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DrumBeat: April 14, 2008
Posted by Leanan on April 14, 2008 - 9:06am
Topic: Miscellaneous
Fears emerge over Russia’s oil output
Russian oil production has peaked and may never return to current levels, one of the country’s top energy executives has warned, fuelling concerns that the world’s biggest oil producers cannot keep up with rampant Asian demand.The warning comes as crude oil prices are trading near their record high of $112 a barrel, stoking inflation in many countries.
Leonid Fedun, the 52-year-old vice-president of Lukoil, Russia’s largest independent oil company, told the Financial Times he believed last year’s Russian oil production of about 10m barrels a day was the highest he would see “in his lifetime”. Russia is the world’s second biggest oil producer.
Mr Fedun compared Russia with the North Sea and Mexico, where oil production is declining dramatically, saying that in the oil-rich region of western Siberia, the mainstay of Russian output, “the period of intense oil production [growth] is over”.
Global warming has a new battleground: coal plants
WASHINGTON -- Every time a new coal-fired power plant is proposed anywhere in the United States, a lawyer from the Sierra Club or an allied environmental group is assigned to stop it, by any bureaucratic or legal means necessary.They might frame the battle as a matter of zoning or water use, but the larger war is over global warming: Coal puts twice as much temperature-raising carbon dioxide into the atmosphere as natural gas, second to coal as the most common power plant fuel.
Food Inflation, Riots Spark Worries for World Leaders
Rioting in response to soaring food prices recently has broken out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. In Pakistan and Thailand, army troops have been deployed to deter food theft from fields and warehouses. World Bank President Robert Zoellick warned in a recent speech that 33 countries are at risk of social upheaval because of rising food prices. Those could include Indonesia, Yemen, Ghana, Uzbekistan and the Philippines. In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he said.
Finance Ministers Emphasize Food Crisis Over Credit Crisis
WASHINGTON — The world’s economic ministers declared on Sunday that shortages and skyrocketing prices for food posed a potentially greater threat to economic and political stability than the turmoil in capital markets.
Former oil company chief accused of fraud
HARTFORD, Conn. (UPI) -- Connecticut is suing a former oil company president, charging him with defrauding purchasers of home heating-oil contracts, the state's attorney general said.Attorney General Richard Blumenthal charged that Christopher T. Carr took millions of dollars on behalf of F&S Fuel when he knew the company couldn't deliver on its prepaid contracts, WSFB-TV in Hartford reported Monday.
China's Guangdong ups power fee to cover gas costs
BEIJING -- Six of south China's wealthiest cities are charging industrial users a temporary surcharge on electricity prices, to compensate gas and oil burning power stations for soaring fuel costs, industry sources said on Monday....The money collected could help tide the booming area over peak-time summer power shortfalls that the local government warns could be as high as 15 gigawatts, by providing cash to plants that can be easily fired up but have high fuel bills.
Mexico Opposition Barricades Congress
MEXICO CITY (AP) -- Leftist lawmakers erected makeshift barricades in Mexico's lower house of Congress Monday to block attempts to dislodge them from the podium, where they have been camped out for nearly a week to protest an oil reform bill.
Iran warns Total, Shell over gas deal
Press TV -- Iran warns Royal Dutch Shell and Total against inaction, calling on them to enter a contract if they seek to develop South Pars gas field."The deadline set for Shell and Total (to enter a contract on developing) phases 11 and 13 of South Pars (gas field) will not be extended; they are likely to be replaced by Asian corporations," said Ali Vakili, the managing director of Iran's Pars Oil and Gas Company.
BANGALORE - India's quest for energy security received a boost last week with its oil diplomacy paying off to varying degrees on more than one continent. In South America, India signed a deal allowing it to participate in a joint venture to drill oil and gas in Venezuela, while in Central Asia, the door was pried open for Indian companies to invest in projects in Turkmenistan. In the same period, New Delhi's wooing of Africa's oil-rich nations moved into top gear as it played host to the first India-Africa summit.
Methane boom has Colo. landowners worried: Energy industry jobs return, as does contamination and explosion risks
WESTON, Colo. - A hamlet near here of wooded gulches, rocky outcrops and views of the snowy tops of southern Colorado’s Sangre de Cristo mountains is the perfect escape for retirees and telecommuters who’ve settled in.But people who bought lots on the 4,000-acre North Fork Ranch about 200 miles south of Denver, hoping to leave behind big-city hassles, worry when they flip on a switch or take a drink of water. They’re afraid that volatile methane gas from drilling in the area’s coal seams could seep into their water wells or migrate inside their homes.
Bill McKibben: Where Have All the Joiners Gone?
CHEAP FOSSIL FUEL has made us what we are. Which is to say: rich, powerful — Look at us! We can make the ice caps melt! The oceans rise! But something else too: cheap fossil fuel has made us the first people on Earth with no need of our neighbors.
New cracks suggest largest remaining Arctic ice shelf destined to disappear
WARD HUNT ISLAND, Nunavut — New cracks in the largest remaining Arctic ice shelf suggest another polar landmark seems destined to break up and disappear.Scientists discovered the extensive new cracks in the Ward Hunt Ice Shelf earlier this year and a patrol of Canadian Rangers got an up-close look at them last week.
“The map of Canada has changed,” said Derek Mueller of Trent University, who was amazed to find how quickly the shelf has deteriorated since he discovered the first crack in 2002.
“These changes are happening in concert with other indicators of climate change.”
Better Batteries Dramatically Boost Wind Energy
The giant wind turbines on the west coast of Ireland stand not only on the geographical limits of Europe, but also on the cutting edge of a revolutionary technology that makes wind power more reliable and valuable. The 32 megawatt (MW) Sorne Hill wind park will be Europe’s first to integrate a large scale battery back-up system that ensures a reliable supply of electricity regardless of how the wind blows.
Pemex Shuts Two Gulf Oil-Export Ports on Bad Weather
Petroleos Mexicanos, the third- largest supplier of crude to the U.S., has closed two oil-export terminals in the Gulf of Mexico because of winds and lightning.
Cantwell calls for probe of petroleum price fix
WASHINGTON -- With the price of crude oil hovering near $110 a barrel and gasoline prices at record levels, a Washington senator says federal regulators need to stop delaying and start investigating whether petroleum markets are being manipulated.
