Drumbeat: August 11, 2010


Protests spew over Montana-Gulf pipeline plan

Environmental groups and landowners, upset by last month's oil spill in Michigan, are urging the Obama administration to deny a proposal for an oil pipeline that would go from the Montana-Canada border to refineries along the Texas Gulf Coast.

Alberta-based TransCanada's proposed 1,661-mile Keystone XL pipeline would link up with its existing 2,151-mile Keystone pipeline, which began operations in June, and go through Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.

Opponents say last month's spill underscored the dangers of the United States' reliance on fossil fuels. A pipeline ruptured on July 25 and spilled nearly a million gallons of crude oil into a tributary of the Kalamazoo River in southwestern Michigan, according to Environmental Protection Agency estimates.

IEA warns of Gulf spill effect on new oil supplies

BP’s oil spill in the Gulf of Mexico has placed the ability of the industry to find important new oil supplies on “a knife-edge,” the International Energy Agency, the rich country’s watchdog, warned on Wednesday.

“Macondo also places the ability of the industry to access important new reserves on a knife edge. Some 30 per cent of existing global oil, and nearly 50 per cent of new supplies by 2015, needs to be sourced from offshore, much of it from deep water,” the IEA said in its monthly oil market report.


Fast-Growing China Consumed Less Energy Than U.S. Last Year, Xinhua Says

China, the world’s fastest-growing major economy, consumed less energy than the U.S. last year, the official Xinhua News Agency said, citing a government statement.

Energy use reached 2.146 billion metric tons of oil equivalent, at least 200 million tons less than U.S. consumption, Xinhua said, citing a joint statement by the National Energy Administration and National Bureau of Statistics. China’s energy consumption per capita was 1.61 tons of oil equivalent in 2009, one-fifth of the U.S., according to the Xinhua report.


Rosneft vows to get back $430 mln paid to Yukos

(Reuters) - Russia's state-owned oil giant Rosneft said it aimed to get back the $430 million paid out to Yukos Capital earlier this week following a protracted lawsuit between the firms.

"Rosneft has complied with the Dutch court's decision but is expecting to regain control over the disbursed funds," the company said in a press release on Wednesday.


Fuel Production in India Is Normal After Mumbai Port Closure, Refiners Say

India’s state refiners said fuel production at their plants in Mumbai is normal and no shortage is foreseen as the nation’s busiest container harbor in the city remained closed for the third day after a ship collision.

Oil and Natural Gas Corp., operator of India’s biggest oil field off the west coast, is diverting crude to the two facilities through pipeline to compensate for blocked seaborne imports, the refiners said.


Gas and oil supply disruption causes 3,500MW shortfall

ISLAMABAD: Disruption in the supply of natural gas and fuel oil because severe damage caused by flood to some major installations and transportation network has resulted in a shortfall of more than 3,500 megawatts of electricity, leading to up to seven hours of loadshedding across the country.

The power shortage will persist longer than estimated also because of a delay in the commissioning of some under-construction power projects which were nearing completion. Six power stations of about 1,500MW are already off the national grid.


The energy conundrum

The latest oil shock has re-emphasized the urgency for India to evolve a solution to secure its energy needs such that they mitigate, if not preclude, such economic shocks. All the more so because the existing energy plan envisages India’s dependency on imports to increase to 90% by 2030—a period in which it strives to achieve double-digit growth as part of a strategy to push for greater inclusiveness. This is not surprising given that its consumption of petroleum products has grown at an annual compounded growth rate of around 4% in the last seven years and, according to the International Energy Agency, consumption is expected to rise to 135 million tonnes (mt) per annum by 2012 from 112 mt now.


Anadarko removes non-essential staff from Independence

(Reuters) - Anadarko Petroleum said on Wednesday it removed non-essential personnel from its key natural gas facility, Independence Hub, as well as Neptune facilities in the Gulf of Mexico on Tuesday evening.


Repsol to Sell Shares in Brazilian Unit to Fund Offshore Fields

Repsol YPF SA, Spain’s largest oil company, filed to sell voting shares in its Brazilian unit to fund exploration and production at offshore fields.


Texas oil interests line up for Proposition 23

Money has always been crucial in California politics. As far back as the mid-1960s, the legendary Assembly Speaker Jesse Unruh called it "the mother's milk" of his profession.

He was talking about campaign donations from both individuals and businesses. But this year, the role of money has acquired entirely new dimensions.


Beyond BP: Michael Klare on US Energy Policy

The disaster engendered by the explosion and subsequent hemorrhaging of British Petroleum's Deepwater Horizon oil rig in the Gulf of Mexico has thrust energy costs—economic and environmental—back into the public discourse in a way not seen since gasoline prices went ballistic in the summer of 2008. That summer, with prices hovering in the $4-per-gallon range, Hampshire College's Michael Klare published Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books, Henry Holt & Co., New York).


Vogue’s oil-inspired spread stirs muck in August issue

There she is again, lying on her back in a feathered dress, and in close up, her hair and face sleek with oil.

A stirring photo spread in the August issue of Vogue Italia was inspired by the Gulf oil spill, leaving readers wondering if the magazine crossed from evocative to insensitive. Editor-in-Chief Franca Sozzani understands the debate stretching from blogosphere to beaches and said the motivation is straightforward.


Solar power could boost Sharjah’s energy security

DUBAI — Sharjah finally broke its syndrome of denial over its energy crisis recently and issued an apology to the public. It came as a welcome respite during a summer of discontent for residents.


Mankind must abandon earth or face extinction: Hawking

LONDON (AFP) – Mankind's only chance of long-term survival lies in colonising space, as humans drain Earth of resources and face a terrifying array of new threats, warned British scientist Stephen Hawking on Monday.


IEA Raises Forecast for Global Oil Consumption Even as 2011 Growth Slows

Global demand for oil will exceed the International Energy Agency’s earlier estimates, even as the adviser predicts the economic recovery will slow next year.

Crude demand worldwide will average 87.9 million barrels a day in 2011, the IEA said today in its monthly oil market report. While that is 50,000 barrels a day more than the Paris- based adviser forecast last month, it lags behind the upward revision of 80,000 barrels for this year’s estimate. There are “significant downside risks” that demand will slow on an uncertain global economic outlook, the IEA said.

“Global economic activity is seen expanding by 4.5 percent this year but remains capped at 4.3 percent next year,” according to the report. “Concerns that the global economic recovery may falter from the second half of 2010 pose a significant downward risk to the forecast.”


Oil Falls for Second Day as China Output Growth, U.S. Productivity Slow

Crude oil fell for a second day as a demand outlook from the International Energy Agency coupled with data from the U.S. and China reinforced concerns that the recovery is faltering.

The IEA, an adviser to the Organization for Economic Cooperation and Development, raised its 2011 demand forecast by 50,000 barrels a day while noting “significant downside risks” to consumption. Oil slipped after China’s industrial output grew the least in 11 months and U.S. data showed worker productivity dropped in the second quarter. The Energy Department will release its weekly report today.


Q1 set to lose its crown as peak oil demand season

The typical drop in world oil demand between the first and second quarters of the year is disappearing, and could even be reversed as the global market increasingly takes its cue from consumption trends in non-OECD countries, according to the International Energy Agency.

The established seasonal pattern of oil demand has historically seen demand peak in the first quarter, when the rich countries of the OECD consume greater quantities of fuel for heating. Demand then normally falls away sharply in the second quarter, making this is a time when many refiners plan scheduled maintenance.

But this pattern is being turned on its head, as the growing importance of non-OECD demand means that the very different consumption patterns in developing countries are now setting the tone for the wider global market, the IEA says in its August monthly oil market report.


Europe Halts Naphtha Shipments to Asia for a Second Month

Asian petrochemical companies may import little or no naphtha from Europe for a second month in August amid ample supplies and weak demand in Japan.

There may be no shipments of the oil product, used to make petrochemicals and gasoline, in August according to the median estimate in a Bloomberg survey of four Europe-based traders, who declined to be identified as they aren’t authorized to speak about transactions. The dearth of cargoes compares with 300,000 metric tons in June and 500,000 tons in May.


Oil refiners to run more crude in Q3 - IEA

LONDON (Reuters) - The world's oil refineries will process an average 74.7 million barrels per day in the current July-September quarter, rising from a year earlier and the previous quarter, the International Energy Agency said on Wednesday.

"The third quarter 2010 global crude runs are estimated at 74.7 million bpd, 70,000 bpd higher than our last estimate and 1.1 million bpd above the third quarter 2009," the IEA said in its monthly oil market report.


China Imported More Than 55% of Oil Needs in First Half, Securities Says

China imported more than 55 percent of its oil needs in the first half of the year, the Shanghai Securities News reported, citing data from the China Petroleum and Chemical Industry Association.


Iran hit by tough fuel sanctions

Tougher sanctions against Iran appeared to have halved the country’s petrol imports last month, according to a monthly report from the International Energy Agency.

As a result Iran has been forced to pay a 25 per cent premium to market prices for its petrol deliveries as many companies shy away from supplying the country, the International Energy Agency reported on Wednesday.


Turkey backs petrol sales to Iran despite sanctions

ANKARA (Reuters) – Turkey will support petrol sales by Turkish companies to Iran, Energy Minister Taner Yildiz told Reuters on Wednesday, despite U.S. sanctions that aim to squeeze the Islamic Republic's fuel imports.


Russia's LUKOIL resumes gasoline supply to Iran -trade

SINGAPORE/MOSCOW (Reuters) - Russian oil giant LUKOIL has resumed gasoline sales into Iran in partnership with China's state-run firm Zhuhai Zhenrong, even as the United States urges the international community to be tough with Tehran.


Russia's last unalloted big oil fields a hard sell

MOSCOW (Reuters) - Russia has finally set a date to auction off its last unalloted big oilfields, but analyst say the terms it set out for a potential buyer make the deposit difficult to use and develop.


ExxonMobil lifts Nigeria force majeure

US supermajor ExxonMobil said today its Nigerian unit had lifted a three-month old force majeure on Qua Iboe oil shipments.


Jeff Rubin: Boone Pickens’ plan full of hot air

T. Boone Pickens’ plans to save the United States from its energy dependence on so-called hostile petro-powers is, simply put, full of hot air. The abundance of shale gas in the U.S. will no more free the country’s motorists from dependence on foreign oil than have either the American production of over ten billion gallons of corn-based ethanol or the rollout of GM’s electric-powered Volt.

There’s a reason for the fact that, for a given amount of energy, natural gas prices today trade at a fraction of the price of oil. If people could just switch from using one fuel to the other, that price gap would quickly be arbitraged away. But they can’t — at least not where it counts the most.


July power output rises 12% to record

China increased power generation to a record in July to meet summer electricity demand.

Output rose 12 percent from a year earlier to 377.6 billion kilowatt-hours, according to data released by the National Bureau of Statistics Wednesday. That surpassed the previous all-time high of 350 billion kilowatt-hours in December.


8,000 People? E.P.A. Defers Hearing on Fracking

After successfully holding hearings around the country on the impact of the natural gas drilling method known as hydraulic fracturing, officials with the federal Environmental Protection Agency ran into a hurdle this week in New York State: finding an acceptable site for a hearing and for the passionate crowds expected to show up for it.

The agency announced on Tuesday that it was canceling an all-day hearing that had been scheduled for Thursday at the OnCenter Complex Convention Center in Syracuse after Onondaga County officials expressed concern that they had not been given enough time to prepare security in anticipation of rallies and protests at the event.


Peak oil is the villain governments need

Using the threat of a high oil prices is a sell the public will buy into – unlike intangible arguments over climate change.


Louisiana Declares Emergency as Gulf Storm Builds

Governor Bobby Jindal declared a state of emergency for Louisiana after a tropical depression in the Gulf of Mexico was forecast to strengthen into a bigger storm and slam into the southern state tomorrow.


The Twilight of Matt Simmons

I can still vividly recall his describing to me his wading through a three feet-high stack of Saudi oil field engineering reports, the consensus of which convinced him that Saudi Arabia's oil fields were in serious trouble, a conclusion that was not only the underlying premise of his book, but also earned him the reputation of an oil and gas industry gadfly, as well as a favorite cable news guest as oil prices briefly crested -- propelled mainly by greedy speculators -- at nearly $150 a barrel the summer of 2008. A year earlier he correctly predicted that the price would climb to over $100.


Maine loses a 'visionary' on energy alternatives

U.S. Sen. Olympia J. Snowe, R-Maine, called Simmons one of the nation's most prominent and innovative energy scholars.

