuels may be, this trade-off will take place, up to the ever worsening point where the price paid for oil by the rich destroys enough demand from the less rich to keep supply and demand in balance. Until enough time (a few decades ?) has elapsed for the bulk of transportation energy (for the rich) to be substituted by lower priced alternatives such as electricity.
So perhaps the picture is one where the rich and the middle class in the developed world will have fuel food, and inflation, the middle classes in the developing world will have food and inflation, but will have their travelling much curtailed, and the poor in the developing world will be short of food, will have their travelling severely curtailed, and will have inflation.
Homo semi sapiens
We never had 7 billion people to feed before either. If we also had 500 million horses to feed (just extrapolating 26 million US horses to a possible world population of horses), we might be starving even more than we already are.
I venture to say you have never seen how the other half of this planet live. Earning less than $1,000 a year, never owned a car and are likely living in their home on common or illegally occupied land. Never had a loan. Half their food nourishment comes from grain, and they need roughly 1.5 kg per day.
One tank of ethanol in the average car comes from enough grainstock to feed a family of four for one year.
Combined with global warming, the biofuels craze has led to the lowest grain stocks in history, and every revision for the last six months is down. 90% of the exports the United States intended to make by May 2008 has been made, and at some point they will cut off exports to retain the grain for use here. I don't ever remember that happening. In fact the grains now diverted to biofuels EQUALS what the US typically exports.
For the third world the grain equation is easy for every 30 kilograms of grain deficit, a person dies. And personally I believe it will begin to happen in the summer of 2008, when the entire world depletes to its seed stock only for the entire summer.
But hey, hoist that beer. You got a job right?? And, there's too many people in the world anyway, right.
Did you intend to reply to my post?
Hello Highplainsfarmer - welcome to TOD. It's very helpful to get this type of perspective - it makes us think and modify our concepts and understanding. There are certain things however that you need to consider alongside side the excellent data you present.
Back in 1910, America had a truly solar powered agricultural system that presumably produced a surplus, sufficient to feed the urban masses and perhaps even some food for export. I say it was truly solar powered because all the fuel for the horses was grown with little else than solar energy and manure.
The modern bio-fuels industry is completely different. In your argument above, you talk about land area, and today loss of agricultural land to bio-fuel is only half the argument. The other half of the argument is the huge amount of petroleum and natural gas that is used to produce the bio-fuel. Most estimates say that 1 unit of corn bio-fuel is produced for every 0.83 units of petroleum and nat gas that is used to make it. So the question is this. Is it worth losing so much potential food production for such little energy gain?
Furthermore, in 1910, the sustainable solar fuel system that existed then fueled mainly agriculture - enough to feed your whole country, and I imagine some local transportation. What is trying to be achieved now is to fuel totally pointless 100 mile a day commutes for 10s of millions. This is on a different scale all together, and is unattainable. Others here can post the figures that show how much land is required to pursue this American Dream (recently turned American Nightmare).
America of course has more than enough food to feed itself, but the bounty of cheap oil has built a global agri-business that now feeds half the world. So the moral issue now, that we have allowed the global population to explode, do we now let it die in the interest of preserving an unsustainable life style in the OECD for a short while longer?
I will not pass moral judgement on that but will say this. If the US government and US farmers are informed of this outcome then they need to declare that they will relentlessly pursue this self interest regardless of the consequences. In a few years time it will be no good saying "we had no idea that millions might die".
Just because we could use land to feed 26 mln.horses in the begiining of the last century does not mean we could feed 1 billion cars in the beginning of this century the same way. Not even a sizable fraction of them IMO.
You missed a whole lot of other details too - the population which arable land is feeding now is about 5 times larger, and a car has quite a bit higher "energy requirements" than a horse :)
highplainsfarmer wrote: "Farmers today deliver a cheaper BTU than does the oil industry."
Sorry. Wrong. First, you have to grow, fertilize, and harvest the corn without petroleum products--then get back to us about the price per bushel.
Using corn as fuel is a net energy loss over using the petroleum instead.
One barrel of oil = 25,000 hours of human labor.
Ethanol from corn is an enormous waste of energy:
approximately 6x loss!--
http://www.sciencedaily.com/releases/2005/03/050329132436.htm
doesn't that re-inforce the underlying point though...
...which i read as a dollar spent on farm product represents more energy than a dollar spent on oil
...pointing out the inputs just reminds one that actually the corn dollar represents even more energy
i didn't read it as a EROI comment
stiv;
There are 395,000 BTUs in one bushel of corn.
CBOT price minus transportation cost (basis) = $4 in the corn belt.
A family wanting to heat the home can save 50% on heating bill by burning corn. BECAUSE IT IS MUCH CHEAPER THAN BURNING propane or heating oil.
Farmers are delivering a cheaper BTU source with corn than the oil industry does with oil.
395,000 BTUs per bushel of corn. Corn is $4 in central Iowa and most of the rest of the Midwest.
