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323 comments on DrumBeat: May 22, 2008
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Twice today Peak Oil is on the front page of the WSJ:
First, in an article entitled "Energy Watchdog Warns of Oil-Production Crunch," a good explanation of the shift at the IEA on the peak oil issue. For those who have access:
http://online.wsj.com/article/SB121139527250011387.html?mod=hps_us_whats...
Second, in an article about one of the first effects of Peak Oil: "American Cuts Flights, Adds Fees as Airlines Face Crisis."
Please excuse me now, while I go off to redeem all of my frequent flier milers.
I feel this article is the singlemost important article ever to have made it to a major MSM- institution ! It mentions the words "peak-oil"-theory ..... in a "traditional" manner, but one sunny day Peak Oil will become a reality ,IMO , without "" and theory attached
I agree, it's quite a milestone, just three years ago we were sharing the same spot with UFO research and Raëliens.
Of course most of the MSM still believes in UFO's , Unlimited Findable Oil (sources).
...and even though its got me down at times I'm glad to have been with you.
IMO this IEA revision and the Contango event are the most important bits of news I've heard for a while short of a 'Jimmy Carter' style emergency declaration (its coming!)
I've put my 2nd home on the market today and ramping up other PO 'preparedeness' activities. All around are dead men walking: airlines, truckers (Uk logistics friend told me today "1/3 of the Industry to go to the wall by Xmas"), etc etc.
Nicks PO Timeline:
http://www.flickr.com/photos/8745365@N04/2504887199/sizes/o/
Well it is starting to hurt now.
Read the comments...distress, anger, confusion, rebellion.
And its not even started yet....
http://www.dailymail.co.uk/news/article-1021109/Motorists-warned-years-p...
Families face £650 rise in petrol and energy prices as oil breaks through the $135 barrier ... and air fares are going to rise too
By Ryan Kisiel
Last updated at 3:43 PM on 22nd May 2008
• Comments (47)
• Add to My Stories
Families were warned today that the latest dramatic spike in oil prices will cost them an extra £650 a year in petrol and energy bills.
The oil price soared again on international markets last night to exceed $135 a barrel for the first time. The $5 surge is the biggest since the start of the first Gulf War in 1990.
And don't forget the Daily Express (ignoring Princess Di for once) and their new campaign to cut UK taxes now, rather than when the price REALLY rises.
http://www.dailyexpress.co.uk/posts/view/45277/Stop-petrol-tax-robbery
Well.
At 17:10 BST , Chris Skrebowski was interviewed on Radio 4 re PO.
Snippets:
CS'we are at peak light sweet. This is the foothills of Peak oil .'
'when will final peak occur?'
CS'probably 2012-2013.'
pause...'2013?'
Listen again for that episode.
http://www.bbc.co.uk/radio/aod/news.shtml?radio4/pm
Not sure if it will work outside the UK, probably will.
Thanks for that
The oil price is now lead story on the BBC News website and number 2 on the BBC News channel. What with the bunch of stories turning up in various places it looks like an editor has finally decided to take it seriously.
Still have the non-explanations of the price though; equivalent to shrugging shoulders.
Its not rocket science people!
I'm fairly certain that Gordon Brown will face a vote of no confidence before the 2010 general election.
Ever since I can remember, the airlines have jumped from one crisis to another. The airline industry service model, which in any case was never very much good to begin with, is now falling apart.
What we'll end up with in a very few years is a system of corporate jet and (as someone mentioned yesterday) turboprop-based air taxis for the highest end business and leisure travelers.
Boeing and Airbus aren't both going to make it. 15 years from now there just isn't going to be room in the civilian market for two of them. Possibly not even for one of them. The combined A380 and Dreamliner fiascos are going to come to symbolize the end of an age.
Let's hope their future isn't in bombers, cruise missiles and surveillance aircraft.
I've seen postings on various threads which follow the pattern "let's nuke (city/country) and grab their oil". Air power can be used to deny oil to someone else - it can't be used to seize oil assets.
In the best of times, it is hard enough to keep flammible liquids and gases under high pressure from blowing up in refineries and pipelines. Start throwing bombs or missiles around, and there is likely to be nothing left to seize.
Of course, the fact that it is stupid, immoral, and counter-productive doesn't mean that someone won't try it(:
Not to mention that things like pipe-lines and refineries are easier to blow up than to build, or maybe even to guard. Case in point: as far as I know Iraq's oil production is still slightly lower than the pre-war levels.