"Matt possessed a unique and powerful voice as a leader in the energy industry to reduce our dependence on foreign sources of oil," Snowe said in a prepared statement.


Matt Simmons embodied integrity

What I remembered first when I learned that Matthew R. Simmons died at his summer home in Maine on Aug. 8 was the anguish in his voice when we spoke by telephone in early 2001 as it became increasingly clear that Enron Corp.’s problems extended to other companies and businesses.

“It’s truly awful,” he said when I mentioned my dismay that the so-called Chinese Wall between investment banks’ research and marketing departments had simply disappeared. “It will take years, if not decades, for our business to regain the trust it has lost. I’m not certain that it ever will.”


RIP Ted Stevens, architect of the Alaskan petrostate

Stevens was a gruff politician of the old school, of a generation of senators whose other members -- Fritz Hollings of South Carolina, Robert Byrd of West Virginia -- have nearly all retired or passed on. It's hard to overstate the stature he enjoyed among Alaskans, who routinely referred to him as Uncle Ted, and who kept him in office for all but one decade of Alaska's half-century of statehood. In the view of his constituents he was less Alaska's senator than its patriarch, the leader who guided Alaska's transformation from a territorial outpost to a modern petrostate.


BP oil spill evidence to be collected by suspects

NEW ORLEANS, Louisiana (AFP) – Key evidence on one of the world's worst oil spills could soon be in the hands of the leading suspects as BP and partner contractors are set to start salvaging the wreckage of the Deepwater Horizon oil rig.

The US government is leading what could become a criminal investigation into the disaster. But it does not have the technical expertise to gather evidence some 5,000 feet (1,500 meters) below the surface of the Gulf of Mexico.


U.S. Lawyers Seek Dismissal of Lawsuit Challenging Deepwater Drilling Ban

U.S. regulators asked a New Orleans federal judge to throw out a lawsuit seeking to lift a deep- water oil and gas drilling ban, arguing that new government rules make the litigation irrelevant.


Australian Labor Party to Bolster Offshore Oil Safety Agency If Re-Elected

Australia’s governing Labor Party would expand the powers of the National Offshore Petroleum Safety Authority should it win re-election on Aug. 21, Resources and Energy Minister Martin Ferguson said.

Australia may create a single offshore oil and gas regulator, Ferguson said at a conference in Perth today. The government is still studying a June report into last year’s oil spill from PTT Exploration & Production Pcl’s Montara well and won’t release the findings before next weekend’s vote, he said.


UBS Sued for Copying Oil Reports in Investor Research

(Bloomberg) -- UBS AG’s U.K. unit was sued for allegedly copying articles from oil and gas publications and reprinting them in the investment research it distributed to clients.

Energy Intelligence Group Inc., based in New York, said its publications, which include International Oil Daily, World Gas Intelligence and Petroleum Intelligence Weekly, were copied by UBS Ltd. at least 10 times during 2006 and 2007, according to the lawsuit. Energy Intelligence articles or portions of them were reprinted in UBS’s own investment research publication, Daily Oil News, according to the suit filed in a London court last month and made public this week.


Giant iceberg drifting toward Canada could threaten ships, oil platforms

The Canadian government’s top ice experts have begun planning how to deal with a massive iceberg that broke off a Greenland glacier last week and is expected to drift south over the next two years into East Coast shipping lanes and toward offshore oil platforms.

NASA, the European Space Agency and a host of academic institutions are already helping Canadian officials monitor and analyze the mammoth object, the biggest free-floating mass of ice in the Arctic Ocean in 50 years.


Chefs help craft healthier school lunches with local food

On his first day on the job as director of food and nutrition for Baltimore City Schools, chef Tony Geraci brought in 40,000 pounds of tree-ripened, Maryland-grown peaches for students.

On that day two years ago, he sat in the cafeteria with several second-graders who were eating fresh peaches for the first time in their lives.


Alberta offers cash for greener lighting

The Alberta government is offering financial rebates to businesses that use advanced lighting equipment to reduce energy consumption and greenhouse gases.

Restaurants, offices, and warehouses become eligible for rebates if they make their buildings more energy efficient.


Recycling Land for Green Energy Ideas

LEMOORE, Calif. — Thousands of acres of farmland here in the San Joaquin Valley have been removed from agricultural production, largely because the once fertile land is contaminated by salt buildup from years of irrigation.

But large swaths of those dry fields could have a valuable new use in their future — making electricity.


Russian wildfires raise Chernobyl radiation fears

MOSCOW (AP) — Russian emergency workers have increased forest patrols in a western region previously contaminated by the 1986 Chernobyl nuclear disaster, trying to prevent wildfires from spreading harmful radiation, officials said Wednesday.

At least six wildfires were spotted in the Bryansk region this week — the part of Russia that suffered the most from the Chernobyl catastrophe in what was then Soviet Ukraine— and fire crews quickly extinguished all of them, Emergency Situations Ministry spokeswoman Irina Yegorushkina said. Her agency also had reported sporadic wildfires last week, saying all had been put out.


Climate Regulation's Newest Foe: Enviros?

The Environmental Protection Agency's plan to roll out regulations on planet-warming gases may hit a snag in the coming months—opposition from environmentalists. While industry groups are mounting major legal challenges to the agency's ability to regulate greenhouse gases, the EPA's decision to scale back the number of pollution sources subject to these new rules has raised the ire of greens who worry the agency isn't being aggressive enough.


Greens Great in Tasmania Says Greens Deputy Leader, Christine Milne

Tasmanians with an eye on the environment, climate change, the economy and the state of our health system need look no further than The Greens on August 21, says Australian Greens Deputy Leader, Christine Milne.

Speaking at the launch of the Tasmanian Greens Federal election campaign, Senator Milne said the Greens offer a comprehensive range of policies that will see Tasmania thrive as a leader in creativity, competitiveness, safety and innovation as the world tackles climate change and peak oil.


In Vancouver, No Traction for a Bicycle Backlash

Radio sportscaster Dave Pratt of the Pratt and Taylor Show, "the sports fanatics' #1 choice on the drive home," has a reputation across the Lower Mainland for his daily rants about all things sports.

But lately, the middle-aged, leather-pants-wearing bachelor has embarked on a personal vendetta against Vancouver city council for its bike-friendly behaviour. Mayor Gregor Robertson's dream of a downtown network of separated bike lanes has created a traffic nightmare for commuters trying to get to and from work, he says.


Russia Approves TNK-BP Carbon Emissions Project

MOSCOW -(Dow Jones)- Russia has approved a project by TNK-BP Holding to sell emissions reduction units, or ERUs, on the international market, the Anglo-Russian oil major said Wednesday.

The project, which will be implemented under the Kyoto Protocol, will seek to utilize associated gas from TNK-BP's Samotlor oil field. TNK-BP has been granted the right to sell ERUs equivalent to 846,000 tons of carbon dioxide.


U.N. Chief Recommends Small Steps on Climate

UNITED NATIONS — Ban Ki-moon, the United Nations secretary general, said Monday that he doubted that member states would reach a new global climate change agreement in December at a conference in Mexico.

Mr. Ban, who was the head cheerleader for reaching a deal during the 2009 conference in Copenhagen, suggested that a better approach might consist of small steps in separate fields that built toward wider consensus rather than aiming for one sweeping pact.


Frozen jet stream links Pakistan floods, Russian fires

Raging wildfires in western Russia have reportedly doubled average daily death rates in Moscow. Diluvial rains over northern Pakistan are surging south – the UN reports that 6 million have been affected by the resulting floods.

It now seems that these two apparently disconnected events have a common cause. They are linked to the heatwave that killed more than 60 in Japan, and the end of the warm spell in western Europe. The unusual weather in the US and Canada last month also has a similar cause.


Think this summer is hot? Get used to it

This summer's stifling, deadly heat along the Eastern Seaboard and Deep South could be a preview of summers to come over the next few decades, according to a report about global warming to be published Wednesday by the National Wildlife Federation and the Asthma and Allergy Foundation of America.

In fact, according to NWF climate scientist Amanda Staudt, the summer of 2010 might actually be considered mild compared with the typical summers in the future. "We all think this summer is miserable, but it's nothing compared to what's in store for us," she says.

Re: Frozen jet stream links Pakistan floods, Russian fires

Here we see another example of bad science. To one with little knowledge of science, the explanation given (the jet stream is being locked into a fixed pattern, caused by blocking) sounds reasonable. But, I suggest, it's wrong. The author writes:

A static jet stream freezes in place the weather systems that sit inside the peaks and troughs of its meanders. Warm air to the south of the jet stream gets sucked north into the "peaks". The "troughs" on the other hand, draw in cold, low-pressure air from the north. Normally, these systems are constantly on the move – but not during a blocking event.

The problem is, there's no way to "suck" or pull air. A fluid can not support tension forces, only pressure forces and those forces due to relative motion called viscous forces. The jet streams are not the cause of the other flows, they are the result of the flows from tropics toward the poles caused by the differences in energy flows at the Equator and at the poles. The only force which "pulls" in the atmosphere is gravity, which causes the densest air to migrate to the bottom of the atmosphere at the surface. Near the Equator, the atmosphere is warmer and therefore thicker. As a result, it's "downhill" from the tropic to the poles and thus the air flows follow that path.

The author goes on to write:

Similarly, as the static jet stream snaked north over Russia, it pulled in a constant stream of hot air from Africa. The resulting heatwave is responsible for extensive drought and nearly 800 wildfires at the latest count. The same effect is probably responsible for the heatwave in Japan, which killed over 60 people in late July. At the same time, the blocking event put an end to unusually warm weather in western Europe.

No, I submit that it's the hot air flowing toward the North Pole which was the cause, perhaps strengthened by AGW or blocked by conditions in the oceans...

E. Swanson

You lost me when you write: "Near the Equator, the atmosphere is warmer and therefore thicker." Normally warmer air is thinner - as in, hot air baloons tend to be more bouyant and thus lift up.

He means "deeper", as in the troposphere is higher in the tropics compared to the mid-latitudes and poles.

-best

Yes, the word "deeper" is a much better description. Trouble is, most people aren't aware that we live near the bottom of an ocean of air, which has no "surface" from which to compute depth. I doubt that very many folks have seen an 500 or 300 mb upper air chart, let alone understand it. The 500 mb height is roughly half way thru the atmosphere. Notice that the pressure height declines at greater distance from the Equator...

E. Swanson

Skew T log P is a more readable form of what the atmosphere is doing through the column and you can get them from the University of Wyoming Atmospheric Science department website: http://weather.uwyo.edu/upperair/sounding.html

Here's an example: http://weather.uwyo.edu/cgi-bin/sounding?region=naconf&TYPE=GIF%3ASKEWT&...

The leftmost line is humidity, the right line is temperature, and off the graph on the right are wind direction and velocity. The gobbledy gook on the far right are indexes used for determining the possibility and intensity of convection.

I also really hate how people think they JetStream "controls" anything - it's a reaction - the end product of other processes, not some mystical controlling force.

Your comment about the Jet Stream "controlling" things mirrors my point. For short term weather, the Jet Stream is useful for predictions of storm tracks, but over longer periods, the Jet Stream changes location. Here's a link to a graphic of recent Jet Stream locations across the US, from the Weather Underground. Here's the graphic for Europe. I think that some folks who focus their attention on weather may be missing the underlying physics...

E. Swanson

Normally warmer air is thinner

He meant "thicker" as in the atmospheric scale height (the elevation change that causes a one over e reduction in pressure) is directly proportional to temperature. So a column of warm air next to a coloumn of cool air. Only at a single elevation can their pressures be the same, below that elevation the hot column will have lower pressure, and above it it will have higher pressure than the cooler column. That is what drives atmospheric circulation. A warm region will tend to have low presure at the surface, and high pressure aloft.

Actually, warm air rises, and the pressure rises. As the pressure increases, low pressure cells form along the outside permimeter of the resulting dome of hot air. The air goes from high to low pressure, and the greater the gradient between the two, the stronger the winds that form along the boundries. Jet streams travel along the divisions between major masses of air; high pressure to the North will usually cause the JS to move to the South. The problem with the stationary JS phemomenon is that this is locking weather patterns into a static pattern, and where there is rain, you have floods; where there is heat, you have extreme heat.

The Poles are the two areas where AGW is the most pronounced. I don't know that climatologists are certain the exact cause, and it I have not heard that it is from hot air flowing toward the Poles. In fact, because there is higher pressure than normal, there would be more outflow than normal. Having said that, my surmise is that the formation of unusual high pressure centers near the poles would cause heating (the pressure of the dome causes the air to heat).