My point is that grains (like natural gas) must double in price to go to historic norms relative to the price of crude oil.
Grains/food inflation has yet to start in earnest.
highplainsfarmer,
To support your point. The following is from the website of Green Systems UK which sell a ‘Woodchip boiler’
http://www.greensystemsuk.com/solar_questions_w.php
Questions & Answers On Biomass Heating ......How do Wood Chips compare to heating oil? ..........How does Grain and Corn compare to heating oil? ........Grain and corn from fallow fields or energy crops can be used as fuel, *2.5 kilograms of grain or corn can substitute approximately 1 litre of heating oil. .......
Ok, I realize you are saying "cheaper" in terms of price.
I was merely making the point that corn is cheap only because it is parasitic upon cheap petroleum for its production.
That a corn stove is cheaper than burning oil for heating is truly a strange and temporary economic issue.
There doesn't seem to be a debate about EROEI. . .
I think some of this can be contended.
First you don't feed grain to horses or mules that are not working. You can pasture them. Plus they return manure to the soil. When you work them we fed them corn plus enough roughage in the form of hay to keep them in shape to work the fields or pull a wagon to town, which was infrequent.
We never fed oats but the people who ride horses for pleasure did. I did to some of my riding stock but again hay and pasture was the mainstay.
You rotated the horses and cows in order to keep the parasites down.
Five acres to feed one horse? I differ. I had up to 12 head of horses and never used more than 10 acres to paddock them in. I did cut hay for them but I had to cut it anyway and most of it I sold. How much? I figured a big 5x6 round bale per horse per the winter over season. I never fed hay when pasture was available.
I guess I disagree with a lot of statistics and graphs. It looks good on paper but I think most of it is nonsense. Besides each region varies considerably. One size does not fit all!!!
A lot of this feed is for people who 'play' with horses. Mules are far better work animals, at least for field work. A big draft horse could be used to haul logs but in my area I never seen them. We all used mules except for necessary riding horses to get around and watch our ground,etc.
In fact I was always amazed at how little feed was given to the work stock when they were active. A mule or horse has a rather small stomach and therefore a higher concentrated feed is required when he is worked since he spends a lot of time at pasture to get enough food by foraging. Hence we fed corn. A lot of protein and energy in corn. So I didn't give my riding horse much corn for he was too full of energy. Just enough and mixed with something else. But I didn't ride enough to usually warrant more than just good quality hay.
My hay could get up to 12% protein if baled correctly. Thats enough for the animal but if you use him a large part of the day then you must use grain. Best to not work them right after feeding them so we never fed them until the days work was done.
This is how I remember it and what my own experiences were as I bred, raised, and trained horses. I also shod them myself. I found them to be a losing proposition at that from the hobby point of view. Better to just get a couple good mules if you have to do field work. Ride them if need be then or use a one horse buggy,,thats a far better solution than riding them.
I kept horses for more than 20 years.
My choice for the future when TSHTF is cattle/oxen. A very good choice is Red Poll. They milk well,are good to slaughter for meat, are gentle and make good steers to work with. Slow ,but so will be your life when you find yourself in the future as I see it happening.
A wagon is not necessary on a farm in survival mode. A 'sled' is good enough for many uses. Foxfire shows how to make one. I don't mean a snow sled. A work sled. Like to haul with.
airdale
Airedale - you really have me wanting to take all the horse'n'cow courses at the local horse'n'cow college extension.
I already eat Oats every morning!
All true, I'm sure. Nevertheless, a good draft horse is a magnificent creature to observe!
In today's news:
"Honda boss sceptical about plug-in hybrids"
Quote: "The head of Japanese automaker Honda Motor Co. said Wednesday he saw no value in developing plug-in hybrid vehicles."
Article at:
http://afp.google.com/article/ALeqM5jAZaBm_Ete53zUxbO-_kU7odb6zQ
That's ashame, I like Honda's cars. It is ashame they would miss out on the PHEV and HEV Car Explosion that is going to happen over the next several years.
You may be correct but there is, as yet, absolutely no evidence for your implication that there will be anything like enough energy to run the world in the way that it does now - even 10 years from now.
If I were you I would keep the positive attitude that the 'just-in-time-technology-fairy' will come up with the goods ... but make a plan B assuming that doesn't actually happen. You shouldn't assume Honda doesn't know anything about making cars.
Is that why Honda pulls out? They explode?
that gave me a for real lol. thanks
Honda's statement makes more sense if you consider the difference between its hybrid system and Toyota's. Honda hybrids have only one motor, which can either recapture energy (mostly from from braking) or power the wheels. It's attached to the same shaft as the engine, so it can't operate independently. Toyota's system has two motors - so it can simultaneously generate and consume electricity - and both are independent from the engine. Everything is mixed together in the planetary gearbox.
In the first generation of hybrids, there was little difference in fuel economy between the two systems, but as battery technologies improve, the advantages of Toyota's system will become increasingly apparent. Toyota's system can be used as a bridge to a vehicle that's largely electric; Honda's system will require major changes to be anything more than an electric boost.