Better yet, I hear this from the same people opposed to the Iraq invasion. I guess someone better clue them in to exactly why we chose Iraq and not Zimbabwe to spread "democracy".
We were very careful when we "liberated" Iraq not to cause uneeded damage to the oil infrastructure.
I wonder what kind of flows we will be looking at if they get a political solution in place and allow foreign companies to drill? Anybody have any idea what they can pump?
Depends whether they really have that 350 billion barrels they now claim. The chances of that are about 5%.
I think years ago they hit a peak of about 4 million barrels a day. If they really have about the same reserves as Kuwait and Iran, that would put them in the same ballpark, up from about 2.3 today.
During the sanction years, Saddam was woefully under investing, so the facilities need tremendous work. Seem unlikely to happen unless the political situation improves a lot more than now seems possible. If peace breaks out, I think they might get another 1.5 to 2 million barrels a day in 5 to 10 years. The neocons who went in there for oil apparently think you could take it up tp 6-8 million. (I have no expertise in the oil industry.)
I heard somewhere that during the period of sanctions, Saddam had all flow meters and gauges removed from pipelines and storage tanks so that inspectors couldn't detect when he was cheating on quotas.
During the eight years that Iraq was at war with Iran, I think that they both produced at as high a rate as they could to pay for weapons. AFIK, when wells are produced at too high a rate you get "channeling" in the reservoir leaving a lot of oil unavailable for future production (stranded oil).
I am very curious as to what the real potential of Iraq is after decades of mismanagement.
Case in point: as far as I know Iraq's oil production is still slightly lower than the pre-war levels.
WHICH 'war'? Iraq had its 'Hey you - go pick on your neighbor Iran' conflict. Then the 'We have no opinion on your claims that your neighbor is slant drilling oil you claim' conflict that has been ongoing for years.
Perhaps new lyrics are pending. Boeing and Airbus will be humming "Flight of the Concorde" instead of "Flight of the Condor".
Airbus and Concorde will be entries among other extinct winged creatures in future textbooks in addition to the Dodo and Passenger Pigeon.
My money's on Airbus.
Finances in Europe are in a healthier state to support it, and the availability of nuclear power should keep costs in check.
But Boeing's finances are "supplemented" by it's extensive defense contracting.
I can't see current defence expenditures in the States, or anything like them, remaining financeable for 15 years, or likely much beyond 2009 or 2012 at the outside.
They may use it in an oil grab, or loose it, but either way they will have gone within that time frame, is my guess.
I would agree. But I would also expect, given the expected geopolitical environment surrounding oil depletion, that the U.S. government will continue to see military expenditures as their single highest priority. Current yearly levels of military spending in the U.S. (especially if supplementals to fund the Iraq occupation are included) are just about the same as the entire rest of the world. And while the current absolute level is unsustainable, I would not be surprised if the relative level is maintained, even increased. That spending by itself should be enough to keep some of the larger contractors afloat, even if at smaller sizes.
Or perhaps we will see a merger of Airbus and Boeing, stranger things are likely to occur.
An associate of mine mentioned how the 'economies of scale' that has helped the airline industry won't be there in the future to help either. A world of hurt for the business model - plus the active efforts to make the experience of flying to be distasteful.
Then your money will likely be lost.
The 787-8 and 787-9 are almost ideal a/c to be selling post-Peak oil. At the small end of twin aisle a/c and 20+% more efficient than what is flying today.
International travel over water and the Eurasian land mass will shrink but not disappear post-Peak Oil, and what is left will be flying in smaller and the most fuel efficient a/c available (for long flights the 787 beats turboprops, the air (aerodynamic resistance) is thin up there).
Despite being backed by the treasuries of France, Germany, the UK and Spain, Airbus costs are largely in euros and pounds, Boeing costs in US $ (yen #2). Boeing sells a better product at a lower cost of production.
As for the 737/A32x replacements, Boeing has a substantial technological lead with the 787 vs. the planned A350. ATM, Boeing is waiting for a better, more fuel efficient engine before launching the 737 replacement. Shrinking the 787 to 737 size with current engines would save about 12%.
Best Hopes for Boeing,
Alan
You might be right, mine was very much a guess based on the state if US finances.
Any idea of how they are off for power supplies in Seattle?
BTW, I posted a question for you on a old DrumBeat, but it is probably lost in the wash now - I wonder if you could inform us at all on the likely implications of trying to switch freight to rail in Europe, as they have done a dire job on that as opposed to passenger transport.
It will have to take priority in any case, but any idea of how it will impact the passenger side of things here?
Thanks.