Railing Against Fuel Costs - Cost of diesel means good times for freight trains
With diesel topping $4 a gallon and trucking prices rising accordingly, it looks to some people like boom time for trains.Freight is already a cheaper form of transportation than trucks, and according to the Central Massachusetts Regional Planning Commission's 2007 Regional Transportation Plan, railroads can move a ton of freight three times as far as a truck on a gallon of fuel.
Nigeria: How to End Fuel Scarcity
The minister, who apologised to Nigerians for the recent hardship over fuel scarcity, said lack of adequate strategic storage capacity was one of the underlying deficiencies in the system."Imagine we were at war and there was a blockade, the country would grind to a halt. So it is a matter of urgency that we should develop this capacity. For the future, we are looking at what we've done wrong, what we are doing wrong, what we should do right. I can assure you that this administration will do what is necessary to ensure that this (fuel scarcity) doesn't recur," he said.
Gambia: Fuel Shortage Hits Again
According to our correspondents hundred of vehicles could be seen packed at various petrol stations in the country as drivers struggle to get some gallons of diesels. "The fuel shortage is seriously causing huge headache to the traveling public particularly we the civil servants, as we always find it hard to reach office and home on time" a 34-year-old lady told the Freedom Newspaper, describing the situation as an absolute abysmal."Many private car owners and commercial vehicle drivers are currently bereft of petrol and now joining pedestrians to walk to reach to their destinations."
Pakistan to sell $1bn bonds to tide over deficit
The United States is negotiating a deal with India to sell civilian nuclear power reactors to the country but has declined to make a similar offer to Pakistan because of the alleged involvement of its scientists in proliferation activities. But Mr Dar raised the issue again in the presence of a number of senior US officials at the embassy, indicating that Islamabad might renew its request to Washington to help it meets its energy needs.
Gaza power plant to shut down by Tues. due to fuel shortage
Palestinian Petrol Corporation chief in Gaza warned on Monday that Gaza's main power plant will be closed by Tuesday due to the shortage of fuel."The remaining amounts of industrial fuel to keep the power plant operating will be only sufficient until Tuesday," Mujahid Salama said in a statement, warning "if more fuel is not allowed, Gaza Strip will be sinking in full blackout."
ANALYSIS: Energy crisis meets food crisis amid bio-fuels backlash
Efforts by industrialized countries to reduce their dependence on foreign energy sources and cut climate-changing emissions has prompted a strong backlash from some developing nations dealing with a worsening food crisis. The problem lies in bio-fuels, an alternative source of energy that is often made from food crops. The World Bank last week said that a boost in bio-fuels production was largely to blame for an 83-percent increase in food prices over the last three years.
Energy - crisis elsewhere, opportunity for North Dakota
What surprised and disappointed me when researching this column was the limited role of alternatives in relation to the total demand for energy.The best I could get my scientific friends to say is that alternative energy could create enough power to take care of the increase in demand. This means that unless there is some undiscovered energy, the best we can expect to see is that fossil fuel energy still will be needed to meet the present level of demand.
ESCOs and Utilities: Shaping the Future of the Energy Efficiency Business
As oil hits $110 per barrel and climate change reaches the mainstream conversation in both our consumer culture (carbon neutral products, hybrid cars, etc.) and political conversations (green collar jobs, cap-and-auction schemes, etc.) the issue of energy efficiency has once again become prominent. There is virtual agreement, among policymakers and economists, that efficiency is the low-hanging fruit for reducing carbon emissions and essential to any comprehensive approach to halt global warming.
UK: Shipping carbon tax costs will fall on consumers
Consumers will bear the cost of a future marine fuel tax proposed by the UN to reduce carbon emissions, as shipping companies, importers and retailers hand on the increases, say commentators.
In much of North America, despite propaganda to the contrary, exploration and production have been yielding disappointing results for a long time, and expectations about e.g. the Gulf of Mexico and imports into the U.S. by pipeline from Canada often have an air of unreality about them. In Europe a more rational tale can be deduced on the basis of what happened in Finland. With copious potential gas supplies adjacent to Finland in Russia and Norway, the decision-makers in that country chose nuclear as the best option for additional power. They understood that given the likely future demand for gas in Europe, Asia and North America, in the long-run they might have found themselves relying on imports from very distant sources – e.g, Qatar and Iran.
High oil prices and the return of “resource nationalism”
As oil prices rise, global oil companies may seem to be making up for previous times when revenues barely covered production costs. However, the oil executives know all too well that high oil prices are a mixed blessing.
Three Arab Oil Phenomena in 2008
The year 2008 has been characterized by three Arab oil phenomena with significant future implications. These are summed up in the noticeable expansion in crude oil and natural gas production capacity, the significant increase in the capacity of refineries, and the ongoing establishment of private Arab oil companies.
Saudi to invite bids for Jizan refinery in May
RIYADH (Reuters) - Saudi Arabia plans to proceed with a project for a new oil refinery at Jizan and will invite bids to build and operate the plant in May, the oil ministry said on Monday.Spiralling costs have cast doubt over the viability of new oil refineries worldwide. Industry observers were sceptical over the Jizan refinery going ahead as it is a long distance from crude production.
Turning the world right side up, one conference at a time
The meetings and convention industry is in for some radical changes, if predictions put forward by Thomas Homer-Dixon prove true.
Rising Powers, Shrinking Planet - excerpt from Klare's new book
In this new, challenging political landscape, the possession of potent military arsenals can be upstaged by the ownership of mammoth reserves of oil, natural gas, and other sources of primary energy. Hence, Russia, which escaped from the Cold War era in a shattered, demoralized condition, has reemerged as a major actor in the international arena by virtue of its colossal energy resources. For all its military might, the United States has, in contrast, sometimes found itself reduced to cajoling its foreign oil suppliers—including long-term allies such as Saudi Arabia—to increase their petroleum output in order to slow the upward spiral in energy prices.[2] The “sole superpower” has, in short, found itself scrambling—on the battlefield, on global trading floors, and in diplomatic back rooms—to somehow come to terms with what Sen. Richard G. Lugar (R-Ind.) has termed “petro-superpowers”—nations that wield disproportionate power in the international system by virtue of their superior energy reserves.