So it makes sense that Honda is lukewarm about plug-in hybrids, because Honda's system has less to gain from plug-in capability.
RE: nervousrex,
One cannot create cheap grain with scarce oil.
You can take away biofuels. The outcome is less total grain due to demand destruction. Less total grain is not going to feed more people.
Grains are WAY TOO cheap currently. The market will not allow this travesty to continue.
A BTU of corn will again buy more than a BTU of crude, as it always used to.
The sick, lame, and lazy food industry will eventually get off its haunches and properly bid for grain. Once the bids by the food industry raise high enough, no more grain will go for fuel.
All that needs to happen for the end of biofuels is corn to return to its NORMAL value relative to crude.
I expect this to happen in the next 18 months. At that point, all biofuel production will stop.
Corn stoves will again NOT make econ sense. They didn't make econ sense in the 20th century, and they will not for much longer.
What I meant when I said a loss of biofuel demand on grains meaning less grain is this; farmers are pushing for higher yields and more acres like I've never seen.
With today's input costs, a loss of grain price would COLLAPSE grain production.
If the food industry wants all the grain, it can have it. Just bid more.
There is no reason for a corn burning stove (WITH ZERO SUBSIDIES) to make econ sense.
Food is WAY too cheap, and that problem is going to get solved.
http://news-service.stanford.edu/news/2008/january9/nanowire-010908.html
Stanford's nanowire battery holds 10 times the charge of existing ones
That is promising - now, if only I believed that the banking collapse/Peak Oil/effects of AGW were not going to cause too much disruption too fast to give us time to use inventions like this to get us out of all the mess we've made
hard to get capital to start-up a company and produce on the scale required when there are bank runs and liquidity problems etc.
but hey, I may be wrong and a Li-ion battery electric vehicle, charged by solar panels IS in my future, lord knows I'd sign up quick for it if it were out there....
Hello The Antidoomer,
Thxs for this info, but as I posted before: we need to basically forget building personal PHEVs--the industrial emphasis should be on heavy-truck PHEVS to haul the vital bulk goods from the endpoints of Alan Drake's RR & TOD ideas until the SpiderWebRiding Network is extended outwards.
http://www.autobloggreen.com/2007/01/30/beyond-peak-oil-are-we-facing-pe...
----------------------------
Forget peak oil. Are we facing peak lithium?
-----------------------------
14 page PDF Warning ahead!
http://www.evworld.com/library/lithium_shortage.pdf
----------------------
The Trouble with Lithium
Implications of Future PHEV Production for Lithium Demand
-------------------------
The Chilean mining company with access to the biggest Lithium reserves is the stock symbol, SQM, 25% owned by POT.
Yahoo Finance 5-yr chart shows skyrocket performance:
http://finance.yahoo.com/q/bc?s=SQM&t=5y&l=on&z=m&q=l&c=
Next chart shows that biosolar mission-critical investors are more concerned about solar power [FSLR] and eating [POT] than driving a battery vehicle [SQM]:
http://finance.yahoo.com/q/bc?t=5y&s=SQM&l=on&z=m&q=l&c=pot%2C+fslr&c=%5...
Nothing will postPeak compare to SpiderWebRiding, and canoes, bicycles, and wheelbarrows:
http://www.uni-kiel.de/sino/ar/sk/12a_1970s.jpg
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
"Forget peak oil. Are we facing peak lithium?"
Lithium is the waste product of power production in thermonuclear power plants. There should be a lot of it available - real soon now --- ;-)
Interesting links to "peak lithium". They make the entirely valid point that all possible battery technologies should compete in the electric car marketplace, including those involving relatively common elements like zinc and iron/nickel. If lithium turns out to be too scarce/expensive, it presumably won't be used. The lithium case is probably not as dire as they present, however (they seem to have an axe to grind).
Lithium seems rather rare on a ppm (weight) basis, but that is because it is the lightest metal (half the density of water) - its main attraction for batteries. Unlike many ore metals, it is not attracted to sulfur, and so is not concentrated in sulfide ore deposits. Rather it is dispersed in silicate rocks. The only way to concentrate Li is extreme fractional crystallization, either of magma (molten rock) or brine. Fractional crystallization of huge bodies of granitic melt eventually forms smaller residual bodies (pegmatites) containing lithium aluminum silicates, including the mineral spodumene (used directly in ceramics such as Corningware). Extreme fractional crystallization (evaporation) of common salts in brines eventually yields Li-rich brines. Brines are much cheaper to mine (pump) and treat than solid rock, and so the discovery of the Li-rich brines in South America drove most hard rock Li mines out of business in North America, beginning about 30 years ago. There's still lots of Li around (including Li in clay minerals), if prices rise sufficiently (an argument perhaps analogous to that made for syncrude from tar sands). Unlike syncrude from tar sands, as pointed out in the pdf, most Li used in batteries will be recycled into more batteries - and the higher the price, the more likely this is.
