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DrumBeat: December 7, 2008
Posted by Leanan on December 7, 2008 - 9:56am
The singularity: The fantasy and its effect
...There is the perception that technological progress is speeding up. But is it? After one hundred years, we are still dependent on the internal combustion engine for almost all of our land and much of our sea transportation. We were promised miracle cures for genetic diseases a decade ago, but they haven't arrived. After a half a century of research, we expected fusion reactors to be in place. But the latest international project promises to bring us commercial fusion power only by the mid-21st century. In truth, it is not altogether clear that we will ever be able to master fusion energy. Our main fuels by far remain fossil fuels, 86 percent by energy content. And, these fuels are heading toward depletion faster than anyone anticipated as the world economy and population grow, and as more and more people want access to high-energy lifestyles.In reality, technology sometimes progresses in fits and starts, and sometimes not at all. Joseph Tainter, author of "The Collapse of Complex Societies," suggests that we may have reached an era of diminishing returns for technology and for the complexity it fosters. Complexity, Tainter explains, can increase the power and reach of a civilization. But increasing complexity will also eventually have diminishing and even negative returns to a society thereby endangering its very cohesiveness. He cites Roman and Mayan civilizations as examples.
Oil price could fall to $US25 a barrel, analysts say
CRUDE oil prices have collapsed to just above $US40 a barrel as the global recession deepens in the United States, Japan and across Europe.Some analysts are even tipping that prices could go as low as $US25 a barrel next year if the global downturn hits hard in China and OPEC doesn't drastically slash its production levels.
Any optimism that oil prices had stabilised at around the $US50 mark have evaporated in the past week as it becomes clear the US, Europe and Japan, which collectively consumed almost 50 per cent of the world's oil in 2007, are entering their first simultaneous recession since World War II.
China is responsible for only 9 per cent of global oil demand.
Iran lets 'private' Iranian firms trade oil
Iran, the world's fourth-largest oil producer, is permitting local private firms and not just foreign companies to enter the trade in Iranian crude, officials said on Sunday.Deputy Oil Minister Akbar Torkan referred to two Iranian entities now permitted to carry out the business and said it was part of a drive to boost the private sector. But he told Reuters the state would still control crude production.
Iran set for a year of living dangerously
Iran enters 2009 with economic woes to the fore and plummeting oil revenues set to restrict President Mahmoud Ahmadinejad's public spending in an election year marked by continued international tension.
Chavez Says Venezuela Economy to Face Difficult Years
Bloomberg) -- Venezuelan President Hugo Chavez said his country’s economy will face difficult years ahead as the world financial crisis expands and demand for oil, Venezuela’s principal export, wanes.Venezuela is prepared to confront the crisis and should restrict spending to strictly necessary items while saving as much as possible, Chavez said in comments on state television.
Arabs urged to pursue petrochemical projects
Gulf states and other Arab oil producers need to push ahead with costly petrochemical projects to diversify their economies despite the ongoing global financial crisis, according to an official study.Although the tightening in the world credit markets could hamper the implementation of some of those projects, Arab states could still resort to the equity option by inviting more foreign partners into such ventures to secure funds, said the study by the 10-nation Organisation of Arab of Petroleum Exporting Countries (Oapec).
More than 160 US, NATO vehicles burned in Pakistan
PESHAWAR, Pakistan – Militants torched 160 vehicles, including dozens of Humvees destined for U.S. and allied forces fighting in Afghanistan, in the boldest attack so far on the critical military supply line through Pakistan.
Sudan confirms troop build-up in oil region
KHARTOUM (Reuters) – Sudan's government on Sunday confirmed it had moved troops to a volatile energy-rich central region, telling state media it wanted to halt "feverish attempts" to attack the area by Darfur rebels.The deployment into South Kordofan raised tension in the province that contains key oil fields and borders some of Sudan's most sensitive areas, including the western Darfur region, southern Sudan and the contested town of Abyei.
New US military report on global warming raises worry
WASHINGTON - A new US military report has come under scrutiny for asserting that the scientific data on what is causing global warming is "contradictory" - a position one leading specialist said indicates the government still hasn't fully embraced the urgency of climate change....A section of the 56-page report on climate change and natural disasters prompted criticism yesterday from some leading specialists who said that spreading the inaccurate perception that the causes of climate change remain an open question could result in government agencies not taking the issue seriously enough.
Shell consortium to pull out of UK wind project
LONDON (Reuters) - British oil major Royal Dutch Shell Plc confirmed on Sunday that the company and its partners have withdrawn from a major UK wind energy project.The consortium of Shell, Scottish Power and Denmark's Dong Energy have abandoned the Cirrus Array project off the Northwest coast after denying a month ago that it had exited the project.
Repsol Boss Snubs The Russians
Spanish oil and gas company Repsol's chairman, Antoni Brufau, said last week he would resign if the company did not remain Spanish, independent and private: "If these conditions are not met, I will no longer head up the company." The statement appears to underscore Spaniards' unhappiness about a possible sale of a substantial stake in the company's to Russia's Lukoil.
India: Commuters flock to fill up their petrol tanks
CHENNAI: N Chokalingam is a very happy man. As he oversees dealings in the Bharath Petroleum outlet at Nanandanam, this manager’s face breaks into a smile. “Look at the vehicles streaming in. Sales are definitely going to increase,” he says.The outlet that sells an average of four kilolitres a day had sold five kilolitres before Saturday evening. “There will definitely be a 25% increase and people will stop rationing of fuel,” he adds. With petrol prices and diesel prices decreasing by Rs 5 and Rs 2 respectively, most petrol bunk dealers in the city echo Chokalingam’s view.
Oil’s fall pinches Latin nations
BOGOTÁ, COLOMBIA — During the five-year bonanza of rising oil prices, resource nationalism took hold across Latin America, and energy-producing countries boosted spending, raised taxes on foreign oil companies and salted away billions in petrodollars.But with the onset of the global economic crisis and the collapse in oil prices, Venezuela, Mexico and other regional energy producers are feeling the squeeze.
If prices don’t rebound soon, the countries will be forced to cut spending on popular programs or dig into their reserves. Governments also will probably see slowdowns or cancellations of energy projects ranging from explorations to biofuels plants.
"The old assumptions are out the window," said RoseAnne Franco, a Latin America analyst at PFC Energy in Washington. Lower prices "are forcing a very strong readjustment for all concerned.’’
List of delayed Gulf oil-refining projects grows
The list of delayed Gulf oil-refining projects is growing as demand for fuel shrinks rapidly throughout the industrialised world.
John "Nuke Bailout" Bryson must NOT be Secretary of Energy
John Bryson will forever epitomize the bailout of the nuke power industry and the horrific catastrophe of electric utility deregulation, including the contrived energy crisis that cost Californians tens of billions of dollars and allowed them to be robbed by the disgraced Enron.
I suspect that market forces would have worked to keep the cities and suburbs in balance, that they would have fostered the co-existence of multiple modes of transit between them, which in turn would have kept center cities and surrounding towns both distinct and compact, both internally walkable and efficiently linked by road and rail. Instead, the federal government catered to the fantasy that no one should ever have to walk again anywhere. In turn the built environment transformed into a place where no one can ever walk. A byproduct of all this is that the land between distinct urban zones that used to be devoted to local food production (“farms”) have been gleefully paved over to cater to the auto-dependence fetish.
Think tank: A high energy solution - Cliff-top reservoirs could meet all of our power needs
Ireland has many high cliff areas, so my proposal would be to build vast reservoirs on top of these cliffs and use wind power to pump salt water to them from the ocean. These reservoirs can be thought of as energy-storage areas.The principle is simple: during times of high-wind activity, turbines would provide the energy to pump the sea water from the ocean, thus filling the reservoirs. In times of peak-energy demand, the reservoirs could be emptied.
Will solar power ever be as cheap as coal?
“Solar power is the energy of the future – and always will be.”That tired joke, which has dogged solar-generated electricity for decades due to its high cost, could be retired far sooner than many think.
While solar contributes less than 1 percent of the energy generated in the United States today, its costs are turning sharply downward.
Ancient skills 'could reverse global warming'
Ancient techniques pioneered by pre-Columbian Amazonian Indians are about to be pressed into service in Britain and Central America in the most serious commercial attempt yet to reverse global warming.Trials are to be started in Sussex and Belize early in the new year, backed with venture capital from Silicon Valley, on techniques to take carbon from the atmosphere and bury it in the soil, where it should act as a powerful fertiliser.
The plan is to scale up rapidly into a worldwide enterprise to reverse the build-up of carbon dioxide, the main cause of global warming, in the atmosphere and eventually bring it back to pre-Industrial Revolution levels.
In China, OPEC’s nightmare comes true
China’s decision to link domestic fuel prices indirectly to the international crude oil market, subject to a price cap, while hiking the consumption tax on petrol and diesel and phasing out a variety of road tolls and other fees shows Saudi Arabia’s worst fears about high prices are demand destruction are starting to come true.It seems likely to confirm the kingdom’s determination to see prices stabilise around $75 per barrel, well below recent price peaks, and far below the level sought by some other OPEC members, as well as international oil companies and advocates of alternative energy.
Crude’s collapse oiled the Bank’s wheels
T Boone Pickens, the legendary US energy investor, said oil would never again go below $100 a barrel and his view was echoed by many lesser lights. Some journalists went out of their way to deny a speculative element in the spike, even as some investment banks continued to pump up the oil story and funds poured into commodity-index futures. Arjun Murti, Goldman Sachs’s energy strategist, said the price could reach $200 in the second half of this year and plenty of rival banks pushed the rising oil story. Jeff Rubin, chief economist at CIBC World Markets, was also a $200 man.Peak-oil enthusiasts explained every price rise as further evidence that global production had reached its maximum. Weekly rags spouted “sell your house, buy commodities” nonsense. I hope nobody did.
How Will Temporary Decline in Oil Prices Impact Energy Sector?
Oil prices have fallen off a cliff recently and everybody’s breathing a sigh of relief as prices tumble at the gas pump. Late last week I read on Bloomberg that Francisco Blanch, a commodity strategist at Merrill Lynch, is forecasting a market bottom in the $25 range and a 2009 average price in the $50 range. The relief is welcome but I have enough experience in the oil business to know that we’re merely experiencing that pleasant calm that comes when the eye of a hurricane passes overhead. This is no time to go out and buy a gas-guzzler!
I’m not about to call an oil bottom but there certainly are some signs that suggest the bottom is drawing near. I remember thinking oil was going to bottom at 95, then 60, and here we are at 40 and all the peak oil enthusiasts are saying we are going to rebound just as fast as we have collapsed. Here’s my take on where we stand.
Regulators give environmental OK to LNG plant
BALTIMORE (AP) — A proposed liquefied natural gas terminal near Baltimore cleared a key regulatory hurdle Friday when the Federal Energy Regulatory Commission concluded it would not be too harmful to the environment.
More consolidation likely in oil industry
HOUSTON -- Big Oil is set to spend billions on new exploration in 2009, but in addition to ocean beds thousands of feet below the water's surface, major producers are surveying the balance sheets of vulnerable companies in the sector.
North Sea oil firm up for sale
Oilexco has been caught out by a dwindling cash pile, a large cost base and a heavy reliance on the capital markets to fund an aggressive drilling programme. It needs to make nearly $600m in debt and rig-contract payments in the next year alone, according to company filings. The oil price, meanwhile, continues to plumb new lows, hitting $39.57 last Friday.
Brazil’s new oil reserves still buried in doubts
BRASILIA: Despite tumbling oil prices, Brazil’s government insists it will develop massive offshore oil deposits, but critics say geological hurdles, regulatory uncertainty and depressed markets could delay the country’s hope for a fast track to oil wealth.
Libya could buy up to 10 pct of Eni - ambassador
ROME (Reuters) - Libya would be interested in buying up to 10 percent of Italian oil giant Eni, the North African country's ambassador to Italy said in an interview published on Sunday.
Detroit has run out of road. The car's future lies in Europe
The world is near peak oil production. Energy prices will be volatile, but this summer's top figure is a forerunner of what is to come. Cars and, with them, concepts of how mobility is to be created have to change. That, in turn, demands a new role for public leadership. Governments, consumers and companies must agree a new vision and then it must be regulated and legislated for.It was telling that as Detroit's CEOs were suffering humiliation in Washington, Germany's BMW was unveiling a battery-powered Mini E two years before GM's Volt hits the streets - and with treble the range. If anything, the German love affair with the car trumps America's and its car companies try to resist regulation no less aggressively. But European political systems are less open to being completely bent by corporate lobbying and regulation is seen as more legitimate.
Argentine automakers to sell at cost, protect jobs
BUENOS AIRES (Reuters) - Argentine automakers will sell basic models at cost through state-subsidized loans in a plan to protect jobs in Latin America's third-biggest economy from the global economic slowdown, government officials said on Saturday.
Private schools, parents feel pinch
Parents this year have seen their investment portfolios dwindle, food prices spike and gasoline costs seesaw wildly.As the economy worsens, households with children in private schools are digging deeper to pay thousands of dollars in tuition. Lower Shore private schools say requests for financial aid are up, and they're bracing for potential drops in enrollment when parents sign next year's contracts in the winter and spring.
How a 24-year-old secret technology can save the planet
Now, suppose Hansen skipped the climate science lecture and simply told world leaders that there's now a new technology available for generating electric power. It's cheaper and cleaner than coal, produces minimal waste and generates power 24/7. The fuel supply is virtually inexhaustible and is safer than coal. The technology uses as fuel the long-lived "waste" from today's reactors, and you can build a plant anywhere you can locate a coal plant.What world leader could resist such a pitch?
Melting ice may slow global warming
Collapsing antarctic ice sheets, which have become potent symbols of global warming, may actually turn out to help in the battle against climate change and soaring carbon emissions.Professor Rob Raiswell, a geologist at the University of Leeds, says that as the sheets break off the ice covering the continent, floating icebergs are produced that gouge minerals from the bedrock as they make their way to the sea. Raiswell believes that the accumulated frozen mud could breathe life into the icy waters around Antarctica, triggering a large, natural removal of carbon dioxide from the atmosphere.
Native hunters say climate affecting herds
POZNAN, Poland — Chief Bill Erasmus of the Dene nation in northern Canada brought a stark warning about the climate crisis: The once abundant herds of caribou are dwindling, rivers are running lower and the ice is too thin to hunt on.
Four harsh truths about climatic change
Scientists are really scared. Their observations over the past two or three years suggest that everything is happening a lot faster than their climate models predicted. This creates a dilemma for them, because for the past decade they have been struggling against a well-funded campaign that cast doubt on the phenomenon of climate change.
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Another telling quote from the Oilexco North Sea story linked above
North Sea oil firm up for sale
I call into question the idea that the problem is with the fundamental model of exploration and production companies.
At least those businesses are actually doing something productive by finding and extracting petroleum.
The problem lies in the financial shenanigans cooked up by the Wall St. wizards who won't be happy until they've brought down every productive business on the planet as collateral damage.
If you manufacture, grow, build, or extract something as your "fundamental model" you stand a very good chance of being destroyed by those in the "industry" of producing debt and all the accessory financial nonsense we've witnessed over the last decade.
Nice catch, Catskill.
