Hello Everyone,

I would like you all to know that my favourite newspaper - the Financial Times - had a special, 12-page, report on energy on Friday 20th October. The report can be found here I suspect that it is behind a firewall but since I am a subscriber, I am not sure.

In any event, the important thing is that this report mentions "Peak Oil" paragraph

Troubled future: peak oil theorists are warning that the world's oilfields are on the decline and soon will be unable to match our insatiable appetite for energy

Our previous water heater was the last natural gas appliance left, so we installed a PowerStar AE 115, made by Bosch. The AE 115 required two 240V/40A circuits. The AE 125 had a greater flow rate but would have required three circuits - too much for our panel. I mounted it on a basement post between the bathroom and kitchen, closer to the bathroom.

Now we can cancel gas service altogether. My ultimate plan is to bring in solar-warmed water from the porch roof and bring it to full heat with this unit.

The unexpected supply from oil companies, lack strategic reserve requirements from America, China and India, hedge funds capitulation -all are working towards making oil cheaper.

What unexpected supply from oil companies? According to the IEA's Oil Market Report, world oil supply (all liquids) is down .8 mb/d in the last two months. They have it 86.2 mb/d in July, 85.8 mb/d in August and 85.4 mb/d in September.

At any rate, the oil supply has been flat for almost two years now. Prices rose, as one would expect, then they have fallen by twenty dollars per barrel in the last two months.

So the big question is; why is the price of oil falling. Well, I can tell you one thing, it is not because of an increase of oil supply on the market. But the article does get one thing very right:

The economy is falling fast. The great Asian depression has started. US economy is about to cool although currently in a mode of slight acceleration.

That, dear hearts, is, in my opinion anyway, the reason oil prices are falling. And if they fall further, and they just might, that will be the reason. We are on the cusp of a major world recession. And the high price of oil is part of the reason.

Ron Patterson

ELECTRICAL WORRIES LOOMING:

(excerpt)

Despite a few nasty pockets of outages, the country managed to weather the summer with no large-scale, prolonged blackouts similar to the epic Northeast power failure of three years ago.

We likely will not be so lucky in years to come, say many of the executives responsible for producing electricity for America.

When the country thinks about its energy problems, it often focuses on our dependence on foreign oil and the recent high prices of gasoline. Petroleum provides 40 percent of our energy and is particularly vulnerable to geopolitical swings in unstable regions of the world.

But utility executives worry that Americans are failing to appreciate another aspect of the energy picture, namely that the power plants using coal, natural gas and nuclear power to produce electricity may soon not meet our growing needs.

"My biggest fear is that we are running out of generation," said Michael G. Morris, chairman and chief executive of American Electric Power, with 5 million customers in 11 states. "That is an issue that the average person doesn't know a thing about. When we tell corporate America, they say, 'What do you mean you're running out of power?"'

The executives' concern is echoed by the North American Electric Reliability Council, which last week said in its annual report that in two to three years, the margin between power supply and demand will drop below levels necessary for reliability in Texas, the Northeast and the Midwest. Other parts of the country could reach that point in the next decade.

During the last round of power-plant construction, most new units were designed to burn natural gas, which was then available at prices much lower than today. Deciding on the next fuel of choice will be more difficult.

"People don't realize how dangerously close we're moving to not having enough capacity," said Walter M. Higgins III, chairman and chief executive of Sierra Pacific Resources, which serves Las Vegas. "I'm worried about where the natural gas is going to come from for all that generation."

...Another problem that retards innovation is the nature and condition of the country's $1 trillion transmission grid. It was designed for a system in which cities were served by nearby power plants. It was not designed to move power across regions, something that is increasingly needed.

As Gov. Bill Richardson of New Mexico puts it, "We're still a superpower with a Third World electrical grid."

Richardson, former U.S. energy secretary, faulted utilities for being slow to respond to investment incentives contained in the sweeping energy act passed in 2005. "The grid is in very bad shape," he said. "Blackouts are still happening. The promise of the energy bill was that it would be taken care of."