Again, gloom, but not necessarily doom. Other battery technologies of course will take over the energy market, if they turn out to be less expensive and equally efficient. The big question - is there sufficient time available (like 10-20 years) for this battery technology race to determine a winner, or even to get started?
Wow. If 10x translates into a commercializable product, that would be a huge boon for electric cars, plug-in hybrids, off-grid solar, ...
So?
It's an old news that nano based tech can be better: batteries can store more energy, electronics can be smaller and more efficient...
But the problem is that we do not know how to grow small things like that in mass quantities and cheaply.
http://en.wikipedia.org/wiki/NaS_battery
It's all you need to know. Four or five of the most common elements in the earth's crust. NGK (as I recall) in Japan is building them now for utility companies.
Gunfight over the thermostat
sounds like she shot the right culprit - if anybody has it coming, it's the flat screen
Suppose she has a "Kill Your Television!" bumper sticker??
Say what you will about the United States, we generate more weird stories per capita than your typical place.
"When the going gets weird, the weird turn pro." - H. S. Thompson
How, one wonders, would the pillow help?
The poor dears.
There will be ZERO biofuel industry in the USA within 2 years.
The reason is very simple; biofuels, even with subsidies, require grain that is cheap relative to crude oil.
Ethanol (A TOTAL JOKE AS AN INDUSTRY) requires MORE THAN JUST SUBSIDIES. It needs CHEAP GRAIN. Grain today is cheap, just as relative to crude oil natural gas is also cheap.
There is a good reason why a BTU of corn could buy several BTUs of crude for the entire 20th century. IT TAKES TREMENDOUS ENERGY TO PRODUCE CORN.
Today farmers dry corn at harvest using propane. This is senseless. This is only the 3rd harvest since Squanto taught the Pilgrims to grow corn, that it paid to BURN CORN instead of propane to dry corn.
What I'm trying to say is this; today the marketplace places less value as a BTU source than crude oil.
Farmers will not be able to continue bringing a cheaper BTU source to the marketplace than crude. When will this cheap corn end?
Cheap corn will end when natural gas returns to its value relative to crude oil. When that happens, say GOODBYE to all biofuels.
The sport of raising corn will get brutally ugly, and less will get raised. Here's how;
The first 10 lbs of N fertilizer brings home the highest return per lb of N applied in terms of yield. The last 10 lbs of N bring home the least extra bushels. (Law of diminishing returns)
The day that nat gas goes to its old ratio relative to crude in price, the rate per acre on nitrogen fert will drop in half. Those extra bushels will get left "on the table".
After the smaller harvest, the food industry will bid for ALL the grain, leaving ZERO for biofuels.
Corn will return to its old price relative to crude, which means a BTU of corn will buy multiple BTUs of crude, JUST AS IT ALWAYS USED TO.
Or we have a drought etc and it happens even sooner. Or both happen.
Grains are CHEAP. They will NOT stay this bazzarely cheap.
Ethanol plant investors have no future.
highplains
the government will become very involved before they allow biofuels to fail; of course they probably will already be very involved on a no. of fronts in 2 yrs.. i don't believe the marketplace will be left alone as i think you imply.
Welcome highplainsfarmer. It's pretty lonely being a farmer and ethanol supporter on this web site. I post anyway just because it's such an excellent site and some of the posts are really ridiculous, just crying for responses. Your last post dropped into that area; so here goes:
You state the corn will return to it's old price relative to crude. I don't think so. Crude is the leader and corn the follower. Corn may go up but so will crude. I've been following this for many years and watched as the price of corn went from about 3 gallons of gas to less than one and now about 1.3 gallons of gas. The main demand for corn is not human food but livestock feed. The hog farmers are losing money and will eventually cut back which is my dream as there are 7 factory hog farms within about 3 miles of my place here in north Iowa. The stench is horrific, especially when they clean out the pits in the fall and spread the manure on the fields for fertilizer. Feeding corn to animals is an energy loser. Animals should graze the poor land and that means beef not hogs.
I agree with you that corn is ridiculously cheap, but this has been the case ever since I can remember. Corn is a perfectly competitive market just like labor and is not limited in supply as finite oil is. Unlike oil which has restrictions due to NOC's and the oil oligopoly, if the price of corn should rise market forces will be unleashed. It has happened many times before and there are large amounts of fairly good land still locked up in the conservation reserve.
I'm sorry, but ethanol plants have a bright future because the corn producers own a large share of them. They will not let them fail. Exporting corn is the height of stupidity. Those here who think it is their business to solve the worlds problems by sacrificing our own resources and people are foolish. First of all the starving are not buying corn, they have no money. High grain prices have the same effect in foreign countries as here. It encourages production.
I have been burning corn for 4 years now to heat my house. I do not believe the market can price corn for it's heat content as it has failed to do so for a long time. I estimate the local corn price would have to go to $9.00/bu. for it to become uncompetitive with LP. It ain't gonna happen!
