Oops, I know, you warned me. Sorry about the mess.

(More regulation? He really wants that? Wasn't he supposed to be opposed to big(ger) government?)

Peak oil is really hitting the headlines these days. But why haven't scumbag O'Reilly been de-nationalized = (tarred/feathered and run out of the country) yet?

My favorite part is that OPEC is cutting production in order to drive up demand. So, if OPEC went to zero, or better yet, started importing oil, demand would go to infinity?

However, to a large degree, ExxonMobil and CERA, et al, are reaping what they sowed, i.e., by asserting that Peak Oil is--worst case--decades away, they have provided ammunition to the conspiracy heads.

Tune in next week for the continuing saga of CPSRS--Cornucopian Primal Scream Response Syndrome, i.e., there must be some way, somehow to maintain an infinite rate of increase in our consumption of a finite energy resource base.

In the O'Reilly clip he talks about a bill to make speculators actually take delivery of the oil?

That sounds like at best would do nothing (just change the paper trail), at worst it further disrupt supply increasing prices. But I haven't actually read the bill. Does n't matter - it's probably designed to fail. So that representative can say he did something, when he of course just wasted out time.

If Iran does something stupid?

If we deported everybody who says something stupid then the US population would quickly drop to zero. Which brings up this stupid thought: We could quickly achieve energy independence by deporting the richest 50% of the population. It ain't the poor folks who have bought all those giant SUVs and McMansions. It ain't the poor folks who need to replace 100+ light bulbs with CFLs in their homes. It ain't the poor folks who drive from New York to Florida every winter for a 2 week vacation and have kids who fly to Cancun every spring. It ain't the poor folks sitting on Congressional committees saying stupid things about energy issues. It ain't the poor folks spewing stupid things every night on Faux News.

This new setup mignt be limiting posts-personally, I have been unable to reply to any posts snce the rating system was installed-no idea why.

you really have to have low expectations when it comes to fox propaganda.

I have predicted much higher oil prices for years, but I will go on record here saying we will never see the $500 per barrel that Hirsch suggests in the video. Though oil intrinsically is of course worth much much more than $500, and if market forces were left alone, it could trade that high or higher, our current capitalist/globalized system will not be able to function above $300-$400 per barrel. The equity disparity will balloon, banks will fail, people won't work (and riot, etc.). The civil and social unrest both regionally and internationally at $500 would be so severe that the system as we know it would not function. Ergo, before that time, we will see nationalization of the remaining oil reserves, rationing, martial law, etc. etc. Of course, well before that point we have recession===>depression, which will reduce the price of oil, at least for a while. Higher highs, higher lows. But not $500.**

** I admit we could see nominal $500 per barrel if world central banks print 2X the currency in existence today, but in 2008 real terms that would then be only $250 per barrel.

Conservation. Efficiency. Change of social metrics of success. Starting yesterday.

I have sold 80% of my ExxonMobil holdings (owned for 30 years). XOM has announced they are selling their fuel stations they own, who wouldn't want out of a business you know will have half the volume in 5-10 years with the competition reducing the retail markup. Besides the plan should be to eliminate the ExxonMobil name in front of the retail buyer looking for a target to blame.

Maybe the majors planted the seed for nationalization of the refineries. You have an old facility with high maintenance costs, a low to zero crack spread, and reduced throughput in the years ahead. The refinery capacity rates are down because there is excess capacity in the world and foreign refineries are dumping excess gasoline in the US. If I was XOM, I would want the US gooberment to take the refineries for $1 while accepting the cleanup liability. I have got rid of a nonprofitable sector with a declining throughput. I will continue to market gasoline and diesel to the retail vendors. The gasoline and diesel will come from overseas refineries. I will keep the pipelines and make a profit in distribution of the government owned refinery products. I will sell my crude to the highest bidder, the new refinery owners can enter a bid.

Can you imagine the US DOE operating the US refineries. One half the production at twice the price. They will even less competitive with foreign refineries.

For the #3 vid... FuelWatch apparently exists... LOL...

http://www.fuelwatch.wa.gov.au/

"We can see the future. And the future is very f*cking expensive."