It really is the economy, stupid
So can you still be an economic superpower if you don’t make anything and an increasing share of your of GDP consists of debt owned by other countries? What happens if those countries decide they don’t like us anymore? Remember the oil embargo of the 1970s? Arab countries who sit on top of much of the world’s oil reserves got angry with America for refusing to allow them to eradicate the state of Israel, so they stopped selling to us. The U.S. economy was hit hard as the price of gasoline skyrocketed, and the government was forced to impose price controls and rationing.And we are much more dependent on the goodwill of other countries now than we were then. Worse yet, there are some signs we are approaching Peak Oil, the point at which the world hits maximum oil production (aided by the increasing demands of emerging economies like China and India). If that happens, gas prices won’t come down. Ever.
Economist Sachs believes we can save world
Sachs has a far more sanguine view of the future than does Homer-Dixon. Homer-Dixon tries to end his book on an optimistic note and Sachs sprinkles his optimism throughout his book, such as: Economic convergence is inexorably lifting up the developing countries to a good standard of living. Tackling climate change will cost a miniscule one per cent of the world’s GDP. Oil may be running out but coal is abundant and carbon capture and storage technologies will soon be available that will cheaply store CO2, thus allowing coal to be used in an environmentally safe way.
One thing our politicians keep dancing around and ignoring, however, is the continuing failure of natural resource and oil companies to find additional fossil fuel reserves.The fact of the matter is, oil reserves are dwindling and natural gas has to be imported because we've all but depleted our resources in America.
Climate change spells coal phaseout
Taking swift action to solve climate change will cost only a modest amount and may even benefit the economy in the long run. Delay, on the other hand, could be disastrous.That was the message delivered in late March by James Hansen, head of NASA’s Goddard Institute for Space Studies and one of the first U.S. scientists to sound the alarm about global warming. Hansen released a report stating that catastrophic climate change is now likely if we fail to promptly reduce greenhouse gas emissions. Uncontrolled global warming would, he said, “forever alter the conditions under which civilization developed and to which life on Earth is adapted.”
That’s a scary prognosis. Yet Hansen’s report did not make the evening news, and no presidential candidate mentioned it.
Diesel weasels its way into costs, supply-chain strategy
Soaring fuel costs percolate through to a range of product prices—and call into question just-in-time inventory practices. Watch out for open-ended fuel surplus charges.Record-fast price increases for diesel fuel are shaking up the nation’s manufacturing and supply chains, contributing to price hikes in everything from Meow Mix to mattresses and forcing corporate executives to rethink business models that may be too dependent on just-in-time inventory management policies honed during the era of cheap oil.
Those who deny that peak oil is a near-term problem can be so predictable. Hours after the U.S. Geological Survey released its study Thursday showing that the Bakken oil formation has up to 4.3 billion barrels of "technically recoverable oil," the emails started trickling in.There's plenty of oil out there.
We just have to keep looking.
Peak oil is a scam.
U.S. on 'monorail with a cliff at the end,' UA prof warns
In your April 6 Viewpoints essay ("End of the world as we know it"), you write about some pretty frightening things: $400 for a barrel of oil soon, our oil supply running out in 30 years, the modern world coming to a screeching halt because of a lack of energy. How much of this do you actually believe? And how much is a scare tactic to get our attention?I believe everything I wrote. I am trying to inform people, not scare them. I do not benefit from peak oil or spreading the word about it. Indeed, it will cost me my 401(k), my 403(b), and the job I love, and writing about it has been costly to my so-called career. And then there's the consequent hate mail ...
Greenspan, Bailouts and Fed Policy
Greenspan has been skewered recently for helping to create the subprime "bubble" by keeping interest rates too low too long. In my opinion, this is not his biggest policy failure. His biggest sin is writing a book whereby he acknowledges the inequities of the Bush tax policy, that the Iraq war was all about oil, and the dangers of Republican fiscal policies with respect to the fiscal and trade deficits. Yet, when he was the Chairman of the Federal Reserve and had the bully pulpit from which to impact these issues, he said virtually nothing. This is Greenspan's biggest sin: he was more worried about keeping his job than he was about the economic welfare of the middle class and what was best for our country as a whole.
Food, Fuel, and Finance: The Crisis of the Three Fs
While the share market digests the news of collapsing brokers and falling financial profits, the grand poobahs of the world's economy are wringing their hands in worry. What's keeping them up at night? The three Fs, each its own kind of crisis: food, fuel, and finance.
Green Festival in Seattle - Day 2
I have no doubt that we humans have the ingenuity necessary to solve this "energy crunch" that is approaching. If we do not solve it it will be due to pride, greed or both. It became crystal clear to me that life was designed in a way that we are never faced with a problem that we cannot solve. However, even if it is true that we can solve all problems, that does not automatically guarantee the survival of the human species.The human species is probably not at stake (regarding the depletion of natural resources that are essential to life), but population die-off is a possibility. Those who continue to party while the Titanic likely will not survive.
BCC conference looks at 'Cheap Oil'
FALL RIVER, MA — Bristol Community College will examine "Cheap Oil — Going, Going, GONE!" at noon on Tuesday, April 22, Earth Day. The lecture in the Jackson Arts Center on the Fall River Campus is free and open to the public.Richard Heinberg, one of the world's foremost experts on peak oil and its impact on industrial society, will speak on the end of cheap oil and what it means for America and the world. As gasoline streaks towards $3.50, $4 and more a gallon, how will we get to work and school? What kind of education will we need? Mr. Heinberg will cover these questions and more and look at the ramifications of a life without cheap oil.
The decline and fall of the American empire of debt
As for oil, while at first it might seem a bit off-putting to find a chapter on "peak oil" in the middle of a book mostly devoted to financial shenanigans, the current price tags of a barrel of crude and a gallon of gasoline obviously pile even more stress on top of an economy already teetering after years of gross mismanagement. Phillips has long castigated the Bush administration for its energy misadventures -- believing, as do many Bush critics, that the invasion of Iraq was motivated in large part by geopolitical petroleum concerns. But how could two oilmen in the White House have screwed up so spectacularly? Dark times are ahead, he foresees, as the major powers of the world struggle for control of the world's dwindling supplies of fossil fuels. But as this time of peril hastens toward us, the once mighty U.S. is no longer master of its own manifest destiny.
Pakistan's Musharraf pushes for China oil pipeline
BEIJING (Reuters) - Pakistan President Pervez Musharraf is pushing a proposal for gas and oil pipelines between his country and China to bolster bilateral ties, he said on Monday, during a visit that has highlighted security concerns.