During WW II, the volume of passengers and freight more than tripled in the USA (from memory) and it was 98-99% rail (truck & bus was de-emphasized and cut back).
Some lessons might be learned from this. Priority was given to freight, then troop trains, then civilian trains.
All railroads operated as a single entity, operating on whatever tracks worked best/had spare capacity.
FedEx has approached SNCF about using TGV lines to carry special package trains, has not happened (yet). I could see most food shipments (fruit & veggies) going by HSR where available.
Switzerland is in the middle of a massive switch from truck to rail, and SBB is the best run railroad in the world (some in Japan rival it). Some lessons to be learned from them.
The EU does not have enough rolling stock to suddenly switch modes (see WW II in USA) but it could be built in 3 or so years (IMHO). Additional tracks to add capacity while building that rolling stock. Finish electrifying (adds +15% capacity).
The biggest issue for EU freight, is how does one impose good management ?
Not a coherent answer, but hopefully some useful bits.
Best Hopes for EU freight rail,
Alan
Very useful information. That sounds very do-able.
Eurocrats in spite of being startlingly obtuse and rigid have some formidable administrative capabilities to draw on once the political will is there.
I can easily see decisions being taken on a rapid schedule out to 2010 after initial shock and paralysis, and then perhaps your 3 years for transfer to rail and water.
To pick up on another comment on the same thread, France is actually installing 50,000 air source heat pumps per year, which are fine for their climate and far less expensive than ground source.
It is informative to compare that with how many they will need to install to really substantially impact the need for gas.
A medium sized European country like France has around 25million homes.
So they would need to expand their effort by perhaps 40 times to maybe 2million a year to convert on some useful schedule, and their plans for residential solar thermal of 5 million in a few years would have to multiply by a factor of 5.
Although this is challenging builders there are getting invaluable experience of installing the units, and the ramp up will be much easier than in the States, where solar heaters are essentially used for swimming pools.
Another technology that I have recently come across is the use of desiccants for a/c- apparently this uses a fraction of the power of traditional a/c:
http://www.nrel.gov/dtet/thermal_air_cond.html
NREL: Distributed Thermal Energy Technologies - Thermally Driven Air Conditioning
Early days for it, and immediately post peak probably not do-able anyway, but perhaps some hope for workers in inclement climates at a power consumption which may be affordable.
Anyway, thanks for the train info!
What about the mix of high/low speed traffic? All frieght or all passenger is easier to schedule than mixed speed traffic. The only solution that I have seen to high density mixed traffic is to have lots of rail sidings.
SBB (see best managed railroad in world) plans to operate up to 300 trains per day through their new dual track 58 km tunnel at varying speeds from 110 kph to 240 kph. Longest train 1.5 km long.
If any other RR made that claim, I would be incredulous.
Best Hopes for GREAT RR management,
Alan
I am interested. Where did you read that?
On the TransAlp website, in German from memory. They also talked about maintenance (vaguely remember shutting down for 48 hours every ten years), the new class 160 kph freight trains, etc.
Some heavy lobbying for the smaller tunnels along the Zurich-Milan route (10 and 18 km long ?).
If I remember, you are Swiss ?
Best Hopes,
Alan
Do you think we will see a new form of transport in the form of a rubbish train. You get free transit in return for sorting the rubbish the train collects on its rounds. Recyclable, compostable and landfill wastes are deposited at the appropriate locations. Took the inspiration from the postal trains, I think trains would be ideal locations for stand up comedy, preaching, sing-a-longs, live music or even a gym. Some of the carriages could have certain debate topics and encourage more human interaction. Food serving and preparation is also an obvious function. I guess the extra costs and less seats would make the economics stink, but would be a bit more interesting IMO.
I have not looked it up but I think they have just about the best hydro resources up there in Washington and BC of any place in the world. I think they send a lot of it down here to California. But when supplies get tight, can they redirect them locally? I doubt it since US states are not that autonomous. They could also build a lot of nuclear up there because they have great ocean and bay cooling water resources, although they have moderate earthquake hazards. With all the mountains near the coast, they probably have some pretty good wind sites as well. They are probably better set for local power than any other place in the US.
I think the biggest hydro infrastructure in North America is in Quebec. About 40GW installed capacity. 100% renewable power generation from hydro/wind.
Doesn't most of Quebec's Hydro power really come from the upper Churchill in Newfoundland and Labrador (under a really favorable, to Quebec, 75-year contract from the days of Joe Smallwood)?