He also said the federal government "is falling asleep" when it comes to fixing our energy infrastructure. "The public is not aware, and neither are policymakers, that the investments in transmission are not happening."

full article -
http://www.denverpost.com/search/ci_4525454

Camel caravans give the trucks a run for their money

The BBC says.

There can be no doubt that Iran has plenty of oil, but that oil is the only thing Iran has going for it, in terms of a viable world-class economy. In 1976, the Shah of Iran came to the United States, sent his representatives to intercede and say, "Look, we've done an analysis, and we've got a finite amount of oil. And right now we need to export it. And if we don't export it, we don't make money, etc. We don't have enough oil to sustain this. We need to come up with an indigenous energy policy that frees up our oil for exportation. We want to use nuclear energy." And the U.S. government went, "Good idea, Shah. We're all for it." That was Gerald Ford.

The chief of staff of the White House at the time was Dick Cheney. The Secretary of Defense was Donald Rumsfeld. So, this argument that both Cheney and Rumsfeld put out today that Iran is a nation awash in a sea of oil, there is no need for a nuclear energy program, they both supported Iran's goals of achieving nuclear energy in 1976. Not only nuclear energy, but they also supported the Shah when he said, "We cannot allow a nuclear energy program's fuel to be held hostage by the vagaries of sanctions and war. We need an indigenous fuel-manufacturing capability inclusive of the full uranium enrichment process." And guess what the U.S. government said in 1976.
"No problem, Shah. Good deal." Of course, in 1979, the Islamists come in and suddenly we change our opinion.

The bottom line is, Iran has every right legally to a nuclear energy program, and economically, we've already deemed it a responsible way to go.

And this:

...Look, we're already overflying Iran with unmanned aerial vehicles, pilotless drones. On the ground, the CIA is recruiting Mojahedin-e-Khalq, recruiting Kurds, recruiting Azeris, who are operating inside Iran on behalf of the United States of America. And there is reason to believe that we've actually put uniformed members of the United States Armed Forces and American citizens operating as CIA paramilitaries inside Iranian territory to gather intelligence.

Now, when you violate the borders and the airspace of a sovereign nation with paramilitary and military forces, that's an act of war. That's an act of war. So, when Americans say, "Ah, there's not going to be a war in Iran," there's already a war in Iran. We're at war with Iran. We're just not in the declared conventional stage of the war. The Bush administration has a policy of regime change.

They're going to use the military, and the military is being used.

Found this story from USA Today to be filed under the 'Its not the heat, its the stupidity' file dunno if it has been posted but I scan these pages daily and didn't see it

By John Ritter, USA TODAY
BAKER, Nev. -- Rancher Dean Baker picks his way through greasewood and sedge to a shallow dirt depression that was once a small pond fed by a natural spring. Both have been dry for years, casualties, he says, of pumping that draws underground water to the surface to irrigate fields and water livestock.

Over a half-century, agriculture's needs have lowered the water table, Baker says, but it's nothing compared to what may be in store for this arid, sparsely populated, mile-high desert near the Utah border.

The Southern Nevada Water Authority wants to pump vast quantities of groundwater from rural eastern Nevada valleys and pipe it 250 miles south to Las Vegas, the nation's fastest-growing major metro area, a tourist mecca with a limited water supply strained by population and prolonged drought.

After hearings last month, a decision rests with State Engineer Tracy Taylor. More hearings on plans in other valleys are pending. The water authority aims to build a pipeline by 2015 and pump nearly 30 million gallons a year from 19 wells in Spring Valley alone.

At stake, ranchers say, are livelihoods and a delicate ecological balance on a landscape cursed with at most 8 inches of rain and snow a year.

"If they pull the water table down enough, this will be a dust bowl," says Baker, 66, whose family has raised cattle in Spring Valley since the 1950s. "It will completely change the economics of agriculture. It will also change the life of the 40 head of antelope that stay in that alfalfa field."

Those concerns are unfounded, water authority officials say. Nevada law prohibits impinging on existing water rights, says general manager Pat Mulroy. "It's emotion," she says. "It's regionalism. It's rural vs. urban. It's fear-based. Protecting that environment will always be of tantamount importance to us."

