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.

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.

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.

Many on TOD believe that the commodities market is immune to manipulation.

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 believe when sufficient refining capacity for heavy/sour crude is on line that OPEC will have more influence than currently have

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.

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 revolt was put down and the leaders tried and executed. The king was at that time undertaking his second war of annexation in the midst of poor harvests, low prices, and a level of taxation above the people's capacity to pay. In these circumstances, taxation did not cause unrest in Normandy alone. It spurred a debate that brought into question all the current ideas about economics. Why, for example, should the nobles' ancestral tax exemption be continued in a rational economy?

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:

From the moment of his Imperial election Charles V found himself saddled with enormous committments. The struggle with France in the 1520s, the offensive and defensive operations against the Turks in the 1530s, and then, in the 1540s and 1550s, the hopeless task of quelling heresy and revolt in Germany, imposed a constant strain on the Imperial finances. Always desperately short of funds, Charles would turn from one of his dominions to another in the search for more money, and would negotiate on unfavourable terms with his German and Genoese bankers for loans to carry him over the moments of acute penury, at the expense of mortgaging more and more of his present and future sources of revenue...

The payment of the sevicio...was customarily limited to one section of society, the pecheros or taxpayers, while all those enjoying privileges of nobility were exempt... As a result the incidence of the servicios was extremely unequal, both geographically and socially, but the general effect was everywhere to place the burden of taxation on the shoulders of those least able to bear it. Moreover, the procuradores who voted the tax were themselves drawn from the closed municipal oligarchies, most of whose members enjoyed, or were quick to acquire, privileges of hildalguia, and they consequently showed no great compunction in voting a tax which they themselves would not be called upon to pay.

The reign of Charles V, in fact, saw three dangerous developments that were to be of incalculable importance for sixteenth- and seventeenth-century Spain. In the first place, it established the dominance of foreign bankers over the country's sources of wealth. Secondly, it determined that Castile would bear the main weight of the fiscal burden within Spain. In the third place, it ensured that within Castile the brunt of the burden was borne by those classes which were least capable of bearing it.

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,

In my opinion, the key internal element in Rome's success or failure was the economic well-being of its taxpayrs. This was because the empire relied for its security on a professional army, which in turn relied on adequate funding.

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.

Don't look now, but it looks as though TPTB are going to go yet another bridge too far:

http://www.timesonline.co.uk/tol/news/world/middle_east/article4322508.ece

At this rate it will be a miracle if we make it to 1/21/2009 without another major armed conflict breaking out in the Middle East.

Then again, neither of the two presidential candidates has done much to assuage me they will behave more peacefully AFTER 1/21/2009.

... 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.

Nope. At least from the samples available to me, I can assure you the "owners of our society" are for the most part sure of continuing abundance. You have to be a bit of an outsider to see the likelihood of massive systemic failure. That's why so many insiders got so enthusiastically caught up in the tech bubble, the real-estate bubble, and so on.

You're comment about Ghandi reminded me of a demotivational poster I saw once about Che Guevera. Something to the effect of, "Failure: You can spend your whole life fighting the forces of capitalism and still end up being on a t-shirt sold at The Gap."

“First they ignore you, then they laugh at you, then they fight you, then you win.” Except that Ghandi doesn't quite get the last step right.... because the victory is often a false victory.

Or more likely, a temporary one. And then you start over trying the next step and find that you are starting from scratch again. And Gandhi was speaking from a winner's perspective. Usually they fight you, and you lose. But it's still worth trying.