I'm about half way through Kevin Phillips' Wealth and Democracy where he develops this theme at some length:
Once these banking and finance types get their clutches into a country, it's pretty much the kiss of death.
Re: Crude’s collapse oiled the Bank’s wheels (linked uptop)
Like a lot of other Peak Oilers, I am not surprised that we are seeing price volatility, but I am surprised at the scale of current price decline, but every Peak Oiler I know argues about flow rates first, and then discusses rising oil prices and price volatility. Notice that the Cornucopians are treating numerical flow rate data like the data are radioactive? Instead, they are framing the argument purely in terms of price.
After two years of slight declines, through August of this year (average to date) world crude production (C+C, the stuff that accounts for about 98% of the input into refineries and the stuff that we use for the index price) is up by about one half one percent over the 2005 annual rate. Basically, we will have seen four years of flat crude oil production, with 2006 and 2007 showing declining net oil exports(EIA). Total liquids is up a little more than crude, but Simmons attributes a good deal of the NGL bump to the dying gasps of many large oil fields as the gas caps are blown down.
imo, the markets are way too focused on demand, of late. nearly every drop in crude oil is blamed on(or credited to) reduced demand, current and going forward. seldom do i see anyone in the msm discuss supply and i suppose that is a reflection of the assumption that supply follows demand i.e. ever increasing.
My guess is that the production drop due to reduced demand will be from October forward, but in any case if we take the 2008 EIA data (subject to revision, frequently downward) at face value, the 2005, 2006, 2007 and 2008 annualized production volumes are as follows (C+C, using 365 days for 2008):
2005: 26.9 Gb
2006: 26.8
2007: 26.6
2008: 27.0*
*Based on preliminary data through August
If we round off to the nearest billion barrels, it's four years at 27 Gb per year. Alternatively, the cumulative shortfall between what we would have produced at the 2005 rate and what we actually produced would be 300 mb, using 27 Gb for 2008.
Of course, different crude oils trade at different prices, but if we use Brent as an index price for comparison purposes, the total dollars paid for crude would like like this (assuming $100 for 2008):
2005: $1.48 Trillion ($55 per barrel)
2006: 1.74 ($65)
2007: 1.92 ($72)
2008; 2.7 ($100)
This pattern of flat to declining production versus rising oil prices is exactly what we saw in the initial Texas and North Sea declines, two regions developed by private companies, using the best available technology, with virtually no restrictions on drilling:
http://www.theoildrum.com/files/TexasAndNorthSea.png
If we use 27 Gb for 2008, we would have increased annual production by 100 mb (per year) relative to 2005, so we paid (for comparison purposes) $1.2 trillion more for an incremental increase of 100 mb, or about $12,000 per barrel of incremental production.
However, the reason for using cumulative production is because that directly relates to the area under the production rate versus time curve, which is the argument that Hubbert made back in 1956. The bottom line is that the crude data show a cumulative shortfall relative to 2005, even with the contribution from unconventional production.
I find it fascinating too the focus on pricing we see. Analytically, everything revolves around supply and availability. Monetary worth is purely a side effect and not very important in the greater scheme of things. Economists show their stupidity by always referring to "fundamentals" when in reality they have yet to come up with any kind of model for oil depletion. It could be the case that no one field of study uniquely covers constrained resource exploitation. Economics definitely doesn't cover this.
This is the sort of empirical analysis that puts the lie to all the current chatter in the media that the days of high oil prices are over. The plateau cannot be explained by demand being flat as clearly reflected in the exponentially increasing price. Therefore the plateau was maintained by the development of marginal and unconventional oil fields, which of course was expensive and solidly in the realm of diminishing returns. I expect the plateau to turn into a decline now that the price does not justify expensive field development (exhibit A: the Canadian tar sands). The plateau is a transient feature regardless of oil price but the current financial meltdown will shorten its life.
Good points, Westexas.
I wonder what's happening to spare capacity. When the public works are in full swing from Peoria to Paris to Peking (or is that Boston to Berlin to Bejing?)how long will it be until the oil industry is back to the high cost barrel?
Apart from the availability of financing, it seems to me that the industry will not be well served by too much spare capacity, as this would keep the price of oil down, at a time when higher prices are required to overcome the cost of the marginal barrel.
The markets and the extended "perception space" as manufactured by the MSM are in total denial about supply. We will have shortages if oil prices stay low. Unlike the 1980s there is not enough spare capacity and the much discussed demand destruction in most of the world is not destruction at all, but a transient driven by price. Even if Americans reduce their oil use due to the recession it does not mean that the rest of the world will reduce by as much or more. There is always a need for oil.
The global economy is still expected to grow next year is it not? Why would that cause a decrease in oil consumption? And especially now that oil prices are at multi-year lows? As long as the global economy is growing we will still see stable or increasing global oil consumption next year.
The depression we are headed for will be global. Everyone will be reducing demand involuntarily due to a collapse of purchasing power. Remember that demand is not what you want, it what you are ready, willing and able to pay for. As the credit bubble implodes, taking the vast majority of the effective money supply with it, demand will fall dramatically, but so will supply as falling oil prices make more and more projects non-viable. We will also see a significant impact on supply from lack of maintenance, fighting over control of infrastructure, sabotage by those with nothing left to lose and piracy in an era of neo-mercantilism. The result will ultimately be far higher oil prices that will price ordinary people out of the market almost completely.
You might be interested in today's Debt Rattle - Energy, Finance and Hegemonic Power. Thanks to deflation, demand will collapse first, followed shortly thereafter by supply.
I have started reading the TAE daily and I commend you for your efforts to educate and decipher a complex situation. I have to highly disagree with the following comment you have made.
The anglo saxon countries have most definitely NOT placed all their trust in the markets. As of March 31, 2008, U.S. Forces were stationed at more than 820 installations in at least 39 countries, many of them are in or close to countries with vast energy supplies, for more http://www.financialsense.com/series3/part2.html , the invasion of Iraq with possibly the largest/2nd largest reserves in the world along with the direct influence that the Americans have on Saudi Arabia mean that the Anglo Saxon nations aren't relying on markets alone.
You also go on to say,
So you say China's strategy is successful and that there will be a transfer of power to the East, yet just on your blog on the 2nd of December Illargi wrote
So power is going to transfer to China while it is facing civil war and its economy is more vulnerable to a global slowdown than America's? HOW?
The US relies less on markets than other Anglo-Saxon countries, but still leaves its domestic population to the mercy of the market even as it engages in foreign occupations in order to ensure its military will be well supplied.
My view of China is that it is facing its equivalent of the 1930s - a set back on the road to the Chinese century as the Great Depression was a set back on the road to the American century. That will likely mean violent upheaval, especially in a nation with a large surplus of young men, but China remains the empire in the ascendancy (see Entropy and Empire in the TOD archives).
What the US and Europe are facing in this global credit crunch is far more terminal IMO.
In order for China to remain on the ascendancy,
1) It requires access to Cheap, abundant energy - the age of cheap energy is passing by.
2) It would mean a rising standard of living for its population, meaning greater consumption, better health care, better infrastructure etc. If everyone in China were to live the lifestyle of the average American/ European that would require 2 earths I believe?
3) China relies heavily on exports. It must stoke domestic demand, which would be very troublesome to do with a restive population and potential civil war, this would mean their economy could quite possibly collapse.
4) China has an aging population due to it's one child policy. An aging population can not be the key to ascendancy as Japan found out in the late 80's.
It is all to easy to dismiss Europe and America but the history of the World is filled with periods of long depressions and panics and from the ashes the phoenix arises. It is true that we may never reach the heights that we reached in the past few decades but there will still be a rise at some point.
Also one thing that might not be well known is that China is far more corrupt than the West (this according to my Chinese friends and from reading online). Things such as freedom of speech, freedom of beliefs etc are very important in the growth and development of any nation. Also one mustn't forget that China lies next to India and Pakistan and these two could get easily embroiled in a Nuclear conflict. Asia is not as strong as one thinks. It is still highly dependent on the west for technology, key ideas, innovation, culture, literature, (infact where did the idea of blogging come from? ;-) it's become a cultural phenomenon, and it originated in the West)
American culture is the dominant cultural force in the world. People still want to live the American life, listen to american music and rock bands, watch american movies. Although for sports most of the world turns to britain and spain (soccer). I don't see any cultural shift that marks the rise of ascendancy i.e. people turning to China for ideas in innovation, entertainment, technology etc. Western culture is fluid and dynamic IMO, China is still very rigid in terms of its rote and memorize education system.
Infact I would not be surprised if you asked a group of 1000 random people, which country they would prefer to live in, in the next 50 years, and you told them all about peak oil, its implications etc. Most would choose Europe and America IMO.
I would write off todays ponzi scheme global economy, but I would never say that the US and Europe are in terminal decline, simply because over the last few centuries they have led the way and IMO will continue to do so, because they adapt faster and information flows more freely and the culture is not rigid.
I am not arguing that China will claim any kind of dominance now. Their economy is about to collapse under the weight of over capacity and there will be serious civil strife at the very least. In the longer term I see them assuming and consolidating hegemonic power, but that could take decades. We will have a chaotic interregnem first, probably culminating in a large scale war. I can see China emerging from that as the dominant power, as the US did after WWII, although the Chinese century could be a pale shadow of the American century due to energy limitations.
The US and Europe are economically hollowed out. There is the appearance of great wealth, but much of that is an illusion based on credit that will destroyed in the great deleveraging that is now underway. Of course they are currently pleasant places to live, but their future is not so bright. Europe appears headed for a future of balkanization and the US for fascist theocracy, following in the footsteps of Spain after the collapse of its empire.
To take your points in order:
1) It is clear that oil is at or near it's peak, and that gas probably is from conventional resources at least, although methane hydrates may alter this picture, albeit at unknown cost to the environment.
2)Figures such that it would take 2 earths for the Chinese to live at American or European standard's need a helping of several pinches of salt.
For a start, even when all allowances are made for outsourcing of energy intensive production, it is clear that a high standard of living costs very different amounts of energy in Europe and America, and even more so in Japan.
Secondly if energy is more expensive then they would be looking for ways to minimise it's use whilst still living better - for instance today it was announced that China is to institute progressive taxation of motor fuel, and a major new investment in rail of several billion pounds was announced.
For other resources, it is also clear that the strain on the environment from a Swedish style system of regulating inputs and outputs for things like forestry, and later sewage would lead to far less impact than many alternatives.
The nuclear industry in China is also moving far faster than in the West, and is rapidly accumulating critical mass, such that plant will be more and more able to be produced rapidly, and the expertise gathered should enable the introduction of new, more efficient designs.
Coal gassification may also become important.
So IOW the oil peak does not necessarily imply that sufficient energy resources will not be available, although the cost may be higher than recent fossil fuel prices.
3)A rapid fall in exports will certainly put great strain on the Chinese economy, but it is a rather better place to come from than the West not producing much.
With great difficulty, but still attainable, is to transfer that production to producing more goods for their own consumption and improving their infrastructure, for instance in energy.
4)The situation of China and Japan is very different.
You argue that the large population of China will impose too much strain on the environment.
Well, in that case the reduction in birth rate has a very positive side to it, and not the purely negative implications you draw from it.
In some ways it will make things a bit tougher, but overall must be a good thing.
In addition to the above considerations, the world is moving to a more Government directed economy, as the fissures appear in the old order.
China has much more recent experience in controlling it's economy in this way.
Maybe it will collapse, but it seems in a stronger position than most in my view.
Hello Davemart
IMO the west still produces a lot, it is Germany that is the world's largest exporter and not China. Also China is hugely dependent on Australian minerals and resources. And I think that America exports more now than it did at the so called height of manufacturing?
Western countries are World leaders in computing - Microsoft (Ok, ok, Apple fans but they are the "leader" so far by volume), IBM, Oracle.
For what it's worth, American car manufacturers are still the biggest in the world by volume.
Of the worlds top 20 biggest pharmaceutical companies, 19 are Western Based, one is Japanese.
The West still leads the way in terms of engineering and transport think of firms such as Rolls Royce, Boeing and Airbus.
The West still leads in terms of education exports. Think Harvard, Yale, Oxford, Cambridge etc.
Western countries still lead when it comes to Nuclear, France comes particularly to mind.
The West still leads in terms of literature in terms of the sheer number of books produced and the creative freedom that it allows, the number of ideas that flow through TOD are incredible.
Just from an outsiders view point, back home in Kenya, we still rely to this date on the railroad system that the British left us a century back. In India if i'm not mistaken, there has been very limited modernization and they still rely on the railway system that the British left behind.
IMO every country faces a potential collapse but I do believe that the survival power of the West is underestimated. It's manufacturing capacity is vastly underestimated. There are so many financial sites out there that were predicting the demise of the dollar and now its the Euro, there are many blogs out there looking for the collapse of America and all of a sudden it's Australia or NZ which face massive currency risks. IMO even though Iceland went bankrupt, they will not see and feel the true poverty that people in Zimbabwe face for example due to support from the IMF and Europe.
I have never been to America but American ideas and culture have greatly shaped my world view. Maybe there is a lot of anger in America, beneath the surface, at where the country is headed, how people have become mindless shopping zombies, the rise in the cost of living and how the middle class is getting raped. I see it in many blogs and forums. Don't really know what to make of it. Still developing thoughts on that.
Yep, the West still produces a lot, and France anded Germany are in relatively favourable positions, IMO.
However, my intention is to focus on China in this discussion. I don't think it will become a world-wide hegemonic power such as America is for the forseeable future, but many here regard that as undesirable anyway.
On a more localised basis, the problem with selling Chinese goods is not that people don't want them, it is that they are loosing their ability to pay for them.
So there would be good reason to think that trade with Australia will remain vigorous, as China wants the resources, so you may end up with a Far-Eastern economy, rather than the present world economy.
As America's arm gets shorter, Chinese influence will likely increase in the region, so it seems doubtful that environmental concerns will lead to Australia restricting exports of coal and uranium - with China hungry for them, that would hardly be politically advisable.
France is still the number one power in nuclear energy, as it's build experience is more recent than the US and it's nuclear infrastructure including personnel is in a more ready state to build reactors as it has recently been involved in builds.
Japan also has recent experience.
Just the same, EDF puts present European capacity at 1 reactor per year, and hope to build it up to 3 over a few years, as against 5 a year at the height of their build in France alone.
Incidentally, that is not far off of American capacity, where Alan from Big Easy informs us that a study puts the number they could build in a decade at 8.
In China, they have been building a number of reactors, using several technologies and pretty much on time and to budget.
This capacity will rapidly expand. They are building production lines capable of 1-2 reactors a year, and plan ten lines by 2020.
They are also moving to pebble bed reactors which are mass-producible, so that would go on top of their projected capacity of 10-20 reactors a year by 2020.
These things are cumulative, so it should mean by around 2030 they should be able to build around the same number of reactors as they currently build coal plants.
This increasing expertise will also mean that they will develop the design expertise to build more advanced reactors such as Molten salt reactors and metal cooled reactors.
In my view both cheap fossil fuels and political opposition from the coal industry, together with an obstructive and incoherent regulatory regime were the chief obstacles to early prototype reactors on these lines in the West.
The economics of nuclear power are also treated rather unfavourably by Western accounting systems for similar reasons to the unfavourable accounting treatment of renewables.