In sum, we are dealing with some very complex systems. And, we are playing games where we do not know the rules - a certain recipe for disaster. And, just one of at least six rapidly forming and converging crises. Above, we learned that experts are already working on how to deal with a new ice island, 8 km x 29 kx, that is floating toward the shipping lanes and towards Canadian oil platforms. I would feel better if scientists were working together on the floating island of peak oil that is drifting at increasing speed toward the world economy. These things all run together today... static jet streams, AGW, financial chaos, hygronomic disaster, and all bound up in the global overshoot of population. Where are the 'scientists?' Where are the politicians in the most important looming catastrophe in human history?

Ahhh....

-- takes deep breath --

I guess it is more 'no science' than 'bad science?' Anyhow, thanks for your comment. I always read yours, and usually come out either better informed, or, equally fine, thinking more and differently about things. A little sanity in an insane world, and all that.

Craig

I guess it is more 'no science' than 'bad science?'

Two things are going on. The locked circulation pattern (jet stream) argument is correct. But, the wider question, why are these things happening more frequently is deliberately avoided so as not to upset corporate fossil fuel interests. Hinting that global warming may be involved is simply not allowed.

My theory, EOS, is that the reason the PTB do not deal with Peak Oil or AGW is because if they did it would mean they acknowledged that the problem was real, and that it was serious. It is the classic 600 Lb. gorilla in the middle of the room.

Craig

Chu has restarted DOE advisory group. And guess who is on the list of 12 people, if not our friend Mr Yergin.

"August 10, 2010 - DOE Announces Secretary of Energy Advisory Board"..."Daniel Yergin President, Cambridge Energy Research Associates".

Hmm I wonder if Chu considers him "a voice of sanity" or "the devils advocate"....

(http://news.sciencemag.org/scienceinsider/2010/08/chu-restores-top-energ...)

August 10, 2010 - DOE Announces Secretary of Energy Advisory Board"..."Daniel Yergin President,

Isn't a Yergin 30 dollars because he predicted oil to drop to that price so many times in the past? If so, then we are now paying 2.67 Yergins for a barrel of oil.

I thought we were getting "CHANGE" with this White House. Bringing in a discredited Yergin indicates a lack of understanding for peak oil.

The Obama admin is a trojan horse.

When I saw Geithner crawl out of it's belly I knew it was all over but the crying.

Even those of us not on the fringe who voted for him had very low expectations, which he has consistently failed to meet. I recall the discussion two years ago on this site was that whoever won was in for a world of hurt as the problems are physical and structural, but hardly political.

Maybe the Yergin thing is just a matter of keeping ones friends close and ones enemies closer.

I swore after 2008 I would never vote again because they're all scum. Unfortunately, I must reneg and head back to the poles once again this fall. I mean Prop 19 to legalize marijuana? That's change I can really believe in! Maybe this year the booth will smell like something other than old people and uptight religious nutcases.

Even those of us not on the fringe who voted for him had very low expectations, which he has consistently failed to meet.

I mean Prop 19 to legalize marijuana?

I'm right there with you on those two. Not even an attempt to make good on the promise of ending lobbying in DC, and caved in on the Public Option via Lieberman! That's when I threw my hands up.

But on the 2nd item. Yeah, that could have the distinct scent of change.

I recall the discussion two years ago on this site was that whoever won was in for a world of hurt as the problems are physical and structural, but hardly political.

I think this was very prescient. I don't care if you come from the Austria school or the Keynesian school of economics. Neither approach can address the significant physical and structural problems that the world now faces. But in our limited political thinking, we may end up ping-ponging back and forth between those methods arguing the whole time without realizing that the real problem is much more fundamental . . . no cheap energy = no cheap GDP growth no matter what economic policies you adopt.

Even those of us not on the fringe who voted for him had very low expectations, which he has consistently failed to meet.

Keep talking like that and Gibbs will have you put in treatment after you get tested.

(Robert Gibbs says leftwing critics of Obama 'ought to be drug tested')

I thought we were getting "CHANGE" with this White House. Bringing in a discredited Yergin indicates a lack of understanding for peak oil.

Yergin is discredited ONLY in the eyes of peak oilers. To the other 99% of the world he is an oil Guru. And yes there is a lack of understanding of peak oil. You expected otherwise?

In 2004, I wrote about how George W. Bush's second energy secretary, Samuel Bodman, got rid of SEAB—known as "See-Ab"—opting instead for guidance from his employees:

Bus junked the Energy Advisory Panel and Obama reinstated it. Yet Obama is chastised on this list for reinstating it. Go figure! And Yergin is only one of 12 members of the board. How does anyone know what the other members will conclude. And Yergin is not an idiot. I believe he will change his mind when the facts start to pile up that the world oil supply is in decline.

And suppose Chu put all peak oilers on the panel? What kind of hornet's nest would that stir up? Even when Obama does the right thing he is criticized by the Obama haters.

And I expected otherwise? No, of course not.

Ron P.

And yes there is a lack of understanding of peak oil. You expected otherwise?

Yes, absolutely. They picked up Chu on Energy and he'd won a Nobel. Even Bush met with Simmons, so it seemed like 'Change' would include a new understanding of peak oil.

Yergin is only one of 12 members of the board. How does anyone know what the other members will conclude. And Yergin is not an idiot. I believe he will change his mind when the facts start to pile up that the world oil supply is in decline.

I can't believe you're standing up for Yergin on TOD, Ron. Wow!

"Yet Obama is chastised on this list for reinstating it. "

Ah, did anyone here chastise Obama for reinstating the panel... ???

Anyone ???

"Obama Haters"

Anyone ???

Anyone here actually hate Obama, or just hate being disappointed by him?

No?

Okay, carry on the actual conversation.

Hate him? Obama?

Not exactly hate but extreme displeasure. Even anger at his antics and lack of experience.

I hated Clinton.

I had a love/hate relationship with Bush.

Currently I will not trust or believe ever again in any politician.

Even in my own hometown right now a lot of local politicians are maneuvering secretly to drop a bombshell on their populace. This is the way of most all politicians anymore, by deception. They are of the opinion that THEY KNOW what is best for the county and the people are stupid and just there to deal with them right before election and then dismiss them.

Obama is the master at it. Others are now imitating him.

Its disgusting. My country has become a hog feeding trough.

Hate to tell you this, but the majority of Americans ARE stupid.
The so-called educational system based on tests, not thinking
produces an easily governed populace that does not ask questions, but
accepts whatever the Mass Media says is the Truth. Right or Left.
The politicians pick their issues so the voter divide is 50-50 so
elections can be easily controlled when needed.

Yergin is discredited ONLY in the eyes of peak oilers. To the other 99% of the world he is an oil Guru. And yes there is a lack of understanding of peak oil. You expected otherwise?

It was the late Matt Simmons who said "Yeah . . . that Yergin is a great historian of oil. But his analysis . . . "

When I think of Yergin, I think of this infamous Economist issue:
http://static.seekingalpha.com/uploads/2009/2/6/saupload_dtw020509oil4.png
And the fact that it is supported by CERA data & graphs and obviously CERA analysis guided it.

And right after that issue, Oil took off in a bull market that lasted for nearly a decade.

I discuss peak oil with my friends and family and you want to know what happens? They say, "Of course we might be running out of oil, but I am banking on running out of years first." Even the youngin's say this. See what we sow?

Absent long lines at gas stations, it is a rational response, I think. There is little doubt that we are at or close to peak oil (maximum oil production per year - almost certainly maximum exported oil per year), and that it will decline gradually from here on. We might only be at peak cheap oil - and that western nations will use (literally) all their resources, including blood, to ensure continued supply for the foreseeable future.

But I think it is probably more pertinent to talk about Peak Dow Jones Index (will the conditions ever emerge again to reach 16,000, or even 13,000?), peak NASDAQ, peak housing prices, peak 401(K)s. That might get their attention more easily.

And in any case the response should be the same: (a) pay down all your debt, (b) have some useful skills, (c) cut consumption by 50%, (d) think about securing a non-discretionary income, and (e) choose to live somewhere friendly and sustainable without a car. But that might be just as hard.

I thought we were getting "CHANGE" with this White House.

In the US, elected officials come and go.

The behind-the-scenes lobbyists and advisors (e.g. Karl Rove http://en.wikipedia.org/wiki/Karl_Rove) endure.

Except for panels and speeches, all a President can do is sign or veto legislation, true?

all a President can do is sign or veto legislation

There is the ability to order about the military (Strict Constitutionalists would say only after Congress has actually declared war)
There is the executive order (Strict Constitutionalists say they are not valid expressions of power or only effect the people in the executive branch)
There is the selection of who runs various enforcement agencies and the whole 'the law is written this way but enforced this way therefore the enforcement is what is legal/illegal not what the law says (Strict Constitutionalists must have something to say on this, no idea what the arguments are)

I think the structural mistake you (Americans) have made is to allow the Senate to become so powerful ... over the generations. One hundred men (and a few women) who are not representative, have long terms, and have almost zero chance of being voted out in normal circumstances. The House of Representatives is where 90% of the power should lie, and the Senate reduced to merely a house of review, with a hat-tip to states' rights occasionally.

The fact that the Senate can generate its own Bills I find extraordinary, as are its powers to veto presidential appointments. And it should not have the power to kill HR Bills at all (just send them back for review once or twice) - let alone impeach the president, etc.

I will take the optimistic viewpoint and assume that Yergin is there so that 'all viewpoints are considered'. Dr. Chu has given lectures that mention the peak oil issue so it is clear that Dr. Chu understands the issue and he won't be easily dissuaded by Yergin's cornucopian views.

Edit: And I agree that Yergin is not stupid. He will be forced to change his views in the face of mounting evidence. IHS/CERA graphs have actually changed over time to reflect the reduced oil production. Of course, they had to because they were dead wrong.

One wonders how much his advisory panel knows about energy supply realities.

Energy Secretary Steven Chu is not about to get zapped with accusations that he’s too close to the energy industry. The Department of Energy announced the members of his Energy Advisory Board today, and there isn’t a single executive from an oil, natural gas, coal or nuclear company, even though those fuels account for 92% of the energy consumed in the U.S. Nor are there any representatives from any electric utilities, which account for the single biggest chunk of U.S. power consumption, at 40%. There isn’t even a wind or solar executive, even though Chu is quoted in the press release as saying the board “Will be providing their expertise and experience at a critical time for our country as we chart a new course toward a clean energy future.”

http://blogs.forbes.com/jonathanfahey/2010/08/10/chu-energy-advisory-boa...

...there isn’t a single executive from an oil, natural gas, coal or nuclear company, ...

There isn’t even a wind or solar executive...

Now that's scary!

Craig

The group looks to be comprised of execs from companies which manufacturer energy consuming equipment, such as UTC's senior VP. UTC includes Pratt & Whitney, Carrier and UTC Power. Dupont is also a heavy user of fossil fuels, making plastics and explosives and once owned Conoco and built the Savannah Nuclear Weapons plant.

Given the usual interlocking directorships of various companies, I suspect that there are back channel links to the fossil fuel industries. For example, Dupont's directors include Samuel Bodman, former US Secretary of Energy, John T. Dillon, President and CEO of International Paper and a director of Caterpillar, Lois D. Juliber, a director of Goldman Sachs and William K. Reilly, who directed the EPA in 1992 and was later a key player in the leveraged buyout by TPG and Kohlberg Kravis Roberts & Co (KKR) of Texas Utilities (TXU, now Energy Future Holdings Corporation) in February 2007.

Remember Senator Fulbright, (J. William), "The Arrogance of Power"? The more things change, the more they stay the same...

E. Swanson

there isn’t a single executive from an oil, natural gas, coal or nuclear company, even though those fuels account for 92% of the energy consumed in the U.S. Nor are there any representatives from any electric utilities, which account for the single biggest chunk of U.S. power consumption, at 40%. There isn’t even a wind or solar executive

I think that is AWESOME! It is best not to have special interests with a dog in the fight. Instead, they are a bunch of science wonks and RETIRED industry people that will make decisions based on what the science tells them.

Of course, I don't really view Yergin as a neutral party as he dances for those that pay his fees.