Mexican leftist leader wants oil debate
MEXICO CITY - Mexico's foremost leftist leader predicted Sunday that protesters would prevent Congress from moving forward on the president's oil reform proposal during the current legislative session.At a rally in Mexico City's central square, former presidential candidate Andres Manuel Lopez Obrador reiterated calls for a national debate on the reform bill, which President Felipe Calderon introduced last week to allow state oil company Pemex to partner with private companies for oil exploration and refining.
An Explanation for Soaring Commodity Prices
How to explain commodity prices go up while the economy turns down? If strong economic growth is not the explanation for the large increases since 2001 in prices of virtually all commodities, then what is?
Riots break out in Pakistani city over power cuts
Multan: A crowd protesting power cuts rioted in the home city of Pakistan's new prime minister on Monday, ransacking the office of the state electricity company, torching a bank and leaving at least 13 people injured.
The Case for a Sustainability Emergency
Say the government, instead of spending billions of dollars putting TV ads on and propagandizing to us, spent the same money to hire us, to pay for our salaries. And say 100,000 people across whichever country we happen to be in, was asked to come in and meet over a period of some months, say one day a week, and talk through and try to come up with recommendations about what to do about climate change and peak oil.
Uranium Bull Market: Not Over Yet
When it bottomed at $7 per pound in 2001, uranium was one of the most derided commodities on earth. The most common associations with uranium were Chernobyl and bombs. Environmental protesters were calling for the shuttering of nuclear reactors, and plants continued to be mothballed.What a difference six years has made. Uranium rocketed from less than the cost of a pizza to $138 per pound in June 2007. Articles appeared in financial publications like MoneyWeek and Forbes on investing in this “white-hot” market. Dr. Patrick Moore, a co-founder of Greenpeace, started supporting nuclear plants as a clean and safe fuel. Even oil producers such as Egypt and Saudi Arabia have expressed interest in nuclear power.
Govs to gather to address global warming
NEW HAVEN, Conn. - Organizers hope a gathering of governors this week will be as effective in addressing climate change as a similar event that launched the conservation movement a century ago.As many as 10 governors and leading experts on global warming plan to attend the conference Thursday and Friday at Yale University, and review state programs and develop a strategy to combat global climate change.
Rich countries not leading on climate change: IPCC chief
LONDON (AFP) - The head of the United Nations's scientific panel on climate change said in an interview published Monday that developing countries were unwilling to sign up to a global deal on cutting carbon emissions because rich countries were not leading the way."Looking at the politics of the situation, I doubt whether any of the developing countries will make any commitments before they have seen the developed countries take a specific stand," Rajendra Pachauri of the Nobel Prize-winning Intergovernmental Panel on Climate Change told The Guardian.
Renewing Incentives for Wind & Solar in USA
Due to expire at the end of this year.
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/13/AR200804...
Best Hopes for Limited Political Stupidity (and no Bush veto),
Alan
PS: 116,000 jobs in renewables
The $0.02/kwh Production Tax Credit (PTC) is something Senator Grassley pushed through sixteen years ago. I had a short chat with him about this a few weeks back and he said basically that revenue is the problem. That PTC is dollars that could be coming in and if they're not they're taxing something else somewhere else at a higher rate.
I've been doing a bit of analysis on this recently and I think that I like the PTC as it is, but for the things we're doing I'm not all that concerned for specifically our projects if it happens to drop. There is a systemic concern that wind turbine makers will drop like flies, but I'm hoping a weak dollar keeps them rolling with the product going overseas - would serve us right for being so shortsighted.
Anyway, here is why I'm not so tuned up about that lapsing.
If I want to put in a large service here, with large being more than 50kw, I pay a $150/month Transmission and Distribution charge (T&D). The actual electric cost is $0.041/kwh but I also have to pay the local coop to maintain the electric network. They watch for your highest usage in the peak hours and in the nonpeak hours, charging $9.0/kw for what you use peak and $4.50/kw for what you use off peak. Note that this is per peak kilowatts used, not kilowatt hours - they take your highest fifteen minute interval for the month.
Lets say we're building an ammonia plant running on electricity that needs 50mw continuously:
50,000kw x $9.00/kw = $450,000
50,000kw x $4.50/kw = $225,000
50,000kw x $0.041/kwh = $2,050,000
Total rate for electricity? $0.0545/kwh. So ... T&D is $0.0135 ... and if you can build a system that doesn't care about the variable rate of electric production you're free of the T&D charge except for your own internal T&D cost, but it isn't that much to build the 34.5kv lines to transport the native voltage coming off a modern wind turbine.
A 2.0mw turbine will yield 660kw continuously here and cost about $1.5/watt. Assuming a ten year life you get about fifty eight million kilowatt hours out of the machine for its three million dollar price tag - a cost of $0.0519 per kwh. Now modern turbines, they last about twice that long ... $0.0259 per kwh.
Wind energy without a grid connection is competitive with hydroelectric. There are some policy issues with this, to be sure, but the renewable energy industry today basically stands where MCI was in 1983 - ready to start bypassing a monopoly network that is necessarily procedurally slow to accept new inputs. I don't think anyone else has noticed this, but my as yet to be indicted co-conspirators at the Stranded Wind Initiative are busy with patent applications for processes that make industrial chemicals using electricity and they specifically don't mind the variable nature of wind energy inputs.
I think the world is going to be an awful mess but maybe we can make corn country a survivable enclave. Each morning I get up, wrap that messenger line around my waist, and fling myself into the void, looking for a way to get us across that whole Olduvai Gorge thing. Setting aside the frightful things coming at us I must say I've never had so much fun running a startup operation before :-)
Welfare programs are not the answer for renewables. Lets end the subsidizes on non-renewable energy sources and level the playing field.
Todd
A carbon tax (quite high) would work as well.
Alan
Good point, a BIG carbon tax, rationing and heavily tiered electric rates are really the only fair way to get the mindless consumers to change their behavior in a way that does not penalize the least amongst us.
Todd
An idea via global media.
The Air belongs to us all. We are send carbon trading credits. We can then sell the credits (or keep 'em). The money from the sale goes into the consumers pocket. If you have a low footpint - you make money.