Costs are amortised relatively quickly, which is unfavourable for resources with heavy capital costs up-front.
A reactor lasts around 60 years, or 80 years projected for the latest designs, so after the capital costs are amortised the costs are very low indeed.
That is why France has some of the cheapest power in Europe, although the build in the 70's was probably 'uneconomic' against then fossil fuel costs in the late 70's and early 80's.
Similar considerations would apply to Chinese reactors. It will cost a lot to build up the fleet, but once built up then costs should be low, so it should not be the end of 'cheap energy'.
Similar considerations apply to decommissioning and waste storage costs.
Although many 'greens' may not like these ways of dealing with the waste, I see no reason to think that China will not use cheap methods.
If a reactor is decommissioned you remove the fuel, and then leave the structure for a long time, and it costs little if you do not go in early and have to deal with high levels of radioactivity.
For waste, the cheap way of dealing with it is to put it in cooling tanks for a few years, and after that put it in casks.
The cost is minimal.
This is far from saying that nuclear technology is the only string on China' bow.
One of the arguments made to contend against the increasing energy efficiency of the West and Japan is that a lot of the energy consumption is displaced by producing the goods in the Third World, a great deal of this from China.
Well, that cuts both ways, and if the West can't afford so many of the products then China will have large surpluses in it's energy resources for use for other purposes.
Energy use is also low per capita.
In many ways China is already at the point that many ecology minded folk want the West to move to, with low energy consumption, no extensive suburbs, most people being in touch with growing their own food, heavy reliance on public transport, the world's highest production of electric bikes, massive use of residential solar thermal hot water heating etc.
They also have a very large wind-power build and are the biggest builder of batteries and solar panels.
Finances are also a lot stronger in China than in most places in the West.
None of which is to argue that it will be easy for China, or that successful transition is inevitable, but the prospects do seem relatively favourable.
Hi Davemart and Stoneleigh,
This is the view I am gathering, on the one hand China is seen as the new power, the rise and rise and rise of the Middle Kingdom. On the other I see a China being constrained by a resource crunch, pollution and increasing internal unrest.
One of the really confusing things I find is that there are predictions being made that lie in direct contradiction to each other.
Fair enough that China is currently investing heavily in Nuclear, Renewables, Wind Farms, batteries and solar panels. This assumed trend depends upon the fact that the country doesn't get embroiled in a civil war, a great depression or into resource wars with so far stronger military powers e.g. the USA or Russia. If any of these three were to happen, all bets are off on China's possible favourable transition as the countries resources would be diverted or put on hold indefinitely.
Energy use is indeed low per capita but NOT at the center, where power and wealth are concentrated. If the center breaks down eg Beijing and Shanghai, the rest of the country could easily follow suit as the center is as vulnerable to energy needs as New York or London or Tokyo.
Also according to Time Magazine, there are I believe 70,000 "Mass Protests" in China every year. That's nearly 200 protests a day that the authorities have to suppress. With the recent slowdown to 5% growth (I don't believe the stats, I assume they are in recession) we are already seeing massive protests and discontentment in China. What happens if a great depression occurs? The fall of the Communist Party is entirely feasible. What would this mean for their energy use, economy, growth and alternative energy?
I disagree that China's finances are stronger than the West, the stock market has fallen much further, almost 65% last time I checked. Also their banking system is far more opaque than even America's. And the Chinese are printing money now, maybe at an even faster rate than the West. Their currency did depreciate slightly last week.
Also my knowledge of Nuclear power is very limited, but from what I know, it requires massive amounts of fresh water. China has severe water problems. This could seriously constrain their ability to develop nuclear power in the future. One drought, global warming kicking into high gear and the whole scenario can change.
Chinese cities are hardly as dependent on heavy energy use as Western cities, and more especially not than American cities.
The introduction of the car has simply been too recent, and densities are far higher.
Public transport and bicycles were almost the only means until recently, and still move the vast majority of people.
I am not sure I would describe Russia as being massively more powerful than China, and if there is a gap it is closing rapidly.
It seems doubtful that the US will be able to maintain it's present armed forces, as they can't be paid for - it is Chinese and Japanese funds which allow their maintenance!
The potential is certainly there for breakdown, but perhaps to a degree the Chinese are immunised from such tendencies, as they have recent horrific experience of a divided society fighting amongst itself.
It would seem to me that the likeliest result of a failure of the Westernising, export led model would be the ascendency of the left, as moderniser's ideas would be discredited.
Control would likely be very severe, and no dissent tolerated.
This might have severe negative consequences for the economy in itself, but might reduce the tendency to disintegration and should allow the transfer of resources to infrastructure.
One of the biggest reasons that the Chinese are reluctant to spend is that they have to have money for medical emergencies, and state provision of this would both raise internal Chinese demand directly and give individual Chinese people more freedom to spend.
Although it is true that not everything in the Chinese financial garden is rosy, just the same the Central budget is in surplus, China has been producing surplus goods and exchanging them for dubious assets in the West.
IOW China has the problem of diverting production to internal demand, which is surely a far easier problem than the Western one of living beyond their means.
As for nuclear power and water use, the reason most of them use a lot of water is simply that that is the cheapest way of doing things where it is available.
Incidentally, it only 'uses' the vast majority of the water in the sense of raising it's temperature somewhat, and there is good potential to make use of this warmer water to keep greenhouse temperatures up a bit, and so on.
Most of the biggest users of energy are near the coast, so sea water can be used.
If not, at a slight premium dry cooling can be used:
http://www.nrel.gov/docs/fy06osti/40025.pdf
http://www.powermag.com/water/1361.html
Droughts where water is usually abundant have caused issues with water use, rather than any inability to design around lower water use.
To the extent that nuclear replaces coal, the water for cooling is being used anyway.
Similar considerations apply to solar thermal, where some of the less populated areas have good potential.
Many thanks for your considerable input Davemart, certainly plenty to think about. Still a newbie in terms of the more technical stuff on energy. So I will have to dig deeper into this.
In terms of car use, Just Beijing by itself has about 3.5 million vehicles for a population of 16 million. In addition, about 1,200 new vehicles take to the roads everyday. This according to last years statistics according to http://news.xinhuanet.com/english/2008-11/19/content_10382874.htm
According to the WEO 2008 Cities contribute to 67% of world’s primary energy demand or equal to 7,903 Mtoe.
Also according to the WEO here, http://www.gcp-urcm.org/Main/TheWorldEnergyOutlook2008
So are Chinese cities really that independent of heavy and intensive energy use? The data seems to suggest that the cities are really energy sucking centers.
One of the key points that I would like to make is that the new, rich urban middle class and elite live a lifestyle equal to or surpassing their Western counterparts. In the last 20 years they have seen far greater improvement in their country and lifestyles than have their Western counterparts.
So they might be in for more of a shock than the West? There rise in the past few decades has been meteoric.
Most of rural China might be on bicycles and foot but ultimately it is the Center that holds the key to the stability of the country. And Beijing, Shanghai and Hong Kong are highly dependent on cheap, abundant fossil fuel energy as well.
You also state the following,
Seems somewhat contradictory as if they do impose strict and harsh controls than wouldn't that make the Chinese even more reluctant to spend? So on the one hand they require people to spend more to stimulate domestic demand on the other hand they don't yet have the funds necessary to create a national health care system so they are entirely dependent on exports?
Plenty of people use cars in Chinese cities, just as they do in British cities.
That does not mean that it would be impossible to get around without them.
The high density of most cities in the UK make public transport very practical, even if less convenient than a car, and the still higher densities in Chinese cities make that even more so.
I would be more concerned with diesel for use in trucking, but the rail system is being rapidly expanded.
Strict and harsh controls do not necessarily imply that people would be reluctant to spend - Chile under Pinochet springs to mind.
Wages in China have hardly risen for years, so a modification of present circumstances and reduced inequality might have positive as well as negative effects.
A lot of the money needs to go to infrastructure in any case, and so expenditure can be centrally controlled rather than a matter of personal choice.
I'd be curious to know what it is that whoever downrated my posts feels is abusive or against site rules, as that is the purpose of the rating system, rather than as a general expression of disagreement.
BTW, It appears that China is also the number one in geothermal energy, although it is presently a very small proportion of total energy:
http://en.wikipedia.org/wiki/Geothermal_power_in_China
China is towards the forefront of most renewable energy resources and advanced energy technologies.
From the above link on entropy and empire, it is written,
Looking at the above, the political centre in the article is referred to as the US "Empire" and it is seen as using it's influence to suck resources towards the center.
Now, in the above article, replace the center with Beijing/ Shanghai and the third world periphery as the poorer provinces of China. You get the same situation and possible collapse, but within one country. China depends on cheap rural labor to power its growth. Massive amounts of resources go from its external provinces to the center, think of the Tibet situation? What about the way in which the government forced millions of their land during the construction of the three gorges dam. These people "didn't count" and are seen as in the way of the center.
The country's wealth is mainly concentrated in certain provinces such as Guangdong, Jiangsu, Shandong, Hong Kong, Beijing and Shanghai. These can be seen as centres sucking in the other provinces wealth.
China also faces massive environmental challenges, according to the World Bank
Again one can see that the poor periphery is where the resources are mined and is used as a dumping ground for waste. Entropy and Empire are very much in play in the Middle Kingdom.
Also the descendants of the Roman empire are very much alive and kicking today. Infact they have gone on to conquer the world and create a Global empire one could say.
I agree completely that China also has a centre as a periphery, as do all countries. Wealth conveyors in favour of the centre exist at all scales simultaneously. The centre of the centre of the centre (etc) is inhabited by the wealthiest, while the periphery of the periphery (etc) is the abode of the most wretched and destitute.
I have written quite a lot about this recently, see for instance: From the Top of the Great Pyramid.
I also agree that China has massive environmental challenges to face. I expect it to face them at least partially through migration and colonization, as empires have always done, and as we did when we were in the ascendancy. This time we (or more likely our children and grandchildren) would be on the receiving end, which we/they would find acutely uncomfortable.
China is a poor country. People have the impression that it might be rich, simply because it is so big. But this is false. Nobody has a car in China. More people have a car in Syria or Morocco than in China. People are very poor. The poorest people in the US would be part of the top 1% elite in China. Since the chinese population has climbed from being dirt poor to only being very poor, it results in the second biggest economy in the world. Still, the chinese population can only dream of being as rich as the average Mexican, not to mention the average eastern european.
"The poorest people in the US would be part of the top 1% elite in China."
wondering how it is that these poorer than the poorest us residents manage to save so much and us citizens manage to borrow so much.
"Nobody has a car in China."
maybe that is a partial explaination.
A lot of financial types are seeing the current crisis as a shift in global power from the US to China.
I just can't see that. As you say, it's all about resources. While China is certainly trying to secure resources all over the world, I'm not sure they'll be successful.
IMO, the current situation is unprecedented in recent history. I don't see how any country can create and maintain a global empire in the face of declining resources. Barring expansion into space (which peak oil will likely prevent), I don't see China (or any other nation) becoming the new center of global power (financial or otherwise).
I don't think we'll see another global empire such as the age of oil has given us. As I said, I think the Chinese century will be a pale shadow of the American century due to energy limitations, but I still think China will be the centre of the largest power structure in the world at the time (several decades down the line).
I don't think we'll see another global empire such as the pre-Age of Oil has given us, either. The easily-exploited resources that fueled empires past will be gone.
Now that is possible. That is what they were for a very long time.
I do not think that Empires are fuelked only (or even mainly) by resources. If That was the case, England would never have been able to overcome China, which has always held more of everything (people, coal, ore, etc) than the UK. Or worse, how could Portugal have conquered/established itself across half the world with sucha a tiny population and empire??
The big difference then (and still now) is IMHO technology and the strengtth of institutions that allow you to be more efficient and agile in using the endowments you have.
Yes, technology matters. Jared Diamond has written a lot about this, particularly in Guns, Germs, and Steel.
Tainter has written about it, too, and he points out that technology is dependent on resources.
I don't mean that the easily-extracted resources have to be in the center of the empire. They can be on the other side of the world, as long as the empire controls them. That's kind of the point of an empire.
So one can conclude that within our lifetimes America will still be the central power influencing the world? Since it will decade several decades for China to rise.
Also one point i'd like to question, empires could also end because the center is damaged? I recall that after World War II, The British Empire began breaking apart simply because the British couldn't afford the burden of empire. India, the jewel of the British Empire was let go mainly I believe due to the fact that it became too costly too manage. Not because the land was any less richer but because Britain had to rebuild itself.
Also apart from Finance, the role of culture and freedom plays a HUGE role in how a country can influence the world. Till this day, the thinking of Victorian Britain affects India in terms of it's conservatism and cultural attitudes. The power of western culture and it's influence can not be underestimated, many cultures look for acceptance and validation from the West.
As an example, in Kenya, people hardly watch and support local football but they will madly follow Arsenal and Manchester United (British Soccer teams), look at many spiritual sites that promote hinduism and it's spiritual teachings, they refer to what Nicholas Tesla thought of their religion, or what Einstein said of their teachings etc. They too look to the west to support and validate themselves.
When it comes to the power of beauty, regardless of any country you go to, for most people, the gold standard of beauty is a Caucasian blonde girl with blue eyes. Maybe this came about as a result of the sheer amount of advertising that is being done, but what it does is create a powerful narrative that should not be underestimated in how it influences culture and thinking - in terms of making America and Europe seem "superior". Frankly Japan/ China have very limited influence on the world in terms of culture, when people buy japanese cars, they want to listen to american rock bands play in their cars. When they buy chinese tv's they want to watch American culture and movies, the bold and the beautiful, maybe a bit of monty python (British humor is awesome I have to admit). I don't see many people watching Japanese drama or movies across the world.
What this allows is for America and Europe to have more influence than they would otherwise. Which also means they are more likely to keep it.
I am still developing more insight into this so maybe I will post more later.
I think we are moving towards a dangerously unstable interregnem, or period between regimes, with three poles - the US, Russia and China. The likelihood of another cold war, complete with nasty proxy wars in the periphery (especially the resource rich parts of it) is quite high IMO. Further down the line I think we will see a larger war as the competing interests of a global population far above carrying capacity become more acute. Resource wars will actively degrade carrying capacity further, with tragic consequences. If we see a Chinese century, as I think we will, then I expect it to rise from the ashes of such a conflict.
The cultural dominance you are describing has indeed lasted for a long time - since the Enlightenment in fact - but in recent years it has devolved into a kind of worship of instant personal gratification along the path of least resistance. I think much of the world will turn against symbols of western culture as we fall deeper into depression and the blame game begins in earnest. Since the scale of financial collapse is likely to be unprecedented, so will the magnitude of the anger of the dispossessed around the world, and that anger is likely to focus on the symbols of previous excess (see Markets and the Lemming Factor).
Also it is quite possible that more poles arise in the world. I mean Germany, France, Britain, Japan will play central roles. They might not have a large military right now, but they certainly have the industrial capacity and political tools to quickly create military structures and complexes. I mean Germany was pretty much muffled after WW1 but with the rise of Hitler, they quickly went about building their military. Japan could easily do the same.
I don't quite understand what you mean by "but in recent years it has devolved into a kind of worship of instant personal gratification along the path of least resistance." Is there any evidence that it was any different before? It might have been worse before as well?