Dumping XOM may prove to be a very smart move Boldtswagon. I've only seen it reported once since the original XOM press release. An XOM vp announced that they were making a major shift from international exploration to redeveloping their existting fields. Reason: limited opportunities ans skyrocketing costs. I understand their delema. I've been a petrroleum geologist for over 30 years and have seen small public oils run into the same brick wall: XOM has gotten so large thru it previous efforts that as those fields go into decline they cannot replace the lost production. Shell and Chevron hit this wall two years ago.

Any public company that cannot offer a confident biz plan to grow their assets offers no reason to be their stock. without growth of cashflow/assets they are slowly fading away. The first response of most companies to to sell assets to provide short term bumps in cash flow and to cut overhead which will also provide a bump in net cash flow. An independent oil back in the late 70's boom is a poster child for such a death. UPRC drilled over 600 horizontal holes in thee Austin Chalk trend in Texas. Huge initial oil flow rates that provided a great ROR. But after the play was drilled up they had nothing to replace it and went into a rapid negative growth. eventually they wer sold for scrap.

A simple way to put it: most of the majors have hit their own personal PO.

Matt Simmons looks so exhausted, frustrated: the toll of educating the masses. MSM has been all over the Outer Continental Shelf new supply... which will ride in and save the day, like a Die Hard sequel. Matt has said before: Conservation is our last great resource. These are not the words anyone wants to hear... In my humble opinion, we're approaching this argument without sound bites. We need some; we need one, before we all puke on MSM feeds.
"Conservation Supply" or "CS"
Can't you hear it?: "Conservation Supply holds the greatest potential for securing our energy future". Kinda buzzes in the head. [This is just an example. Some TOD reader has the ultimate one. Enjoy the weekend. Jim

As I read various things in the news, people are casting blame all over the place. OPEC, environmentalists, Democrats, Speculators, Big Oil. Very few are willing to admit that we are all to blame for using so much of the stuff.

I have been reading about the so-called "Enron Loophole", which in some way liberalized commodities futures trading. The Farm Bill of 2008 supposedly closed this loophole, and this bill has been enacted (by overriding Bush's veto).

The text of this bill can be found here. And it appears that section 13001 starting on page 505 seems to be relevant, but the language of bills isn't exactly designed to be easily understood (oftentimes because they talk about striking paragraphs of existing code and replacing them, so you have to look up what the previous wording was to see what they changed). This sort of thing:

(a) IN GENERAL.—Section 2(c)(2) of the Commodity Exchange Act (7 U.S.C. 2(c)(2)) is amended by striking subparagraphs (B) and (C) and inserting the following:

My understanding is that the loophole won't be officially closed until the CFTC finishes writing the enforcement regulations.

The real question is, what does closing this loophole actually mean? In other words, how much (if any) of the current price of oil is driven by speculators buying up commodities futures, and how much of it is just the intrinsic value of the oil in our new supply-constrained world. How effective will this bill be in curbing speculation, and how long will the CFTC drag it's feet in writing regulations?

$500 a barrel in a few years....hmmmmmmm that will happen in the first year of global production decline, which could be this year. Soon after we can say good-bye to commercial air travel and gasoline. I heard that Hirsch told an audience recently that soon 2/3 or you (the audience) will be unemployed -- anyone hear that.

About O'Reilly, thanks, but my father told me long ago to avoid stepping in it and avoid to getting down in the gutter with idiots.

First time commenter here. Just a few thoughts, which probably won't win me any popularity votes, but WTH.

Elected officials suggesting that we nationalize, errr I mean, let the government run the oil industry. Are they kidding? The fact that people even entertain the idea shows just how deeply communist ideology has been injected and accepted in this country via mainstream media and education during the past 25 years. These are indeed dark days; hopefully people will wake up soon.


As Victor Davis Hanson reminds, lifting restrictions on domestic drilling will "give us the necessary bridge to new generation fuels, ensuring in the interim that we don’t go broke, enrich our enemies, or hurt the poor until we reach the nirvana of wind, solar, electric cars, biofuels, and nuclear power. What is so moral about refusing to pump oil carefully on our soil, but demanding that the reckless Russians or Saudis drill ever more? And can we rightly suspect that the Left, by its inaction in Congress on energy production and *radical* environmentalism, welcomes the gas shortage?"

