DrumBeat: July 13, 2008
Posted by Leanan on July 13, 2008 - 8:16am
Topic: Miscellaneous
When ends won't meet: Soaring gas prices mean financial hardship, major cutbacks for low- and middle-income households
Jeanne Renner's financial consulting business is devoted to households that have found themselves financially adrift in a sea of burgeoning debt, higher prices and stagnant wages. Renner worries about how they will be able to cope in a world of radically higher gasoline prices.In the meantime, she is shepherding clients through financially trying times by stripping them of their credit cards and putting them on budgets that include only nominal spending for entertainment.
“I have people who come to me right now and say, 'We're headed back to the hills to live off the land,'” Renner said. “People are learning to do without the things we believe are necessities.”
Gazprom ready for Iran energy deals: report
TEHRAN (AFP) - Gazprom's chief on Sunday assured Iran that the Russian energy giant was ready to participate in major Iranian oil and gas projects, days after Total dropped out of a multi-billion dollar gas deal.
Decisions Shut Door on Bush Clean-Air Steps
Any major steps by the Bush administration to control air pollution or reduce emissions of heat-trapping gases came to a dead end on Friday, the combined result of a federal court ruling and a decision by the head of the Environmental Protection Agency.
Are you gonna eat that? How to curb food waste
Amidst growing concerns about rising food prices and global warming, many Americans are taking a closer look at what they do — and don’t — eat.Research in the U.S. estimates that at least 14 percent of purchased food ends up in the garbage.
The Militarization of Energy Security II
The possibility that access to energy resources may become an object of large-scale armed struggle is one of the most alarming prospects facing the current world system. The political stability of advanced societies, and the continued prospects for economic and social improvement in developing countries, are both linked to the operation of international energy markets. The increasing scale and complexity of these markets since the end of the Second World War has been one of the primary drivers of global economic growth. Like all international markets, the market for energy is sensitive to war and upheaval, whatever the cause. Energy markets are efficient at discounting risk, and there is a long history of price spikes and shortages whenever large-scale violence, chiefly but not exclusively in oil-producing regions, threatens established patterns of production and consumption. Strategic planners in the United States and elsewhere are well aware of the degree to which the anticipated effect of military operations on the price and availability of oil and natural gas needs to be considered in their work.
Despite 800 billion barrel potential, oil shale a hard sell
If the oil industry can learn how to extract oil and gas from the oil shale in a cost-effective manner, the United States could lay claim to oil reserves totaling, perhaps, 800 billion barrels — three times Saudi Arabia's.With oil prices riding high and conventional crude reserves ever more difficult to find and produce, companies including Shell Oil Co., Chevron Corp., Exxon Mobil Corp. and Schlumberger are conducting research on a resource that could forever alter the geopolitics of energy.
But the history of oil shale has been a story of grand plans and locked gates.
Gazprom considers gas sales to UK households
LONDON (Reuters) - State-controlled Russian gas giant Gazprom is examining a possible entry into the UK retail gas market, a spokesman for the company’s UK unit said on Sunday.
Kuwait oil sector cuts power, water consumption; 16, 13 percent
KUWAIT, July 13 (KUNA) -- The Kuwaiti oil sector has managed to cut its electricity and water consumption by 16 and 13 percent respectively by using steam turbines in oil refiners, a power official said here Sunday.It has also saved 23 megawatts of electricity by scrapping an ammonia plant, Adel al-Jassem, assistant undersecretary of the Ministry of Oil for control and media affairs, told reporters.
Thailand - E85, cheap diesel oil from Russia will tackle energy crisis: Samak
Prime Minister Samak Sundaravej said his government would buy cheap diesel oil from Russia and support the use of E85 vehicles as parts of the government's measure to tackle energy crisis.
U.S. Considers Increasing Pace of Iraq Pullout
The Bush administration is considering the withdrawal of additional forces starting in September, as the need for troops in Afghanistan becomes more pressing.
Bush, Democrats spar over gas prices
WASHINGTON (AP) -- President Bush on Saturday tried to pin the blame on Congress for soaring energy prices and said lawmakers need to lift long-standing restrictions on drilling for oil in pristine lands and offshore tracts believed to hold huge reserves of fuel.
Big Oil Not Sitting On Oil Acreage Despite Democrats’ Claims
Congressional Democrats now have their unified response to increasing calls for oil exploration in Alaska and in the waters off our shores: The energy companies, they say, are already sitting on plenty of oil, refusing to recover it.But is that true?