Also although I have not read much about Mandelbroit, I have read the books of Nicholas Nassim Taleb and one of the difficult things about making predictions is that the world is simply too complex and there is so much going on that one mind simply can not deduce the state of the world in it's entirety.
The above is an assumption and who knows, it could turn out to be entirely opposite? One of the paradoxical things about coming from a developing country that was once a British Colony is that although we want our freedom from the West there is still a huge sentimental attachment to Britain and the West.
We follow the British system of parliament, the British legal system and one of our two national languages is English. This after the West (Britain) kept us occupied for decades, treated Africans as separate and almost inhuman, segregated society etc.
Similar startling examples can be found in India, I mean the British occupation of India lasted an entire century or more, they subjugated the people, basically stole wealth from India and transferred it to the West. YET, India still has English as a national language, follows the British judicial and parliamentary system. Many Indians moved to Britain and America following the end of the empire even though the reckless manner in which India was partitioned resulted in millions of deaths. There is still a huge sentimental attachment to Britain, to the english language and all the symbols of the West. The West is easily forgiven.
So even after all that, the symbols of the West are still prized by people's all over the world. In fact the commonwealth games are held every four years to celebrate the fact that We were once all subjects (slaves?) of the British Empire. Ironic but true. I wouldn't be surprised if the love for all things American and symbols of the West didn't become stronger after this financial debacle.
Whatever may be the case for France, Germany and Japan, Britain will be very lucky indeed if it's populace can continue eating and not freeze, let alone being a regional power centre.
It's own production of oil and gas is rapidly falling, and there are no timely and realistic plans in place to replace it, or to pay for imports assuming that they are available.
Racial and religious divides appear to indicate that in the event of severe shortages Civil war is a considerable danger, as that is the usual response of societies under very severe stress where the populace is that diverse - it is a form of rationing.
Very interesting. If you don't mind I'll take a roll with it from Macro to Micro. Something I've been thinking about for a long time and relates to my own and my family's fortune in these coming days. I call it my hypothermia theory.
When the human body is exposed to extreme cold, a reaction sets in. Body resources are pulled in from outlying areas. Nothing we even have conscious control of. The body actually gives up extremities to save the central core. Fingers and toes go first. All effort is put into the central core. Arms and legs after that.
I think you folks are right on the macro scale, china has the best chance, the reason I think that is that china is not very far along from total government control,it would be quite easy to fall back to that. Not very far from tanks in the square, when is the last time tanks rolled in New York?. Those areas easier to control will be the focus, resources they have will be used to keep the central core going, it's reach will not be as far but it will struggle to survive.
When the central core is threatened it acts. That crosses all boundries. The core pulls in and musters it's strengths and gives up the extremities.
I see our government doing the same thing, control what it is possible to control, cut your loses and focus and what you can do. Martial law. Cordons around the cities. It's going to be all about control.Homeland security's first premise in a red alert is you are not allowed to go anywhere. You have to stay in your house or be arrested. We can see that shaking out now in the bailout thing, who gets bailed who doesn't. Control the food supply to major cities and you control the people. My boys, growing up, had the upstairs as their own, when they got to me, I walked down cellar and tripped the breaker to their rooms. It always got very quiet. Control the power and you control the people.
Kind of beats all hell out of go back to the city threads.
I headed for a major extremity.. and I will be ignored, to busy to deal with the likes of me.
Good.
Peace
Don in Maine
Hi Don,
I made some new arguments against China having the best chance above and the so called fall of the West. Would like to hear more of your input.
It is true that those who control the power control the people but that can only be done for so long. The love and respect your sons had for you also surely played a part, in the same way surely fear and anguish can only work for so long. Real power and respect come from understanding, respect, tolerance and love IMO.
Best wishes.
The two seemingly contradictory concepts - free market or state control - come together in what Bobbit and John Robb refer to as the "market state".
Unfortunately, the most important of those "citizens" are not flesh-and-blood, but the likes of Halliburton, Boeing, you-get-the-idea. The market state - which is largely owned by those same good citizens - uses state force to promote the "market"
cfm in Gray, ME
It's great to see somebody besides Denninger starting to get mad:
Perhaps the anger thus far has been ameliorated by the fact that Obama ran and won on a campaign of change. But with each passing day it is becoming more and more evident that Obama intends to screw those very rank and file Americans who put such high hopes in him, as these two NY Times articles point out:
and
If and when it becomes evident that Obama intends to keep economic policy on the same trajectory that it has been on since the early 80s, how will the American people react? Will they do like Mexicans do, and just bend over and take the big one up the rear? Or will they revolt?
couldn't it be that obama sees letting the tax cuts expire as less disruptive and allow his administration to focus on more important stuff(like shutting the back door of the treasury).
The only problem with that theory is that I see no evidence that he wants to shut the back door of the treasury. He supported opening it in the first place, and is surrounding himself with the people who created the mess in the first place.
Not that I'm surprised, mind. I've said all along that Obama is no different from any other politician. He could not have been elected were it otherwise.
I must admit that I am surprised at Obama. Sure, in his coalition he had the bankers and finance people. But he also had millions who gave him donations of $10 and $20 and $50.
It's amazing how quickly he's betrayed all those little people.
The guy is a salesman's salesman. Sincerity is the important thing-if you can fake that, you have got it made-this guy is the King.
You can count me as one of those he had fooled. I was hopeful before, but the hope is slowly fading, anger slowly welling up in its place.
This was the election year I decided to never again vote for republocrats or demoplicans. Yeah -- "wasted vote", but is voting "least worst" a well spent vote?
An old geologist told me, "be sincere, whether you mean it or not".
Obama's foreign policy staffing choices are no doubt bitterly disappointing his anti-war supporters too. I, for one, am not the least bit surprised - neither by the foreign policy betrayal nor by the economic policy betrayal.
Nevertheless, I remain relieved that he was elected rather than McCain. My relief on election day factored in my anticipation of all these betrayals.
Lets wait till the man actually gets into office. Remember George W Bush is still in charge.
You are wrong, Leanan. Obama is very much different from the politicians we've had since roughly 1968.
He is filling his domestic cabinet positions with emphatic progressives, and that is a very good thing because it will gradually cause a redistribution of risk and reward in this country. He is making White House meetings transparent by posting attendees and discussions on the web, and inviting regular citizens to participate in policy making. He is developing a stimulus package that focuses on jobs for working Americans as well as things like alternative energy, which will greatly improve the utility and efficiency of not only our energy use, but our economy.
Even his financial advisors and treasury secretary are very different from past appointees, and even when they're the same people, they are people whose views have changed. Geithner fought Bernanke on allowing Lehman to collapse, and Geithner was right. The problems we're seeing right now are due to Bernanke's tightening of money supply to fight inflation in the middle of a recession. It was the bone-head decision of our lifetimes. Summers has stated publicly that he has learned that he was wrong about allowing globalization to create such extremes of income inequality.
I don't know how fast these guys will come up to speed on the subtleties of our energy supply problems and their connection to our economy, and I don't know that even if they do come up to speed that they'll be able to do politically what needs to be done. But they're definitely a step in the overall right direction.
Obama can't change an entire country, let alone the world, on a dime. There are huge numbers of people who've made all kinds of investments and plans based on expectations that have nothing to do with where Obama wants to go, and he can't just single-handedly roll over them, nor should he attempt to do so.
I find the cynicism of many of the people at TOD to be very unhelpful, and not at all in touch with the real possibilities of change in the works. You could be playing an important role in changing policy, but you choose to sit back on your asses and bitch and moan.
Moe_Gamble,
Thanks for your input. I am a cynic of the highest caliber. But my practical side will give Obama time.
At this very moment, I am mulling employment strategies to enter a new career. My retaining program in HVAC/R ends this month.
Speaking of practicality, I'm considering somehow getting into a field associated with the existing housing/government stock. For example, I have an informal briefing with the local electric utility regarding how the DOE energy star program works.
I am open to suggestions - my bio page has my email.
Thanks in advance !
Moe,
Very accurate comments. However you got a -2 (prior to my upping it to a -1). You have to wonder why? And remember that some bloke Denninger is the guru for this blog and is frequently quoted.
Also note that any policy that collapses the money supply is heavily favored by this blog.
Wonder why?
I don't think it's his views on the money supply that got him the down ratings. It's the rudeness with which his opinion was expressed. Going anywhere and accusing people of "sitting on their asses and bitching and moaning" is not likely to be received well.
I had a great conversation this Summer with a member of Obama's energy team. I expressed my dismay to her about a WPT--not so much on a narrow basis, but, in the sense that any focus on a WPT by Obama suggested that a larger understanding of the energy situation was less than present. Since that time I've made suggestions on my blog, and, sent emails back to the campaign.
If the infrastructure program that Obama eventually puts forward overweights "roads and bridges" however vs. commuter rail and light rail, then, I think that will be a mistake. I've told them this as well.
I think the energy team is incredibly smart and open-minded. The one concern I've had is that I don't think they understand oil on a deep level. Also, I have suggested that the Energy Secty should indeed be someone who understands oil on a deep level.
In general I agree with you Moe that the reflexive analysis of Obama as "just another front-man for the powers-that-be" is both lazy in its analysis, and, tedious to hear.
G
Gregor: IMO everyone agrees that Obama is "incredibly smart" and that guys like Rubin, Paulson, Summers,Bernanke etc. are "incredibly smart". You are stating that the analysis of Obama as a front man is lazy, yet you are sticking to the politically correct road, i.e. all errors have been of logic-the intent of the players is beyond reproach. Denninger, Kunstler and others feel that high profile players in the massive fraud should be going to prison, with Obama leading the clean up. So far, Obama hasn't done one thing that displayed courage of conviction or a real desire to right the ship-hasn't anyone noticed that both Edwards and Spitzer (two of a very small group of figures who pose a real threat to the BAU crowd) have no place in a Obama administration?
DownSouth -
..... Climb Mount Niitaka ......
East Wind Rain:
http://www.revilo-oliver.com/Kevin-Strom-personal/East_Wind.html
So Roosevelt not only knew when and where the the Japanese were going to attack, the Dutch and English also knew and warned him. Does this change anything? Other than maybe a couple of million conspiracy wackos were right? Damned Freedom of Information Act.
Any comments, Darwinian?
Consider the source. Google Kevin Alfred Strom and Revilo Oliver.
Um, dipchip, do you realize you're citing a Neo Nazi activist who is currently doing time for possession of child porn?
I was going to note that this guy being quoted is pretty strange and scary.
Not to be "Ad hominem" or anything, but at some point I become pretty skeptical of the story being told because of the story-teller's own story, as it were.
There are others who pin FDR with pre-knowledge of the attack on Pearl Harbor, I believe. Of course we all know of General Smedley Butler's experience with opponents of FDR trying to overthrow FDR by force -- and this has strong credible documentation, although many people do not care to include it as am important event in the history of the USA.
The answer is no: I was simply looking for feedback on “East Wind Rain” and thought this would attract some comments.
IMO a much better study on the subject of Naval Code Breaking at the time was a book, “And I Was There”, by Rear Admiral Edwin T. Layton and Capt. Roger Pineau.
To Save on costs of pepto-bismal and anti-depressants... remember the Serenity Prayer. And Dmitry Orlov's advice...
I was kind of wondering when people were going to talk about this stuff. As for myself, I never really invested in much of anything besides CD's and treasuries, but I have monitored other people's equity and bond investments as a favor. So I was really scrambling to cut short their losses during the September fiasco. In particular, they had significant amounts invested in what are called "fixed income funds", which are mainly bond funds that purport to provide a stable rate of return.
Well, these stable funds nose-dived just as badly during the crash as everything else. And the strange thing is, the ratings of these funds nose-dived right along with them! One in particular that I followed was a Loomis-Sayles bond fund, ticker LSBDX. At the beginning of September it had a Morningstar rating of 5 stars and then it went down to 3 stars as it lost at least 30% of its value. I haven't looked at the rating since.
I am not the only one that noticed this at the time. I agree with Barry Ritholz that these ratings company owners should be locked up for corruption.
Look around enough and you can find evidence of a lack of any kind of information coming from the fund managers concerning the "safety" of these fixed-income funds. Ratings such as Morningstar and Moodys don't mean anything and some people have said that they have always been stacked in favor of, and probably recommended by the funds themselves. So the original *****-star Morningstar rating was generated by Loomis to begin with.
This also happens in the corporate world with stuff like ISO and CMM ratings. A company interested in getting a quality rating typically has to pay for consultants to rate their process, and if the consultancy doesn't provide a high-enough rating then they will not go back to that consultancy again. They will fish around until they get a consultancy that can guarantee a level-5 CMM or CMMI for example.
And this is all prefaced by the fact that I am nowhere near an expert in these matters, only that I can smell charlatans and rip-off schemes from a distance.
BTW, The following link explains the drop in these high quality bond funds but doesn't explain the corruption behind the ratings:
http://traderfeed.blogspot.com/2008/09/corporate-bonds-when-safe-asset-c...
This is really a bizarre episode in Wall Street history that hasn't really been plumbed yet.
I am with ya Downsouth.
Just as Bush was not sittin in the control room pulling levers, pushing buttons, barking orders to his minions to attack countries, adjust regulations, etc. etc. Obama is not running anything.
It is and always has been a group of people that make the decisions and initiate them.
Bushs job was to look like the bumbling fool who just couldn't help making so many mistakes. OOPS!
Obamas job is to provide FALSE HOPE.
Change.gov exists purely to provide FALSE HOPE.
Anyone who can't see this is blind to history and in deep denial.
Those who say "give him a chance he hasn't started yet" are delusional Just look at the people that make up his administration (not that he has much say in who they are) and it is CRYSTAL CLEAR what the general direction we are headed.
This is not conspiracy theory any more than PO is just a theory. It is observed reality.
I agree with you.
The folks who Obama has picked so far seem like More Of The Same. These folks have been around the Washington scene so long that they practically define the term "insider". They are like foxes placed in charge of the hen house.
Of course, Obama might really be playing to his audience. He clearly would not want to rock the boat until after he gets his hands on the levers of power on 20 January. Once in office, he could simply chuck the entire lot and go for some new blood, so to speak. His picks so far have been the top execs and they need to be confirmed by the Senate. Could it be that Obama has a "secret plan", which won't be revealed until after the Inauguration? After the Christmas season concludes and we learn December's unemployment results, the drastic sort of economic shift really needed (as described in his radio address yesterday) will be much easier to set in motion. as well as any efforts to "discipline" those who share the guilt for destroying the U.S. economy.
E. Swanson
Meet the new boss, same as the old boss, Won't get fooled again....
That WAS the dawning of the Age of Aquarius, right???
Or, was it the dawning of the age of Alzheimer's (I forget)??
E. Swanson
At first I supported Kucinich and then Nader. I told everyone who would listen that both McCain and Obama can not be trusted. First Obama's supporters claimed he was against telecom immunity while he refused to vote and help Sen. Dodd's filibuster. When the final vote was counted and after the competition from Mrs. Clinton was eliminated, he voted for telecom immunity and spying on Americans. He talked about reaching across the isle and appointing a Republican senator who heavily supported the Iraq war as Secretary of State. All of that indicates he supports Republican policies. If Obama had been in Congress at the time, he would have voted for the Patriot Act. Obama was selected by the corporate controlled American media. His true stripes are as plain as day. I believe both Kucinich and Nader to be sincere, but Kucinich was suppressed by the media and less than 1% of the voters voted for Nader. The sheeple have confined themselves in a dark, dank, impenetrable dungeon of fantasy. We need a jail break.