My test of good government: Is "the average family" flourishing?

To video TED: Pardon Me for Living

We diminish smoker's habits because most Americans still value our freedoms to choose; although that raw number is diminishing.

Have you noticed that the Global Warming myth has driven a LOT of people insane?
Ted reminds me of Nurse Ratched.

Nurse Ratched: Aren't you ashamed?

Billy: No, I'm not.
[Applause from friends]

Nurse Ratched: You know Billy, what worries me is how your mother is going to take this.

Billy: Um, um, well, y-y-y-you d-d-d-don't have to t-t-t-tell her, Miss Ratched.

Nurse Ratched: I don't have to tell her? Your mother and I are old friends. You know that.

Billy: P-p-p-please d-d-don't tell my m-m-m-mother.
(from film "One Flew over the Cuckoo's Nest)

Once we see "the planet" as personal, it is easier to see humans as the vermin good only for eradication.

This is very, very dangerous. Is anybody paying attention?

Self-denial is the best form of self-government. Some folks need to think about wrangling in their excessive envy.

O'Reily and other talking heads...

The media is clearly interested in the oil crises. I believe the best posture is to occasionally point out to O'Reily, Cavuto et al. that they have zero knowledge of the sciences and engineering sciences relevant to petroleum discover, production and refining. This should give them about three milliseconds of pause to reflect. Unfortunately pointing out that economists are likewise ignorant, though far more damaging to the situation, will have no effect for some time because economists are the Holy See of "western" social-economies. In time the media, economists and the Members of Congress will be exposed for what they are -- ignorant and driving wearing a blindfold. My guess is as the crises deepens and becomes obviously more intractable -- read, the cost of everything continues to increase and ever larger numbers of citizens of the G8 nations, in particular the United States, are marginalized -- it will dawn on the common Joe that the only people that really understand the crises are, well, scientists and engineers trained in petroleum-centric specialties.

Why is it always people who know nothing about the futures market feel fit to explain it?

If anyone here actually knows how real oil is sold and purchased, I sure wish you would explain it. I spent a long time researching this and couldn't find out a thing. Is ANY oil actually sold and delivered by means of a futures contract? As far as I can tell, the answer is no, but I can't prove this.

Hello TODers,

http://ap.google.com/article/ALeqM5iqEt_0DvpP2BQ4-FWSAZl8ND7pZAD91E07500
--------------------------
Businesses to be advised to secure chemicals
-------------------------
As we go postPeak: is this basically just codewords to start stockpiling? Recall my Ft Knox postings.

Or alternatively: will this info be used to support extreme JIT & BAU to the bitter end by selectively punishing those who start speculating by hoarding?

From the same link:
---------------------------
The list of the 7,000 sites will not be publicly released because of security reasons, the department said.
---------------------------
Of course, I am all in favor of keeping key chemicals from those who seek to violently harm others and/or the environment, but imagine the market power if you had the near real-time inside scoop on total inventories of vital supplies plus coercive powers to minimize and/or direct these flowrates for the desired ends.

As discussed before: imagine the effects if sulfur, potash, and phosphates were suddenly severely curtailed by decree.
Job specialization is dependent upon food surpluses. Recall that the UN FAO is highly worried that rising energy prices and/or shortages from FF-depletion will lead to shrinking supplies of fertilizers. Earlier post reproduced below.

Let's hope it is not curtailed by a human-attack and/or a natural event [earthquake, tsunami, flood, fire, etc].

Alternatively, imagine the wealth that would accrue to those who controlled the flowrate-trickle from huge stockpiles made with cheap energy prior to the Hubbert Downslope.

Have you hugged your bag of NPK today? Have you joyously danced around your compost pit?
***********************************************
Hello TODers,

Recall that some NPK-newbies wanted some more information. IMO, the following link is mostly a "Hurrah, aren't we just Great PR release".

http://www.gulf-daily-news.com/Story.asp?Article=220525&Sn=BUSI&IssueID=...
---------------------------------------
Fertiliser industry's role in food security praised

He said the world consumption of fertilisers witnessed a major growth amounting to eight per cent during the period from 2005 to last year which equals seven million tonnes annually.