Churchill is about 5.7GW. The "La Grande" complex on James Bay is a bit over twice that; the Manicouagan complex is maybe about the same as Churchill.
The power from Churchill would be counted as part of Hydro-Quebec's capacity, although it is not properly in Quebec (and the lease will expire in another 40? years). I should have included that info in the original post.
Here's a link to the Hydro-Quebec generating network (in English).
Hydro-Quebec
I said the best hydro resources, not installed generation. According to Wikipedia, the Grand Coulee Dam (6809 MW) is bigger than any in Quebec. But I was also thinking about what seems to me a lot of untapped potential from all that rain in those mountains up the Washington and BC coast. I will give you that Quebec currently probably has more installed generation.
Robert Bourassa (formerly LaGrande 2) is 5,616 MW and La Grande 2A is 2,106 MW for a total of 7,722 MW. The two are side by side, drawing from the same reservoir and discharging into the same river.
2A was an add-on in a multi-stage development. I could see where it might be easier to split water flows.
http://www.hydroquebec.com/generation/hydroelectric/la_grande/index.html
Alan
Won't get nuke power in BC and Washington - both made it illegal. But that's o.k., they'll keep the lights on by sitting around the camp fire, holding hands and wishing real hard.
Working on the hydro developments up here in BC. Yes, there is huge potential in run of river systems. There is only one dam site under consideration of 900 MW and it is naturally running into all sorts of opposition because they need to flood family farms.
Run of river is pretty cool, but small and distributed, which isn't necessarily a bad thing. The other drawback for RoR is the generation is lowest during the winter months just when you need it most.
Activists, (which is considered a bonafide occupation here - go figure), have drank the a little too much of the global warming kool-aid though. The problem is there is no rational discussion on anything and people reiterate these mantras without having an inkling of knowing what they are talking about. There is no dearth of eco-nazis around here, followed in a close second by the NIMBYites. As I've said before, we're going to object our way into the dark ages.
The other positive aspect of Wash-BC (Cascadia for the non-locals and Conch Republic members) is the moderate climates, abundant farm land and ocean access. This is a secret, so I expect discretion.
As for power in Seatle, you can look up the Resource Acquisition Plan on PSE's website. Look real hard at the forecasted new natural gas generation expected to come on line in 2010-2012, and ask yourself the pertinent questions "Where from?", and "How much?" The western U.S. could find itself in a real pinch in 5-10 years if BC doesn't get busy and build hydro generation and start becoming an net exporter again.
The State of Washington has 1,195 MW of wind on-line with 94 MW more coming. The State of Oregon has 888 MW on-line with 201 MW more under construction.
The State of Washington also has the WHOOPS 2 nuke (renamed Columbia I think).
I suppose that wind winter peaks in Cascadia ?
Alan
"Won't get nuke power in BC and Washington - both made it illegal. But that's o.k., they'll keep the lights on by sitting around the camp fire, holding hands and wishing real hard."
There already is nuclear power in Washington State: Hanford.
http://en.wikipedia.org/wiki/Columbia_Generating_Station
I agree there's not a chance in hell of ever building one in BC though. I grew up in BC ... and nuclear power is *scaaaaaaaary* out there.
Yup, sorry. I should have said Washington has put a moratorium on nukes. Definitely not non carbon sequestered coal though.
Darren--
Remember WPPSS aka Whoops in WA?--
The biggest corp whore nuclear giveaway of all time.
Even the Bewildered Herd will not fall for that one more time.
The problem with hydro is that you destroy major habitat (that is why we have a fraction of the salmon historically), and is a finite resource (dams fill with sediment).
I', not totally against hydo if done right, it's just the people that hydo attracts are usually brain dead.
BC_EE, great post!
There are all kinds of obstacles to nuclear that I think will be swept away once people realize how dire the crisis is and how vital nuclear will become. In California, we have a moratorium until a waste depository is in operation. How quaint now that the direction is to reprocess the partially spent fuel and we really will not need a repository for quite a while because of the very small volume of the remaining unrecycled short half life true waste.
I take it "run of river" means harnessing runoff without a reservoir. I guess the valleys to those fiords are too steep to create long reservoirs. But the volume of water into those awesome mountains must release incredible amounts of energy. What an enormous untapped resource. You people must be appalled by a Californian like me lusting over it.
Trying to build more gas generation up there is crazy. I still think that your hydro will be scaled up 10 fold or so by 2050. I am not kidding about all the nuclear sites. All those Puget Sound channels could support hundreds of sites.