Here’s a list of the members:
* Norman Augustine Former Chairman and CEO, Lockheed Martin, Former Under Secretary for the Army
* Ralph Cicerone President of National Academy of Sciences
* John Deutch MIT Chemist, Former Under Secretary of Energy
* Nicholas Donofrio Former EVP of Innovation and Technology, IBM
* Alexis Herman Former Secretary of Labor
* Chad Holliday, Jr. Former CEO of Dupont
* Michael McQuade Senior VP, United Technologies Corporation
* William Perry Former Secretary of Defense, Stanford University Professor
* Arthur Rosenfeld Former Commissioner, California Energy Commission
* Susan Tierney Managing Principle, Analysis Group
* Steven Westly Managing Partner, Westly Group
* Daniel Yergin President, Cambridge Energy Research Associates

A few good people... also some retreads from Clinton's admin, and a whole bunch of MIC folks. Still, given how DC works, it may be better than it could be.

Craig

Art Rosenfeld, Chu's mentor on energy issues, and the godfather of energy efficiency

http://newscenter.lbl.gov/feature-stories/2010/03/09/the-rosenfeld-unit-...

A version of the "Thermo-Gene Collision" can now be viewed in audio-visual format on youtube: http://www.youtube.com/watch?v=2ZFe7YVvliU

If the link doesn't work just visit youtube.com and enter "Thermo Gene Collision" in search box...

First Matt, then this guy . . . I'd bet JHK is weeping this morning (bad attempt at humor off\)

The death of an obscure New York entrepreneur on July 27 — Morrie Yohai, 90, a World War II veteran who was the man responsible for Cheez Doodles — was a reminder that the world of junk food is no different from celebrated American industries. The pioneers behind the automobile and the personal computer are household names, and their ingenuity and a-ha moments have become part of the folklore of American entrepreneurship. But the back story of junk food and fast food has its own moments of genius, serendipity and clever adaptations.

http://www.nytimes.com/2010/08/08/weekinreview/08manny.html?_r=1&pagewan...

From up top: "The US government is leading what could become a criminal investigation into the disaster. But it does not have the technical expertise to gather evidence some 5,000 feet (1,500 meters) below the surface of the Gulf of Mexico."

FYI for all - BP also doesn't have the technical expertise, equipment or personnel to gather the evuidence on the sea floor. All of that effort will be conducted by subcontractors. The same subcontractors the govt can hire to do the work. The same subcontractors the govt has the right to wwitness in person as the process goes forward. If the MMS wanted to put an observer on a rig to watch a cook make a gumbo they have the legal right to do so. If the feds aren't directly involved in the process it's because they choose not to be.

"If the feds aren't directly involved in the process it's because they choose not to be."

I believe that motto is engraved above the entry to the SEC, FDIC and numerous other government agencies.

Like the FrankenDodd Monster Financial Reform Bill, our government will likely pass a bill soon detailing the Hundreds of Studies and New Rules they will need before they can effectively regulate offshore drilling.

The Comedy of Errors.

Exactly.

In every arena, the position of the Obama administration has been "if the criminals were smart enough to get us into this mess, then the criminals must be the only ones smart enough to get us out of this mess."

The Obama administration would be funnier than the Keystone Cops, if only it wasn't all real.

What exactly is your gripe, GZer?
The economy is no longer crashing.
Obama actually passed HCR, albeit of the corporatist kind.
Obama passed the new corporatist version of financial regulation.
No socialism so far, unfortunately.
Bush's war in Iraq is wrapping up and he's giving the military another shot Afghanistan.
The national debt is rising as the wars go on and the Bush tax cuts go into their final year.
Obama sent more troops to the Mexico border than anyone in history.
Obama saved the auto industry and gotten bank bailout money back from the banksters with interest.
Obama is keeping 'small government'(municipalities, schools) alive with stimulus money.

Do want to go back to 'the most experienced WH' in history--Rumsfeld, Cheney, Powell-Condi, Ashcroft Gonzalez, Paulsen-Snow, etc...

Bush Dream Team Brings Values to Governance
Insight on the News, Jan 29, 2001 by Donald Lambro

The kind of Cabinet nominees George W. Bush has chosen tell us a lot about how he will make decisions, how he will govern and how committed he will be to the reform agenda he ran on.

The president-elect by and large has picked people with extensive experience, both in and out of government; people who have proven track records as managers and, most notably, people who have stature in their respective fields.

These certainly were the common denominators in his choice of Richard Cheney to be his vice president, the man he has heavily relied on to put his Cabinet together and who may be the most experienced vice president ever to hold that office.

Maybe your memory is defective?

Perhaps you remember the team of Old Man McCain and Lipstick-on-a-Pig Sarah Palin?

It's not quite so long ago.

I remember what the Republican boobs did to the USA. So what exactly has Obama done that's so wacky?

Economic policy is driven by the federal reserve. Right now they are not living up to their charter. GDP growth is anemic, job creation (when it actually occurs) is no where close to keeping up with population. Capital markets have basically been flat for a decade, the economy is absolutely terrible.

Debt will explode due to Medicare, Medicaid, and Social Security. Either that or they have some sort of "default" in the form of a restructuring.

Health care reform was no reform at all other than the imposition of new taxes. Canada's health care system was described in 19 pages. Germany and Japan used less than 100 pages each. Ours is still a mess, nowhere near what Canada, Germany or Japan do, and it took 2400+ pages? That's FAILURE, marjorian, massive failure.

Financial reform was watered down to where it was meaningless, again because Obama is a fascist in the classic Mussolini sense of the term - in bed with corporations, and subordinating individuals to the will of the corporations. That's the same thing that drove the disaster called health care reform too. Then we see it again on Deepwater Horizon - a White House so incompetent that it has to turn to the very criminals that created the problem to solve it. And at the same time, after two years, the SEC, the MMS, and the TSA are shown to be MORE corrupt than even during the Bush years? If he can't clean up the SEC and MMS in two years, how many years does he need? Do we need your Saint Obama to be El Presidente for Life?

And let's talk about the war. We were supposed to be out of Iraq. Nope. Another campaign lie that has him in hot water with his own supporters. He's widened Afghanistan - more war from a fascist president ensuring that military-industrial complex corporations profit above all else, and again pissing off the very base that helped elect him. He's even opening war up against Pakistan with drone attacks. Sounds just like Bush to me in the points that really matter.

He's run up the federal deficit, given trillions in bailouts to corporations and Wall Street insiders, told Main Street to piss off (by his actions), and has demonstrated callousness and incompetence at nearly every turn to ordinary people. Hey, at least McCain and Palin would have been worth a laugh a day. And they couldn't have done worse than Obama so far on financial reform or the Gulf Oil Spill. All Obama is worth is the destruction of any remaining chance we might have of correcting our civilization's course. But no, he's the Billion Dollar Man, bought and paid for by corporate campaign contributions, from Monsanto to ADM to Goldman Sachs. And you expect me to simply accept the lesser of two evils? I think it's time we had some choices from further up the ladder and right now neither the Republicans NOR the Democrats are demonstrating any common sense and both parties are in a feeding frenzy at the public trough.

By the way,even the Federal Reserve now admits the economy is still in trouble. Recovery? There never was one. Unemployment remains high, record highs. Food stamp usage has increased for 18 straight months from under 30 million to almost 41 million, a 35% increase. People are not going back to work. The total work force is shrinking and people are falling off the back end of unemployment benefits. Car sales remain down by 26% from 2006-2007. Yeah they are a hair better than last year but just barely and still double digit percentages down from before the crash.

I guess you must listen to the shills at CNBC, eh? Check what they said about today's 260 point drop in the DOW. They claimed "no volume" yet it was the highest volume day in the last 40 days. All those days of stocks rising in July are the low volume days, driven by HFTs controlled by the 5 major banks on Wall Street, yet the highly biases CNBC commentators won't tell you that their income depends on getting suckers (like you) to buy into a fake rally.

Get ready for the double dip, marjorian. And the second leg down is going to be worse than the first was. We'll get to see just how much worse it ends up being and how pathetically Obama fails to respond to it, yet again.

P.S. I didn't like Bush and I don't like Obama. I just am not too keen on incompetents, especially incompetents who tried to sell the entire world a bill of goods about how special they were. If we're lucky, we'll see the House go Republican and the Senate lose its fillibuster proof majority and have gridlock. At least gridlock will prevent both parties from doing anything really stupid.

Right down the line Greyzone, I agree with everything in your comment.

He is an abject failure and I recall how his flag was hoisted here on TOD. Now hardly a whimper as we slid down the abyss and HIS wife is out on a fling while the numbers continue to slide and worsen.

The man is a con artist from ChiTown. A whole city of con artists and idiot mafia wantabe jerks.

Sadly, the inauguration of a US President appears to us outsiders to be a coronation ... rather than the swearing in of the next prime minister who runs things for while. I think both of you are expecting far more from the White House than a mature people should ever expect from its elected leaders. Perhaps Americans put far more faith in the office than has EVER been justified. Even King Canute knew his limits, and he didn't have to face the ballot box.

Maybe Michelle is shopping for their buggout Villa. A separate peace?

(as MSM is reporting new jobless claims,,,,,unexpectedly higher. Duh!)

Its not possible to be human anymore. No one can make mistakes. Not possible. We are all held to the standards of our cousins, the robots :) Arrest everyone. Build more jails. When everyone is working for the government or behind bars, then we'll be safe!

O.T. but, why did you shoot your mom ?

I need a new screen name! my-mom-is-hot :) Just goes to show you where your mind is at, you evil monster :) as aunt Edna would say "You belong behind bars!"...

I used to spend a lot of time behind bars...

Prosit!

Craig

LOL - my second thought was that was your bar-band's name.

I wonder where YOUR mind is at. Calling Doctor Freud :)

In south Florida we have billboards on the highway that say "Your wife is hot"... It's from an AC company.

As for mymomishot, don't even know or care if its a he or a she or what or why...not my business.

BTW, my own mom is a spry 78 year old silver haired little lady with glasses, who can slap you silly if you dare disrespect her. She has a pretty HOT temper and doesn't gladly suffer fools.

. But it does not have the technical expertise to gather evidence some 5,000 feet (1,500 meters) below the surface of the Gulf of Mexico."

I don't have the pursestrings or toolset at my disposal.

But the US government has submarines. And the ability to say to nearly any owner of property 'mine' - so things like the ALVIN replacement can be conscripted.

"The Government" has the tools and the checkbook + laws in case someone wants to claim they lack the tools. How much was spent on the investigation into some dress stains? How much is spent by the FBI chasing down filesharing?

"The Government" lacks the willingness.

How much was spent on the investigation into some dress stains? How much is spent by the FBI chasing down filesharing?

"The Government" lacks the willingness.

Subsea recovery operations aren't really the same as computer stuff or the random DNA analysis at a lab somewhere.

There is a reason for the rankings on this list. "Willingness" can also translate as "affordability". You just can't afford to hire your own experts (and these aren't experts but beginners pay scales) and then let them cool their heels for 20 years waiting for the next mess to clean up just so that the government can say "WE" did it, rather than hired guns within the industry.

http://www.theoildrum.com/node/6310

Subsea recovery operations aren't really the same as computer stuff or the random DNA analysis at a lab somewhere.

Who do you think was bankrolling and providing tech help to the Glomar Explorer?

How do you think the Genergal Electric MK10's got deployed - magic? (ok, ok different depths)

"Willingness" can also translate as "affordability"

The US government is dumping how much into Iraq/Afghanistan? It has a spending problem of 4-5 trillion a year. $773,000 was spent "to remodel a cinder-block building to house a KFC/Taco Bell restaurant," and somehow on *THIS* item/effort the US Government is gonna say 'naw, too rich for our blood'.

Sorry - I don't buy the 'affordability' argument.

Summary of Weekly Petroleum Data for the Week Ending August 6, 2010

U.S. crude oil refinery inputs averaged 15.1 million barrels per day during the week ending August 6, 509 thousand barrels per day below the previous week’s average. Refineries operated at 88.1 percent of their operable capacity last week. Gasoline production decreased last week, averaging 9.3 million barrels per day. Distillate fuel production decreased slightly last week, averaging 4.3 million barrels per day.

U.S. crude oil imports averaged 9.4 million barrels per day last week, down by 188 thousand barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged 10.1 million barrels per day, 539 thousand barrels per day above the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.0 million barrels per day. Distillate fuel imports averaged 315 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.0 million barrels from the previous week. At 355.0 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories increased by 0.4 million barrels last week, and are above the upper limit of the average range. Finished gasoline inventories were virtually unchanged while blending components inventories increased last week. Distillate fuel inventories increased by 3.5 million barrels, and are above the upper boundary of the average range for this time of year. Propane/propylene inventories increased by 2.3 million barrels last week and are in the middle of the average range. Total commercial petroleum inventories increased by 0.1 million barrels last week.