Back in 48 you could purchase 8 gallons of gas for a bushel of corn thats about $20 dollars Bu with 60 years of inflation and gas is still the same price.
Hello Highplainsfarmer,
Thxs for your postings--please continue--fascinating stuff, IMO. Recall my earlier link where a forty pound bag of NPK has the equivalent of 3 gallons of gasoline energetically embedded into its manufacture:
http://www.thedailygreen.com/environmental-news/latest/7853
The P & K rock is essentially free, but it takes much energy to mine, prepare, then distribute; the N is free too, but it takes much natgas and the Haber-Bosch process to consolidate into a usable form for farming. That embedded energy has to be eventually incorporated into the price of the harvested good.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Dry corn with propane?
Not around here. All the dryers are rusting away.
We put it in the bins and just run the bin blower as needed.
If you got wet corn then the grain elevators tell you to not bring anymore. You don't combine it when it has high moisture.
I am beginning to wonder if your really a farmer.
I think you just might be pretending to be one.
Most of the bins in Iowa have propane tanks next to them.
Propane dryers are used in Nebraska.
Greetings from a small town in Maine. I talked with our senior Selectman today. The requests for fuel assistance this year is unprecedented. He has never seen anything like this nor anything close. In view of peak oil and the global economy this is only the beginning
I would suggest that the town do a survey of everyone that can't make it through the winter without help and then suggest that people look at moving in together in some selected homes, with the remainder of the homes winterized and abandoned for the winter, with the fuel assistance divied up among the select housing units.
One way to nudge people in this direction would be to provide a flat per-person subsidy (maybe a voucher that any home heating energy vendor can accept) to those under a qualifying income threshold. Lots of people in a smallish energy-efficient house would do very well under this scheme. One or two people who stubbornly insist on staying put in a huge, inefficient old house would be free to do so, but would have to find some way other than taxpayer largesse to afford their preferences.
If people didn't have so much pride the idea would work. As it is I think there is a native stubbornness which would get in the way. There will be enough fuel assistance for people to get uncomfortably through. The State will add to their debt load and push off hard spending / tax decisions for another year.
Most people would sell their vouchers.
Not that difficult to match up registered person to registered address to registered energy vendor.
khaos3;
Drop me an email at jetpig att earthlink nett. I've been trying to develop some prospects for Mainers, and would love to toss them at you, see what you think.
Bob Fiske
ps.. I agree that it would be REALLY challenging to get people to try to co-inhabit, either being in 'someone elses' place, or sharing their own.. sensible, in a way, but most folk, particularly Yankees would probably rather die than get that close, that constantly. We have a good and robust state, it's just largely under-utilized, misapplied.. (depressed, addicted, cantankerous)
'And the land was sweet and good, and I did what I could.'
My first post. I have been lurking for 6 months and find it informative. I am in the business of doing energy conservation work in buildings. I do the technical side and would classify myself as intellectually challenged when if comes to economics and finance.
Would some one be kind enough to answer this question? If we experience hyper-inflation and an apple costs $15 (I have a small 37 acre farm) should I worry about my 7 year locked in mortgage of $150k?
Todd
It depends upon whether or not you have income that is going to keep up with inflation. If you do, then your morgage payments will consume an ever-shrinking portion of your income; if you don't, then everything other than your mortgage will be consuming an ever-increasing portion of your income. In the second scenario, how will you be able to continue paying your mortgage?
If you have 37 acres, one question that comes to mind: how much of that acreage is in food production (apples or whatever)? If it is in profitable food production (net losses won't do), then as inflation increases, so should the prices of your products. Just make sure that you are not so dependent upon energy, fertilizer and other inputs that their price increases will wipe out all of your gains.
ontario
u do realize that hyperinflation could readily & quickly move to deflation. this is what concerns me.
not sure what that would mean in u'r scenario; however i think wnc observer said something like 'they would be
tricky shoals'.maybe he will comment. sounds like he ran some rivers.
i think u have the right attitude unfortunately below
'I should be more worried about userous property tax (cash starved municipalities will no doubt try to get blood from a stone), equipment maintenance and theft..... and a seemingly endless list of issues, and it only takes one to sink you.'
You have got to be joking!!!!! Do you think that we are all STUPID!!! You cannot be - you obviously have a computer. If apples went to $15 each, you could pay off your mortgage with 10,000 apples. For God's sake, please understand that being a DEBTOR in times of hyperinflation is better than stealing (it is legal).
Why is TOD such a Todd magnet?
Not that I'm complaining.. and my brother's name is Todd, and he doesn't come to this site..
Well, welcome, Todd! I'm not money-minded, either, tho' I do have an entrepreneurial sparkle, for some reason.
37 acres? How about a 'Dark Ages Summer Camp'?
Bob
"Why is TOD such a Todd magnet?"
I was thinking the same thing, but it's ironic for you to say it...this place is a Bob magnet, too.
Yeah, but I'm USED to a lot of Bob's..