They will indulge all those wild eyed activists until there is a crunch. With the embarrassment of riches, it will take a while but that area has a very bright energy future.
A couple of comments:
1. Very arguable that Airbus has the better product. Boeing has neglected civil aviation market. Airbus has not.
2. Politically more feasible that Airbus better chance to sell into ME & China markets.
3. Eurasian travel will shrink - not sure that this computes at all.
4. The last routes to drop will be those NOT able to be serviced by train so it is the large haul airframes that will survive (ie A380). Boeing has conceded this to Airbus.
4. The last routes to drop will be those NOT able to be serviced by train so it is the large haul airframes that will survive (ie A380). Boeing has conceded this to Airbus
HUH !?
The 787-8 will have = fuel/seat-km, and the 787-9 slightly better fuel/seat-km to the A380-800 (assuming that Boeing does not do it's typical "exceed promises on fuel economy").
One can schedule one, two, three or four 787-8s or -9s (mix and match -8s and -9s if an airline has a mixed fleet) on a city-pair, depending upon seasonal demand. Or one (or zero) A380-800s.
The 787 will be more comfortable than the A380 and a choice of flight times is always better.
The A380-800 ONLY works on Hub to Hub traffic today. Hard to see where it would work post-Peak Oil (Frankfurt-Beijing ? Paris-Dubai ? London-NYC ?) but a 787-8 could fit in quite a few city-pairs (Los Angeles-Sydney, Chicago-Paris, Houston-Dubai, Rio-NYC, etc.) even with much reduced volumes.
Direct flights to destinations (or rail hubs, both Charles de Gaulle-Paris & Frankfort are high speed rail hubs) are more energy efficient than transfers at hubs. One take-off and landing is better than two to get from A to B.
Best Hopes for the 787 and 797,
Alan
The dreamliner is not even flying commercially so lets see what real efficiency numbers are. Also not sure what you mean "more comfortable" as set configurations are determined by airlines. I have seen some rather comfortable configurations for the A380 that the Dreamline cannot hope to match.
Not sure how you can be so sure about the A350 - its scheduled to launch in 2011 by which time I am sure that Airbus can exceed all of the 787 specifications just as completely as they have done in the past.
The 787 will have significantly higher cabin pressures and humidity than any a/c flying (no Al corrosion to worry about). Much of jet lag is prolonged hypoxia and dehydration and the 787 is the cure. Also larger windows (small +)
Airbus could not match Boeing tech, so the A350 is bolt on composite panels to an aluminum frame (last time I looked). No real reason to expect it to match the 787, so it was sized to compete more with the 777-200 than the 787 (the smaller A350 kind of straddles between the two).
Best Hopes for Boeing,
Alan
Boeing has supposedly been working on creating an 800-passenger flying wing aircraft
It's claimed that the "flying wing" is very fuel efficient.
It would be the first passenger flying wing ever built, but they have been around quite awhile for military use. The B-2 stealth bomber is the best-known and most recent example, but the YB-49 (from WW II days) demonstrated the technology.
Of course, the airlines (and perhaps Boeing too) might be bankrupt by the time this thing is ready to fly. Maybe we'd better go back to turboprops, or blimps.
If everyone Peak Oil aware here say, "Peak Oil Bugger OFF", perhaps this airplane will turn into matter... and fly the sky one day ...
Or what about an oil-exorcist, who will expel more oil out of the ground in a timely pace which please us.And when I'm at it, another who can put a needed amount of CO2 back in there .. we should try everything!
IIRC, one of the reasons that it (and a less extreme Airbus "twin fuselage" type design were dropped was because no-one could figure out a way to design in enough exits to get CAA / FAA certification, specifically the "number of people that can be evacuated in 90 seconds through only half the exits" part.
Some aircraft ended up being certified to carry fewer passengers than there was space for, because of this.
AKH
One thing to consider is that while the 787 may be a competitive design, its production process may not hold up to changing conditions. It is the ultimate globally sourced high tech product. Boeing has to transport big sections of it to their assembly facility by custom air freight. There's a good chance the 787 business model will collapse under hopeless efforts to contain parts acquisition and shipping cost increases.
There is a lot of air transport lifts and so on in Aerobus too, and for the fundamental reason that production has to be split between different stakeholder nations, and so is highly resistant to centralisation.
The wings, for instance, are made in Britain and air-lifted to Toulouse.
Maybe Brazil or China will eat both their lunches - I doubt it however, as the two giants have a big technological lead.