The US production numbers fell quite a bit in this report for the week ending August 6th. In thousands of barrels per day.

Week ending     U.S.   Alaska  Lower 48
Jul 30, 2010	5440	566	4874
Aug 06, 2010	5239	382	4857
Change	        -201   -184	 -17

The Alaska numbers have been quite low for the last two. I suppose they have been doing quite a bit of summer maintenance but the numbers have been averaging about 42 thousand barrels per day below the same two months of 2009. (567 kb/d for that period in 2009 versus 525 kb/d for that period this year.) This kind of ties in with this article:

The flow has slowed through the trans-Alaska oil pipeline

What this means for the continued delivery of oil to the rest of the U.S. from Alaska is significant. Engineers have warned that the pipeline — the only means of delivery of North Slope oil — will develop potentially dangerous problems with corrosion and ice if flows drop below 500,000 barrels a day, as they are expected to within the next five to 10 years.

At 350,000 barrels a day, which pipeline operators say could happen by 2022, frost heaves could cause the underground portions of the pipeline to dangerously wrinkle and kink.

Ron P.

I suppose that it's possible to build some large tanks on the North end of the Alaska Pipeline. Then, the pipeline could be shut down for 6 months of the year and the well output stored until warmer weather in Spring. That way, the flow thru the pipeline might ramped up to more than 1 million barrels a day during the warm season. The pipeline once transported 2.1 million barrels a day, so running it part year at a high rate should not be a big problem, from my limited perspective of the situation...

E. Swanson

Those looking for evidence of a slowing US economy won’t find that in this week’s EIA report. Contrary to rising expectations of a ‘double-dip’ recession, US oil product demand is doing quite fine, thank you.

Even US gasoline demand is now up 3.3% over last year, not bad when it is considered total employment is less than one year ago. I don’t have all the answers as to why this happening, but could it be that those more desperate for employment are travelling further or travelling to second jobs? Total oil product demand was up a similar 3.1%.

As to the figures themselves, it appears that most adjustments, revisions, and corrections, have been baked into the EIA figures now, so there is no need to mentally adjust the figures for some extraneous factor.

Total products supplied were about 600,000 bpd higher than the comparable four weeks of last year. Keep in mind that the EIA expects oil product demand to increase only 110,000 for the remainder of 2010 [I made a post yesterday about the EIA appears to be understating potential US oil demand, and the EIA along with the IEA, keep telling us about how demand could fall].

US population is still growing so total consumption should grow just to be even. The US population is growing at just over 1% (about 3 million per year) every year from 2005 through 2009 (2010 data not yet available). Source: Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2000 to July 1, 2009 (NST-EST2009-01). Note that you can select CSV or Excel formats for the data.

Given an annual population growth rate of 1%, consumption should rise about 1% also, all other factors being equal. So removing population growth indicates that the increase is about 2% over last year.

We have to remember that last year was the depths of The Great Recession, just after the March 2009 stock market lows. People stayed home and saved money out of fear. People are still saving money, but not being quite as stingy as last year because they've been fed a steady diet of "green shoots", which are turning out to be nothing but lies. There never was a recovery. There was just a temporary heroin (stimulus) induced high that is now wearing off and which will demand an even bigger shot of the drug of choice (more debt) or suffering withdrawal.

The US, and really, the entire industrial world, is nothing more than a debt junkie, high on debt, willing to do anything for that next hit of debt. That junkie has painted itself into a desperate corner and is painting even still. Room to make choices grows smaller as time passes. Eventually the junkie will have to decide to quit or die. Given the political realities around us, I fully expect the junkie to choose death.

Eventually the junkie will have to decide to quit or die. Given the political realities around us, I fully expect the junkie to choose death.

I don't know how many people read the story about the mayor of a suburb of Dallas, who killed her teenage daughter and then herself--apparently primarily because of financial problems. Her husband died not long ago, apparently without life insurance, and the mayor had been trying to maintain their lifestyle (partly by misusing her city credit card). She couldn't keep the charade going, so she chose death for herself and her daughter:

http://www.google.com/hostednews/ap/article/ALeqM5j8CQo2_Xn2BTagTQ1SjFo6...

several similar stories in the UK recently.

Murder-suicide has been common in the Indian sub-continent for some years now. This is by proud farmers who used to be able to feed their families and have a cash surplice. However, rising energy costs, falling water tables and being locked into expensive industrial agriculture has lead them to kill their families rather than watch them starve.

I think the increase in gasoline demand is caused by the same thing that is causing sales of light trucks to go up and hybrids to go down -- people are adjusting to the new normal in gasoline prices. $3.00 a gallon gasoline just isn't the shocker it used to be so people are returning to old patterns of use. Also, it's possible that the drop in gasoline demand we saw in 2009 hit the bottom of what we, as a country, can live with.

and don't forget the off the books economy. scofflaws can buy drugs gasoline too.

Seoul bus explodes

Maybe we shouldn't switch our transport to natural gas.

Maybe we shouldn't switch our transport to natural gas.

yeah, an empty tank is more dangerous than a full one, and that is exactly what may happen with a switch to ng.

An empty tank is only dangerous if air gets into it. A tank on a vehicle should never be completely emptied;it should always have some residual pressure, which makes ir far safer and far easier to refill, as it need not be flushed and/or evacuated to get the air out before refilling.

Empties-actually NEAR empties- are often associated with fires and explosions due to careless handling by ignorant consumers.

The buses used in Korea are obviously poorly designed, because an explosion, as opposed to a fire, can only occur if one, a tank ruptures, or two, leaking gas can accumulate within the body and chassis of the vehicle where it mixes with air and creates a bomb in effect when it is ignited by contact with something hot enough to set it off-an engine exhaust manifold, a spark in an electrical switch, or a lit cigarette butt dropped on the floor maybe.

If a tank ruptured on this particular bus, it must have been just about empty because there was no fireball so far as I could tell from the very short film clip.Even a small tank if fully pressurized creates a considerable fireball when it ruptures and burns.

It seems very likely that a fuel line between the tank and the engine sprang a leak and gas accumulated underneath the passenger compartment,and the leaking gas was trapped by the floor and the sides of the bus, which typically extend well below the floor level.

This stuff is all old hat to tradespeople such as welders who work with compressed gases.

Why would the empty tank be more dangerous?

Never mind, oldfarmermac answered that before I posted.

As evidence of the environmental advantages of fuel switching to natural gas vanishes upon closer examination, and other cans of supply worms open up, there may be other reasons not to switch as well. Particularly given the infrastructure investments that would be needed for widespread adoption of NGV's and how that could siphon off capital from more permanent answers, like the electrified transport coupled with renewable electricity we'll need eventually anyway. Safety scares are mostly sensationalism, the overall safety record of the industry is fine, but the overall life cycle benefits are not so clear as they are made out to be. NG is sold as a 'transition fuel' but it's not clear how it is really helpful in this regard, as it just switches dependence from one finite, depleting resource to another and creates further intertia in terms of built infrastructure. It would be better if proponents were more honest about the actual benefits which are primarily in terms of cost savings on fuel.

Meanwhile, we are tricking ourselves into believing we have more gas than is really available, via shale and other unconventional sources (oh sure, there's plenty there, but at what price, both monetarily and ecologically?), basing supply predictions on R/P ratios to make outrageous proclamations of 'hundred year supply' even as we want to run more and more of our machines on gas all the time.

Of course, in the short term, the benefits for Boone Pickens are pretty clear...

Imagine if it was a whole tanker and you had to back off in reverse. This cop has nerves of titanium alloy. Must be a combat vet.
http://www.youtube.com/watch?v=nNY2YsVjcd4

Maybe just not in Seoul?

Los Angeles County MTA runs natural gas in their busses. Never recall a news story about one blowing up....

You kidding me. Look what us rednecks can buy. For disclosure and humor purposes, I was born in Seoul and I am half Korean. The other half is Alabama Spanish Creole Redneck. Dad was a warrior and a traveler.

Does it come with optional rocket launcher?

From the Archives

A 'Special Place' for Arabian Oil - Herald-Journal - Oct 7, 1972

Saudi Arabia recently proposed a joint arrangement under which the oil of that country would be given a "special place" in the expanding United States market. In return, the Arab state would be permitted to invest in U.S. refining, distribution and sales.

The Saudi Arabian proposal is attractive in several particulars: (1) a vital and growing need would be met; and (2) much of the money used to secure, process and distribute the additional oil would come from the investment by Saudi Arabia of its profits.

However, it is not without its drawbacks. The heavy reliance on a single supplier is not without its dangers. Also, Saudi Arabia would want to acquire an immediate 20 per cent interest in companies handling such oil and ultimately a 51 per cent interest — or control.

Still the United States is facing an oil shortage and is going to have to make up the difference between available supplies and need from some source. The Arab states have the world's largest known proven reserves.

Saudi Arabia recently proposed a joint arrangement under which the oil of that country would be given a "special place" in the expanding United States market. In return, the Arab state would be permitted to invest in U.S. refining, distribution and sales.

Take the deal before the Chinese scoop it up.

PE - This is one of KLR's archival stories from 1972.

Back then they were worried about depending on Arab states for ~25% of our oil. We did take that deal but it didn't prevent us from experiencing the Oil Shocks of 1973 and 1980.

I wonder (NOT) how our current dependence on a mixed bag of foreigners for >60% of our oil will turn out?

Jon

Mankind must abandon earth or face extinction: Hawking

LONDON (AFP) – Mankind's only chance of long-term survival lies in colonising space, as humans drain Earth of resources and face a terrifying array of new threats, warned British scientist Stephen Hawking on Monday.

Why doesn't someone as astute as Hawkings understand that, evolutionarily, homo sapiens will certainly not survive. At least, we can hope he doesn't. Instead, like most other species, he will evolve into something different. Better? Maybe, maybe not, from our perspective. Just different, and hopefully sustainable for a while longer than H.S. seems to be.

As for colonizing space? Well, yes. An earth-based species can survive for a longer period by colonising space. Eventually, though, this universe looks to be doomed as well. If that is a problem for you, you need a new perspective. I am concerned with the next 100 years, because I have grandchildren who could possibily still be living then. Later decendents will just have to take care of themselves, and they can have their own worries and concerns.

Best wishes in outer space.

Craig

As for colonizing space? Well, yes. An earth-based species can survive for a longer period by colonising space.

Colonize space? What would you propose, building your own small planet. Everything, including water and even the atmosphere, would have to be imported from the earth.

But perhaps you mean another planet? Well you would have the same problem there. Build a dome on Mars then import everything from Earth to support life there. Not much to be gained by doing that.

But perhaps you were talking about another earth like planet somewhere out there in deep space. Well according to the book Rare Earth only one star in millions is likely to have an earth like planet, with the right atmosphere, gravity, temperature and so forth, that is capable of supporting large animal life. And only on a tiny percentage of them would humans find a livable habitat with tolerable temperatures, gravity, atmospheric pressure and oxygen content of the atmosphere.

To find such a planet we would have to go searching for it perhaps hundreds or even thousands of light years away. Such a journey that would take thousands of years. Not bloody likely in my opinion.

Ron P.

Build a dome on Mars then import everything from Earth to support life there

Ignoring the failure of biodome - the process COULD be bootstrapped. The secret sauce would be AIs that could run small mining and manufacturing machines. The AI run machines would take energy + raw material and churn out finished goods for building the dome.

Such AI's would be the offshoot of either sex robots or military killing machines, given human motives.

Such a journey that would take thousands of years.

And that needs even MORE secret sauce. Knowledge of the human development process between fertilization and birth - we don't know what hormones in what levels at what time do what. Artificial wombs. Robot AI nannies to bring up well adjusted rebellious teen colonists.

Would it hurt, though, Zaphod, to take a serious stab at colonizing space? Beats the heck out of the endless monotony of more cars, houses, hamburgers till that sucking sound becomes the inevitable galactic flush.

Yes, it would hurt.

Maybe we should keep hopping up there, taking a peek around with a few explorers.. maybe a means will emerge.. but basically, the hurt is called 'escape velocity', and getting much more than a few people and a modest ship through that would entail, energy-wise, 'a world of hurt'.

Hawkings is sounding a bit like Simmons of late in this one.. sorry to say.

We need to try colonizing all our Storage Spaces first, get a handle on our Mammon obsession. Earth could be a nice place to live, and we'd be happy to wave to the eighteen or so scientists who were posted out at Luna or Mars..

Gives me no pleasure, from an existential perspective, to say this, but human beings are never going to colonize space, much less the solar system, much less Mars, much less the Moon.