Under Bush the American Empire was supposed to be put on a stable footing with the World's resources firmly under it's control. Unfortunately, for TPTB, it all went horribly wrong.
So what's Obama's remit?
My guess would be to fix it and put the Empire back on track, but, covertly this time. In the process the elite will attempt to regain their lost status and wealth, probably by relieving the middle-class of theirs. With less wealth to go around and the extra burden of rebuilding the Empire someone is going to have to take the financial hit.
For the elite, Obama means hope also, as they need the US to be saved as much as the man on the street. His failure would make him the most reviled president in US history by just about everyone. Whoever comes after him will be given free-rein to save the Empire at whatever cost, militarily if necessary.
So, in a sense, it is not false hope, he is the only hope of stemming the decline for everyone. Believing that the decline can be stemmed is probably the false hope.
I'm involved in providing input on energy policy to the Obama administration, as well as on regulation related to trading.
Based on my experience, I think cynics like Souperman and Leanan are uninformed.
Obama's job is not to provide false hope--it's to give voice to new groups of people to displace government by corporate lobbyists. He's not your babysitter, he's your president. You can be one of the voices, or you can be a freerider and let people like me do all the work for you, which is the choice you seem to have made.
The fact that you could put up a post like this shows me that you have made zero effort to get involved. In other words, you don't have a clue.
Best wishes Moe Gamble.
You too, VK. I'm a strong admirer of your posts.
Thought i'd share this with the board. I picked this up from a book recently, can't recall which one. But if Jesus had set aside 2 cents at the time of his birth, compounded at 3% annually, that would be more than all the money that has ever existed. I came up with 1197228932770 TRILLION, I don't quite know how to make that number any smaller or how to describe it. Maybe someone with a physics degree can quantify this for me.
The Dow Jones Industrial Average returned 5.3% compounded over one century, from 1900 to 2000. How some of the smartest minds in the world could believe/ still believe that stocks can return 10% infinitely...beats me. Honestly. Though I did a whole degree based on interest rates, the Jesus example was quite astonishing.
Another example regarding house prices, if a 150,000 dollar home appreciates annually at 6% per annum, in a 150 years that house would cost 937,499,508 dollars. That's nearly a billion for a house if we had believed the pundits. Dr Albert Bartlett was right when he said humans just don't get exponential functions!
IMO you are the one that doesn't get it-the US dollar (and penny) has been diluted consistently at a rate exceeding 3%, so the guy on the cross wouldn't be any better off than with the original 2 cents (but he didn't need moolah anyway).
I read the USD has lost 98% of it's value since 1913. Eventually all paper currencies not backed by physical assets tend to Zero. The point I was trying to convey was that the money system the world uses is very much unsustainable. It's a pyramid scheme. The house whether it costs a 150,000 or a billion still consists of the same materials and a certain amount of energy went into constructing it. So while the house is still the "same" a 150 years later, it's money value has gone up sharply, implying the value of money has declined significantly.
Moe-
I wish your efforts to succeed, and the best to your intentions. I will also be doing my best to hold Obama accountable.
But, I would not hold my breath, or get attached to results, as it will immobilize you for future action.
Hi Moe,
Thanks for sharing this:
"I'm involved in providing input on energy policy to the Obama administration, as well as on regulation related to trading."
How is it you became involved in providing input?
How do you know your input is being received and heard?
How can someone else (besides yourself) provide in put on energy policy and know it will be received?
How can one receive a reply and feedback - in other words, in put with conversation that allows for understanding about the message?
What are your suggestions for this?
DS--
Regarding the ongoing RRC/EIA natural gas debate, here are the current Texas RRC data, for the Barnett Shale, from their Barnett Shale summary section, along with my comments.
http://www.rrc.state.tx.us/data/fielddata/barnettshale.pdf
(Newark, East Field) Gas Well Gas Production –
January 2004 through December 2004 = 380 Bcf
January 2005 through December 2005 = 502 Bcf (+28%/year)
January 2006 through December 2006 = 707 Bcf (+34%/year)
January 2007 through December 2007 = 1,021 Bcf (+37%/year)
January 2008 through July 2008 = 656 Bcf (+10%/year, annualized data)
At the 2007 rate of increase, Barnett Shale production would triple by the end of 2010, but the annualized 2008 data show only a 10%/year increase, and the recent sharp drop in drilling activity probably means that 2008 production will actually be flat to only slightly up over 2007, with a strong likelihood that 2009 production will decline relative to 2008. The key metric to keep in mind is that the average Barnett Shale well will reportedly produce about 80% of its total production in the first two years, so a decline in drilling activity will probably result in a very rapid production decline.
Even if we had maintained $14 gas, with abundant access to capital, there is a serious question as to whether the industry could maintain the rate of increase in completed wells necessary to maintain a 30%/year plus rate of increase in production.
westexas,
It looks like the number of rigs running in the Barnett Shale peaked at about 200 in December or January, and has since fallen off only slightly:
http://gis.bakerhughesdirect.com/Reports/StandardReportChart.aspx
So if production isn't growing as fast as it once was, it can't be explained by diminished drilling activity.
I notice also that the common stock of Chesapeake Energy, which I suppose is the biggest resource player in the U.S., temporarily fell below $10 per share on Friday. The markets have punished all the independent O&G producers, but that's a pretty extreme fall from its 52-week high of $74.
It would take a heck of a lot better mathematician than me to model production performance of a company (or a nation) built on wells that, like you say, "produce about 80% of [their] total production in the first two years," but it appears Chesapeake may have run up against a wall.
On the Baker Hughes web page one can drill down to the number of rigs running in the Bend Arch-Fort Worth Basin, but the link I used doesn't seem to get you there.
Anyway, rig counts were at about 150 in Jan 2007, slowly increasing to 200 in Dec 2007-Jan 2008 and then flat at about 180 since Feb 2008.
Hopefully Chris Nelder is reading this. He still seems to be addicted to these shale plays.
... profiting from PO with shale plays was his slogan. Well, most of his recommendations plunged between 80% and 99%! Fine business model, congratulations!
I dare say my opinion of the Shale plays is proving true ?
People are starting to figure out they are pretty much a ponzi scheme.
Good show DownSouth as usual:
I thought it was most interesting in the comments section of the ‘ritholtz’ article. After all of the above commentators bitched about bond rating system and proclaimed this one and that one f-ked up and what should be just punishment for them, ‘constantnormal’ made the comment that I most agree with. Basically he said, “Caveat Emptor”.
Do any of you think for a minute that a bond rating company could not be bought? Don’t blame Bush, don’t blame Moody’s, don’t blame the Arabs; just look in the mirror for the person who lost all your 401 money. Did you have to buy stock? Did you have to go in debt? WTSHTF and you are wondering where you will get water after the grid goes down: don’t blame Bush, don’t blame the Obama government, don’t blame Moody’s; look in the mirror.
IMHO Obama is has no special power to see ‘the way’ and it looks like the people he is selecting to help are clueless except when it comes to politics as usual and making lots and lots of money by ripping off the rest of us. He talks well but it's what does he actually do that counts. Nothing so far, so we will have to wait and see what he does. If you want to get dreamy eyed about this guy that's up to you. And if any of you don’t have water after the grid goes down … look in the mirror.
Another thing … I believe none of the $10 donors have any pull. Even several million of them have no pull. Only when it comes to torches and ropes do any of the politicians give much of a damn.
Hey clueless, justice is a function of money so all these guys are going to walk clean and all your bitching has about the same impact as the $10 donor.
Sorry bout that … Rant Off
It's not just an American Problem, infact America is a far better place politically than a lot of countries on earth. The problem stemmed right across the world, irrational exuberance is the real answer to whats going on at the moment, even the UK, Australia, Spain etc had massive housing bubbles and with much much higher interest rates than the US. Can it be that this was Greenspan's fault? No. What about China's ills? They are the ones who kept their currency too low and didn't create internal demand. What about russia and eastern europe? They speculated as well and depended on oil prices being high forever. And today they are in a far worse position than America.
Something else is at work apart from just lower interest rates, bad politics and politicians, poor rating agencies. The thing that the automatic earth points out and followers of elliot wave theory say is that from time to time humans experience collective irrational exuberance. Bubbles and blow ups have been part of humanity as long as it has existed. It was a collective mania, that things would be good forever.
Bad politicians have existed for as long as good ones have. In the last one century, American politics and your system of Government have led Americans to enjoy the highest standards of living in th world, freedom of speech. Yes a lot of it is powered by cheap oil but atleast American's experienced it! There are billions of people right across the world who never had it so good.
America has the finest universities, best military on earth, even in this financial downturn they are considerably less affected than other countries. Americans led the way in letting a man of colour become the President, though it might not seem much now, it means a LOT. It can not be underestimated how liberating such a moment was to the world. I'm not even an American and i'm very pro american, maybe because America saved my country from a civil war earlier this year and I admire American technology, freedom of speech and the freedom that people have there.
I hear a lot of talk about what politicians are not doing, what people are not doing about peak oil. But there are great politicians like Ron Paul, Roscoe Bartlett etc. Even the so called elite like Paulson and Bernanke, Buffett and the like are doing the best they can given their world view and how they perceive and understand economics. The scary thing is that they might not know what they are actually doing and make things worse, but I doubt that they are part of some elite conspiracy to screw the middle class over. The system has evolved into that because of the millions and millions of interactions and the fact that energy per capita has been declining since 1970's.
So a question for the board, what good piece of legislation has come out of Washington? How has your life been improved because of politicians? What good do you think politicians have done so far? Because they must have done something right for America to be the most powerful nation on earth!
VK
Geographically the United States was/is an exceptional piece of property and yes, we are better off than most because of geography and a bunch of fellows who wrote our original documents. Politicians OTOH have been trying to bastardize those documents since day two. We have had lots of land barons, etc. but there is so much here, it didn't have the impact that it would in a smaller, less blessed place.
The point I was making came from the article DownSouth linked us to. Basically, they were (and I see some of it here too) blaming everyone for being a crook and what they did to me and they should be punished. My point was to "Get Real, Crooks and Politicians Happen" and you have to take care of yourself. If you think the Stock Market is a virtual ponzi scheme don't go there. Sure it is attractive. I learned long ago about the stock market ... if you buy a stock or a commodity it is because someone else is selling it. They may know more than you do about the stock or commodity. Why else would it cost so much to buy a seat there?
One time someone stole some of my tools from a job site. I was mad at myself for leaving them there. I did it … someone else just took advantage of my carelessness. I didn’t blame the cops for not being there. If I had later found my tools, I would have prosecuted and since the person was probably not rich, they would have been punished. Had it been a politician or the banker, all bets are off about punishment.
That's all, no BFD.
Hi Lynford, my post wasn't directed just to your post, I just hit the reply button when I got there. I fully get what you're saying about personal responsibility and being accountable for your own actions. The people allow themselves to be deceived by the politicians or maybe self deception is a key part of human nature, something about what a politician says makes us feel right inside?
Also IMO politicians in America are held more accountable than elsewhere. Examples to mind come Nixon, Clinton, Scooter Libby, there were a bunch of senators who were caught and disgraced -Larry Craig and that senator from Alaska. Yes President Bush and Cheney have gotten away with it so far but at what price? Their reputations are in tatters due to the MSM and Jon Stewart and Stephen Colbert (Apart from FAUX news).
One thing that does trouble me about America is the gun culture and the fact that for the land of the free, it has some of the highest prison populations.
Agreed. I think WTSHTF and financial collapse happens here, we will find out that Orlov was an optimist. Here in the high desert, I think after a couple months of chaos, fights and dieoff, most everyone will have left.
Will I have to defend what is mine (food, water, solar) with a gun? I don't know but it would be stupid to not be prepared for something like that.
Just this morning I woke up and it was just before daylight. This time of year I get up with the sun so I was just laying around. The thought came to me, what if my solar well pump went TU? I have a 45 foot lift in our well. So I designed a tube from a steel fence corner post with leather flapper valve in the bottom. It will only fetch a gallon at a time but that gallon of water is important here in the high desert.
This place supported 3000 indians before white man showed up. I think the indians are smart enough now to leave this place when it gets bad. So that will leave just a few of us, trying to get along with less after the time of chaos.
There were house parties organized through change.gov all over the country this weekend, including a dozen in Las Vegas, where I live. They are looking to plug regular people into committees that can provide citizen feedback and information to Obama on whatever areas they have expertise.
One of the things a group I'm involved with is doing is providing feedback to Obama on choices for Energy Secretary and the alternative energy portions of his stimulus package. Have you joined that committee? Why not? What are you waiting for? A personal phone call from Obama?
I'll bet not a single one of the commenters in here who is bitching about Obama has done anything about participating in this process, even though Obama keeps seeking you out.
You don't get any respect from me until you get in there and mix it up. If all you want to do is bitch and moan, you're just a bunch of blowhards.
You are absolutely right. Good Luck and hang in there. If it works, great! If it doesn't work, don't complain about politicians or your wasted time. Politicians are a well known commodity. IMHO you and the Internet committee don't have enough juice ($$$) to impress a politician. I do allow that I may be wrong but I believe the next lobbyist that comes along with enough bucks will get that phone call, not you or me. Time will tell.
As mentioned before, Obama hasn't done anything except talk enough people into voting for him to win the election and it took almost a billion dollars to do that. Now he want a few more million to bail out Hillary. Huh? She will make more than enough on her next book about her Bosnia adventures. It doesn't seem real to me so I shant dream with you.
I'm and older, ugly guy but for that kind of money, it's hard to say how far I would go in politics. :-) We do know that spending half that much didn't work for an older ugly guy to be president elect.
Hey Moe - (does that make me currly?)
Save the high falutin finger pointing for your Obama meetings.
I have done 100 times more than you or anyone you know to prepare my family, friends, and community for POWER DOWN.
I have greatly increased food production in the region.
I have successfully introduced my friend, a local emergency room physician to
Dan Bednarz and health after oil and they are in communication. He is making great strides in educating the local healthcare community.
I have discussed the constraints going forward with a good percentage of the population of our area and I leave the door open for anyone who wants to seek more info. I provide list of resources.
I am involved everyday in everyway possible all of which is totally inadequate and nearly meaningless in the big scheme of things but is creating tangible results.
I am an increadably wealthy man in all the right ways.
You are preparing for what? BAU? You believe the system that is in place can initiate POWER DOWN?
I suspect you are fairly well off financially and wish to secure the value of your wealth. This is exactly what the rest of the well off, in all their varying degrees of wealthy, are doing also and this is exactly what insures the worst possible outcome for humanity.
Seeking and securing Financial wealth represents all of what is killing us and the planet.
Obama has already made it perfectly clear that he will, above all else, protect everyones wealth, which is mainly the US but includes any who are playing on the right team. If he didn't make that clear he would not be where he is today.
And please for gods sake don't just use that lame excuse that he is just playing along until he is in the driver seat. There is no driver seat. OK!
and by the way I was totally involved in the email, fax, and phone calling to protest the bailout.
I got dozens of friends and relations to do the same.