Another point not mentioned in this discussion (perhaps lower in thread) yet is the financial condition of the airlines and their bankers--Will either be solvent enough to buy either jet? Or as I advocate will they spend what capital they can raise on very fuel efficient turboprops and thus remain in business? Imagine yourself a banker approached by a consistent money-losing (as most are now) airline CEO in search of another loan for new aircraft. You clearly hold the reigns; so, what are you going to tell the airline CEO about the type of aircraft you'll allow him to purchase with your bank's money?
I would urge those following this discussion to look at AVIATION AND PEAK OIL Why the Conventional Wisdom is Wrong (PDF} slide presentation from last years ASPO-USA conference.
As an aside, I discovered these links to airline fuel costs, http://www.iata.org/whatwedo/economics/fuel_monitor/index.htm
http://www.iata.org/whatwedo/economics/fuel_monitor/price_analysis.htm
Current global average jet fuel price is $3.90/gal.
It's interesting to see how much the situation has changed for the airline industry since the date on that ASPO presentation (10/07). Jet fuel prices have inxcreased dramatically, demand for airline travel is falling and the supply is contracting. The canary isn't looking so healthy now.
So much air travel is completely unnecessary. And this includes a lot of business travel.
The whole reason the airline industry moved away from Turboprops and towards jets was because maintenance of jet engines is cheaper, easier, and needs to be done a lot less often resulting in huge cost savings.
I'm skeptical there would be any savings going back to turboprops.
Garth
Fuel is now the #1 expense for airlines, and rapidly taking-off, making labor a grounded #2.
As I suggest above, the problem must be looked at through a banker's, of CFO's, eyes.
For someone or group, I think there's a very potential business opportunity here to organize a highly competitive, because fuel efficient, airline. Feasibility could be tested through gaming. The greatest variable, as pointed out in the ASPO presentation, is customer base.
Sorry, but I have to point out that turbo props ARE jet engines - the added complexity of the gearbox & variable pitch prop are insignificant compared to the efficiency gain and the short-field performance.
The most advanced of the turbine engines (2005) now matches the fuel efficiency of the last piston radial engines (1965). Turboprops caught on for passengers as they were so much smoother than radials.
Reliability is a whole different story - there are many stories of large piston aircraft ditching on the Hawaii run, and I can only recall one jet having to ditch (while being hijacked!). But you'll still find people making money with radials 'cause they're cheap to feed!
http://www.buffaloairways.com/fleet.htm (I briefly worked here)
The future for the airline-industry will follow the Cuban model.
Counterfeit parts made in sheds just-like-that .... The Cubans now how to approach the challenge, they did it with their 1950s automobiles, you know. They are still coughing along !
Joke aside - actually there exists a counterfeit-market for modern airliners today.Mostly nuts and bolts, but with dire concequenses ....
Warren Buffet - He owns Netjets and Railroads. No more need be said.
Did you ever play "Monopoly" as a kid?
If you could manage to get all 4 railroads, you would always win the game. Also the cheapest properties (Mediterranean and Baltic) always turned out to be better investments in the long run than the most expensive (Park Place and the other purple one.) The worst of all, in my long experience, were the upscale mcmansions -- the green strip.
Ed Tennyson's first job out of college was to help electrify 10 miles of the Reading Railroad :-)
Best Hopes for More,
Alan
Man, I would love to play you in Monopoly. The RR's were nice, but the killer corner was the Oranges and Reds--once you controlled the middle class, and caught everyone coming out of jail rolling double threes, fours, and sixes-- you had the game. Plus, you had the two chances of forcing people either to advance to Illinois, or go back three spaces to New York. The rate of return from exploiting the middle class was truly breathtaking, once you got to three houses. The downscale side, with the dark purples and light blues, was never a killer, because people would land on these relatively cheap places just after pay day. Mediterrean and Baltic were LOUSY investments; the board was never configured to encourage many landings there. These are the properties most likely to be left unpurchased once the deed deck gets down to five or so.
The Dark Blues, Boardwalk and Park Place, are advantageous because they are easy to acquire (only two, as opposed to three, properties), and cheap to get to hotels, because they only took ten houses to get to hotel status. In other words, once you are in the true upper stratus of the wealthy, the game is yours-- all you need is one opponent to pull advance to Boardwalk after you have a hotel there, and the game is finished.
All you need to do, at least in a game with 7 people...land on Park Place your first trip around the board, then land on Commubnity Chest and draw "Advance to Boardwalk". Game effectively over.
I only did that once, but then, I only played with 7 people once.