Forecasts indicate that demand for fertilisers will increase at an annual rate of around 2.9pc during the period from last year to 2012 which means doubling the annual rate witnessed in the last five years of the previous decade.

The world fertiliser consumption will reach around 173m tonnes this year and this rate will increase to reach 193m tonnes in 2012.
--------------------------------

As Usual: No mention of the Hubbert Downslope and ELM effects possibly making these projections very difficult to make as the population grows 70 million/year.

I think the UN FAO does a better job of pointing out the possible difficulties ahead if one carefully analyzes this document with a critical thinking mindset [57 page PDF Warning]:

ftp://ftp.fao.org/agl/agll/docs/cwfto11.pdf
-----------------------------------
Current world fertilizer trends and outlook to 2011/12

[Page 14]...High oil prices could depress the use of oil-based fertilizers which have been behind much of the increase in farm production during the past half century.

[Page 15]...Freight rates have become a more important factor in agricultural markets than in the past. Increased fuel costs, stretched shipping capacity, port congestion, and longer trade routes due to altered trade patterns, have pushed up shipping costs...The impact of transport costs on fertilizer prices will grow as fertilizer is produced in fewer localities close to raw materials and ample energy availability.

[Page 15]...The decline in the United States dollar against most currencies since 2005 has made imports from the United States cheaper and lessens the true impact of the rise in world prices. This is a major reason behind the brisk world import demand that, in spite of high prices, shows little sign of retreat.

[Page 17]...Conversion of grain areas to vegetable and fruit production will translate into higher fertilizer demand as average application rates for the latter is about double those for grain crops.

[Page 20]...At the same time, concerns about the impact of nitrogen and phosphorous losses to the environment will call for increased recycling of organic nutrient sources.

[Page 29]...Nitrogen and phosphate production capacity exists in only 11 and 6 countries respectively. High transport costs in land locked countries contribute to prohibitively high fertilizer prices. An array of other factors which further limit input and output markets, severely constrain fertilizer use.

[Page 34]...Nitrogen use efficiency is declining as nitrogen fertilizer consumption increases faster than grain production.
Yields and nitrogen use efficiency should be increased simultaneously.
------------------------------
I believe I have discussed and newslink-addressed multiple times all of the issues listed above with a Peak-Everything-Outlook that is not included in many agricultural reports. Please feel free to examine my postings in the archives for further details.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

I would like to revisit the refinery issue. In the US we are expanding refineries for heavy crude. The problem is that it takes 2 years for a FEED, 2 more years for the design, and 3 - 4 years for construction. WE DONT HAVE PEOPLE OR THE MACHINERY. We will be engulfed before we can get the damn things built.

While I certainly don't endorse everything he says, I agree 100% with O'Reilly that oil speculators need to be attacked and reined in. Numerous people on this website, and in the mainstream media, have large bets that oil prices will rise, and thus have a financial interest in fomenting panic and hoarding. It's really no different than profiteering during wartime, and should be dealt with as such.

Personally, I would like to see highly-invasive reporting requirements for all investment in commodities. The U.S. already has a rule requiring that you file a report on any cash withdrawal/transfer over $10,000. We need that kind of invasive probing of the commodities markets. We need to know the names of everybody turning a profit on the rise in oil, and the exact amounts they're making.

The reality, at the moment, is that the cop on the beat, the CFTC, is totally clueless, and has no information.

Lukken, the Chairman of the CFTC doesn't even know what percentage of transactions the CFTC can see:

CFTC Acting Chairman Walter Lukken, whose agency is conducting a nationwide probe of crude oil markets, conceded that "the environment is ripe for those wanting to illegally manipulate the markets."

However, the top U.S. futures market regulator said there was no "smoking gun" that indicates that speculators are to blame for record oil prices.

Democrats on the joint Senate panel said the CFTC lacks enough information to make that determination.

Sen. Richard Durbin, Illinois Democrat, asked Lukken what percentage of U.S. crude oil trades are reported to the CFTC, and Lukken said he was not certain.