Biggest Public input on any issue in the history of the house of reps. 100 to 1 opposed.
Yes, the system works. OOPS! I mean NOT.
and please don't make any lame ass excuses for these Motherfuckers. They simply have to GO.
C'mon, soup,
Tell us how you really feel!
:-)
True, so very true. POWER DOWN...
If Obama is not prepared to power down the government, especially the overblown military, he has a broken leg right out of the gate. He is the typical BAU wolf in sheeps clothes. No matter how much wishful thinking goes on by the Sheeple in this country.
He needs to come out of the gate wide open. Doubt he has the B*lls for it.
POWER DOWN
It's OK to advocate cutting Obama slack, but this "bunch of blowhards" line is insulting. You don't know what most of these various blowhards have done. You better hope none of them take you up on that bet.
cfm in Gray, ME
Moe. How do you get connected to these "house parties"? After your comment yesterday I logged onto Change.gov, but couldn't find out how to do so. A few weeks back I sent in a couple of submissions to Change.gov -and now get automated emails from them. I'd like to get a little closer to the project. I suspect a few others on this site would as well, but perhaps they just haven't figured out how to connect? (Note I didn't follow up on any of the healthcare stuff, as that isn't my area of expertise.)
Man I think you have totally 'lost it'!
This is not the election anymore. He won.
Now WE The People get to judge him and so far I am not giving him high scores.
So why don't you STFU and let folks exercise their freedom to commment as they wish?
You have said it more than a few times already. Give it a rest.
If I say something negative about the man so what. I bet you whined a lot about Bush. Many here did yet no one came down their throats.
I don't wish to 'work' for any politician.
Airdale
Basically he said, “Caveat Emptor”.
Consider for a moment that this here TOD is like a Moody's for the oil depletion crowd. We should start issuing AAA ratings for the most accurate forecasts. How would we ever know if someone was bought off or not?
But then again, who is going to go through all the models to substantiate these forecasts? Its an issue I grapple with since its hard to get anyone to check your math or re-derive your work for free.
I voted for Obama, but without great hopes. The hopes I did have are: 1) that he would be less precipitous in leading us into wider war 2) that he would be less able (less willing?) to promote ethnic and religious discord that is necessary to embarking on wider war and dealing repressively with the unfolding economic disaster.
I also believe that in spite of his betrayals, he will not be an adequate tool for TPTB for the above reasons. There was no way that TPTB would let someone get to the WH who wasn't more or less in the box. That he got in and they weren't able to stop it was more or less accidental, i.e. the financial crash came a little too soon. Hanky panky would have been too obvious with such a wide gap. The military-industrial complex did not go into hibernation with his election. Despite his willingness to appease, I think sparks will fly and fly soon.
I also think there is potential in the young people and others that the Obama campaign brought to life in order to get in. There is going to be a lot of conflict there also. It's going to be exremely interesting.
One last thing is the incident in Mumbai. This too is part of the box. In whose interest is that attack? Pakistan's? No. In India's? Some faction's possibly, but overall no. Whose then? Some one who did not want to see an Iran-Pakistan-India pipeline? Ah. What I'm saying is that the agenda is already being prepared. Will there be any resistance to following that agenda? I don't know. Here I may be deluding myself in allowing myself any hope at all.
Dave,I think Pakistan itself will be a flashpoint in the near future regardless of the long standing Indian/Pakistan conflict.The real issue is that the situation in Pakistan directly impacts on Afganistan.
I think that the West needs to take a good,hard look at why we are in there.What were the original reasons- ie, Bush and the neocons and their exploitation of 9/11? Given that the original action was useless in it's "stated" objective why are we there now? If it is some sort of Grand Game strategy I suggest that the time for that sort of thing is long past.
I have no sympathy for extremist and fundamentalist behaviour and I do feel for the victims of it however the West is on a hiding to nowhere trying to be the world's policeman.
High time we cut our losses and cease expending blood and treasure in Afganistan.
Agree to that. Also get out of Germany, Iraq, Korea, Japan and a hundred other places; anywhere else we have troops. Take all that money and put solar on ever roof in the US and a windmill wherever the winds blows.
hear hear
Re: Oil price articles up top.
It appears that the current oil price situation is somewhat analogous to the 1980 price spike experience.
http://www.inflationdata.com/inflation/Inflation_Rate/Historical_Oil_Pri...
I remember the situation well. President Carter had appointed Paul Volcker as head of the Fed and he took up the task slowing inflation by raising interest rates. Chrysler went begging to the government for a bailout just as the big 2.8 are doing now.
We were in a bad recession and Carter lost to Reagan after an unpopular handling of the Iran situation, which broadly speaking could be thought of as analogous to the unpopular Iraq war that has defeated McCain.
The American car industry was in crisis because it didn't produce the fuel efficient front wheel drive vehicles like the imports. Sounds familiar doesn't it? Even though it is 28 years later.
Anyway it took twenty eight years for oil demand to pick up enough for prices to again rise to inflation adjusted levels of 1980. If we cut the time frame in half because of Peak Oil, it could be another ten years or more before there is enough oil demand for prices to again reach the level of July 2008.
Just a guess, of course.
x,
I wonder how geopolitical tensions will affect the price of oil in the next six months. When oil prices were rising it was the importing nations who had sever problems. We had congressional threats against OPEC, and many other examples of friction. Now, as prices plummet, the exporters are in deep trouble. Todays attack on a Nato convey in Pakistan, http://www.google.com/hostednews/ap/article/ALeqM5hkiMxbHNH0BqgpWA2ZG6VD..., is yet another example. How long until someone blinks?
The difference between the oil crisis of 25 years ago and now, is that the previous crisis was the result of the Hubbert peak in US oil production, while the current crisis is the result of the global peak.
Unless we start importing hydrocarbons from Titan or something, this peak will be the last one for hydrocarbons.
x, I agree with DIYer--I don't think it will take that long, because we don't have any new North Seas coming on.
I think OPEC will cut production enough on December 17 to get oil back up to $55-$60. I think the economy will continue to disintegrate in the new year, weakening demand enough to take care of the decline rate for production outside of OPEC, despite winter demand. So I see very little chance of a price increase before next summer. But I think when prices start rising again, it will be pretty fast.
Then we have to see whether the Fed will make the same mistake they made this time. Rising oil prices will inevitably produce rising inflation. If they are determined to maintain core inflation of 2%, the only way to do it will be to crash the economy again.
What they should do instead is use inflation due to energy supply shortages to spur the economy into greater efficiency.
Actually I think the biggest issue is this.
Its in my opinion the story of the century. It pretty much assures that we are going to face some
massive problems in a matter of weeks months at most.
Why ?
If oil and natural gas prices remain closely coupled then the value add of complex refining of
heavy sour crudes becomes negative. If this happens then we for all intents and purposes have
just lost 50% of our oil supply.
Thats the maximum potential damage all other potential outcomes are less dire time will tell but if this coupling persists on the way up then we are already have hit the wall.
Hello Memmel,
Thxs for posting this chart for our consideration. If heavy, sour crude processing becomes hugely problematic, it may also present terrific problems with the flowrate of recovered sulfur, which tends to greatly impact I-NPK flowrates, primarily phosphorus [P] through the beneficiation process. Let's not forget the words of the USGS:
http://minerals.usgs.gov/minerals/pubs/commodity/sulfur/
-----------------------
Through its major derivative, sulfuric acid, sulfur ranks as one of the more-important elements used as an industrial raw material. It is of prime importance to every sector of the world's industrial and fertilizer complexes. Sulfuric acid production is the major end use for sulfur, and consumption of sulfuric acid has been regarded as one of the best indexes of a nation's industrial development. More sulfuric acid is produced in the United States every year than any other chemical.
---------------------
The ongoing credit crisis, effectively driving both FFs and I-NPK flowrates downward, is on track to profoundly induce great sulfur pricing volativity because sulfur is used in staggering amounts globally too. Recall that 65%+ of global sulfur is used directly in I-NPK flowrate mfg.
[latest USGS Aug report, PDF Warning]:
http://minerals.usgs.gov/minerals/pubs/commodity/sulfur/mis-200808-sulfu...
------------------------------
Significant adjustments have been made to the sulfur import data. Reports from the U.S. Census Bureau appear to underreport sulfur imports, especially material from Canada. The revised figures are based on Census information and data from personal communications with industry experts.
Indications are that global sulfur prices have begun to decline,
although the average customs value of elemental sulfur imported into the United States was still trending higher. The average unit value of imported sulfur was $378 per ton in August 2008. This was 17% higher than that of July 2008 and nearly 20 times what it was in August 2007.
------------------------------
As discussed in a prior posting, we should be very glad that gasoline pricing hasn't annually fluctuated from $2/gal to $40/gal, then slammed back to $2/gal again. Yikes! Thus, IMO, the very modest July-Dec 60% decrease in motor fuel pricing is profoundly unappreciated by the general public compared to sulfur or even the earlier whale oil pricing volativity.
Obviously, the USGS AUG report is now ancient history. But it is devilishly hard for me to get current sulfur info because much of this info is inside bigbuck$ proprietary sulfur market reports [and increasingly so], and/or obscured by the US Census Bureau, but this relatively current weblink of Nov. 26th seems to reinforce the USGS price decline projection:
http://www.marketwatch.com/news/story/Stingray-Corporate-Update-Strong-F...
---------------
excerpt: ...The spot price of this commodity as reported by the research firm PentaSul has declined from a high of US$650 per tonne to an October price of US$150 per tonne.
---------------
Recall my earlier post where New Zealand paid $900/ton for landed sulfur. It will take time, due to FF/I-NPK latency effects, for sulfur pricing decreases to filter through to I-NPK pricing, but the rapid curtailment of I-NPK production [as evidenced in prior posts] may ride roughshod over this trend; i.e, cutting sufficient supply to insure demand side drivers predominate [even though weakened by the credit crisis]. Here is another recent link:
http://www.financialexpress.com/news/DAP-producers-look-for-cheaper-phos...
-------------------
New Delhi: Indian producers of diamonium phosphate (DAP) fertilisers are interested to import phosphoric acid from the global market with a view to bridge the likely shortfall of this essential nutrient in the near future in the country.
..Meanwhile, Indo-Jordan Chemcials Co Ltd (IJCC) has shut down production at its phosphoric and sulphuric acid units for December 2008 and January 2009 due to prevailing market conditions. The closure may extend to February unless market conditions improve, said the FMB report.
-----------------------
Let's hope, that even with the Titanic sinking of the Baltic Shipping Index, that megaton trans-oceanic movements of sulphur, phosphates [P], potash [K], and [N] ammonia and urea are still ongoing because I still do not detect a frenzied First World rush to O-NPK recycling.
Regardless, having I-NPK moving through the supply chain [no matter the price up or down] to meet critical planting seasonality, is always better than a global supply chain shortage.
If [as you project?], or as I understand the thrust of your discussion: it is that heavy, sour crude and/or tarsands are becoming ERoEI-priced to reflect their true value as overall societal energy sinks? Please correct any mis-interpretation on my part.
This is a fascinating conjecture, but I think your analysis needs to include the overall global NPK and industrial value of the recovered sulfur from these fields. Recall my earlier post, excerpt below:
=================
Consider a pound-for-pound comparison of sulfur vs crude:
http://www.eppo.go.th/ref/UNIT-OIL.html
-----------------------------------------
1 ton of crude oil = 1 metric ton of crude oil
= appr. 7.3 barrels of crude oil (assuming a specific gravity of 33 API)
= 6.6-8.0 bbl. of crude oil with 7.333 bbl. taken as average
---------------------
Where NZ landed sulfur @$900/ton = approx. crude value of $122/bl.
======================
Of course, the primary end product, say DAP [Di-Ammonium Phosphate** for newbies]: sulfur->sulfuric acid->phosphoric acid + much more H-B natgas-generated ammonia is a much higher embedded-energy value and $price.
**
http://www.simplot.com/industrial/industrial_products/products/di_ammon_...
------------------
Di-Ammonium Phosphate
Product Type: Dry [chemical formula (NH4)2HPO4]
Di-Ammonium Phosphate, NPK analysis 18-46-0, is the worlds most widely used ammo-phos fertilizer. DAP is easily adapted to all ranges of dry fertilizer application methods. DAP is a perfect choice, as a base product for custom blends. The high analysis of 18-46-0, also aids in reducing handling, freight, and application costs.
-------------------
As global pop. continues to grow, the need for I/O-NPK continues to ratchet upwards. This need will tend to induce a rising bottom value for sulfur extracted from sour crude & sour natgas [CTL too?], thus adding a rising bottom value to these FFs.
Now the question is [hat-tip Sailorman]: will demand-desired and quantity-demanded match each other and also to supply, or does this credit crisis + unaffordability trend set off huge amounts of demand destruction? Thus, the delays and shutdowns of sour sources is not a good trend for future food production.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Interesting discussion, the relationship between sour crude and food production is new to me.
Also significant, as noted above, is the relationship between oil and ng price and sour crude economics. Obviously something has to give, we will perforce continue refining sour crude... IMO this is one more reason why current low price is will not last.
Totoneila,
Your post gave me pause for thought.
If I understand your post right, dwindling usage of sour crude equals reduced quantities of sulfuric acid equals reduced quantities of Super Phosphorus Fertilizer. Current prices may be out of whack. The world may need NPK, depending on how you see world population. Speaking for my neighbors, and myself I need NPK and modified seed (GMOs). If I feel that way, I guess everyone who's used them feels the same way as I do. So, from where I sit, demand is high and purchasing power is dropping.
Nitrogen doesn't appear to me to me to be the immediate problem. Natural gas hasn't hit a wall. It will hit one, just not today in terms of available commodities to make the nitrogen.
Potassium, well the Canadians appear to have this market. Potassium is in tight supply and the situation could worsen due to demand issues (given no factors like having money to buy it.)
Phosphorus, on the other hand, appears to have a few barriers, dwindling world supply of phosphorus rock plus a potential for reduced production capabilities due to reduced sulfuric acid availability. Regardless of money supply, this stuff just isn't going to be around in the same quantities it used to be.
GMO Seed, well, from what I know, my life is in the hands of a few people who control this stuff. Without GMO, the benefits NPK are, well, strained. I wish I understand this market. From what I know, the GMO seed has been in tight supply. The world wants GMO!!!! Who get's it, it don't know.
Now, with a financial crisis, the whole thing looks a lot messier.
Does the World Population still have the money to BUY the food they want and have become accustomed to? How long until unemployment checks run out.
Who wants the currencies of the poor nations that have little to give in return for these commodities?
Who, even if they have something to offer in return for the commodities, say coffee beans, can get credit to but the NPK and GMO?
What's with the American Farmer? Can he get credit to buy next years NPK and GMO? If they can all get their hands on the stuff, in abundance, where will they sell their crops? Sure, everyone WANTS the farmer's food, but what do they use to pay for it? If they don't have a job, they may, at some point, be looking at Uncle Sam to support their diet and their farmer's pocketbook, another Government bailout. Yes, again, people want the food the same way they've had it, pork, wheat, fat, and sugar. I just see a problem from them paying for it without offering something that the farmer of today want in return.
I would guess there won't be a problem with supplies of OIL, NPK or GMO for the foreseeable future, I would think the problem is going to be at the farmer level and at the level of the USD's value as a world currency for establishing value.