Re: turboprops
I moved my office to Ferry St. in Newark almost a year ago. I am DIRECTLY under the north-south approach to EWR. Planes come in not 3000' overhead for the smaller ones and mebbe 2K for the Heavies. I notice a great increase in the number of large(slightly smaller than the smallest commercial jets, at a guess) twin engine turboprops coming in over the last eleven months or so. I would say maybe 5-6% of all approaches now, whereas you rarely saw them even a year ago.
Cheers
RC
P.S.--We are nowhere close to peak Whaleoil yet!!!
I also live near an airport, once the busiest in the nation and which is now solely a General Aviation operation, of late there has been a lot more activity made up of turbo props and small jets coming into the field, the airport is busier and it may not be able to handle the new traffic, there have been two crashes in the suburban locality in the last month or so.
RE: Turbo-props
That is interesting that you noticed that. I have been predicting for a while that the airline models will not fail (not right away) but will alter signifigantly. Turbo-props are far more efficient and require less maintenanace than jet acft. This will create a vacuum for both Boeing and Airbus (both of which are out of the turbo-prop business). The airlines will retire most of the older fleet and there will be enough late model jets for sale at wholesale bargains...why buy new?
Therefore airlines will take a several steps backward in order to survive. Overseas flights will remain viable on large haul jets even with high prices. There will just be a lot fewer of them and the cost will make first class a thing of the past. The airlines will charge first class passage for coach. Also forget about comfort and legroom. Grin and bear it! Of course the rich won't travel with us anymore. They will travel on a new type of hybrid like: Conspicuous Consumption Airlines. Slogan: "Travel with the stars and avoid the threat of SARS"
The thing going forward (that is truly frightening) is how will the U.S. Govt maintain a transportation department as large and wieldy as the FAA when they finally admit insolvency? Also remember that airports depend on maintenance from landing fees based on passenger load. With far fewer people traveling going forward the fees will be woefully inadequate.
Does anyone have any idea how we'll pay for airport maintenenace?
You are talking about the U.S. so the answer is easy - privatization!
Joking aside, I would not be surprised to see this happen as traffic declines. Air travel will become the preserve of the wealthy who will pay for the "security"* that privatization will provide.
*security = security from the not wealthy.
European airlines use turbo-prop commuters extensively for short haul domestic and international flights.
I've flown extensively on this:
on routes like Zurich/Vienna. Seats 50 or so people.
Looks like a Bombardier Dash 8-Q402. AFIK, Bombardier is one of the few surviving companies still making regional turboprops. Everyone else thought that jets were the wave of the future.
I think the one I've flown in most often is the shorter Q300.
I've got lots of hours in multiengine turboprops. They are more efficient than turbojet or turbofan engines. We regularly flew up to 35,000 feet. However, we were limited to a maximum air speed of about 480 mph, which is about the design maximum for turboprop engines.
A newer prop-based engine design, called a propfan, overcomes the speed limitation. It also can operate at higher altitudes and is 30% or so more fuel efficient than turbofans. A friend worked on one design and helped with flight tests of the engine on a DC-9 or MD-80 airframe (IIRC). The tests were successful but the project was killed for lack of interest.
For larger airlines, fuel savings were not enough to offset increased noise and vibration. Tests showed that both could be dampened to levels comparable to those in turbofan aircraft, but jet fuel prices at the time meant fuels cost savings compared unfavorably with the costs to achieve the dampening. Also, surveys showed the public perceived turbroprops (and probably propfans) as not being "modern."
While regional air travel could eventually migrate to turboprops and propfans, it would not do so quickly. Production of turboprops would take time to ramp up and their is no existing certified design for a propfan aircraft.
A 787 tech (all composite, all electric) a/c could be interesting with following specs.
5 abreast seating
75 or 80, 100 and 120 or 125 seat versions
Tail mounted propfan engines (DC-9 configuration) *cheap seats in the rear
Cruise speed 400 mph, ceiling 41,000', range 2,800 miles, ETOPS capable
Use where 737s and A320s are used today.
Just speculation,
Alan
Think it would be interesting to work up the operations and maintenance numbers for that design. With that cruise speed and ceiling, could hit 35% fuel saving over comparable turbofan model.
Big problem for now is no one is even close to ready to produce propfans. Suspect there are improvements that could be made over the last commercial size model test model that was produced in late 80's. But, design to testing to certification to production is 7 years or more. Might get 5 if the program was pushed.
Which speaks more to the increasing complexity that causes all sorts of unintended consequences that could not have been seen. We believe we we can see them all.