"Precisely, and that is one of the reasons why we are here. You don't know," Durbin told Lukken. "You can't answer that question."Source

Similarly, in the recent hearing on index speculators before Joe Lieberman's committee, Jeffrey Harris (the Chief Economist of the CFTC) admitted complete ignorance of the scale of index investors in the oil market:

Masters: We don't actually know what the index traders are in crude oil because the CFTC doesn't release that data. We only get it on the 12 agricultural commodities. It would be helpful if we could actually get that data from the energy markets, and from the metals markets as well. Something that the CFTC currently doesn't provide.

Harris: I would interject here that we don't provide it because we actually don't have it. (Laugh) We have classes of traders like I mentioned. Since a swap dealer in an ag product is almost exclusively doing index trading, we know that that swap dealing trading is index trading. In the metals and energy space, we know that swap dealers have vast amounts of other trading business that contaminates the index trading that they report to us.
(1:38:10)

It's late here in Texas, and I'm just getting home from a
wedding, so my comments are brief.

Mark Twin once quipped: "Know how to tell if a politician is lying? His lips are moving." Whoever you choose to vote for, Obama or McCain, look behind his words at what he really values. No matter the outcome, we'll be "playing ball while running on water" for about 30 years, minimum.

In the meantime, below is an excerpt of an A. Hawkins article.

[...]
Like Marx, Lenin pointed to the struggles and dichotomies in Russian society in order to postulate solutions; solutions to problems that were not always there. From roughly 1915 through 1917, Lenin repeatedly decried the exploitation of the Russian workers by the land and business owners. This "crisis" not only justified, according to Lenin's rhetoric, but demanded a revolution that would take power away from the land owners and give "power to the people."

Lenin's revolution against the "greedy" landowners was carried out at the end of a gun.  The gun was necessary because the crisis Lenin saw was not a crisis that every Russian believed to be real. But as Crane Briton has pointed out in his work on revolutionaries, Lenin was willing to use force to move his countrymen toward what he thought was best for them, whether they agreed with him or not.  Lenin's implementation of Marxism was so stringent, so accurately in tune with Marx's own predilections for government intervention in every facet of life that Marxism came to be referred to as Marxism/Leninism.

Sadly, this practice of creating a crisis in order to implement a solution has become a staple in today's Democratic Party. Although each individual Democrat may not hold Marxism/Leninism as his or her political and ideological paradigm, many Democrats in Congress hold to the resulting methodology and have adopted passing legislation as their method for revolution and their solution for every type of crisis known to man, be it healthcare, the environment,  gun violence or energy problems. For the Democrats, every crisis is but a segue toward the passage of more and more legislation, furthering the revolution while enslaving the very people they claim to be liberating.

[...]

[T]he disturbing fact is that Marxist/Leninist ideology and method of "crisis revolution" has rarely been stronger and more dangerous among Democrats than it is right now. The current revolutionary cry is to tax the "greedy," American-owned oil companies for their "wind-fall" profits. In much the same way that Clinton spoke of gun companies in the 1990s, today's Democrats demean oil companies with their "shame on you for what you're doing to the American people" approach, while simultaneously refusing to allow domestic drilling, to increase offshore drilling, or to drill in ANWR.  

Like Clinton, the Congressional Democrats, who have created the current crisis, will allow a certain degree of suffering on the part of the people in order to insure their agenda is furthered. They will continue to blame and punish "big oil" for the rise in gas prices just as Clinton blamed and punished Smith & Wesson for the violent crimes that took place while he was in office. Moreover, like Lenin, these Democrats will try to to push their agenda through even if many of their countrymen fail to place the blame on "big oil." With the backing of the federal government, today's Marxist/Leninist leaning Democrat party will implement their agenda through "crisis revolution" at the expense of the people by using scare tactics, and raw force when necessary, to silence their detractors.

[...]
[T]he bottom line is in the end, the people will suffer at the hands of an office holder who uses "crisis revolution" tactics to further their Leftist, legislative agenda. This means we will continue paying excruciatingly high prices in order to give Democrats the opportunity to pull a bait and switch, whereby they can continue to lessen our oil supply by standing in the way of domestic drilling while simultaneously mounting a campaign against the "shameful profits" of American oil companies. Like good Marxists, they do this in order to distract us from the fact that all the class envy and bitterness that undergirds their policies is robbing us of a burgeoning, profitable capitalist society rather than bringing us into a promised utopia.