There's no energy to do so. And even if we did have the energy, there's nothing out there. And even if there was something out there, the distances are so large that we would never get there.

And even if we did get there...what then? Build Burger Kings and Chevy dealerships on other planets?

Would humans live forever, without suffering, if we colonized space?

We are stuck on this third rock from the Sun for our short lives.

Hope lies not with space, but with evolution. Life on this planet just can't be stopped. Not for billions of years anyway.

As I understand Hawking's viewpoint it's basically that "all the eggs are in one basket at the moment". You're right about the need to develop and evolve, but that's about long term sustainability, whereas he's talking about current vulnerability to a single global catastrophe. I don't see this as qualitatively different from quarantining the sick to stop a pandemic.

As for sustainably colonizing space, I don't see any physics based reason why it is actually impossible, just requiring several orders of magnitude more ingenuity than humanity has demonstrated thus far. If we're technically capable of doing it, I have no absolutely no ethical problem with it being done, my only concern is my usual one that it actually gets done rather than just pundited about how Moore's law and the economics of the marketplace mean someone else will inevitably do it.

But what would be the point of such a project? We could build a dome on the bottom of the sea also. It would be less challenging than building a sphere in space. But for what purpose? The tiny amount of people that would live there would make no difference in the population problem. And the enormous amount of energy that it would take to develop, launch and build such a colony in space would sap the resources of a small nation.

At least when we went to the Moon and launched the space telescope and deep space probes we gained a great deal of scientific knowledge. What would be gained from building a space colony? What would we get for all the expense and efforts spent on such a project?

Hawking was apparently talking about insuring the survival of the human race. But if we built a space colony, once life on earth is gone then there goes the space colony's lifeline. It would die also.

Ron P.

>>The tiny amount of people that would live there would make no difference in the population problem.

The idea would be to first Terraform some other planet or moon. Then gradually transfer a few hundred people up there to populate the place and manage the emergence of an elaborate ecosystem.

>>But if we built a space colony, once life on earth is gone then there goes the space colony's lifeline. It would die also.

Well, the aim would be self-sufficiency. Multiple planets/moons with self-sustaining populations.

All the resources necessary to support life can be found off Earth. Yes it would take a huge effort to put the seed infrastructure in place. No I don't think anyone is going to actually do it.

But there is no reason it couldn't be done.

At the end of the day, though ... it wouldn't buy us much. Another couple hundred years of exponential growth (at best). Then we'd run the whole solar system out of exploitable water and minerals.

And interstellar travel is much less possible. Nor would it ever bleed off overpopulation or allow access to resources to be transferred back.

There are so many ifs, Ron, that it is difficult to imagine humanity actually sticking with it and getting it done. First, it would almost have to be a 'seeding' of life to another, or to many other, worlds. At least with current technology. Unless that pesky speed of light limitation can be avoided, we are probably stuck here.

I think that what Hawkins is saying is that we do need to seed the universe with terrestrial life forms. That would be eggs, seeds, sperm, and mechanical devices to 'hatch' that life when a suitable planet is located. All done by AI and without direct human intervention. All possible, though of low probability, and more than that, rather unsatisfying from a person viewpoint.

Local planets - Mars, Venus (no chance), the moons of Jupiter, etc., would all vanish with Sol, in about 4 Billion or so years. That is why he says we must expand to the stars. Ray Kurtzweil writes about this... as does Vernor Vinge. Maybe it is a new mythology. And maybe it helps to avoid total hopelessness, not unlike God and religions do. Hopes for survival endure, even through the worst of situations.

Best hopes for survival and sustainability.

Craig

"I think that what Hawkins is saying is that we do need to seed the universe with terrestrial life forms."

That might explain how human DNA got to earth in the first place .

Perhaps we're all just some other advanced specie's science experiment ..

Triff ..

.....or their accident....

While it may be a noble goal to have a handful of people migrate to other stars, it won't change the reality for those who get to stay behind.

Unless there was instantaneous matter transfer, where one could set up a gateway from here to wherever, and have people walk through, with their belongings, the best we could hope for are long-distance space vessels carrying a few thousand individuals.

Even if the issues of hypersleep and space irradiation were solved, we'd still have monumental issues to deal with at home.

Unless Mr Hawking is suggesting the rest of us don't really matter.

And, who would get to go ?

My contention is we should stay put and learn to deal with our problems, before spreading them through interstellar space.

And, who would get to go ?

Think bigger - we need to send several billion off to other planets. I'll, um, volunteer to stay here - you know, just to keep an eye on things.

I am still sometimes amazed at what otherwise quite intelligent people will come up with. Rather than worrying about having all our eggs in one basket, how about we recognize that all our eggs ARE in one basket, and start treating it that way? It should be pretty clear that wherever we go we will have the same problem - because wherever we go, we'll be there.

Barring some extraordinary scientific feat of discovery, how would one send several billions anyplace?

The reality of space travel is that it will be for a select few, if it ever happens at all.

Personally, I think if we invested as much energy in getting to equilibrium right here on the planet as in trying to get off it, we'd be in better shape.

The idea that we could solve all our problems by relocating died when we ran out of usable continents right here at home.

I was being more than a little sarcastic, and I agree with you. These are just ways to avoid accepting that we must deal with what we have right here. There is no escape.

Sorry, I missed the sarc ;)

You are exactly right Spring Tides, but a generation raised on science fiction have come to believe the fantasy they read is really possible. We can travel to planets thousands of light years away in just a few weeks. Of course our space ship will have to be equipped with warp drive. Either that or we will simply be teleported there is Scotties Beam Machine. ;-)

Ron P.

Hey, I was raised on Science Fiction ! Child of the 60's...

However, I also recognize limits to growth.

Also, I think ET would be a lot happier if we went to the stars without our resource-hungry attitude - perhaps it's a qualifier ;)

Space colonization is a nice fantasy, but nothing more....it makes for great scifi stories, but nothing practical for our real World.

Besides, Isaac Asimov calculated many years ago that humanity would fill the entire known Universe with meat bags (and use up ALL available resources) well before 11,000 CE if we had unlimited power of spaceflight (warp drive, teleportation, whatever)...even with a very small rate of population increase.

My question is: Has any government (such as the U.S.) or organization established any hidden redoubts on the Earth designed to preserve human knowledge, and a small number of select people, in the hopes of rebooting humanity after various possible future calamities?

The seed vault in Svalbard is one example.

http://en.wikipedia.org/wiki/Svalbard

The United States has a 'Continuity of Government' plan...

http://en.wikipedia.org/wiki/Continuity_of_government

Does anyone have a 'Continuity of Humanity' plan?

The Encyclopedia Foundation and Second Foundation anyone? Where is Terminus?

At least someone is thinking about methods to deflect killer asteroids:

http://www.wired.com/wiredscience/2007/08/nasa-developing/

Some folks are making plans for the future!

http://www.lermanet.com/CST/index.htm

http://en.wikipedia.org/wiki/Trementina_Base

input this:

35°31'28.56"N 104°34'20.20"W

into Google Maps

http://cryptome.org/eyeball/cst-bunker/cst-bunker.htm

I was once told that a military helicopter crew got bitched out for buzzing this compound (sometime more than 10 years ago..)

I should drive up there sometime...

Also, I think ET would be a lot happier if we went to the stars without our resource-hungry attitude - perhaps it's a qualifier ;)

Actually, I'm pretty happy right where I am on good ol' mutha airth (as abused as she is)...:-))

Since the two little remote controlled buggies on Mars were so successful...

I think the most likely thing that is possible would be to try to send microbe care packages to Mars that could exist in the Martian environment, and spew O2.

But, even if technically possible, would be a future TOD-level debate on the ethics of even doing Terraforming.

Almost makes one wish we had evolved government to finally have a planetary governing body, as usually exists in sci-fi where things like terraforming is done.

...how would one send several billions anyplace?

You could send them all to hell.

It would be cheaper, easier and only slightly less virtuous leaving them for dead.

the doom deepens. neighbors, you are tedious.

http://nfs.sparknotes.com/muchado/page_144.html

That is correct Twilight. There is no escape for the intelligent ape. Everyone should watch the Thermo Gene Collision video linked above. We were doing just fine for hundreds of thousands of years as a few thousand stupid apes running around in Africa. We got eaten by big cats, starved to death, died of countless injuries and diseases and that kept the population under control just like other animals. Once our brain size reached a point where we could control all these things we were doomed.

If we colonized another planet we would just kill all the animals and use up the resources and collapse like we've done here. Wake up Steven.

A better question might be, "Who decides who gets to go?"

Sort of like the triage questions we will be asking concerning oil products in the not quite so distant future. Who gets to use the fuel, the medical products, the energy derivitives? And, who decides?

How those questions are answered will also determine the type of society we evolve, if any.

Craig

Even if the issues of hypersleep and space irradiation were solved, we'd still have monumental issues to deal with at home.

Those issues - Pshaw. You don't send actual humans. You send zygotes and a DNA "printer" in case the zygote plan fails and grow humans on site.

Far better to make an electronic hitchhiking thumb and see if you can catch a lift.

Unless there was instantaneous matter transfer, where one could set up a gateway from here to wherever, and have people walk through, with their belongings, the best we could hope for are long-distance space vessels carrying a few thousand individuals.

See "Tunnel in the Sky", by R. A. Heinlein.

Yeah - I did read that - I should have acknowledged matter transfer wasn't my own idea ;)

Hey, only 9 years to go: A new life awaits you in the off-world colonies! A chance to begin again in a golden land of opportunity and adventure!

Colonizing the stars is a snap via Astrochicken. But colonizing the Oort cloud would be challenge enough, no?

I hold out hopes for AI, Intelligence per se having come up a bit short. Pulling off a bit of code that could pass the Turing test wouldn't be quite as daunting as viable permanent colonization of space, I'd think. Some assure us that either goal will soon be a fait accompli anyway. Who knows? but Hawking is seriously off his wheelchair if he thinks we can make it to Proxima Centauri within an election cycle, or even a handful score of years. That's a goal for mature civilizations who've solved what Bill Hicks termed the "Food Air deal."

If we want to survive beyond the next century, "our future is in space," added the scientist. "That is why I'm in favour of manned, or should I say 'personed', space flight."

Thank God we're not taking the animals.

Why doesn't someone as astute as Hawkings understand that, evolutionarily, homo sapiens will certainly not survive.

Give the guy a break. He is an ivory tower within an ivory tower. When he was diagnosed with motor neurone disease, his doctors told him he would be dead by 1980. Given the level of medical progress he as witnessed first hand, it is not unreasonable for him to believe that humanity will prevail.

As much as I admire and respect Professor Hawking, I have to agree with Zaphod on this one. Professor Hawking is a brilliant man, but he is simply wrong in this idea of the human species outliving planet Earth.

Some catastrophe (whether man-made or otherwise) will spell the end of life as we know it on this planet. Whether it's global warming, a killer asteroid, or the sun going nova, whatever makes life for the human species impossible on this planet will mean the end of the human civilization.

Finding (or making) a planet with virtually the same resources as our current one is mind-bogglingly improbable. Beyond that, any terrestrial lifeform transplanted to a planet with a different set of resources will either evolve to fit the resources on the new 'home' planet or die. In the long run, there will be no colony of humans on any other planet - ever. The closest we might come would be an ecosystem evolved from terrestrial seeds.

BAU: The collapse of capital markets continues...

- Breaking News: HUD To Offer Interest-Free Loans To Distressed Homeowners

- Lack Of Stock Dispersion Hits All Time Record As Most Stocks Now Trade As One

...stock dispersion, or the measurement of the variation in individual stock prices, or broadly speaking alpha, is now completely irrelevant.

At this rate we anticipate the next broad or acute selloff, will take us to 100 in implied correlation, at which point there will be no benefit whatsoever to trading individual stocks: the entire market will be one big ETF.

(all the above @www.zerohedge.com/)

Old Boys Network and Gentlemen's Agreements Run what remains of the US financial system.

Front Running the Fed - Who Knew?

Curve Watchers Anonymous is paying close attention to the following snip from the Bloomberg article Pimco Calls Fed Rate Policies ‘Good for Risk Assets’...

Clearly no one could have possibly known (edit: about the Fed's move) in advance. Or could they?...

Here is a hypothetical conversation between Ben Bernanke and Jamie Dimon, CEO of JPMorgan, that explains the action in the middle of the yield curve recently.

Hello Jamie, this is your buddy Ben, Ben Bernanke. Here's the deal. We are going to announce a brand new policy called "Quantitative Nothingness".