In my corporate financial policies class we did a case study on Boeing. Basically in a nutshell, they have to bet the farm everytime a totally new plane is produced. We were focused on when they came out with the jumo jet in the nineties. Capital INTENSE industry. Funny how the main competitor to them is quasi public owned. I think Brazil's Embraer will outperform both of them.
Re; The WSJ article on the IEA
Really the first time? This implies to me that up to now the IEA has essentially taken the word of oil exporters which we know/suspect for the most part - ahem - massage - their numbers.
What do you suspect "assess the condition" will/should include?
Pete
Gee, I wonder what might have triggered that...*cough*...
http://en.wikipedia.org/wiki/Oil_Megaprojects
Live and learn.
It seems that they just discovered that oil is in fact extracted so that you get what you can and no what you want.
No, you can't always get what you want
You can't always get what you want
You can't always get what you want
And if you try sometime you find
You get what you need
"You Can't Always Get What You Want"
-The Rolling Stones (1969) from Let It Bleed
(perhaps a little trite, but on point nonetheless...)
Prof
I think you should have quoted the second version of the chorus
You can't always get what you want
You can't always get what you want
You can't always get what you want
But if you try sometimes you might find
You get what you need
Neven in NZ
Well right now I am feeling a more like this (though summer just started), which is basically the same . . err . . direction (lacking a better word):
Autumn Day
(Rainer Maria Rilke)
Lord: it is time. The summer was great.
Lay your shadows onto the sundials
and let loose the winds upon the fields.
Command the last fruits to be full,
give them yet two more southern days,
urge them to perfection, and chase
the last sweetness into the heavy wine.
Who now has no house, builds no more.
Who is now alone, will long remain so,
will stay awake, read, write long letters
and will wander restlessly here and there
in the avenues, when the leaves drift.
(trans. J. Mullen)
OT: Damn, I love those horns and the choir in the extended version so much . . .
Sad to say but this 'schoolboy error' is going to be the death of us...
It looks like it might be starting to dawn to some people that just because oil might be theoretically in the ground and people want it, that does not necessarilly mean that it is going to end up having been pumped and added to inventories. The investments simply have not been and are not being made.
"The investments simply have not been and are not being made."
I wonder about investments. It is my impression that there is plenty of liquidity in the oil business, and plenty of smart oil people. Maybe the problem is that there are no good investment opportunities, that is to say places where the gross geology data are favorable and the costs of development allow for a favorable payback. Maybe the people who are "in the know", realize that happy days are coming to an end.
I really don't know the oil industry. This is speculation that I hope will provoke comment from people who do know the industry.
Oil industry requires some forward visiblity on prices. Oil prices in the 70's were high and led to lots of new investment. Than in the 80's, prices crashed bankrupting the Soviet Union, oil shale projects in Utah, and lots of small companies in Alberta.
To make huge investments based on high-priced oil, people need to feel that there won't be another price crash. This time around, I don't think anybody is expecting a drastic price drop for a very long time (if ever).
Increasing costs plus declining EROI plus increasing risk premiums is not a good formula for encouraging commitments of investment capital.
Hence buybacks of shares - lack of investment opportunities.
That is also a problem with all the talk of giving up on growth - if investors can't see a profit, ie growth, they won't invest, so stability rapidly becomes decline.
From my perspective...I work in Permian...the constraint is not opportunities. My team will keep 2-3 rigs busy all year drilling 30-40 wells. Not a single well has an expected capital cost off over $30 a boe. The constraint is rigs, people, and equipment. Management could easily double our capital budget...but we couldn't spend it... at least not responsibly. In the short term, rigs engineers, and geologists are just as finite as the oil in the ground. There simply isn't an infrastructure in place to ramp up drilling to respond to these price signals. We are left with a situation where revenue has quadrupled or more, but rig counts and headcounts are only modestly up. You can't drill 4x the wells without 4x the staff and 4x the rigs...but that would take decades to build up. So companies buy back stock and increase dividends... it's the only responsible thing to do.
Just as a question, how long could you keep up that pace before you ran out of places to drill?
I don't know for sure... at least another few, possibly another decade. Way to many variables to plan drilling (onshore...US) more than a few years out. It does give me some hope that the other side of the peak will be a slower decline than many anticipate.
There were cases in the past year where service stations in Fort McMurray were running short of diesel because of a refinery fire. Fort McMurray is right in the middle of the oil sands surrounded by over a trillion barrels of oil "resource".
Oil in the ground is not the same as oil in the tank. Most people and politicians don't understand that.
Size of the tap not size of the tank