New England will freeze without fuel aid
With mid-July temperatures in the 80s this weekend, most people are more concerned with paying to fill the gas tank for summer vacation at the lake or the beach than about keeping their families from freezing next winter.But unless the federal government gets serious about the energy crisis that is wrecking the economy and hitting families financially, New England faces a possible catastrophe in a few months.
Today's economic crunch feels like the '70s
"There was a kind of extremism in the air," said Herb London, president of the Hudson Institute, a conservative, Washington-based think tank. "Conditions now are also kind of frightening. But the situation is not as extreme."Still, today's list of potential villains sounds like a cast from the past.
Rural airlines take flight: Service is too costly; passengers are too few
Airline woes that make flights from hubs such as Las Vegas, Phoenix or Salt Lake City less convenient are making it downright impossible for rural residents to fly from small towns across America.High fuel costs, lousy airline balance sheets and a shortage of suitable planes have left more towns than ever without scheduled air service this year, despite the government spending more than $100 million annually to subsidize routes to isolated airports.
The path traced today by planes arriving at airports is a tangle of wasted time and fuel. A startup near Seattle has a program that makes landings simpler, shorter - and smarter.
This is a story of selfishness and greed, of self-centeredness, envy and the ignorant folly of a person too short-sighted to realize she should count herself lucky because her college education didn’t have to be paid for with the milk of a goat.The tale could be called: I Can No Longer Afford to Drive My Car.
Green motorists face 20-week wait for eco-cars
GORDON BROWN'S desire to have all UK motorists driving electric or hybrid cars by 2020 could be undermined by a shortage of the most popular hybrid models on the market.The increasing cost of fuel alongside the heavily discounted level of road tax for vehicles such as the Honda Civic Hybrid or Toyota Prius has led to an unprecedented demand that has caught car manufacturers by surprise.
So, just how green will the eco-towns be?
The plan to build 10 new eco-towns across the UK has been beset by fierce local opposition and concerns over the state of the housing market. But there has been little examination of the towns' green credentials.
Diesel hits record, gas ticks higher
NEW YORK (CNNMoney.com) -- The price of diesel fuel hit a record high and gasoline resumed its march upward, a daily survey from auto club AAA showed Sunday.The price of diesel, which is used to power most trucks and commercial vehicles, hit $4.817 a gallon. It had dipped to $4.811 on Friday and Saturday after reaching a record $4.814 last week.
A New Fashion Catches On in Paris: Cheap Bicycle Rentals
A year after the introduction of the sturdy gray bicycles known as Vélib’s, they are being used all over Paris. The bikes are cheap to rent because they are subsidized by advertising, and other major cities, including American ones, are exploring similar projects.
Say good bye to the good old days
Here's what we know for sure about the latest energy crisis. The cost of virtually everything is going up. Our freedom to roam anywhere we want by car or by plane is being curtailed sharply by fuel costs. As rising prices force us to buy less, jobs will be lost, possibly our own. Interest rates are going to go higher, squeezing our finances. At the same time, the economic turmoil is shrinking our RRSP nest eggs. And no one really knows how bad it's all going to get.
Vanpooling can keep you and your wallet happy
BALTIMORE (Map, News) - With prices at the gas pumps continuing to skyrocket, most commuters are turning to alternative ways to travel. One convenient and affordable option that often goes overlooked is vanpooling.Vanpooling became popular during the United States’ last major energy crisis in the 1970s, and it has seen a revival in the past six months. The country’s largest vanpooling organization — VPSI Inc. — reported a 48 percent increase in applicants this May compared with last year. Paul Volden, VPSI’s marketing coordinator in the D.C. area, said interest in vanpooling has almost doubled in this region from April to May, and he expects to see similar leaps when the June numbers are made available.
Ford SUVs sales ride high in Middle East
Ford, Lincoln and Mercury retail sales grew by 21 per cent in the Middle East during the first half of 2008, setting a record performance for the three brands across the region.Led by a strong surge in Ford utility vehicle sales (up by nearly 50 per cent), the results show an increased consumer preference across the range and Ford believes this trend would get stronger with the launch of the all-new 2009 Ford Flex full-size crossover in the next quarter.
In UAE the trend was similar with an increase of 25 per cent.
Indonesia: Exploding Subsidies
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Even though the wasteful burning of money through fuel subsidies has increased steadily to exceed even the combined spending on education, health and other social services, the President still doesn’t get the real message. |
Energy war: India and China face off in Central Asia
This week, as the oil prices soared to $147 per barrel, the world energy scenario became bleaker. With the market analysts frequently talking about oil climbing up to $200 by early next year, now there is no doubt that another oil shock — worse than its previous avatar in the 1970s — is staring at all the energy-hungry economies, particularly India and China.