We intend to keep the Fed's balance sheet intact, exactly where it is today. However, we are going to do that in an interesting way. I can't tell you exactly what we are going to say but ... here's a helpful hint: "Invest in the middle of the yield curve."...

http://globaleconomicanalysis.blogspot.com/2010/08/front-running-fed-who...

- Stock Market rolling over, Gold falling, Oil failing and preparing to fall below $70...

"Smell..."

"hUH???"

"SMELL !!!

Now Taste...

"but???"

"TASTE !!!"

(apologies to Cheech&Chong)

Is this finally the economic collapse?

Despite the many dissimilarities between Japan and the US, there is one similarity that continues to matter most in the risk management model my colleagues and I use at Hedgeye, our research firm -- debt as a percentage of GDP. Now that the US can't cut interest rates any lower, the only option left on the table is what the Fed just announced it would start doing -- buying Treasury debt. And that could lead the country to the brink of collapse: According to economists Carmen Reinhart & Ken Rogoff, whose views we share, crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It's a point from which it's almost impossible to return.

Except that we crossed that 90% boundary a while ago, by any reasonable measure. And if you bring "off book" crap back into view, the IMF says we are at least at 1400% debt to GDP and possibly higher.

All the nonsense about recovery is just that - nonsense. The game has changed in ways that no one currently alive has dealt with ever before, especially on this scale. Holding to old paradigms is just making the eventual resolution of these imbalances more and more likely to be bloody and violent rather than peaceful.

But this is really sad. When Fortune speculates that this might be economic collapse, not just a prolonged recession but collapse... that is scary, and sad, very sad.

Even though many of us peak oilers have predicted this for quite some time, it really hurts when that realization finally comes about that we were right and what we were right about will cause untold pain and misery.

And so many kept preaching about a soft landing. This is your soft landing, take a good long hard look at it. And this is as soft as it will ever be.

Ron P.

When Fortune speculates that this might be economic collapse, not just a prolonged recession but collapse... that is scary, and sad, very sad.

Darwinian, it is scary. And if Fortune 500 is saying it, then it means the technocrats are losing confidence fast.

Sitting outside the United States, it really is sobering to think that the U.S. may not have the wherewithal to stay at the top of the heap for much longer. Under the post-Westphalian international system this is bad news.

The anarchy of competing autonomous & sovereign "nation states" is held in check by great powers. Has been since the 17th century. The Soviet Union went down in 1989-1992. Without American hegemony holding the players in check, all the 20th century great powers will be gone. Anything and everything will be up for grabs.

China will be able to exert some influence, particularly in Asia. But it is no in a position to fill the larger void left by the U.S.

Remember the Balkans erupted in violence and genocide following the Soviet Union's demise, and that that was in a region on the periphery and one step removed from any direct control by Moscow (think of Tito's Yugoslavia).

Similarly, in a post U.S. dominated world, others will scramble to maintain independence or assert influence. Rwanda will look like a bar room brawl in comparison.

Whether Americans like it or not, whether they realize it or not, the U.S. is a "force" of stability in the world. A poorer America will be a much diminished America. And nobody is immune from the chaos that implies.

Sobering and sad.

PS: I'm hoping that Fortune is dead wrong on this assessment. B/c if they are right and collapse is imminent, the world as we know it will bear no resemblance two years hence.

The best way to start getting out of the current economic black hole is to scrap the globalization/free trade ideology.The last time the world was a prisoner of this way of thinking ended in WW 1.Do we need yet another disastrous war to break the hold of this religion of the rich?

I'm hoping that Fortune is dead wrong on this assessment. B/c if they are right and collapse is imminent, the world as we know it will bear no resemblance two years hence.

I'm wondering if anyone else is getting the feeling of an imminent collapse? Things only have to get to a certain point where the wheels start to come off like they did in 08. Things seem ok, then in short order a few events drop the hammer of reality. Like today suddenly the stock market without any real harsh data just started tanking. It was the result of numerous less than glorious economic indicators over several days coming together to cause a mini panic. But as we saw in 08 a mini panic can escalate quite quickly into something much larger. If investors realize there is no recovery coming in the near future, then the market tanks hard and panic resonates. A 2nd step down and the Fed and States won't have the mullah to even try to skate by, but instead there will be wholesale layoffs of teachers, fed and state employees, policeman and firemen. At some threshold there won't be enoug policemen to keep the peace. People will realize there is no more government per se' and the panic will streak through the populace.

I just don't see that collapse is that far fetched or far from possibly occurring. At this point it will take some kind of miracle to avoid it.

"A 2nd step down and the Fed and States won't have the mullah to even try to skate by..."

Add to your list of woes municipal utilities trying to pay their wholesale suppliers at the same time the utility's customers are getting services cut off for not paying their bills...

In '08/'09 my local utility was in trouble. This time... ???

Perhaps spending the resources to be a stabilizing force for the World has resulting in our bankruptcy?

Pax Americana?

Decline and fall of Rome?

Rome, with far few resources, lasted (in its Italian manifestation) for five hundred years.

Rome fell for a host of reasons, not least b/c it was forever dividing among rival factions and then moved. Constantine transferred the whole shebang to the Golden Horn and thus left the Italian colossus deprived of incoming tribute. Btw, Constantinople lasted another thousand years (330 - 1453 CE) and technically didn't fall but was conquered.

The U.S. has had bases throughout the world for a long time. Wars are frightfully expensive, but as long as others continue to foot the bill by buying its goods and currency, it's all manageable.

The greenback is America's ace in the hole. If it loses status as "petro-dollar" and "currency of world exchange" it won't take long for U.S. wealth to dissipate. And so will America's standing as world policeman.

However, don't expect other countries to pull the plug. Despite perhaps the wishful thinking of Iran, North Korea, Cuba, and Venezuela to name a handful of exceptions, few international players are willing to put themselves at a disadvantage by not taping into the American market largess and its universally accepted money.

Globalization has more winners than losers and for so long as it does outsiders will be happy to keep it going.

Globalization is not sustainable for reasons well articulated many times by many people on this blog. Resource depletion and peak oil are deciding factors in this.

The end will be slow or quick depending on events.

Heaven help us, however, if the the technocrats and oligarchs (for lack of a better term) lose faith in themselves and the system. Globalization and American hegemony is as much an act of faith as it is concrete reality. If the "masters of the game" forgo the will to see this through, then it really is game over.

What will happen is that the rest of the world will merely rearrange the chess board. Anarchy will prevail until a new balance is restored.

Perhaps spending the resources to be a stabilizing force for the World has resulting in our bankruptcy?

Perhaps believing that America's power structure around the world is actually a stabilising force ... is the source of that bankruptcy?

All the nonsense about recovery is just that - nonsense.

Agree, and am having some macalb sense of satisfaction watching CNBC and other economic pundits on MSM look so bewildered by the lack of robust recovery (that was) expected following a deep recession. Their refusal to acknowledge plateau oil production since 05, followed by recessionary level energy prices (4% of GDP or about $80 a barrel), is laughable. They keep quizzing one another on what it could be, with the right saying the Big O isn't business friendly enough and the left claiming it was such a deep recession we just need to be more patient. But neither side understanding or articulating peak oil concepts and their economic ramifications.

There should be a button on the remote control that can be pushed to play the three stooges three blind mice tune, as a background sound to their random and wayward pontifications.

Thanks for the laugh and photo of the Kudlow Report.

"the 90% debt/GDP threshold is... a point at which it's almost impossible to return."

I think it's already impossible to return. Maybe in another time and place with fewer resouce constraints and competent leaders, we would have had a chance.

But for now it looks like involuntary/forced austerity imposed by Crazy "Ma Barker" Nature.

More Reasons to Doubt Rogoff and Reinhart

...unless you want to argue that the current recession was caused by high levels of government debt, then it is obvious that causation runs from slow growth to high debt and not the other way around as Reinhart and Rogoff claim.

They also find that growth deteriorates significantly at external debt levels of over 60% and that most default on external debt in emerging economies since 1970s has been at 60% or lower debt-to-GDP ratios (which is the Maastricht criteria). While this might be a surprising finding for them, it should be clear why countries are not tolerant to external debt which is almost always denominated in foreign currency. When a government borrows in foreign currency, even low levels of indebtedness can be unsustainable since the government is not able to issue that foreign currency to meet its debt obligations. As countries need to earn foreign exchange from exports, a sudden reversal in export conditions can render the country unable to meet its foreign debt obligations leading to a crisis and slower growth. Sovereign governments, on the other hand, do not face any financial constraints and cannot run out of their own currency as they are the monopoly issuers of that currency. They don't need to increase taxes in the future (a la Barro) to pay off the debt as they make interest payments on their "debt" as well as payments of principal by crediting bank accounts, meaning that operationally they are not constrained on how much they can spend.

The US is not only sovereign in its own currency, it issues the de facto world currency. As long as you retain that position, you can leverage it to get real resources in exchange for "pieces of paper" (more like digits in a computer). Overdo it and you will lose that position; but so far, most of what's happening indicate that you're not doing enough.

The economy may be collapsing, but excessive government "debt" is not the problem.

I don't know, KODE. When the panic hits, and we go over the cliff, will it matter a whole lot whether it was too much debt or too little 'stimulus' that pushed us into free fall?

Frankly, I don't think economics is any sort of science, and the great Nobel Prize winners in the field were all looney tunes. It is and has always been a mystery, convoluted into a religion, and then a political paradigm.

When the economy collapses it will be from overcomplexity, and a failure due to impossibility to remedy multi-systemic errors.

We should all enjoy the recession, and then the depression that follows. What comes after is not going to be fun.

Craig

The US is not only sovereign in its own currency, it issues the de facto world currency.

KODE, I agree. It is one of the reasons why the dire prognostications of the Fortune 500 may be way off mark. Yes, the U.S. is in a financial mess, reminiscent of Japan in 1990. But the U.S. is also the world's chief military and financial power and it currency acts as an universal means of exchange. This gives the U.S. immense room for maneuverability. Call it the 'almighty dollar', the 'petro-dollar', the 'de facto world currency', whatever name you give it, it is still the green blood that flows through the globalized system of commerce.

The U.S. dollar as "hard currency" has accrued certain advantages to the U.S. It can hold absurdly lopsided balances of trade with other countries with little to no hazard. It usually means the other country has to buy more and more greenbacks to keep pace. The Bretton-Woods system has basically given the U.S. de facto tribute from all other players since World War II.

The Romans never had it so good. Nor ever did any Chinese emperor.

I find it funny how few Americans realize how privileged they are. Moreover, it is ironic how much ink and breath is spent by ideologues of all persuasions (right and left) who try to convince one another that the U.S. is the way it is b/c Americans are harder workers, or more innovative, or savvier businessmen, or better money managers than everybody else. That's hogwash. Without dismissing the many Americans who share these attributes it should be noted that these same virtues are not specific to the U.S.

The reason why the U.S. is at the top of the heap is that it had the industrial capacity, the population base, the institutions, the geographic isolation, and yes the luck, to have been able to finance the Second World War without experiencing wholesale devastation. Give the devil his due: the post war political leadership in Washington was cagey enough to milk that advantage to its perpetual benefit.

America has acted like every other power throughout history - it caters to its own first. And the invention of the internal combustion engine along with cheap electricity and oil has helped it build up one impressive cache of materiel and wealth.

Overdo it and you will lose that position; but so far, most of what's happening indicate that you're not doing enough.

The economy may be collapsing, but excessive government "debt" is not the problem.

KODE, good observation. That's the way it looks from here, too.

For the first time in my life, I find myself more optimistic than that the people at Fortune 500. Wow!

Hell about to freeze over? There's always a first time for everything.

TSMC to build solar fab in $3.8B capex plan

It also approved capital appropriations of $319.6 million to develop new businesses, including $101.6 million for a LED production line and $218 million to construct a fab for the production of thin-film solar photovoltaic modules. This is the first time it has talked about building a solar fab.
...
Continuing to expand into new markets, silicon foundry giant TSMC last month made its formal entry into the solar business. TSMC and Stion Corp., a San Jose-based manufacturer of thin-film solar photovoltaic modules, reached a series of agreements covering technology licensing, supply, and joint development. In addition, VentureTech Alliance, a TSMC affiliate, will invest $50 million to take a 21 percent stake in Stion. Under the agreements, Stion will also license and transfer its thin-film CIGSS technology to TSMC. The technology is reportedly based on copper indium gallium (di) selenide (CIGS) materials.

Stion Corp is still in "stealth" startup mode, so the CIGS report is possibly a rumor.