Scarce resource

Since early settlers, water has been the West's scarcest and most valuable resource. Towns pumped water, just as ranchers did. Rivers, lakes and streams have been dammed, drained and diverted for decades and now offer little extra supply for expanding urban centers such as Salt Lake City, El Paso, Albuquerque, Phoenix and Tucson.

Now groundwater is the target, even if, as in Las Vegas' case, it'll cost $3 billion or more to get it and benefit one region at the expense of another.

"This is symptomatic of issues going on all over, particularly the Southwest," says Jeff Mount, director of the Center for Watershed Sciences at the University of California, Davis. "When you look at it on a bigger, multigenerational scale, we're basically mining these groundwater basins at rates that can't be sustained. When the water's gone, it's gone."

Farms and ranches consume 80% of Western water supplies yet generate less than 1% of states' gross domestic product, says Hal Rothman, a history professor at the University of Nevada, Las Vegas.

"The real question isn't whether water will be transferred from rural to urban use," he says. "The debate is over the terms of the transfer, how rural communities that cede water will derive fair and valuable benefits from it."

Opponents of the water authority plan say it's one more instance of water flowing uphill toward money, like Los Angeles' notorious "water grab" from the Owens Valley in the early 1900s. That diversion -- basis of the 1974 movie Chinatown-- allowed L.A. to grow but dried up a productive farm region.

"The parallels are stark," says Greg James, former director of the Inyo County, Calif., water department in the Owens Valley. "They're looking to build a pipeline, pump groundwater, and they're already acquiring ranchland."

State water laws and federal environmental regulations wouldn't permit a repeat of Owens Valley, but ranchers want a guarantee that if the land suffers, the pumps would be shut down. Otherwise, "by the time we see the effects of pumping, it will be too late," says Gary Perea, a Democratic commissioner in White Pine County.

The Mormon Church, based in Salt Lake City, owns water rights in Spring Valley and has asked the engineer to withhold approval until a U.S. Geological Survey study is finished next year.

The authority built a computer model to predict effects on the water table but didn't run it. When it was run by a National Park Service hydrologist, it showed a 150-foot drop over 75 years. Mulroy calls those results "hypothetical." John Bredehoeft, a hydrogeologist who testified for opponents, says "it would have been detrimental" to the authority's case.

Time is short, Mulroy says. The Las Vegas metro area -- population 1.7 million, 20,000 new homes a year -- relies on a share of Colorado River water stored in Lake Mead for 90% of its supply. Seven years of drought have lowered the lake to half its capacity. A year like 2002, when the river ran about a quarter of normal, "would invoke a crisis," Mulroy says.

Reducing demand

The water authority is spending millions of dollars to entice homeowners to replace irrigated lawns with drought-tolerant plants -- 70% of water consumption goes outdoors. A system captures, treats and returns water from indoor plumbing to Lake Mead.

Opponents say tougher conservation measures, including raising water rates as cities such as Tucson have done, could save as much as the authority plans to take from Spring Valley.

"That penalizes people who can't afford it," Mulroy says.

Ranchers may think Las Vegas should slow its growth, but that's a political non-starter in go-go southern Nevada. At the area's current growth rate, rural groundwater is a stopgap measure at best, says Matt Kenna, a lawyer with the Western Environmental Law Center representing opponents.

Many people believe that if the engineer rejects a water transfer or awards an amount too small to make the pipeline economical, the authority will ask Congress for a bigger share from the Colorado River.

When the river's flow was divided among seven states in 1922, Las Vegas was little more than a crossroads. Nearly a century later, 400 farmers in California's Imperial Valley still get 10 times more Colorado River water than Las Vegas does.

http://www.usatoday.com/news/nation/2006-10-18-vegas_x.htm

Patrick

Interesting coincidence that the Geologist's last name is "Cheney."  

At least he was realistic enough to say, sure we'll never run out oil, but it's gonna end up costing you a lot more in the future.

I mean, isn't that the point of peak oil in general, that oil will eventually become scarce to the point that it'll be too expensive to buy?

aswipe !