Full article here

Hello TODers,

I think the info in this weblink below closely corresponds with my bulleted points in the UN FAO PDF in the posting in the thread above:

http://www.dailytimes.com.pk/default.asp?page=2008%5C06%5C21%5Cstory_21-...
----------------------------
...The current energy crises across the country have badly affected all sectors of the economy including agriculture.

In the present scenario of price hikes and food security, it has to be realised that agricultural development is more important than any other sector. Population pressure on land is growing and land and water resources are becoming scarce and agriculture productivity is generally stagnating. During the year 2007-08, the performance of agriculture sector was below the expectations. Against the target of 4.8 percent growth, only a paltry growth of 1.5 percent was achieved.

Fertilizer is the most important and expensive input used in the agriculture sector and increases in fertilizer prices necessitated attention of the government.

Productivity of all crops in Pakistan has remained below global standard as the unaware farmers continue increasing the fertilizer use without paying attention to other aspects like the quality of soil and seeds.

Agriculture experts said that blindly adding fertilizers could not ensure higher yield. Fertilizers are nutrients and their fair addition in soil does increase the productivity, experts told Daily Times.

According to the Food and Agriculture Organisation data, Pakistan was gradually becoming more dependent on fertilizer imports as the consumption of different fertilizers had increased at much higher pace than the local production.

Pakistan was self-sufficient in urea (nitrogen fertilizer) in 1990 when its total production of 1.119 million tonne was higher than domestic demand. By year 2000 the production of urea increased to 2.053 million metric tonnes but the consumption stands at 2.254 million metric tonnes, depicting a deficit of 200,000 metric tonnes.
---------------------------
IMO, as we descend further down the Hubbert Curve: we should expect these cascading blowbacks to be seen in more and more countries over time.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?

Hello TODers,

IMO, the following directly points to Malthusian Blowback:

http://www.freep.com/apps/pbcs.dll/article?AID=/20080622/NEWS07/80622057...
----------------------
...But Africa's farms today are only one-fourth as productive as the world average. Populations are growing fast, while food productivity per capita has declined from 30 years ago. During that time, Africa has gone from a continent of food exporters to one that imports millions of tons of it every year...

...The majority of African farmers still tend their crops by hand, fertilizer use is one-tenth what it is in Asia, and less than 4% of farmland is irrigated...

...In a report last week, the Africa Progress Panel, a group of experts chaired by former UN Secretary-General Kofi Annan, warned: "Unless some way can be found to halt and reverse the current trend in food prices, there will be a significant increase in hunger, malnutrition, and in infant and child mortality."
-------------------------------
It infuriates me that Kofi Annan is not the global leader in Peak Outreach across Africa. He could do so much to optimize their Overshoot decline.

Bob Shaw in Phx,Az Are Humans Smarter than Yeadt?

Hello TODers,

I was playing with a varied assortment of 'Peak Everything' keywords in GOOGLE TRENDS and this surprising result popped up:

http://www.google.com/trends?q=OPEC%2C+potash%2C+phosphate&ctab=0&geo=US...

Does this show that Wood Dale, IL talks/invests heavily in potash stocks? I would have expected NYC to be the US leader as that is where Wall Street is located. If this city has been do nothing else but investing in potash stocks for some time---this town must be in the BigBuck$$!

When you change the country selection to Canada:

http://www.google.com/trends?q=opec%2C+potash%2C+phosphate&ctab=0&geo=CA...

It shows as I would expect with Saskatchewan being potash crazy, with other Canadian cites being highly potash informed compared to American cities. If you pop back and forth between these two links you can more clearly see what I am talking about.

Does this suggest, that as we go postPeak, there is much more money to still be invested in these fertilizer stocks, and/or much more actual physical hoarding in I-NPK as more people become Peak Aware?

Does any TODer live in/near Wood Dale, IL? Is this city a headquarters for a big hedge fund, or a big fertilizer company, or a big bank investing Sovereign Investment Funds for a foreign country? Thxs for any reply, as I am not an expert.

Bob Shaw in Phx,Az Are Humans Smarter than Yeast?