TWO VIEWS: Tapping oil reserves would free us from clutches of OPEC
WASHINGTON -- To burst the oil bubble, use a drill! If Congress stands up to special interests and develops domestic energy sources, oil prices will tumble.
TWO VIEWS: Renewable energy offers path to independence as oil production drops
BLOOMINGTON, Ind. -- The United States, like any forward-thinking investor, needs to diversify its energy portfolio. The country is not going to be able to drill its way out of this energy crisis; oil will not save us.
Maine: Governor touts energy Web site
AUGUSTA: Gov. John E. Baldacci has unveiled a new Web page for consumers and businesses that want to find ways to reduce their energy costs. Before the development of the page, energy resources were scattered among various state government and private Internet sites, making information difficult to find.
Obama to meet Energy Smart Debbie
Amid skyrocketing oil, gasoline, coal, and electricity (coming to a neighborhood near you) prices, 2008 offers Americans quite serious and stark choices between knowledgeable, impassioned, and thoughtful candidates when it comes to finding paths toward a prosperous 21st century economy, on the one side, and Fossil-Fool candidates focused on tightening our shackles to the ever-more costly (pollution, financial, otherwise) and archaic oil-coal based energy system.One of these stark choices comes in California's 46th district, where Huntington Beach Mayor Debbie Cook is running against ten-term Congressman Dana Rohrbacher.
Debbie was one of the first on the Energy Smart Act Blue page. Tomorrow, Barack Obama is going to meet Energy Smart Debbie. Let's hope that this is not for the last time. Let's look at some indications as to why.
Oil production is peaking worldwide, at the same moment that global warming has emerged as the greatest environmental threat of the 21st century. This perfect storm has finally convinced the world that the time to act to avert disaster is now.
Technology is there: More electric power and use of rails can offset the so-called energy crisis
Those in the “peak oil” camp, who predict that we are about to run out of easily accessible petroleum, warn that the drop in global oil production will bring dire consequences. Writer James Howard Kunstler, and like-minded groups such as the Capital Region Energy Forum, predict the collapse of Western Civilization and the establishment of an “Amish Paradise.” Yet they forget history and underestimate the technology available to sustain our technological civilization.
Capitalist answer to economic woes
Under that definition of course we do not live in a capitalistic society by any means. And that is Mr. Donlan's point and main complaint. The real distortions, inequalities and environmental threats we face in this summer of discontent stem largely from efforts by governments and other special interests with power to affect outcomes through interferences of one kind or another.The first case in point is the current version of the energy crisis that might better be classed as an extraordinary delusion and crowd madness. We have a sitting president doling out tax dollars so SUV owners can fill their tanks while his putative successors demand an America free of oil imports and the punishment of the very oil producers who are supposed to provide that freedom.
Public transport not prepared for more passengers: Report
The capacity of bus and train services are not prepared to cope with rising passenger numbers, a spokesman from the Australian Association for the Study of Peak oil has said.Convenor for AASPO Bruce Robinson said that motorists should prepare their own fuel shortage plan in the wake of a CSIRO report that petrol may reach up to eight dollars a litre by 2018.
Iran discovers new oil field to hold 1 billion barrels of crude
TEHRAN (RIA Novosti) - A new large oil deposit with estimated reserves of more than 1 billion barrels of crude has been discovered in Iran, the Iranian oil minister said on Sunday.Gholamhossein Nozari said the oil field, located in the southwestern province of Khuzestan, is believed to contain 1.1 billion barrels of crude, with recoverable reserves of about 220 million barrels.
Saudis can't save us: Beseeching oil sheiks to open their spigots and bring back cheap oil for Americans doesn't work any more
For almost four decades, when Saudi Arabia spoke, oil speculators listened. That is why U.S. presidents, starting with Franklin Roosevelt and including most recently George W. Bush, have courted the king of Saudi Arabia on matters related to oil.The problem is that the reality of Saudi oil power has faded and no one, not even our so-called "oil" president or the Saudis themselves, seems to have acknowledged this new fact of life.
Let 'peak oil' concept lead to peaks in other undesirable trends
As doomsday scenarios go, "peak oil" is pretty frightening. It's not as dramatic as, say, an asteroid hurtling in from space.But with gasoline at $4.25 a gallon and our economy in shambles, it's gaining a sobering amount of currency.