I see a destruction of the farmer, of the USD, and then we find a bottom being found to our turmoil, a place to get one more chance as a human race. Once the farmer is destroyed, then will know we are reaching the bottom because, then, food is the one thing we wall want and need. We just need to find a way to pay for it.
I have no idea if these thoughts are correct. There are thoughts based strickly on NPK and those of the ecconcomic system that drive them. Your post just got me to thinking. I would appreciate your thoughts?
As I recall -- a slight but important correction of historical narrative, here -- Carter did not so much mishandle the Iranian hostage situation as Reagan politicos were making backroom deals with Iranians holding hostages in order to keep them from being released.
Many of the players in the Iran-Contra scandal have been woven into evil-doings -- think of John Negroponte and Honduran death squads.
The winding course of history is not neat, tidy, or clean. Brutish and nasty, with little gems of noble intention floating in the flotsam and jetsam.
And so it goes....
Seems like a few weeks back I replied to a TOD demographic survey. Did I miss the results or were they never posted?
I don't think they've been posted yet.
They may not be posted until after the holidays. The staff are busy, and so is everyone else. Traffic is so low during the holidays that many contributors are kind of reluctant to post their best work at this time.
Oil’s fall pinches Latin nations
Of the major countries in Latin America, the U.S. is on friendly terms with only two, Mexico and Columbia. CNN had a very insignful report today on the difficulties Columbia's friendship with the U.S. causes with its neighbors:
http://edition.cnn.com/video/?/video/world/2008/12/06/sesay.columbia.bor...
The U.S. is on friendly terms with most Latin American nations. There is yet trade between the United States and Venezuela and Ecuador, even though they confiscated capital invested in their economies from numerous corporations including some based in the United States. Many people from Latin American nations have located in the United States and nutured ties with families in their countries of origin.
Relations with Cuba are less hostile with the United States allowing food sales to Cuba.
http://www.reuters.com/article/domesticNews/idUSN1557515120080216
There are signs that Chavez may be losing popularity in his own country as some opposition candidates were able to win important seats.
http://www.msnbc.msn.com/id/27893484/
But, but Chavez is a communist petro-tyrant according to the Canadian Press and the rest of the MSM. So what in hell are opposition candidates doing there in the first place.
Down-
South America has abandoned the yoke of the US, with only Columbia being a direct client state. Paraguay just recently elected a new government, and was the other holdout.
Most of Central America is still under the thumb of US corporate control, and are just lapdogs for US interests.
The Caribbean Nations, with help from Chavez, have gained greater autonomy, and are gaining some freedom and choice, although the social conditions are often horrific.
South America is one of the bright spots on the planet, with new economic and political models, a politically literate population, and often massive resources.
Mistakes will, and are being made, but progress is being made.
ALADI, the Latin trade organization, has 493 million people in it, and calls it's own shots, free from US influence.
You make it sound like they are our colonies. Most Americans want little to do with Central and South America. Unfortunately, their currencies keep collapsing (Mexico), dictators keep causing trouble (Panama), rebel armies keep fighting (Columbia) etc.
They have done better recently but people like Chavez will keep the communist nightmare alive, and the people will always fall for it. Studies have consistently shown that the average intelligence of Latinos is approximately 89 (versus 103 for whites, and 106 for asians) so I don't expect Central and South America to ever be world-beaters. I just hope they can attain some security.
Here is some background information to learn more.
http://psychology.uwo.ca/faculty/rushtonpdfs/PPPL1.pdf
Geeze, you sound like Homer Lea and his The Valor of Ignorance or The Day of the Saxon, or better yet the early 20th-century scholars who styled themselves "anthropo-sociologists" and did not hesitate to assert that the "Mediterranean race, with its brown eyes and round skull, was not disposed toward individual self-reliance and risk-taking. Its nature was to favor socialism--protection by the state; whereas the Nordic type was the pioneer, the individual endowed with courage and originality, who single-handed achieves great things. On him alone all progress depends."
The political implications of this pseudo science were that England, Holland, Germany, Scandinavia, and the United States were bound to prosper and lead the world, while the Mediterranean countries ("the Latin nations") would be left trailing farther and farther behind.
That fortunate adventurer in South Africa, Cecil Rhodes, believed this prediction so literally that to help prepare the future rulers of the world he endowed by his will of 1903 the scholarships that bear his name. They were intended for English, German, and American students of high character and ability, who would acquire at Oxford the attitudes and traditions that made Englishmen movers and shakers. Those wonderful colleges had something to teach fellow Nordics and would bind them in brotherly love. When WWI came, the Germans suddenly lost their racial merit, and their scholarships.
Most British wanted little to do with India, Africa and everywhere else the British Empire happened to stick its flag. What Americans or British want, has no bearing whatsoever on what their State decides is in their best interests.
Keithster:
Rushton is a crank. He came out with that crap in the 80's and was thoroughly trounced. He was the darling of the Canadian racist movement. I remember some of his conclusions were derived from brain mass measurements. David Suzuki debated him and cut him a new one. This guy is about as credible as Daniel Yergin.
Keithster100: (claim that Latinos have IQ of 89)
This has no scientific merit whatsoever: the very definition of "Latino" is "originating from Latin America (or a spanish/portuguese speaking country) REGARDLESS OF RACE". If you say that Latinos have an IQ of 89, you say nothing but "Latin America does not have very good schools"
The same is true about the claims about "African Americans": this group is not genetically defined, and due to the love affairs and sex crimes of the slave masters, is between 1% and 100% african genetically (the 'one drop of black blood' rule of the bad old times). Therefore, any results showing low IQ of African Americans just show that either the schools they attend are not as good on average, or that education does not have a very high cultural value in many of their families (which may be due to lingering effects of active persecution of educated blacks during slavery times, yes, cultural effects can linger that long).
I don't know about the need for "one million new young scientists" by 2013, but I do like the idea of 4H youth learning the basics of wind turbine technology.
Besides, local 4H clubs are probably one of the best ways for our kids to learn and develop the skills and the mental character they will need in the future.
(this news release is from September - my apologies if this was previously posted on TOD)
I doubt that they really want scientists, only engineers and technicians. Are they going to start teaching Darwinian concepts, such as Evolution, to all those Fundies out there in Mudville? To understand the energy problems thru science and engineering, one must first understand physics and that presents real problems for people who think the Earth is less than 10,000 years old. Also, the critical thinking based on logic and reason requires one to question dogmatic beliefs.
No, these folks don't want more scientists as the Emperor's new cloths would disintegrate, revealing some nasty truths...
E. Swanson
Your own critical thinking could stand to be a little more nuanced, Black Dog. It's a bit narrow to paint the whole region as a big, dumb monolith like that. Besides, many in the bastions of hardcore fundamentalism still realize that they depend on science to survive these days. You have to try to get into any chink in the armor that you can, and if it's through windpower in this case, I'll take it.
Did I paint an incorrect picture?
Where do all these Fundy folks live?
---
24 October 1988
LOST IN SPACE
Many Americans in Survey Think Sun Revolves Around the Earth
More than 450 years after Copernicus proved the Earth revolves around the sun, Millions of adult Americans seem to think it's the other way around,a researcher said Sunday.
"Its a fairly dire situation," said Jon Miller, director of the Public opinion laboratory at northern Illinois University, who conducted the nationwide survey for the National Science Foundation.
"The results show that on very basic ideas, vast numbers of Americans are scientificly illiterate," he said.
In the telephone survey of 2,041 adults 18 or older, conducted in July, people were asked about 75 questions testing their knowledge of basic science, Mr. Miller said. The survey had a margin of error of plus or minus 3 percentage points.
Asked whether the Earth goes around the sun or the sun around the Earth, 21 percent replied incorrectly. Seven percent said they did not know.
Of the 72 percent who answered correctly, 45 percent said it takes one year for the Earth to orbit the sun, 17 percent said one day, 2 percent said one month and 9 percent didn't know.
That means about 55 percent of adult Americans, or 94 million people, do not know that the Earth revolves around the sun once a year, Mr. Miller said.
---
E. Swanson
That just happens to correspond to the number who bought into the FOX News and Bush regime story on Saddam being behind 9/11. These are people who are too lazy to think for themselves and every country has too many of them.
Plus, there are in fact plenty of bona fide scientists who are biblical literalists, and there have been for decades. Two of the best known are Henry Morris and Duane Gish. And most of the early pioneers of science were biblical literalists - including Galileo and Newton.
I expect that you are correct, especially in the "soft" sciences, such as medicine. Remember that Darwin began by studying for a religious career, then went on his world tour to South America. He returned to Europe with a vastly different world view. His study convinced him that the literal view of the history of Earth given in the Bible was incorrect. He waited 15 years to publish his findings and many more decades passed until his concepts were given weight. Now days, Evolutionary theory underpins almost all new work in Biology and Medicine, especially Genetics, even though there may still lots of folks that do not accept that as fact.
In the hard sciences, such as physics, there are few who still hold to the "Young Earth" world view. I think it's especially dangerous for people to take the fruits of science while ignoring the underlying world view. That's because at some point in the future, there will be the same sort of conflict of viewpoints as we have seen so vividly as the result of 9/11. The Fundamentalist Christians simply will not be able to accept a sectarian world view and ultimately, there will be a severe confrontation, not unlike that which propels the "terrorists" to fight and die for their belief system.
E. Swanson
The pioneering figure in the field of genetics was Gregor Mendel, and he was not an evolutionist. In fact, the evolutionists ignored his work for no good reason for nearly half a century.
This has already been implemented in some places for load-leveling. See http://www.dom.com/about/stations/hydro/bath.jsp.
Well, if anybody reads my little notes, they know I am a big fan of pumped hydro energy storage. That one about the high and low pumped hydro lakes going up and down 80 feet and hence being "unsuitable for recreational uses" got me thinking.
Great idea! Put big (I mean BIG) rafts on both lakes. Plant grass and trees on each raft. Hang a big net below, so that in effect the fish and water plants can have a nice haven x meters below the raft, just like in a normal lake without those ups and downs. Then rent out the rafts for recreational cabins, each with a fishing hole right in the front yard, or for that matter, a swimming hole. What a vacation spot! You have the best fishing ever, and you get to ride up and down like a yo-yo at the same time, watching the shore scenery change. Huge income both from the energy savings, and the rent of the cabins. Happy times are here again. That will be two bucks, please.
These systems could also work as (shell)fish / seaweed farms and would be an ideal place to connect offshore wind and future wave and tidal devices.
I had a vision for combined solar desalination and water transport to higher reservoirs using mirrors to raise steam from the sea water which would then gain potential energy by flowing uphill inside parabolic collectors.
Before being turned to steam, the sea water could by used to cool a sea water greenhouse as described here.
http://www.seawatergreenhouse.com
Pumped storage has a round trip efficiency of about 80% (90% each way), very good response times for grid stability, the infrastrucutre is very cost effecitve and long lived and there is not going to be any shortages of seawater.
Perhaps these ideas, which seem to have real potential to me, could be combined with the greater utilisation of seawater to grow food:
http://www.ecoworld.com/home/articles2.cfm?tid=336
http://www.seawaterfoundation.org/
Off and on the some of the collective "we" at TOD have speculated on the effect that the "global economic crisis" might have on the 2010 Winter Olympics and especially the 2012 Summer Olympics.
Here, courtesy of TAE and some links:
Can the 2010 Games avoid a financial crash?
London's bid is falling down
Dave Martin - how are those beavers doing?
Pete
The beavers should be digging in for a long, hard winter if they have any sense.
With no power in a couple of years a beaver hat would suit me fine.
The aircraft carriers they were fantasising about building have now been set back by two years - the first of an infinite series of delays.
The first glimmerings of financial reality are starting to penetrate the MSM:
http://www.telegraph.co.uk/finance/comment/liamhalligan/3630019/Financia...
Obama, who appears to be a typical Chicago machine politician, may keep the lid on in the US for a while, but my guess would be that in Europe they are going to be tracked back to their ratholes, or at least some of them.
DaveMart,
Thanks for the link to Liam Halligan's article. It's a must-read and I almost feel tempted to block-quote it in full. But the final paragraph says it all:
Ambrose Evans-Pritchard is another columnist in the same paper who knows that something is up.
His solutions seem to differ rather from Halligan, as he favours monetarising the debt, but he is against the bail-outs too:
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/362980...
He realises the scale of the problem:
Here's one from the usually more staid Times:
And the Guardian. Getting rather doomerish across the pond...
Fears of a million layoffs a month in corporate America
Hello Leanan,
Thxs for this info. A million/month moved to O-NPK recycling, permaculture change, SpiderWebRiding, JHK's & Alan's ideas, minimal water-usage methods, and other Optimal Overshoot Decline strategies could do much to help keep food, shelter, and other essentials affordable as we go postPeak. Recall my much earlier postings of ultimately 60-75% of the labor force moved in this direction to help prevent Zim-style deprivation and strife.
In short: early, cooperative, Peak Outreach-induced adoption of wheelbarrows should be much preferred over the default Thermo/Gene tendency to start dancing in a machete' moshpit.
National security and peace is fundamentally based upon the ecosystem's total biolife & water supply, which for us humans, is even-more fundamentally based upon the idealized ERoEI 20:1 Liebscher's Optimal photosynthesis leveraging and avoidance of Liebig Minimums. Recall the UN Fertilizer Forecast that says that North America is headed into a phosphate deficit in the years ahead, plus my many other links on growing I-NPK import problems.
I sincerely hope that Obama understands that we are evolved to sit in the dark; that maximum effort in the postPeak years ahead needs to be directed towards minimal outside lighting, high-efficiency family, tribal, and societal living structures & forms, growing agro-proficiency skillsets, and moving O-NPK to close the Circle of Life and extinction rate reduction.
I am not the sharpest pencil in the box so I welcome any TOD elaboration or refutation. I sure hope Obama, in his Inauguration Speech, asks Tiger to plow the White House lawn. I think every American would be overjoyed to see his charming daughters proudly and happily picking their first tomatoes, carrots, lettuce--I know I would.
Maybe, just barely maybe, we can still faintly remember when the music meant the very best for our children's time [credit Harry Chapin]:
http://news.yahoo.com/s/ap/20081208/ap_on_re_us/gifts_for_guns
---------------------------
In lean times, SoCal residents trade guns for food
--------------------------
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
This is a good look at some of the improvements coming along in solar, but IMHO, it follows a line of incomplete logic to support a correct assumption. It does not consider a future of diminishing resources, the same failure that has led to our financial mess.
The primary cost of solar power is the initial capital investment. Thereafter, cost of the consumed resource (sunlight) is zero. The cost of a new coal-power generation plant is a large capital investment. Thereafter, the cost of the coal to feed the plant will rise as the easy to mine resources are used up.
It appears to me that most everyone persists in ignoring the future when doing their cost/benefit calculations.
Sam, the Prudent RVer
I think solar will sell when electricity starts becoming unreliable. It will never look competitive.
I was looking at the cost of having a PV system installed on my own house, and even with the rebates and tax credits, and knowing what's coming with energy supply, it didn't make financial sense.
The reason I'm going ahead with it is because I'm expecting more problems with power outages in the future, and I want to minimize the effects of that sort of problem.