I was on the board at a Church at one point, and taking the roll once, I found was sitting in a row of four or five Bobs!
Robert
Substrate,
You know it's even wierd for me to see more "Todds" since I was the first one here and now there is Shasta Todd and Ontario Todd. When I was a kid, people invariably asked whether it was a nickname for Theodore since no one had ever heard of Todd as a first name. In my case, it was because a relative had been Robert Todd Lincoln's law partner and my paternal grandmother wanted the name carried on.
I never met another Todd until I was in college in 1956 and he was part of the old Todd family. Hurray! A "Todd."
I'll tell you, when I was a little kid, my dad used to take me to a men's store for clothes and they had this neat rack with sew-on name badges like you see in service stations. Every name in the world but mine. I felt put upon.
#1Todd
Good one :) The only problem is summer is short! My wife is from Virginia and she cannot understand why anyone would want to live in a country with 2 months of nice weather, 3 months of hit or miss and 7 months of crap.
Ontario Todd
A bit of inventory trivia.
Since reaching an all time high of 354,000,000 barrels the week of June 29th, 24 weeks ago, US crude oil stocks have fallen 57,100,000 barrels for an average drop of 2,379,000 barrels per week.
Ron Patterson
Going to be an interesting Thursday/Friday this week isn't it, as traders absorb the 2nd 7 million+ drop in 3 weeks!!
And can gasoline make it to 225 Mbbl by the first week of Feb 2008? 7 weeks of builds to go, currently on 205 Mbbl. I think it probably will (it needs 3 Mbbl build per week), and then will it be time for a repeat of this years Fall and Summer price rises, I expect. Will demand destruction (via recession) prevent a $1 per gallon rise in price like there was between Feb and June this year? Only 2 months till it begins! Enjoy your Christmas people, it could be the last 'normal' one for the rest of your life :-)
Beats me why there isn't more obsession on here over gasoline prices, they are EVERYTHING!! It's what most people (and by extension the MSM) actually care about.
There are many folks on here from or around Northern California.
Is there ANYWHERE around here - within anything like a reasonable distance of the Bay Area (not for commuting - but within a few hours drive), that one can get reasonable land with growing-own-food prospects for a reasonable amount of money. Again reasonable money being what you could get a mortgage on from, say, a $100k income?
I don't own a home any more, since I sold my home in the UK years ago, and I don't see the current living situation as sustainable in any way. But the most likely job prospect for me is in the Bay Area where we just moved to. So I'd need to be able to stay here for work at least.
Any input or biases or opinions on where I might look to buy?
RA---
Mendo is the place, (3 hrs), or Humbolt (5 hrs). Can grow year round. I know of 160 acres with water and timber surrounded by National Forrest on 3 sides for 750K. Some snow in winter, so you would not get the coastal environment.
You could get a smaller piece with established fruit trees and structures with a little exploration.
Plus, you are around people who are already taking action for future unfolding events.
Great recommendations. I am thinking of doing the thing of going in with some like minded friends right now... we're a long way from moving, but I suspect events are sharpening minds.
Look into Oroville, Chico, Durham, Paradise, Susanville, Redding, and Red Bluff. They are all easy growing areas, they are all hot as hell in the summer, and they all have slightly depressed economies so land price shouldn't be to far out of reach.
thanks for the recommendations - i will look at all those places... i am just looking for somewhere that i can buy with friends that could sustain several people
RA,
I pretty much disagree with some of the other posters. I live in northern Mendocino County (and have for more than 30 years) and there isn't any such thing as cheap land. Much of this is because of dope cultivation; who cares what the land costs as long as it has water...and, in addition, many of them have water hauled in all summer.
My area is mountainous which means there really is little land that I would call suitable for serious crop production. I say this as a former certified organic farmer. The best growing areas are around Ukiah, Redwood Valley, Potter Valley and Anderson Valley. But, they will be extremely expensive since they grow wine grapes in all these areas. My 57Ac with two homes still has a current market value of over $800k. I have a neighbor who was trying to sell his 160Ac, house, shop, pond, garden, etc. for $1.3M. Some other people I know here truned down an offer of $1.1M for their 20Ac and house (I think they were stupid not to take the offer.) The most recent sale near me was $675k for 20Ac and a nice house and good well.
Finally. remember property taxes are 2% of the purchase price so that "cheap" $500k property will have taxes of $10k/year.
Todd
You may want to look at Oregon too, as California is likely to dry-out some due to climate change. Either area will experience large migratory influences as crisis victims look for new places.
i expect everywhere will have that problem - but i guess it's better to be somewhere looking out than roaming and looking in - whatever happens next
WNC
Understood. In short the mortgage is the last of my worries. I should be more worried about userous property tax (cash starved municipalities will no doubt try to get blood from a stone), equipment maintenance and theft..... and a seemingly endless list of issues, and it only takes one to sink you.
It reminds me of some engineering problems I deal with; the designed solution is worse than the problem.
Are there any other people from Ontario interested in meeting and co-operatively planning? My place is near Owen Sound.