A recent book, "Gusher of Lies," by Robert Bryce, a former fellow at a think tank funded in part by energy interests, described energy independence as a "dangerous delusion." And a 2006 Council on Foreign Relations task force went so far as to accuse those promoting energy independence of "doing the nation a disservice by focusing on a goal that is unachievable over the foreseeable future."Ignore them. Energy independence does not mean that the United States must be entirely self-sufficient. It simply means reducing the role of oil in world politics -- turning it from a strategic commodity into merely another thing to sell.
Do you want to know why Iran has a nuclear program?
This is where Iran’s nuclear program comes in. You see, even though we may be under the assumption that an oil well will produce oil indefinitely, reality is much different. One of the most important observed properties of oil wells is that they follow Hubbert’s peak theory postulate, “that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve.”
Guatemala added to Venezuelan oil pact
MARACAIBO, VENEZUELA — President Hugo Chavez said Saturday that he is expanding his Venezuela's Petrocaribe oil-supply pact to include Guatemala.Through the pact, oil-rich Venezuela provides nations with oil under preferential terms, including long-term loans and the option of paying for at least some of the costs with goods and services.
"It is an obligation to help the weakest" countries, Chavez said in a televised address.
"The United States would pay us $200 a barrel for oil - give it to me then," said Chavez, whose nation is the world's 10th largest oil producer. "Now Haiti, no. Haiti gets preferential treatment. Socialism says: To everyone according to their needs."
UAE's oil reserves to last 92 years: IEA
The United Arab Emirates (UAE) has total oil reserves of around 98 billion barrels of crude and, at current rates of exploitation, the stocks would last 92 years, the International Energy Agency (IEA) said in a report.
'Professionals' blamed in Fayette County rail theft
A nonprofit Fayette County economic development agency is offering a $5,000 reward for information leading to the arrest and conviction of the people responsible for stealing about 400 feet of steel rails from a little-used railroad spur in Smithfield Borough and Georges Township.Related: Metal thefts pose problems for railroad
Brits raiding savings to pay bills
Nearly two-thirds of people said they had seen a noticeable increase in the cost of food during the past three months, while 61% said they were spending more on petrol and energy, and 44% faced higher council tax bills.
Airlines, truckers point fingers over speculation
SAN FRANCISCO -- Two of the industries with the most at stake from efforts to curb financial speculation in oil ratcheted up their marketing campaigns this week, with an eye on influencing a raft of new bills in Congress.The public pressure dovetails with another round of new records reached for crude-oil futures and a growing exasperation among many lawmakers that they must act to reverse climbing prices before leaving for their August recess.
So, he asked me, when will oil come down?
MADRID (Reuters) - I sank into my seat in the air-conditioned taxi. Heading home from the World Petroleum Congress, exhausted by days pestering top oil producers about when prices might come down, I gazed at the parched scrubland around Madrid."Tell me," the taxi driver interrupted. "When are fuel prices going to fall?"
He peered accusingly in the rear-view mirror.
"Every day they just go up and up. But when are they going to go down?"
That question again.
37 arrested at Australian climate protest: police
SYDNEY (AFP) - Thirty-seven people were arrested at a climate change protest in Australia on Sunday when they blocked a railway line delivering coal, police said.Organisers said as many as 1,000 people attended the protest march from Newcastle to the nearby Carrington coal terminal, where some demonstrators broke through a fence and chained themselves to a stationary coal train.
From the "Saudis Can't Save us article, by Amy Myers Jaffe, linked uptop:
"No one?" Didn't someone publish a book in 2005 warning that Saudi oil reserves were overestimated? Of course, Ms. Jaffe, a long time critic of Peak Oil, attributes the Saudi problems to a lack of investment, and not depletion, but the tone of the article is definitely interesting. I suspect that it is a more a CYA effort than anything else.
A group of unpaid bloggers (here) manage to make predictions years ago which are coming true all too rapidly, and the 'professionals' cannot even speak of what most of the readers of TheOilDrum know-that Peak Oil is upon us, and that we live in a finite world.
Tractor production is rising yet again, Comrade!
yep, tractor production is increasing. around here though they are powered by chickens. If you don't know about "chicken tractors" suggest you go to google. one is in the future of most of us.
Well I googled "chicken tractors" - they may still be in the future of most of us, but to be honest I'm a little disappointed.