Good News from the Pacific Northwest

Two articles in the Seattle Times show incremental progress toward cogeneration and fuel efficiency:

Sawmill produces power, too

What sets the mill apart is an 18-megawatt power plant and transmission lines that carry power out to consumers rather than drawing it in for consumption.

The mill, which has been in operation since 2003, now represents one of the most significant suppliers of renewable energy to the Grays Harbor PUD.

Seattle energy startup builds Oregon factory

EnerG2 can make activated carbon with fewer impurities, making its ultracapacitors more efficient, at a lower cost than companies using natural sources of carbon.

Ultracapacitors are currently used in electric, hybrid and "heavy hybrid" vehicles, such as garbage trucks and Mack Trucks, to quickly store energy generated from braking and use it to power the next acceleration.

Fuel efficiency in hybrid trucks with an ultracapacitor system improves by 30 percent. And the life span of the engine's battery increases, Luebbe said.

Combine ultracapacitors with a (Bellevue, WA) MagnaDrive clutch and next generation hybrid trucks might be significantly more efficient.

As liquid fuels eventually become more expensive, core demand for trucking (e.g. transporting agricultural products) will need these improvements.

Jon

It is kinda sad that all this hybrid and ultra-capacitor technology was not deployed many years ago. But I guess with cheap oil, we just didn't have the incentive. We should have had higher gas taxes because that would have created the incentive, reduced pollution, reduced oil imports, and raised revenue.

It is kinda sad that all this hybrid and ultra-capacitor technology was not deployed many years ago. But I guess with cheap oil, we just didn't have the incentive.

Having a want doesn't create material science. Creating better material science is what is giving us things like ultracapacitors.

Purity, uniformity, ability to manufacture, and even advances in the understanding of the physics is what is moving forward ultracaps.

Wanting - Humans have been wanting flying cars and energy too cheap to meter. I'm wanting a nice BLT right now. But wanting isn't getting any of those things....

Suntech scraps amorphous solar plans

SAN JOSE, Calif. -- Suntech Power Holdings Co. Ltd., China's largest solar cell maker, is restructuring its operations at its Shanghai facility to focus on the manufacture of crystalline silicon solar cells. As part of the restructuring, Suntech has ceased the manufacture of amorphous silicon thin-film solar panels. As a result, Suntech expects to incur a thin film equipment non-cash impairment charge of approximately $50 million to $55 million in the second quarter of 2010.

So are they getting out because they see a brighter future for crystalline or because they may have lost the technology race in amorphous cell construction?

Or for some other reason?

It seems to me that considering the costs of the cells themsevevs are only a minor paet of the costs of a system, the more efficient crystalline cells might actually be cheaper when all costs are considered, including labor and mounting racks and so forth

In another EE TIMES story:

Due to the rapid cost reduction and improving competitiveness of crystalline silicon solar panels, Suntech has been restructuring operations at its Shanghai facility to focus on the manufacture of crystalline silicon solar cells.

When you install PV you are buying kWh forward into the Future ... for a generation or many decades, I consider all products except Crystal Si somewhat perishable, but that is looking in the rear-view mirror. I have ripped and land-filled an installation of thin film. Sharp has a big investment in thin film as well as Crystal Si, it will be interesting to see what they prefer in the long haul. I have some Arco 17 watt panels that produce close to nameplate since the 80's. I sure they
will be around for my lifetime.

It seems to me that considering the costs of the cells themsevevs are only a minor paet of the costs of a system, the more efficient crystalline cells might actually be cheaper when all costs are considered, including labor and mounting racks and so forth

As long as having plenty of mounting area, the thin-film is a cheaper system. That said, if you want to build a PV system to power your house and an electric car, you probably won't have enough good Southern exposure area on a typical house so you'll want to use the higher efficiency silicon instead of thin-film.

Or for some other reason?

My guess is that people are preferring the 20yr+ warranties on traditional crystalline cells vs the short waranties with the thin film ones.

Re: Jeff Rubin: Boone Pickens’ plan full of hot air, up top:

Jeff Rubin messes with a famous Texan and a Texas politician messes with Texas:

http://www.dtnprogressivefarmer.com/dtnag/common/link.do?symbolicName=/a...

"What biofuels can do is add another segment of agriculture industry that we really need at this time," Gilbert said, according to the Advocate.

He said he believes the state needs to start ethanol production along the Texas coast from Brownsville to Beaumont. That's because the climate is conducive to growing both sugarcane and cassava. Cane is used extensively by the Brazilian ethanol industry and companies across the world are looking at cassava as a potential ethanol feedstock.

In recent years Texas made the ethanol headlines by challenging the federal Renewable Fuels Standard. Texas Gov. Rick Perry put forward an unsuccessful challenge -- becoming the only state to file a formal challenge to the RFS.

Candidate Gilbert says that if elected Texas could be producing ethanol from sugar cane by the end of 2011.

There may not be much of a market for it if gasoline usage continues to decline and the ethanol blend rate is not increased.

Ethanol being corrosive, and all, how would existing vehicles need to be retrofitted in order to burn a higher percentage of ethanol ?

I was reading my car's manual the other day (yeah, slow day...) and it's only warrantied for 10% ethanol.

In the the United States (9.3 million) FFV's (flexible fuel vehicles) have been sold. 200 million to go.

Remember this one? How long are we going to talk about it? Keep it up, I probably only have about 25 more years.
http://www.youtube.com/watch?v=HjkFCFeJH9Y

Sloppy Journalism

There's a reason I like to have the Energy Export Databrowser around for quick and easy access to oil statistics. Two articles this morning post bogus information when they confuse "consumption" with "imports".

The energy conundrum begins talking about imports but then states:

... consumption of petroleum products has grown at an annual compounded growth rate of around 4% in the last seven years and, according to the International Energy Agency, consumption is expected to rise to 135 million tonnes (mt) per annum by 2012 from 112 mt now.

Reading that sentence one would think that total consumption was 112 million tonnes last year. A quick look at the chart will tell you that 2009 consumption was ~150 million tonnes while imports stood at ~112 million tonnes.

The same thing happened in the squib on China:

China Imported More Than 55% of Oil Needs in First Half, Securities Says

China imported more than 55 percent of its oil needs in the first half of the year, the Shanghai Securities News reported, citing data from the China Petroleum and Chemical Industry Association.

China’s oil consumption rose 15.1 percent in the first half compared with a year earlier to 220 million tons, the newspaper reported, citing the data.

No, it is China's imports that stood close to 220 million tonnes in 2009. Total consumption was over 400 mt.

Is there any hope of making informed decisions when everyone around is so busy filling the internet with mangled information? I mean, I'm trying really hard to make it easy for people to do a quick visual check whenever they see a published number. Is getting news out quickly really that much more important than taking a minute to make sure the numbers are correct?

... Heavy Sigh ...

Best Hopes for slowing down and checking your facts.

Jon

Don't sigh too heavily!

I have used your Energy Export Databrowser to uncover misleading statements in the Austrian press about how much oil they produce.

At least the press can't fool the ordinary Joe so easily now!

I assumed the Vogue spread was an attempt to call attention to the use of petroleum based fabrics and cosmetics in the fasion industry. Similarly disturbing photo shoots have 'dyspromoted' the use of furs feathers and skins.

If the message is merely "to be careful about nature," and "there is nothing political... nothing social" in it, as Mr. Sozzani states, then what's the point? The models might as well be covered in carbon dioxide.

Hello,

I've uploaded a new version of my free Peak Oil software to my website.

Changes:

* Added new Hubbert Curves for China, Equatorial-Guinea and Gabon

* Added data for Chad, but the Hubbert Curve cannot be generated with it due to a too low linesegment generation resolution for the Hubbert Curve. The resolution might change if multiple countries are affected by the issue.

You can download it here: http://sokath.sourceforge.net/

https://sourceforge.net/projects/emsim/

Diagram (JGraph) driven simulator. Bondgraphs > nonlinear differantial system > plot: implemented for economics and ecology. Network analysis: emergy propagation implemented. Would also fit for electronics, mechanics, cost, GWP, footprint analysis.

Greens Great in Tasmania Says Greens Deputy Leader, Christine Milne

Senator Milne has made an amazing claim that 48% of Tasmania's electricity last summer was supplied by high polluting brown coal fired stations in the State of Victoria. The two States are linked by an underwater HVDC cable. One of the claimed advantages of the cable was so the island of Tasmania could export surplus hydro power to mainland Australia. Up to 2006 the island's stationary energy mix was about 92% hydro, 8% gas fired, 0% coal fired.

Therefore I thought it was uncanny a year or so back when Gail the Actuary speculated that HVDC cables would help coal more than renewables, the example was that of joining Europe to North African solar via cable under the Mediterranean. I think the expression used was 'the bad drives out the good'. Spot on.

Boof,was this high proportion of coal fired electricity due to drought and consequent shortage of water for hydro? Tasmania hasn't grown all that much in 3 or 4 years to account for it by increased electricity demand.

I seem to remember that there was a lot of opposition in Tasmania to the HVDC Bass Link before it was built.Maybe this was one of the concerns.

2009 was the wettest year since 1927 now the dams are back to only 35% full. I think part of the problem is the high spot prices paid for peak power. The idea has been to sell hydro high and re-import coal power low. That way the zinc and aluminum smelters stay on cheap power. Since the Latrobe Vic smokestacks are out of sight they are out of mind. This would all change with a CO2 cap if any political party had the cojones to implement it.

Cat fight in the currency markets.

Peak Hypocrisy: Europe Threatens Japanese FX Intervention Would Not Be "Welcome"

In an apparent example of peak hypocrisy, a Eurozone official told Reuters today that "Forex intervention by Japanese authorities would not be welcome in Europe."

Of course, when it was the Swiss National Bank and the BoE (confirmed) intervening, and the ECB (alleged) doing all they can to lower the value of their currencies it is all good, and Europe doesn't care that the JPY will appreciate. However, when others do the same, it's "not welcome."

Are their any markets that are not dysfunctional? Currencies, commodities, stocks, bonds... ?

Onion today is pretty on point. A lot of the time these days, it seems like the most 'serious' news comes from folks like them, or Jon Stewart...

http://www.theonion.com/articles/millions-of-barrels-of-oil-safely-reach...

Millions Of Barrels Of Oil Safely Reach Port In Major Environmental Catastrophe

PORT FOURCHON, LA—In what may be the greatest environmental disaster in the nation's history, the supertanker TI Oceania docked without incident at the Louisiana Offshore Oil Port Monday and successfully unloaded 3.1 million barrels of dangerous crude oil into the United States.

According to witnesses, the catastrophe began shortly after the tanker, which sailed unimpeded across the Gulf of Mexico, stopped safely at the harbor and made contact with oil company workers on the shore. Soon after, vast amounts of the black, toxic petroleum in the ship's hold were unloaded at an alarming rate into special storage containers on the mainland.

From there, experts confirmed, the oil will likely spread across the entire country's infrastructure and commit unforetold damage to its lakes, streams, and air.

"We're looking at a crisis of cataclysmic proportions," said Charles Hartsell, an environmental scientist at Tufts University. "In a matter of days, this oil may be refined into a lighter substance that, when burned as fuel in vehicles, homes, and businesses, will poison the earth's atmosphere on a terrifying scale."

From the giant iceberg story

Icebergs calved from Greenland’s glaciers and floating ice shelves typically follow that Canadian route south, as did the huge one that struck and sank the Titanic in 1912.

That's a bit tough on that iceberg - it was just there doing its thing, chilling out so to speak, and the stupid captain of the ridiculous Titanic ran into it ... not like the iceberg was the aggressor. Why are modern journalists so sloppy?

Why are modern journalists so sloppy?

If he was going to try to blame the iceburg, he could have at least done it with some humor. Maybe something like this:

As did the huge one that reared its ugly icy head and slammed into the innocently passing Titanic. With malice and bad intentions like Mike Tyson in a 90's boxing match, this gigantic chunk of diabolical frozen liquid surged through the icy waters like a great white shark lunging for a seal, sending super wealthy and steerage passengers to their watery graves. How could an entity we normally take to be so benign, be so calculating?!

I don't know when the USA Today reporter wrote that article about healthier school lunches, but Tony Geraci's relationship with the Baltimore City school system was severed last spring. He has not yet been replaced.

From the Keystone XL pipeline article:

Utility officials in Nebraska, Kansas, Oklahoma and Texas say their states don't require permits for interstate oil pipelines.

I wonder how many states don't require permits for interstate oil and gas pipelines. What kinds of pemits are needed for intrastate pipelines? Can we spell "ostrich"?