FWIW: I think you will have a tough time making it living with agraculture. A few of dad seasons (considering the our wacky weather) could wipe you out leaving you nothing.
One idea (not neccessarily a recommendation) is to set up enough agraculture production for your own needs (plus neigbors and friends If you wish), and keep a day job. Get your property zones for agraculture, since the property takes are reduces (compared to zoned as residential property). Perhaps sell any of your excess harvest, if you wish. Perhaps even donate some food as further tax deduction.
If your living up north consider heating fuel independence, with a substantial wood lot that is sufficient to last many years (replace consumed trees by replanting).
I think it would be impossible to predict how local gov't will act in the future. I think the best bet is to keep all options on the table until you have a clear picture how thinks will unfold in your area.
Having the land, tools, and equipment on hand would be a good idea. Stocking up on consumables such as fertializer is also another consideration. Choosing a location is also another critical decision. If you purchase land in a area with high population, theft, drug abuse, violent crime is a real danger as unemployment soars. I believe areas with high population will not be very pleasant if unemployment soars.
My Plan is to relocate to a rural region with good rainfall and good soil. New contruction (very high efficient housing), Establish a basic agraculture setup sufficent for my families needs (get the Agraculture tax discount), and rent a small apartment where there are jobs (until it no longer economical/safe). I probably will share the apartment with room mates to minimize rent costs, and go home during the weekends. Hopefully I can arrange a 4 day workweek (work four 10-hour days).
If you think High inflation is going to happen see if you can work out a long term contract on your property taxes, by paying the taxes for a decade up front (prepayment). I think desperate local gov't running budget deficits might accept this (believing that better days are ahead). You might approach the town tax collector like this: "I understand that our town is facing a budget crunch, and I wanted to know if I can helpout by prepaying my taxes for several years in advance". But you'll need an airtight contract so that they can't try to screw you over later (ie higher a good lawyer specializing in contracts).
The thing is, that property values will probably fall dramatically over the next few years, and unless local gov'ts start jacking up the mil rates, you might be better off delay an pre-payment contract.Plus they'll be more desperate later on. You might even be able to work out a prepayment discount (ie Prepay 9 years of property taxes with the 10th year free). This will depend on how much capital you have and how low your taxes currently are.
Best of Luck
Tech Guy
Thanks for your input. An interesting proposition about property taxes.
Yes that is really our plan as well. We think a farm of the future is going to be mostly for personal consumption with small surpluses to be used to supplement income.
My wife is in her last year of Homeopathic medicine at university and she intends to set up a practice. We think it is a growth industry as allopathic medicine may become a luxury for the few in the rural areas.
I just have to find something useful for myself. Presently I specialize in energy conservation.........not a very useful vocation in a fast crash scenario
RE: Practical;
Corn will easily top $10/bu, and corn will easily go back to its normal situation where it is too expensive to burn. Why?
1) The demand for food is too strong.
2) As long as corn (which has 395,000 btus per bushel) is cheaper than other fuel, they will burn it.
3) It makes no economic sense to raise corn that is worth less than its energy equivelant in price. ESPECIALLY once natural gas finally rises to 1/6th of crude oil price which is where it belongs. (Yet hasn't been there for awhile)
Food trumps fuel. Ethanol plants WILL all go broke as corn returns to its normal price relative to crude. It was an industry that's purpose was to chew through the corn glut. Ethanol isn't good for anything else, and anyone with shares needs to get out now.
I know a lot of guys who sold wheat 3 years out last summer. That is STUPID. One can capture more value from wheat by lighting it on fire (and doing something usefull with the heat) than hauling it to the elevator at $6/bushel.
Grains will rise in value to the point where ethanol is done for. Grains always used to be too expensive vs crude, and they will again.
Remember, the most expensive sentence in the english language is, "This time its differant." Grains will trump oil on btu basis again.
You have that right. Currently corn is about $11 per Million Btu's and heating oil is about $27 per million. I don't know NG but I suspect about $15 per million all retail.
Way up tread hpf said
Throughout the 20th century, a BTU of corn bought 1.5 to 2.5 BTUs of crude oil
Using your numbers That suggests historically corn should be $40.5-$67.5/ million btu? Or somewhere in the neighbor hood of $43.5/ bushel? Am I following this argument?
Well yes as I said up thread, in 48 corn was $2/Bu and gas was 25 cents per gallon. With AGW,and PO, as for food prices the sky is the limit. The CAFE standards will be met long before the mandates, however the biofuels will never fly, not enough time or technology.
agree/all said
But when I did the math above I used btu's / heating oil, not crude, my new number is $12.25 given that 1 gallon of crude is 138,095 btu's is this how others math is working?
I don't follow $12.25. The inverse of .395 is about 2.5 times current corn price of 4.35 is about $11.
Distilate is also about 138kBtu's/Gal so inverse of .138 is about 7.25 times current retail dist. is $3.27 or about $24. Being in a rush I used 120k for dist before. I also started reading the threads from the bottom.