I just painted my new chicken coop. I live in the city (yes zoning allows us to keep chickens here) and only have small area but thought this would be good to leanr NOW, rather than later when I may really need it. I have chicks on order and hopefully will have a few fryers and later some eggs in a few months.
Like all of us, I am getting older. Each year, I run the Bolder Boulder. As I get older, the trend is that I get a little bit slower each year. If I "invested" a lot more each year in my conditioning, I could seem to reverse this trend in a particular year but the overall trend would still be slower running times. At some point, no amount of investment can reverse the trend. It is exceedingly difficult to overcome entropy. Maybe you can seem to do it for a few years (which I have), but the long term effects of aging are just too great to overcome.
Yes, no doubt SA could have done even more investment and eeked out a few more barrels because of that. But those calling for more investment push the false hope to the addicted that the basic overall trend can somehow be subverted and reversed. This is a criminally irresponsible approach.
Simmons is becoming more and more blunt in his warnings as he joins forces with what is perceived as the radical fringe. But really. Bland warnings have been demonstrated to be ineffective. Perhaps the "shrill" approach won't work either. But it is worth a try when everything else has failed.
I'm mad as hell and I can't take it anymore.
Tstreet, have you thought about it this way?
Hokay, so Simmons gets his message out and everyone knows what's up. Then everyone shifts as much as possible to 'clean alternate energy'. The demand for oil drops . Will the flow rate drop or will we still be using every bit as much oil and polluting just as much, or maybe even more with that added use of alternate energy, just at a cheaper price?
I suppose given time and a bit of work I could think my way through this but I am in an energy efficient mode today, usually I am just lazy but this being Sunday I might as well dress it up a bit:)
Maybe we got to think outside of energy for a best solution?
This is why I mentioned that the chart below should be prominently displayed on this site.
Yes, you have offered up a potential problem even if we start really cranking up alternatives. But you said the oil demand drops. So I am not sure I understand your conclusion that we end up using just as much oil anyway. Anyway, without understanding that there is a problem, there clearly won't be a solution. It's a start. One of Simmons' concerns is that we think we can drill our way out of this. Both Pickens and Simmons clearly state that this is a non starter. Maybe we don't know precisely what will work, but we do know what won't work, at least with an acceptable level of certainty.
Demand, as I understand it, is what we need to pay and are willing and able to spend on a barrel of oil. We can desire more oil but unless we have the loot to pay for it there is no demand. As price falls it allows ineffective desire to be translated into real demand as it will be more affordable. Flow remains the same, aside from peak restraint conditions, but price is a variable influenced by those alternate energy replacements. (now if you can see a way of using those alternate energies will forestall the use of coal ... :))
Anyway, without understanding that there is a problem, there clearly won't be a solution.
Right! And without clearly understanding how the problem might be structured there will be no solution. (pretty safe statement there ,eh?)
tstreet-
As a runner, albeit much more casual than you, I just wanted to take a minute and complement your analogy between increased investment in your race prep and increased investment in aging oil fields. This seems like the type of analogy that could be understood by a wide range of people who have just been introduced to the concept of peak oil.
Ms. Jaffe also says in her article:
Has Ms. Jaffe been falling asleep in front of her TV set?
We have always had "leadership". Leadership's answer is "stay the course ... only cowards cut and run."
The problem lies not in our leadership but in our followship, as in lambs eagerly flocking forward to the slaughter house and turkeys gobbling happy songs to each other on the week before Thanksgiving.
____________
Overheard at the Animal Farm: Tom Turkey to his friend Jerry Turkey: What we need is a good old fashion Mangobble project or an Apt-polo project. Why if we can send a turkey to the outer trough (the moon), we can do anything.
This article brings up an interesting paradox for many of the bubble and conspiracy theorists. They see Saudia Arabia as a White Knight whose role is to flood the world with oil so as to rescue us from $200 per barrel oil. On the flip side, however, in the event of a severe World-wide depression and declining demand, they perceive Saudia Arabia's role is to do nothing. This leads them to predict $30 oil, $60 oil and so forth. They base this on a sole data point--the decade of the 80's.
But is it reasonable to believe that Saudia Arabia, and its fellow OPEC members, would not try to defend some price floor? Could they defend a price floor?
I bring this up because I believe there is another data point besides the 1980s, and that is the 1930s.
It's a fascinating history, which one can read here...
http://www.tsl.state.tx.us/exhibits/railroad/oil/page6.html
or here....
http://www.tsl.state.tx.us/exhibits/railroad/oil/page6.html
But the bottom line is this: even in the midst of the Great Depression and in spite of the discovery of the hugely prolific East Texas Field in 1931, the Texas Railroad Commission and the Roosevelt administration did manage to put a floor back under oil prices. So it can be done, even during a prolonged, world-wide depression.