Call me cynical but it sounds like a licence to pollute. Since the government would decide the amount of "certificates" issued and over time this would certainly increase, it just sounds like another wealth transfer scheme. If you're talking some kind of science based quota scheme I have even less faith in the ability of governments to manage it, Canadian cod anyone?
The free market is already busily imposing an increasing carbon tax of sorts. The Chinese want us to use less oil and so they bid up its price. We want the Chinese to use less oil and so we bid up its price. It is a regular war out there with all the oil users busily pushing up prices.
The free market
Where is this mythical free market? I've heard that it is rare, so humans want to hunt it down, capture it, then torture it for information about where other free markets can be found!
Definition: A free market economy is an economy in which the allocation for resources is determined only by their supply and the demand for them. This is mainly a theoretical concept as every country, even capitalist ones, places some restrictions on the ownership and exchange of commodities.
The Chinese want us to use less oil and so they bid up its price.
Oh, that sounds like some kinda government policy. Ergo the theory you are mentioning is not 'free market'.
But if you ever see a free market in the wild (or being tortured) - can you make a video and post it on archive.org? Cuz I'm sure a whole lotta people would love to see an actual free market.
You know what would be really interesting?
Annualy declining oil import quotas. Either that or just old-school WWII style rationing. BRING IT ON!
Biofuels Nothing Short of Disaster
Well biofuels ain’t gonna save us. They just might help destroy us. Back to the drawing board.
There was a discussion yesterday about denial. Those who believe that we can “find something else” that will stave off, or even mitigate, absolute disaster are in the worst kind of denial. Biofuels are made from food, or land that once produced food. That leaves wind, solar and nuclear to replace all liquid fuel that powers the planet. That leaves wind, solar and nuclear to replace all the fertilizer, pesticides, plastics and everything else that are presently created from fossil fuel.
Sorry, it just ain’t gonna happen.
Ron Patterson
One thing I find interesting is that I have had conversations with average people, and most people are starting to get it. They are seeing higher food prices as a consequence of the push for ethanol. Some people who have read up on the subject are still holding out hope for things like switchgrass or algae or some such, but the tide is turning against corn ethanol in particular.
I agree. I think the tide has turned on corn ethanol.
We'll still use some, of course, as long as we have the Iowa caucuses, but even Dubya is looking to cellulosic, not corn.
I agree. I think the tide has turned on corn ethanol.
The tide of public opinion has turned, as well as the scientific tide. I doubt the political tide will turn, as we have set events into motion that will be hard to undo. Will we drop the subsidies? I suppose with mandates we don't really need them. All the subsidies do is mask the true price. But will we undo the mandates? Will the farm state senators allow it? No, I don't think so. Corn farmers who are becoming accustomed to higher earnings will scream long and loud. Big Ethanol like ADM has enormous lobbying power.
Nate and I discussed this yesterday. We won't win the political battle, until the consequences are so dire that that even an Iowa Senator can't deny them.
No, I don't expect them to drop the subsidies. But I don't expect them to be increased, either.
I think you're onto sommething. But even if the ethanol farmers were somehow won over, there's still the problem that it fuel prices will then rise (with or without a decrease in ethanol production) and consumers will then also yelp loud and clear and ethanol would be put right back into production.
After the political BS and public perception issues are removed from the equation, it really becomes a question of whether the average american would rather drive or know their neighbors will have enough to eat.
The first ethanol corn farmer that gets lynched for selling "food for fuel" will cause a bit of thinking to go on over in farm country. That problem is self-correcting, though unfortunately too late to matter for the empire as a whole.
If reason can't beat ethanol, I doubt threats of murder will help the anti ethanol cause. It shows the hysteria caused by confusing animal feed and human food. Corn is used mostly for animal feed. Those who threaten violence probably don't care.
Farm country will survive long after any lynchings. It is those who reject ethanol who will not survive (at least as well). Iowa is booming. The coasts are crashing.
Maybe Kuntsler is right. But I thought it was those who don't understand Peak Oil who would become violent. If it is the Peak Oil crowd who are going to commit violence I'm out of here.
By the way nearly every Iowa corn farmer sells corn for ethanol. There are about 100,000 of them. And most of them have guns.
"It shows the hysteria caused by confusing animal feed and human food. Corn is used mostly for animal feed."
x's attempts at obfuscation and distortion are unabated. The issue is not the use of corn. Farmland for food production or farmland for carfuel production? That's the issue.
EDIT: I should add that the smart use of resources such as the oil and gas consumed by corn producers, and that wasted in the ethanol plants, directly and indirectly, is also at issue.
My question is:
What do we do with the 150 Million Acres that we were farming a couple of decades, ago, but that are lying fallow, Now? What about the 150 Million Acres that Brazil has lying fallow?
Where I live, much of the former farmland is now covered with McMansions, after having its topsoil stripped and sold. In any case, you need more than land. You need water, and if you're talking agribusiness-scale farming, you need fertilizer and pesticides. I would also guess that land that came out of production tended to be marginal land. On the bright side, lying fallow for a while should have improved the soil quality over the vermiculite substitute that covers much of American farmland.
Some of the most productive farmland in the world and the largest reserves of fresh water are in the USA. A lot of it is being used to grow sod for McMansions as well as flowers to sell to "look at" or make the garden "purty". But we Americans are a stupid and vain people. And we only know two speeds: Complacency and Panic.
I personally believe that we are now on the plateau of peak oil. Sure, I hear a lot of talk from politicians about fixing the "energy problem" but it is empty election year rhetoric. Yeah Congress is going to put up a big wall to the south to keep out the poor and we'll figure out how to bus em in to pick our vegetables and then make sure they get home after they're done. But most of them SOB's we'll elect have the primary intention of getting a nice townhouse overlooking the Potomac and hanging with trendy new socialites. It is all Bullshit!
Even though I have as much or more than everybody else to lose I think that Americans need a "good lickin'" and not just one. We aren't bright enough to learn the first time...We're going to need several hard lessons before we get it.
Much of the best farmland in the US is either unused or being built on. The parts that are suited for suburban development have a price that is too high to farm on (at least until recently). Many of the other parts, in the "original 13 colonies" region mostly east of the Appalachians, have good soil and natural rainfall but tend to be hilly and irregular, with lots of small waterways etc. Not to mention roadways, stony soil, etc. This was just fine for the "family farm" of 20-300 acres, but it is not suited for mechanized agriculture. These areas are making a bit of a comeback with organic and other high-value ag uses, but they haven't been able to compete against super-low subsidized corporate farming prices.