One big problem with solar is the fact that it is intermittent. Thus, storage is a requirement, especially for solar electric generation. Once the fraction of the demand becomes large, solar must be coupled with storage, which adds to the overall cost of a system. Even were it possible to build PV at a very low cost per watt, the cost of the storage would keep the overall cost high when compared with power from fossil fuels. Wind generated electricity also has a similar problem, as does low temperature solar thermal. The article didn't mention the cost of storage, nor did you in your comment.
Of course, you also failed to mention the external costs, such as air pollution and global warming or the security problems from importing oil when you claim that solar "didn't make financial sense." To me, that would indicate a basic lack of understanding of the energy problem on your part. And you are telling us that you somehow are advising the Obama energy group? These ideas have been around since the 1974-75 period after the Arab/OPEC Oil Embargo, when I first began to study our energy mess.
Oh well, the more things change, the more they are the same...
E. Swanson
Again, the macro answer does not hold for the individual.
I would rather have some electricity from solar and batteries than none at all when the grid goes down.
We have a geothermal plant 25 miles south of here and the rest are coal fired or natural gas. If our power company cannot convince the coal producers in Montana or the gas producers back east that they really do have a viable line of credit, they won't be able to make enough electricity after a few days.
There's a big difference between no power and some power, so my recommendation to friends in sunny areas is to acquire a couple hundred watts of PV and a battery/inverter system, as I have. With that amount you can do lighting, recharging of NiMH batteries for devices, water pumping, operating power tools, and a lot more. The first hundred watts is a lot more valuable than the 20th hundred watts.
I'd hoped to put up more, but failed to recognize the deflation for what it was. Oops. Still, a very modest system should be a lot different than no system.
Just my 2 cents...
For same reasons, my plan is to have a plain old IC engine and a biogas generator (wood gas) hooked to a plain old water pump. The wood gas powers the engine, the engine pumps water to a tower, the water runs thru a plain old turbine -alternator, and I get lots of juice when and how I want it, and ALL of this i can do myself, fix myself, and so can most appalachian tire kickers around here.
NO PV, no inverters, no anything that ain't in the junk yard right now. Virtues of poverty, a la Orlov.
PS- wood is stored solar energy, water in a tank is stored available energy.
I'm happy you're going ahead with it.
In the case of grid-tied systems, it seems to make very good economic sense. Where would you rather have your money - on your roof (saving you money) or on Wall street?
In your case this may not be so obvious - you are a very savvy guy. Look at it from a cash-flow perspective. If you were to finance your solar (2nd mortgage - still a go with banks), compare your monthly payments against your utility savings plus mortgage interest write-off. For someone with moderate to large electricity consumption, you are cash-flow POSITIVE from day one. If you have the means to pay for the system up front, your savings will be even greater in the long run.
I'm too lazy to look up what Nevada offers, here in CA it just went from $1.90 to $1.55/watt (I know I pointed this out yesterday, just informing the masses...) cash rebate. Assumptions must be made about what lies ahead, but electricity rates will go up. Sizing the system for maximum economicalness (not a word) is important. Too big and you're replacing cheap electricity (assuming tiered rates).
I'd be happy to do a quick analysis for you on costs and savings.
In the case of off-grid or battery back-up... a whole 'nother story. Expensive, high-maintenance, heavy, messy, imperfect technology. Use the grid as long as we have it.
Hello TODers,
http://www.abcnews.go.com/Business/ConsumerFinance/story?id=6370751&page=1
------------------------
Financial Crisis May Worsen Food Crunch
Although Commodity Prices Have Fallen, the Crisis May Make Food Shortages Worse
-------------------------
Recall that POT's chief, Bill Doyle has warned that reserves are down to nine weeks, which is much less than the time to grow a crop.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
At the other end of the world,People Spending on botox instead of food
http://www.news.com.au/heraldsun/story/0,21985,24761261-662,00.htmlns.
Wonders never cease!
I think these people need an injection of a different sort - of a foot up the backside.
Although I suppose in the broader scheme of things it is merely misdirected priorities and a misallocation of funds. The energy costs of making and injecting botox ought to be minimal..
It seems that quietly, with few realising, the system that puts food on the supermarkets shelves is beginning to falter.
Bakkavor's suppliers lose trading cover as downturn bites
http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/362995...
I've never even heard of this company before, let alone its importance to food security in the UK.
Also, more contaminated food:
Food body says 'avoid Irish pork'
http://news.bbc.co.uk/2/hi/uk_news/7770164.stm
Hi Leanan, I can't seem to open this link, what's this mystery 24 year old cure all energy ills solution? :)
http://www.mercurynews.com/opinion/ci_11149638?nclick_check=1
I also had problems with it, until I trimmed the crud off the end:
http://www.mercurynews.com/opinion/ci_11149638
Your mileage may vary.
Strange. It works fine for me. Registration may be required.
The miracle solution is IRF (Integral Fast Reactors).
Ray Kurzweil: "I personally believe that we’re within five years...". Five years is a joke in the Type 1 Diabetes community. New discoveries that might lead to cures or better treatment are always announced as reaching patients in 5 years. Then they disappear.
On climate change: I read/heard somewhere the answer to my question on modelling the climate with open ocean in the Arctic: A researcher said that no one had looked at this yet!!! I have heard the positive feedback argument that it "obviously" reduces the albedo of the ocean. But it might also increase snowfall on land around the Arctic ocean.
The 280ppm CO2 that existed before the Industrial revolution was a stable equilibrium of some sort. When it went up it induced some response to bring it down and vice versa. We're so far from equilibrium now that we don't know how these forces have changed. What we do know is that when you push a pendulum a long way from equilibrium it can sometimes come back quickly. Now take the price of oil...
Regarding the modelling of the regional Arctic climate with an ice free ocean, it will not be ice free in winter in the coming decades. We are far from the cataclysmic state where the winter polar night is above zero. As seen this year, there is a rapid re-freezing of the Arctic ice sheet and this cuts off the evapouration for additional wintertime snowfall. The Brents Sea is ice free year round and that is quite a large region that can feed moisture into systems that will reach Siberia. Also, there is enough moisture already coming from the low latitudes via the more active baroclinic systems growing off the warming tropics. All this additional moisture is not having a clear impact and has not been an effective negative feedback on the warming.
I think the summertime (actually late summer/early fall) ice free ocean will be slow to have an impact. The absorbed energy goes into the seawater. I suspect it will take several years before the buffering effect of the ocean allows much coupling of the extra energy into the atmosphere.
Don't dismiss him so quickly. He might be right. It seems to me either a nuclear holocaust or a milder, slower planetary meltdown resulting from our technology and industrial civilization would qualify as a technological singularity. The singularity doesn't have to be a "good thing".
cfm in Gray goo, ME
There's a Congressional Report on gas hydrates at http://opencrs.cdt.org/getfile.php?rid=65733.
A few facts which appear to me as meaningful.
1. Consumption of oil in the USA has dropped from 20.85 mbpd to 19.6 mbpd. That’s a 1.25 mbpd drop which represents a 6% drop in usage and is consistent with the 5% drop in GDP that a number of US economists are suggesting for 4th Q 2008 GDP.
2. The price of oil has dropped from the high in July from 147 to 42…a 71.1% drop.
3. Depletion rates averaged 6.7% on the 800 oil reserves that the 2008 IEA report references. This amounts to 5.6 mbpd based on an 84 million barrel per day usage.
4. Unconventional reserves account for 18% of all liquids used per the IEA report. That represents 15.6 mbpd.
5. My breakeven price for unconventional reserves (depending on which experts I use) is between $50-70 dollars.
6. In a rational world, if my costs are above my returns, a good percentage of that 15 mbpd will be mothballed sometime within the next 6 to 12 months.
7. Adding the current depletion rates of convention reserves and the current unprofitable unconventional reserves together on a mbpd basis represents ( 5.63+15= 20.63) mbpd.
8. Since the economic recession in the US has produced a 1.25 mbpd decline and that doesn’t even equal the stated amount of declines due to depletion, my conclusion is that the currently depressed price of oil will be short lived.
9. All comments are welcomed.
This is exactly what the problem is, depletion and expensive production. In Canada, Harper is going to try to rescue the tar sands with tax breaks but I am not sure this will work if the oil price is hovering at $40. I do not think that the 1 million barrels per day of production will go offline as Shell and others subsidize their tar sands production from the still profitable conventional fields. But I highly doubt that the big expansion plans for the tar sands will materialize in the next few years. This by itself is enough to contribute to the global decline driven by natural depletion.
throwing money at the big 3 automakers will accomplish absolutely nothing. I don't forsee the masses of people to run out and buy a $30k car/truck. too many people losing jobs, and more are coming. Congress may as well just climb on the roof of capital hill and throw the money into the wind, or use it to keep warm in the fireplace.
*on a seprate note* I am starting to see plastic baggies on the gasoline pump handles at a few gas stations. No big deal, right? they will be getting a refill soon. But, what if the price of gasoline goes down far enough, say around a dollar a gallon, meanwhile oil prices have dropped down so low that big oil doesn't produce much oil, because they aren't making a profit on it, if any at all. Would it be crazy to think that we could actually run out of gas because it was too cheap?
CBS 60 Minutes December 7
Saudi Arabia Bullish On Oil's Future
Video and text available.
I just finished watching this two-segment sequence by Leslie Stahl on 60 Minutes. I think it might be interesting to make it - somehow - a top post so that it can be commented on for more than just what can be done in a DB.
I suggest this because the interview was primarily with the current Saudi Oli Minister, Ali Al-Naiminm and covered in part the "goings on" at Shaybah and Khurais.
I do not feel qualifed to comment on what was said about reserves and Stahl certainly did not probe about that at all.
There were some questions about pricing and - to me - very interesting comments towards the end on KSA's "desire" to not see the USA move towards alternative energy and that KSA seems to be working a cleaner ICE engine.
I suppose my point is that 60 Minutes - good interveiw or not - is watched by more average people and often quoted in the MSM so it might be a good idea for some of us at TOD to dissect the veracity of the interview and comments.
Pete
Yeah, we watched it. I suppose if you knew nothing about oil production, you might learn something (mainly Saudi spin).
My wife was asking me how much of what was said can be believed. I suppose some of it can - I have no doubt that the Saudis don't wish for us to get off of oil - that's an accurate statement.
The segment was cringe-worthy. Here you have the great resources of CBS, certainly capable of doing some digging, and they report on what looks like nothing more than a marketing presentation by Aramco.
My "favorite" part is the mission control shot from inside Aramco's big analysis center. Lots of big screens and computers but no realization by Stahl that these corporatists will never use that advanced technology to convey the state of oil depletion to the rest of us. Here we are, a few of us on TOD, powering up our PC's and valiantly trying to deduce it through incomplete data and statistical models.
Guess who will ultimately provide the answers?
I agree. I'd like to see TOD draft a counterpoint to 60 Minutes in the hopes they might air it at some point in the future.
Pete
The singularity: The fantasy and its effect by Kurt Cobb is a fine short article on why technology will not save us.
As quoted:
I'd like to add to the list of Tainter, Cotton, and David Orr, another ecologist/scientist/teacher/writer whose preeminent book preceded these people listed, and in one broad stroke encompasses many of the core ideas featured in Cobb's article, especially this point of increasing complexity and its problems: David Ehrenfeld: "The Arrogance of Humanism"
For all of you who think well of the above cited writers and their ideas, Ehrenfeld is a must read.
Kurt Cobb has not taken the time to actually analyze under-delivered technology or taken time to really understand what is being projected in the Technological Singularity.
Kurzweil's Technological Singularity is specifically referring to information based technologies. If the technology is not or does not become information based then there is no direct speed up to exponential development rates. But more technologies are being adjusted to benefit from this - such as biotech with the shift to Synthetic Biology, DNA sequencing and DNA synthesis.
Nuclear fusion for power generation has not been a technological that is tightly coupled to information based technologies. The ITER project and tokomak based attempts at nuclear fusion power are ones that I would argue are not good projects or approaches. This is like picking out the Big Dig as being an example of the limits of tunneling and highway/transportation projects. Sometimes there are crappy projects of all kinds.
I think nuclear fusion success is more likely from the
1. inertial electrostatic fusion (Bussard Fusion work)
http://www.emc2fusion.org/
2. Tri-alpha energy. Colliding beam fusion (raised $40+ million)
http://nextbigfuture.com/2007/06/tri-alpha-energy-raises-40-million-in.html
3. Focus Fusion / Dense Plasma Focus
http://www.lawrencevilleplasmaphysics.com/index.php?pr=Focus_Fusion
http://en.wikipedia.org/wiki/Dense_plasma_focus
4. General Fusion/ Magnetized Target fusion
http://www.generalfusion.com/t5_general_fusion.php
Plus many of the benefits of nuclear fusion can be achieved with deep burn nuclear fission. Integral breeder reactors, Liquid Flouride Thorium Reactors.
Also, the statement that technology cannot save us is a very broad statement to only pickout the lack of success with nuclear fusion as proof. Plus there is a need to specify - save us from what ? Presumably it is from peak oil/energy or from global warming.
There would need to be a review of several possible technological solutions with sufficient potential to "save us from lack of energy and lack of continued economic growth" and to indicate why they will all not be able to individually or collectively.
- the above list of nuclear fusion
- integral breeder reactors, liquid Flouride thorium reactors, accelerator driven fission reactors, high temperature reactors mass produced in China, mass produced uranium hydride reactors / Hyperion Power. Combined nuclear fission burning of uranium and or thorium with improvements in accessing more sources of uranium and thorium (like from seawater)
- partically successful nuclear fusion but a bit more costly combined with regular fission reactors to enable a collective deep burning system
- algae, seaweed based biofuel
- waste based biofuel Coskata process
- advanced solar power (thin film, concentrated solar, space based solar)
- thermoelectric power breakthroughs for capturing and using waste heat
- cheap, light and safe electric cars
- superconductors for engines, efficient energy grid
- ecomotors for advanced diesel, free piston engines etc...
- affordable strong light weight materials to enable lighter cars
and many more technological possibilities
This almost sounds like some kind of doomer-porn parody...
SUVs at altar, Detroit church prays for a bailout
pa-rum-pum-pum-pum.......
Isn't there something in the good book about worshipping false idols ?
Or something like that...
Even the Onion website couldn't top this BIG3 Trinity prayer session-SUVs as the Father, the Son, and the Holy Ghost. EDIT: 3 golden calfs--Savinar was right--> we worship our cars & petrol. Yikes!
I wonder what Rush, O'Reilly, and Hannity will say. They probably want to nominate one of the vehicles to be the next Popemobile.
EDIT: Too bad Tiger didn't use this altar & prayer marketing opportunity to have his Nike signature brand of hi-tech, carbon-fiber and titanium wheelbarrow, bicycle, and scythe displayed instead of these SUVs. I would suggest that we would be better off in the long run.
I didn't see this above, so in case anyone's interested:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aL2dc1mwHOdo&refer=home
Contango Pays Most in Decade as Shell Stores Crude
Dec. 8 (Bloomberg) -- In the worst year ever for oil, investors can lock in the biggest profits in a decade by storing crude.
Hello Greenish,
Thxs for this info. Imagine the profits if you had a huge ship full of sulfur and the price went up 20-FOLD again in a very short time [recall USGS info upthread].