In that turbulent era, as the fortunes of the regulatory attempts to curtail oil production rose and fell, so did the price of oil. It was a wild ride, as these data points gleaned from the two histories cited above amply show:
1929: $1.00 per barrel
Summer 1931: between $0.02 and $0.10 per barrel
Sept 1931: $0.85 per barrel
Fall 1932: $0.30 per barrel
Winter 1932: $0.85 per barrel
Spring 1933: $0.50 per barrel
Summer 1933: between $0.04 and $0.10 per barrel
Winter 1934: $1.12 per barrel
But in the end regulation prevailed. The price of oil was restored.
The oil bubble and conspiracy theorists who rely on the 1980s as their sole data point to model their oil price predictions use an amazingly blinkered version of history. They assume that OPEC either would not come together in attempt to defend some price floor, or could not defend a price floor.
The fact that non-OPEC Russia has indicated much more hawkishness on oil prices over the last month or so also seems to belie the oil bubble and conspiracy theorists' pet nostrums.
Also, it appears that world oil consumption in 1938 was higher than in 1929. And BTW, shortly after the end of the Second World War the US became a net oil importer, more than 20 years before our production peaked.
Down South...I have had many thoughts about SA but I never, ever, considered them a 'White Knight'...I find that suggestion amusing. :)
While in the navy I spent quite a bit of time in the Med keeping an eye on CCCP subs. We were, to a man, well aware of why we were there.
It was about keeping the sea lanes open to tanker traffic then...as it is today.
Lots of cheap money has fled into commodities markets, because there are few rocks to find a possible profit under in these troubled times and lots of slosh. I believe when sufficient refining capacity for heavy/sour crude is on line that OPEC will have more influence than currently have...OPEC has lost some of their pricing power because they do not have enough of the grades of crude that are most in demand. I have made money on gold and am not complaining but I continue to believe that we are seeing a shortage of refining capacity for heavy/sour crude and have reached, are past, or are very close to, PO in sweet/light. I have a strong hunch that there is some 'overshoot' in the oil price now...call it a bubble if you want, I do. Many on TOD believe that the commodities market is immune to manipulation. I believe that no market is safe from manipulation by shrewd people and governments with lots of money, influence, and the ability to write laws and regs that are beneficial to themselves. I don't see my view as a conspiracy theory or even an unlikely scenario.
In any case I am not going to make or lose money in the oil market. I don't have a horse in this race. What you hear from me is from someone that is more interested in how much the dollar/oil relationship will effect gold prices...and, how much our own governments neglect and incompetence is effecting the dollar...which effects all of us.
One of the greatest insights of this article is to point out the extent to which the Saudi royal family finds itself between a rock and a hard spot. The puppet regime is sandwiched between the competing demands of its sponsor, the United States, for lower oil prices and the demands of its own vassals, whose interests are served by higher oil prices.
The situation is complicated for the Saudi royal family because the mystique and prestige of its sponsor's military has been greatly eroded because of its failures in Iraq. As Nathan F. Twining said: "Forces that cannot win will not deter." The natives are becoming emboldened, and it is Bin Landen's avowed life's ambition to overthrow the ruling family.
One of the finest discourses on Saudia Arabia and OPEC and how they can affect the markets is to be found here...
http://www.oxfordenergy.org/pdfs/WPM31.pdf
The reason I like this analysis is because it imagines another framework in which we can fit Saudia Arabia's actions, other than the materialist one of Saudi Peak Oil. I realize such vitalist explanations are anathema to many advocates of Peak Oil, such as westtexas who, back up the thread, expresses disdain for vitalist explanations: "a long time critic of Peak Oil, [Jaffe] attributes the Saudi problems to a lack of investment..." If I were forced to choose, I would have to choose westexas' explanation over Jaffe's, but I nevertheless think it best to be aware that scenarios other than Peak Oil exist that can just as accurately explain the behavior of Saudia Arabia's ruling family. Of course my pet belief is that it is a combination of both materialist and vitalist phenomenon.
The idea the the Saudi Royal family is a US puppet would surprise both of them and the US. By the way Bin Laden doesn't want to depose the Saudi Royal family, he just wants them to pursue a more pure form of Islam.
'The United States of America are my favourite slaves.'
Google it.