Food prices are still way too cheap. I put up historical graphs of food prices on my website at:
http://www.newworldeconomics.com/archives/2007/021707.htm
Many less developed countries have been complaining for years that modern subsidized, factory farming has made food so cheap that it is uneconomical for people to continue traditional ways of agriculture. This creates dependency, with the consequences we are seeing today. What is true around the world is also true within the US. The areas that are suited for traditional, family-size agriculture (Pennsylvania for example) are lying unused because nobody gets paid for farming. Today, a bushel of corn is selling for about $6. A bushel of corn has 56 lbs. Just try to plant, grow and harvest 56 lbs of corn in your backyard garden. For that, you get $6, minus your expenses for seed, fertilizer, the implied cost of the land, etc. Not to mention the labor. It's a lot easier just to flip burgers or clean hotel rooms for an hour.
The historical long-term average prices for grains are about 6x higher than today's prices, adjusted for currency devaluation. If corn was $36 a bushel, it might be interesting again.
Just wait a bit, it will get there.
The thing is though, that same back yard garden space that could grow 56lbs of corn could grow several hundred pounds of fresh vegies and fruits maybe worth $600 or more. As a general rule, the more water content, the more it makes sense for it to be grown as close to the consumer as possible, while the less the water content, the more it makes sense to produce, store, and transport it at a distance in bulk quantities. Water is heavy, evaporates, and promotes rot; that is the basic physical reality underlying these considerations.
Kdolliso, you should never post crap like this without a link. Everyone will think you are just pulling the figures out of your ass, which you are.
The US has just under 450 million acres in cultivation. http://www.carryingcapacity.org/resources.html 150 million acres would be 32%, almost one acre in three. That many acres are not lying fallow.
Brazil is clearing rain forest to grow sugarcane. Often rain forest land will stop producing after a few years and must be abandoned. Nothing will grow there so they must clear more rain forest. But no land that can produce is lying fallow in Brazil.
You just make crap up Kdolliso!
Ron Patterson
Ron,
you should have figured out by now that I don't "make stuff up." Here is a real link on "land use" in the U.S. It's the first item on yahoo.
http://www.ers.usda.gov/publications/AH712/AH7121-1.PDF
You will notice that there are 2.2 million acres in the U.S. 1.2 million Arable Acres. We, currently, row crop 246 million acres for the major 8 crops. There are many more than 150 million acres that can be farmed (including the 34 Million Acres that we pay landowners NOT to farm.
Speaking of "Making Things Up:" The Sugar Cane Land is 1,000 Miles South of the Rain Forest. If you bothered to do research, rather than attack me, you would find out that the Rain Forest is logged For the LOGS! After it's logged, it's grazed. After it's grazed the little subsistence farmers come in and try to raise a few crops on it. There are 150 Million Acres (the President of Brazil's number, not mine) of previous rain forest land available for crops (usually, soybeans.) No one in their right mind could think that the rain forest is being logged so some little subsistence farmer could come in and plant beans for a couple of years.
No, you make crap up. You pull stuff right out of your ass that has no basis in truth! This PDF was published in 1996! It says absolutely nothing about today because it was published almost 12 years ago. And you showed nothing about Brazil. You just expect everyone to take your word for it. Well, I for one do not.
And sugarcane is causing destruction of the rain forest. Sugarcane is taking over soy land in the south and driving soy production into the Amazon Rain Forest.
Ron Patterson
Riots around the world are over the high cost of food. Land, formerly used for food is being diverted to plant grains for biofuels. That is the problem, not just corn. That is what has driven every food staple through the roof. As I posted above, biofuel production is triggering widespread famine around the world.
Land used to produce biofuels instead of food is the problem! People are rioting and threatening violence because they are hungry!
Ron Patterson
Ah, Darwinian, look where they're have "problems." It's the "failed governance" list of Earth's economies. Socialist, corrupt, "Command" economies with high tariffs (import, and Export,) and subsidy/control schemes.
We fed more people last year than any year in history. Our Ag Exports were WAY up.
It's goofy export tariff schemes like Argentina's, and India's that will cause people to starve, not free-market food exporters like us.
not free-market food exporters like us
ROTFLMAO !
Alan
kdolliso -- you might try lurking here for awhile and learn something before opening your mouth and exposing your ignorance.
Our Ag Exports were WAY up.
Prove this. Show your work.
Looks to me like U.S. Ag exports are up about 140% YOY in 2008, and up about 165% vs. 06'.
http://www.ers.usda.gov/Data/fatus/
Caveat: The weaker Dollar will account for 15%, or so; but, it's still a lot.
That's in dollar terms.
Here's some USDA info on land under cultivation and exports.
http://www.ers.usda.gov/Briefing/Baseline/crops.htm
Yes, it's the price of food that's way up, not the volume. By kdolliso logic, Saudi Arabia's oil exports are also up by approaching 100% Year on Year.
And it looks to me like such claims are full-o-bogons.
http://www.leopold.iastate.edu/pubs/nwl/2004/2004-4-leoletter/paper.htm
Finally, a recent announcement has signaled a shift in the U.S. position related to balance of agricultural trade. The 2005 forecasts from the U.S. Department of Agriculture indicate that the United States will have a neutral or negative trade balance for the first time since 1959.
"Net food" appears to be close to zero.
So what, exactly are you trying to prove by your claims Kdolliso?
I said volumes. not
dollarpeso value.And a single year in agriculture is highly variable.
The USA is doing it's best to reduce the volume of food exports with 1) Suburban and Exurban sprawl destroying some of the best lands and 2) converting corn into ethanol.
As for "free market", I can support that. Redirect the $7 billion or so (forgot exact figure) in ANNUAL ethanol subsidies to something worthwhile # and eliminate the tariff on Brazilian sugar cane derived ethanol.
There has been some suggestions and discussions in Louisiana about using domestic sugar cane or molasses residue from processing for ethanol, but caution over the bubble has restrained any investment. Cattle feed is a strong market for molasses.
BTW: Dried Distillers grains have definite upper limits in cattle feed before they get scours (diarrhea). Similar limits for chicken and pork. Unsure about catfish (not much need to dry the feed for them if it cna delivered quickly before souring :-)
How close is the USA to reaching that upper limit ?