Click on Reply at the bottom of the post you are replying to. Your post will then appear under it, rather than at the bottom of the page. Makes it a lot easier to follow the discussion.
Highplains..
Welcome to TOD.
You will want to click on 'REPLY' or 'REPLY in new Window' under the comment you are responding to, instead of 'Post New Message', so all the posts for one conversation stay together.
Thanks for the perspective!
Bob
The whole point of the discussions about Peak Oil is that this time It Really Is Different. Your notion that oil or natural gas prices will return to days gone by where oil was cheaper than corn (on a BTU basis) ignores the possibility that imports will be limited and begin to decline after the peak in production point is reached. It's been more than 35 years since U.S. oil production peaked and petroleum prices since have been relatively low because of imports. Look at the present problems with heating oil in Maine or the high prices for propane I just experienced. Without more imports, as the U.S. population continues to increase, why would you think the prices obtained for fossil fuels would decline?
Lets consider your comment that a bushel of corn represents 395,000 BTU's. A gallon of #2 fuel oil has about 138,000 BTUs and a gallon of propane has about 91,500 BTU. So we see that 1 bushel of corn might equal 2.86 gallons of #2 oil or 4.32 gallons of propane. Suppose fuel oil to the consumer costs $2.50 a gallon, corn would need to sell for more than $7.15 a bushel, while with propane at $3.10 per gallon (my local cost just today, not including tax), corn would need to sell for $13.39 a bushel for the corn to to be worth more than those fossil fuels. And, the corn would need to be shipped and stored too. A farmer likely has on site storage and there's no need to transport the corn off the farm. Looking at the WSJ commodities data, corn today for July '08 is priced at about $4.53 a bushel. The farmer gets the wholesale price for his corn but pays retail price for his fuel. So, it appears that it's still cheaper in dollars to burn corn instead of buying fuel oil and much cheaper to burn corn than buy propane (around here, that is).
E. Swanson
Do the rest of you find this quote as funny as I do:
"Experts with no stake in the argument say ethanol has indeed contributed to rising food costs, but that is only one among several factors."
http://www.nytimes.com/2007/12/18/business/18food.html?_r=3&oref=slogin&...
Thank goodness we have anonymous "experts" with no stake in either energy or food to set us straight! LOL!
Emanuel
Hello TODers,
http://www.usatoday.com/weather/drought/2007-12-18-drought_N.htm
----------------------
Thirsting for answers in dry Georgia
...Across the metro area, an estimated 18% of water is still lost to leaks, says Jill Johnson of Georgia Conservation Voters. Reducing that to 10% would save up to 50 million gallons of water a day, she predicts.
--------------------------
That is insane! If I was the Georgia Governor: I would pull out all the stops to repair every leak quickly.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Bob,
18% loss is probably not that uncommon for a large municipal water system. Asheville NC had over 20% loss. They were working hard on reducing that. A water person I talked to there said that 10% loss is probably about as good as you can get in a city the size of Asheville (~80,000) or larger.
Given infrastructure neglect, municipal water systems are probably on an upward slope for losses on a national scale.
It's said to be 8% in Vienna Austria (population 1,670,000)
Billions will starve in the not to distant future.
Expensive natural gas will END this temporary nonsense of cheap BTUs from corn.
stiv made a great point that it is TEMPORARY for corn to be priced at discount relative to fossil fuels. My entire point is that toaday grains are relatively cheap BUT they will not stay this cheap.
To the guy who claims I'm not a real farmer, I say come over to SD and I'll show you lots of corn that gets dried in the fall via propane. Bins are equipped with dryers. We can't let crops stand in the field after Halloween due to potential snow.
A lot of the farming folks on here sadly do not believe corn will go to $13 or higher, and they will likely go broke if they hedged grain well into the future.
Market forces will NOT allow the farmer to continue to produce a cheaper BTU than the oil industry does. Its only been this way a few years, and is temporary.
We've yet to experiance the effect of expensive nat gas.
Billions will starve in the not distant future.
P.S. How does one post this as to keep the posts together? Sorry for not getting it.
You click on the "Reply" that is directly under the post you are responding to.
"You click on the "Reply" that is directly under the post you are responding to."
:)
You have to admit it's kind of funny (in a dark way). Those other guys were talking about water distribution systems and the maximum reasonable limit on losses in transmission "10% is great!" and "8% is possible!" and then all of a sudden hellfire and brimstone let loose "Billions will starve!"
Yeah,,he seems stuck on that mantra of billions starving.
Thats why I have a hard time with the farmer label.
Three days a member and aleady with the doomer mainline schtick.
"Three days a member and already with the doomer mainline shtick."
It doesn't seem to be too uncommon for someone to run across this site and sign up and start posting crazy-assed stuff as the subject of PO understandably does that to people. Sometimes they calm down after a bit, and sometimes they disrupt things and piss too many people off and get banned. Just seems to be a normal thing.