Just for the record, I don't believe it is immune. I just believe that there would be evidence of manipulation other than high prices (which can have many other causes). Absent that evidence, I apply Occam's Razor.
As to overshoot in prices, there could be some overshoot in near-term futures prices. Until they settle, they are just peoples' estimates of where prices are going to be on settlement day. But in longer-term futures, I think there is considerable undershoot. I don't it is very likely that oil will only $140/bbl in 2014, which is what futures say today.
I'm very interested in seeing what happens as we switch from light to heavy oil. Coking is a more energy intensive processe than fractional distillation (as least that's my understanding...I'm not in the business). Assuming that's true, EROEI decline will accelerate as we switch increasingly to heavy oil. So far we've mainly dealt with EROEI decline from light fields that are harder to discover/develop or are mature and require additional energy inputs to keep up production. I have no idea how many barrels of heavy oil we'll need to replace each barrel of depleted light oil, but I'm pretty sure it is not 1:1.
Yes, No One.
The dominant class maintains dominance so long as they can render their competition invisible. When the thin veil parts and everyone can see the sham (The Emperor's New Clothes), then the last defense must be "no one could have forseen, no one told me."
The relentless search for truth requires one to remain forever at odds with the dominant order, because the new truth is also just a partial truth, and the new ruling class that emerges will be just as resistant to new ideas.
Already, it is obvious that "Peak Oil" has been appropriated by the rulers -- who not more than a year ago were still ignoring it when they could, and vigorously proclaiming its error when they couldn't. And of course, in becoming part of the dominant paradigm, it loses its clean, sharp edge. In service to The Empire, the scientific observations of peak oil become a Kiplingized Just So story that hardly resembles its parent.
Watch Out! Peak Oilers-- the term is about to become irrelevant.
We have seen the same problem with "organic" as applied to food, and "sustainable" with respect to development.
Pioneers have to work awfully hard to stay ahead of the pack, and to maintain the roughness of their hair shirts, which are forever threatening to become smooth and comfortable.
For one thing, one has to ask continually, "what's the point?" Running water and central heat and easy transportation are really very nice.
Never LNG,
Thank you for putting up the post that I was thinking of. Incompetence is going to become the number #1 excuse for the coming wave of fascism. As it has become the number #1 excuse for the Iraq war in best selling works of fiction like Fiasco, Cobra II, No End in Sight etc. There is a growing understanding by posters who "get it." Cid Yama, DownSouth, Super390, DaveMart, Wolverine and a hand full of others understand that there are a group of elites that are positioning themselves for Peak Oil. "Getting it" politically is as important as "getting it" geologically.
James Woolsey, Buzzy Krongard, James Schlessinger, the CIA, Amy Jaffe, James Baker, Dick Cheney and believe it or not even the grinning chimp boy know that peak oil is here. So why aren't they doing anything about it? The answer is they are.
They now have an army of 21,000 people(Blackwater)--- just one of many private armies that they can employ. The executive orders for martial law have already been put on the books. The FISA bill has been passed. In many different small towns and big cities the Taser guns have been purchased. The elites have been quietly reinvesting their money. Don't get me wrong I don't think they will be successful but I think it is going to be a tough fight to keep our freedom. It's going to be messy to say the least. Am I paranoid? Perhaps but it doesn't mean I am wrong.
I don't necessarily think that these elites all sat around in a room puffing Cohibas and plotting one world government but I do think that there is a growing understanding by the owners of our society who want to keep their wealth and power after a collapse that they have known was coming for at least a decade.
neoconned said: "Don't get me wrong I don't think they will be successful but I think it is going to be a tough fight to keep our freedom."
I've been giving this subject considerable thought the last few days, not just the fact that America's ruling elite now appears hell bent on colonizing its own people, but also whether rulers can successfully do this while simultaneously pursuing a program of external conquest. Reviewing my history books, I find no evidence that similar attempts have met with success in the past. The problem is that if you set out to screw your own people, the internal economy always falters before the imperial mission can be accomplished. Imperial enterprises are extremely costly, and need strong internal economies to finance them.
France
Luis XIV's minister of war, Francois Louvois, "fed the king's dreams of glory" and helped to "bring about the four costly struggles that made France the warmonger nation for over a century and a half." His belicosity won out over the Superintendent of Finance, Jean Baptiste Colbert, who, as Jacques Barzun sumises, "there is no doubt that the aim [of his peaceful plans] was to promote the general welfare."