Best Hopes for Better Mitigation to Peak Oil,
Alan
# GWB killed a $900 million federal subsidy that killed the DC Metro extension to Tyson's Corner & Dulles Airport (locals made up rest of $5 billion cost). This extension, when built out, will save 20,000 to 25,000 b/day for a century or more. *MUCH* better deal than corn ethanol.
May I suggest that you read Bad Samaritans: The Secret History of Capitalism by Ha Joon Chang. Chang is an economics professor from Cambridge. He argues that most of the largest economies in the world became major economic powers by protecting their nascent industries with tariffs. If you don't have the time or inclination to read his book, check him out on C-Span's Booknotes. Chang is a very entertaining writer and speaker and he uses historical examples to show how major powers from the US, Great Britain, S. Korea, Japan used protectionism to grow their economies. Those who praise the virtues of "free-trade" often ignore the real history that very few countries have become major economic powers without protecting their homegrown industries.
Phreephallin,
You've, absolutely, nailed me on that one. One caveat: I don't think there's much history of "export" tariffs in the countries you mentioned; but, on the other hand, I wouldn't bet my life (or beer) on it. :)
Let's also not forget overpopulation, or more preceisly, the ratio of natural resources (esp. arable farmland) : population, which correlates quite nicely with that map of countries experiencing food riots.
In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he said.
Countries where buying food requires half to three-quarters income for a significant % of the population also tend to have the highest birth rates on the planet, and are invariably much higher than the rate of replacement (birth/death).
Corn ethanol is a non-starter from an EROEI perspective, but it is *not* the primary reason WHY there are food riots in these countries. The problem is, too many f**king people and sky-high birth rates in the most backward, resource-poor countries.
Harm - I agree with you but ranting about over-population on the oil-drum is preaching to the choir. People who read and comment on the Oil Drum get it.
But where are you when that group of right-to-lifers are protesting abortion clinics and lobbying to shut down a womans right to choose? Why don't you protest fertilization centers?
Les Knight, the founder of the Voluntary Human Extinction Movement, gets up every day and talks to some narrow minded media pundit about the need to curb human exponential population growth and smilingly puts up with ridicule, abuse and death threats. That is Cojones!
He also has one of the best web site on the internet:
http://www.vhemt.org/
People on the Oil Drum are far more likely to stand up for what is right (even if those actions put them on the outside of their contemporaries) than any group of people I've come across.
People also have a right to not be poor as shit and starving. By having kids like it's nobody's buisness impedes on other's ability to have at bare minimum a substance level (as in not waiting for UN food aid to save your sorry ass).
People used to have six or eight kids because, if they were lucky, maybe one or two or three of them would actually survive disease or famine or war and make it into adulthood. Made sense at the time. Then we developed basic sanitation & hygene (the #1 medical miracle), vaccinations, & antibiotics, and increased agricultural production, so now most of those kids could make it into adulthood.
That was the moment to cut back on having kids. Unfortunately, people didn't get the memo immediately. They have since caught on and are making a good progress at getting the baby making down to more sustainable levels. Unfortunately, there was a delay of a few decades, which is why we are leveling off at a too high 8-10B instead of a less disasterous 4-5B.
"Unfortunately, people didn't get the memo immediately. They have since caught on and are making a good progress at getting the baby making down to more sustainable levels"
--I wouldn't be suprised if a lot of it (besides China) is just people are too starving to feed themselves, let alone more kids. And I can't imagine starvation doesn't doo some bad shit to people's reproductive systems.
No, that's simply the expression of self hatred that is increasingly common among members of the western " commoditized" society where "education" and conditioning is designed to destroy the centered individual.
Land used to produce biofuels instead of food is the problem!
Right. Sure.
That being a farmer is long hours around dangerous machines that are expensive while the land you have has gone from tens of dollars to thousands of dollars so people can build housing 'in the country' has had nothing to do with it. Its all about the food to fuel. Nothing at all with people getting old and cashing out.
Eric, try to get a grip on what this debate is all about. We are talking about food shortages around the world, primarily in third world countries where food prices have risen so high people can no longer afford to eat. You are trying to make cute remarks about conditions in the USA which have no relevance to the discussion.
Just News.Google "food riots" and you will get a very tiny clue as to what we are talking about Eric! People are starving, dying in the streets from malnutrition and related diseases and you wish believe the primary problem is farmers in the US working long hours around dangerous machinery and old people dying because they are old. For God's sake, get a clue!
A few food riot URLs and there will be lots of different ones tomorrow:
http://www.voanews.com/english/2008-04-14-voa23.cfm
http://www.upiasiaonline.com/Economics/2008/04/14/food_riots_to_hit_mani...
http://www.news24.com/News24/South_Africa/Politics/0,,2-7-12_2305864,00....
http://www.dawn.com/2008/04/14/top1.htm
Ron Patterson
In Haiti
mobs took over the streets, smashing windows, looting shops, setting fire to cars and hurling rocks at motorists.
Elsewhere in the article land use for biofuels is sighted as one of the irritants as well as high fuel costs. Today in Haiti it seems they are 'getting it' and taking it out on the motorist.
taking it out on the motorist.
VS, oh perhaps the ownership of property shows you are part of a higher class then the rioters?
It's likely to be both reasons. The biofuels angle is so essential talking about someone who is already hungry. You tell them the price of food is beyond their reach and add the (well publicized)awareness that wealthy people are burning food in their cars thus driving up the price. Bound to get just the reaction we are seeing. I'm betting it plays a role and will continue to intensify as a cause of conflict as this plays out.
We are talking about food shortages around the world, primarily in third world countries where food prices have risen so high people can no longer afford to eat.
And somehow the job of the farmer isn't suck-y (vs factory work) and what was land near cities isn't being used for housing in other nation-states? Or diets moving towards meat eating in other nation states? Or even changes in water for irrigation. Or the changing of the rice planting so that the rice eating bugs now have food.
Not only are you SO educated you know there are no conspiracies, but you also know every other nations land/farming use so you can say 'the reason for the shortage is biofuels. Period.'
TOD is so blessed to have you here Ron Patterson, making sure that we all know that its all about making bio-fuel and no other reason. Just like you've said.
Eric, the third world has been teetering on the verge of collapse for decades. The entire world is deep into overshoot. A good percentage of the world's people live on the very verge of starvation. The rising price of food, caused by production cuts because of biofuel production, is driving many into starvation.
No one has ever claimed that biofuels was the ONLY cause. But when so many millions of people live at the very edge of existence, that is enough to push many of them over that edge.
What you, and many others, do not seem to understand is that much of the world's people live at the very limit of their existence. Wheat prices have more than doubled in the last year and quadrupled in the last three years.
http://futures.tradingcharts.com/chart/CW/M
People who were, before the sudden rise in grain prices, living at the very edge of starvation, are now starving. Look at the chart at the URL I posted. That is wheat. That is what bread is made from. That is the price rise people are facing, people who before could barely afford to stay alive are now pushed over the edge.
It is the biofuel production drive that has caused grain prices to go through the roof. It is the biofuel production drive that has driven people from the verge of starvation, into starvation. And some of them are pissed. Some of them are rioting.
Eric, is this all that difficult to understand? Really, is it all that difficult????
Ron Patterson
Ron, I think you might have to expand on this a little bit before you can expect to convince anyone, especially as the specific grain you mention is _wheat_. Now I have not investigated this at all, so I am not saying you are wrong, but we know that there have been massively short wheat harvests in nations such as Australia (a major exporter). That was to do with drought (at least in the Australian case). On the face of it, there is no obvious connection between rising corn prices in the US, and rising wheat prices on the world market.
Rice, incidentally, is also rising very fast. Why? Does the land used in the US for maize compete with that for rice? What is the connection between rice and corn?
I can easily accept that _corn_ prices are going up because of biofuel production. But the other grains?
Like someone has already pointed out, by and large corn is not a staple of Third World diets - though it is a staple of animal feed, and high-fructose corn syrup hidden in everything you eat pretty much keeps you First World 'Merkans running (and, incidentally, obese).
But it ain't you folks who are starving.
No one has ever claimed that biofuels was the ONLY cause.
Huh. Looks like that was the claim.
Now, noting how 'teetering on the verge of collapse for decades.' is far more truthful. So is 'People who were, before the sudden rise in grain prices, living at the very edge of starvation, are now starving. '.
So if the issue of the day was not biofuels, in the future it coullda been UG99, a lack of PNK, rainfall/snowmelt changes, or even the blanket 'overpopulation'. Their situation has been bad for a long time. Biofuels only helps to make it an issue today.
There's a difference between a food shortage and higher prices. The total amount of food hasn't changed all that much, just as the total production of oil hasn't changed much. I will agree that the question of who gets the food is one that is rather fraught with injustices. However, many tens of millions of people were starving with super-cheap food prices, too, so that is a problem that is not exactly new. The effect of higher prices will be that lower-value uses of food (such as a fuel feedstock or animal feed) will be abandoned somewhat in favor of higher-value uses of food (such as direct human consumption). It would be nice if a subsistence allocation of food to the poorest is considered a "high value use" of food, via government participation if necessary.
Oh please can't I be You.
How in the world would a corn farmer get lynched? Everyone here has had great benefit from the ethanol boom and it's not like we're know for being great world travelers.
Sadly, the lynchings will be shop keepers in the countries experiencing food stress, not those here who are simply doing want gets them the best return on their time and money.
I'm not sure what you're trying to say here are you Saying:
"Although the people who are going to be killed are shop keepers in foreign lands the people who should really be killed are the farmers who tried to make an honest profit from their labour."
is that what you're saying?
It is possible that people are catching on about ethanol - but they still want to be presented with a "solution". They are NOT catching on that there is none (at least none that won't require changes outside of what they are willing to consider), and this disconnect will prevent anything from changing.
Exactly.
The presumption is that the BAU solution is out there; we need only to choose the right one.
No consideration for the fact that we need fundamental change.
What is the "crack spread" on turning Natural Gas into Ethanol it's going to be eaten away as NG gets more expensive.
I agree that overturning the existing mandate will be difficult, especially with the prevailing 'one dollar-one vote' form of democracy. Still, some solace is to be had watching evidence-based reality kill the efforts of space cadets such as Dr. Robert Zubrin to have flex-fuel vehicles mandated, as well as efforts to increase the proportion of mandated bio-fuel.
http://en.wikipedia.org/wiki/Robert_Zubrin
http://en.wikipedia.org/wiki/Energy_Victory:_Winning_the_War_on_Terror_b...
Does anyone expect new investment money in the ethanol boondoggle? How long before the Earth Liberation Front turns its attention from SUV sales lots to ethanol plants?
Well considering that the seems the dems have all the money, we might be seeing the "tyrnany of the poor and minorities"
Errr, both sides borrow and spend. Team B does it better than Team A is all.
(But make no mistake - the Teams are just putting on a show - its not about getting real work done.)
I didn't know, but a little googling around revealed that the "Earth Liberation Front" (http://en.wikipedia.org/wiki/Earth_Liberation_Front) has made it from John Brunner's "Sheep Look Up" into reality. Interesting fact.
I can't swing a cat (and I have plenty of those) without hitting someone in the business - the only folks here who don't think ethanol is going under are those involved in operating ethanol plants. I've talked to, in the last week or so, the agronomist for one of our coops, a couple of farmers, some other business leaders in the area, and when the topic of ethanol comes up we're talking its impending doom.
Senator Harkin or Grassley wouldn't admit it, but I think everyone knows that this is coming.
There also seems to be a fair amount of recognition of the problem among beer drinkers, since there's now a Hops shortage thats affecting microbreweries as a result of farmers switching over en masse to corn for ethanol.
This (hops shortage) can only be a good thing long run. If a shortage of a luxury item like beer (and I do like a hops filled beer) helps more people to understand the problems with ethanol, and perhaps the wider energy problems, than it wil inevitibly be (slightly) less painful than if (when?) there is a shortage of oh say... bread perhaps.
"Beer.. the solution and cause to all our problems!" Homer J Simpson
(Okay, Ron, I know you're a Bourbon man)
Bob
Fermenting Revolution: How to Drink Beer and Save the World
http://www.alternet.org/story/80882/
Eric Sevareid's Law: "The chief cause of problems is solutions."
Biofuels are the perfect example of Sevareid's law.
The hops shortage has little if any to due with farmers planting corn, at least in the US. Virtually all of the hops are grown in the Pacific Northwest, with 75% of the acreage in the Yakima valley alone. Corn is not pla