The wars did anything but "promote the general welfare." Dissention and revolt were the result, as this passage exemplifies:
The end result was of course disastrous for France. A broken, defeated, bankrupt country, Luis XIV had learned that glory cost money, not sheer derring-do: "Victory," he remarked, "lies with the last gold piece."
Spain
AS J.H. Elliot explains in Imperial Spain: 1469-1716:
No middling group of solid, respectable, hard-working bourgeois developed to bridge the gulf between the extremly rich and extremely poor. In Spain, these people, as Gonzalez de Cellorigo appreciated, had committed the great betrayal. They had been enticed away by the false values of a disorientated society--a society of "the bewitched, living outside the natural order of things." The contempt for commerce and manual labour, the lure of easy money from investment in censos and juros, the universal hunger for titles and social prestige--all these, when combined with innumerable practical obstacles in the way of profitable economic enterprise, had persuaded the bourgeoisie to abandon its unequal struggle, and throw in its lot with the unproductive upper class of society.
None of this disabused Spain's monarchy of its imperial ambitions. It pursued global hegemony up until 1640, until the country completely crumbled in upon itself, its armies defeated and its internal economy in shambles.
Rome
There is not as much known about Rome as is known about later empires, and there are hundreds of theories as to its fall. However, in The Fall of Rome and the End of Civilization, Bryan Ward-Perkins concludes,
Three pertinent observations from Ward-Perkins:
1) The credit mechanisms did not exist in Antiquity that would have allowed the empire to borrow substantial sums of money in an emergency. Military capability relied on immediate access to taxable welath.
2) In 444, when Valentinian III instituted a new sales tax, matters had certainly reached a parlous state. In the preamble to this law, the emperor acknowledged the urgent need to boost the strength of the army through extra spending, but lamented the current position, where "neither for newly recruited troops, nor for the old army, can sufficient supplies be raised from the exhausted taxpayers, to provide food and clothing."
3) There was a "close connection between failure 'abroad' and the usurpations and rebellions 'at home'." There does not exist sufficient data to confirm what caused the internal unrest, but it is known that there were slave uprisings as well as other social strife. One thing is for certain, and that is that many of the rank and file were not happy with the status quo, and this discontent contributed greatly to the fall of the Roman Empire.
Good post, this bit is really exemplary of what's happening today, especially in the US:
The elite pay little or no taxes and enrich themselves via the public purse which is filled by the taxpayer. The thing is that the elite have now mastered the technique so well that the taxpayer doesn't even seem to notice or care.
I guess the elite have now learnt that the cycle usually ends in revolt and are now busy preparing for it - at taxpayers expense of course. Having learnt history's lessons they now believe they have the wherewithal to successfully colonise their own people.
As far as I know this the first time in American history that the government has cut taxes during a time of war.
I don't think that the neocons are really concerned with empire. If they wanted to really control the Persian Gulf then they would have operated under the Powell Doctrine and brought in 500,000 troops. Instead we worked under the Rumsfeld Doctrine which was to bring in a slim fighting force and then build it up with KBR, Wackenhut and Blackwater. If they wanted empire they would have started a Marshall Plan, instead we have projects like the Laura Bush Children's Hospital -- hundreds of millions of dollars sunk into a dilapidated structure.
These neocons aren't ultra-nationalists; they are parasites. Much like the House of Saud they will suck away at the host until they kill it or until we brush off these leeches.
One can certainly never overestimate the deleterious effect of incompetent leadership. But is incompetent leadership a cause, or is it a symptom, of a decaying society?
Rome
Ward-Perkins, in analyzing why the Wetern Roman Empire fell and the Eastern Empire didn't:
France
Pierre Schneider, The World of Watteau: 1684-1721,
Spain
J.H. Elliott, Imperial Spain: 1469-1716
While you were waving flags and putting your right hand on you left breast, and watching Faux News and going to Nascar rallies, the Top One percent were fleecing you.
Some say that patriotism is the last refuge of the scoundrel.
I say that patriotism is the last act of an idiot.
Do you really think that rich kids will fight and die in your wars?
Anyway, we will find out tomorrow.
2 pm my time, 8 am your time.
Freddie and Fannie...
lets all see how it pans out...
I reckon on bailout...hocking your kids for about 200 years.
It has to be said though that old Louis was a bit short on full-auto weaponry, nerve gas, cluster bombs, IR and GPS satellites, scrambled radio comms, cell taps, bit filtering firewalls, fingers on the food/power/water supplies etc
Quite a different scenario : ( info x firepower ) - scruples = dominance
A few angry rednecks with pump 12 gauges and deer rifles would be so much duck shooting.