Saturday open thread

Things are not looking good in Nigeria (also pointed out by Leanan):
Armed militants carried out a wave of attacks across Nigeria's troubled Niger delta on Saturday, blowing up oil and gas pipelines and seizing nine foreign oil workers.
[editor's note, by Prof. Goose]Also, please check out this interview with Richard Heinberg and JH Kunstler with Jim Puplava over at FinancialSense (it's about an hour). I found it to be a good "primer interview" that you can send to people who might be inclined to listen. (Plus, there's a pretty cool plug in there regarding TOD by Heinberg about ten minutes from the end. Thanks for that, Richard.)

[editor's note, by Prof. Goose]And, after a night of -13F temps, Denver has initiated rolling blackouts. Sweet.

The noise and losses will only increase, making it increasingly difficult to achieve the production levels that might otherwise seem possible.
Heinberg gave a very nice plug to TOD in this roundtable interview on Financial Sense Newshour.
http://www.financialsense.com/Experts/roundtable/021806.html

[There's not much new in this discussion to the PO aware, but it is interesting to hear Heinberg and Kunstler together in the same discussion. Even when they agree, their style differences are notable, to put it mildly.]

wow bman...thanks for bringing that to our attention.  That's a very nice and humbling set of words from Professor Heinberg.

Aside from the nice words about TOD, it's a good primer interview as well...one of those you send to the people who can listen...

Excellent interview. Go listen, even if you're an expert on this stuff.
This otherwise great discussion was missing one key element and skipped lightly over another.

MIA: any acknowledgement that when crude prices jump on the start of public awareness of PO, as they will, it will cause enough economic contraction world wide to slow demand for oil substantially.   Once demand slows, crude prices will temporarily drop, even after PO, but the scare should be enough to propel the adjustment process (more hybrids, less wasteful use of oil, more nuclear, solar, wind, etc.)  Of course, eventually world economies will start growing again and quickly crude prices will spike even higher, and the whole recession, adjustment process will begin again.  The net result of all this is that the world as a whole will have a lot more time to adjust to PO than is contemplated in this discussion.

Skipped over: the very important discussion of regional hegemony, bilateral deals, and production cutbacks by exporting countries to conserve their resources.  These trends, as noted, will exacerbate the effects of PO (opposite to the effects of economic contractions discussed above).   While this part of the discussion was exactly on target, I think, it failed to emphasize the early manifestations that we are seeing almost every week whereby China in particular and India less so are making bi-lateral deals that reduce the supply side of the global "free market" in crude.   This is the future staring us in the face from headlines in our papers nearly every day.  It is truly mind-boggling that such clear indicators of the direction of the future can be either misunderstood or ignored by virtually every single American (and European, so far as I know) political "leader".

well said points there...it should be part of the discussion, but not accepted as panacea either.  
Sweden at least has grasped the point.
On the MIA point: the world may have more time, but it will have fewer resources -- in particular, less capital. Time -- hey, the world will have all of the that we could want!
Time dollars then. Community currencies, mutual credit, that kind of thing. Money is a means to an end -- people transacting with one another. We'll find another way. We dont need central banking to function - indeed we could be far more efficient without it.
I thought it was a nice enough conversation they were having but rather unchallenging as all three were pretty much peakoil advocates. I also think that the breadth of the issue was addressed with to much authority. The degree everyone was an expert on all the ramifications from economics to geopolitics is a bit thin. Some of these conversations need to bring in experts from other areas who have the maturity to operate in the discussions under "if peak oil is true" assumption so we can here a debate from experts (who may not agree with PO theory timelines) but are willing to extrapolate from such a premise

Boris
London

It contrasted very strongly with the program on BBC Newsnight on 22nd December in which Jim Kunstler took part. It can be seen here. After a  fairly straight pro peak oil report by the programme staff there was a discussion with a mixture of different people of different views and different degrees of knowledge which rather rapidly developed into a bear pit. Kunstler on a video link from America was somewhat taken aback by this and finished up appearing the most restrained and understated of the speakers.
It shows the danger of programme producers trying to obtain 'balance'. Without care niether side of the argument gets well put.
Yes, I heard about the BBC Newsnight program and found the copy on GPM. It was very poor. Seemed like a couple of the participants were very effective at disrupting any meaningful discussion and the 10 minutes that look to have been allocated to peak oil got hijacked into bickering about trivia. I spoke to a couple of people with minimal awareness of PO who had watched it and they were none the wiser after having done so.
Thanks for the URL - I too listened - only one person brought up the point that we are not running out of oil as such - only "Cheap" oil - IMHO coal and nukes will be the future ... with coal leading because, correct me if I am wrong, coal processing can come on line quicker than nukes and second, nuke is only power, while coal can take the place of "oil" only at a higher cost ...
Thanks
BTW, there are plenty more audio interviews with PO folks at the FSO site (Simmons, Savinar, Heinberg, Zapata George, Kunstler... ). I've heard them all since I've been listening to their excellent Saturday online broadcasts for years. Do ferret around and do some listening.
There was a story about Kuwait's oil reserves in Delta Farm Press this week:

If recent reports are true, the world's energy crisis just got worse. Kuwait, long assumed to have some of the world's largest oil reserves, may actually have much less.

In late January, Petroleum Intelligence Weekly, an energy industry newsletter, said internal Kuwaiti records show the nation's oil reserves are only about half the 99 billion barrels previously cited. If there, the 99 billion barrels would translate to about 10 percent of the world's reserves.

Delta Farm Press is a publication for  farmers, which usually prints articles about corn prices, soybean rust, farm subsidies, etc.  But high fuel prices have been so brutal on farmers, they're now covering Kuwait's reserves.  

I think a recent post put Kuwaiti reserves at only 24 Gbbl.
Yes, it was the same story, actually - the PIW one.  The info in the article isn't news here.  I was struck by the fact that it was in a farmers' trade journal, though.  There seems to be growing awareness in the mainstream that something about energy has fundamentally changed.
Energy, fossil fuel and electrical, is a high proportion of the input costs in conventional agriculture, a point missed by many. To harvest the sun's energy as plants, tillage, irrigation and harvesting require a lot of horsepower. A typical farm tractor used in tillage or harvesting is 100 HP to 400 HP (and cost $800 or so per hp - think of a typical tractor as 2 nice Beamers or a Mercedes).

http://www.deere.com/en_US/ProductCatalog/FR/category/FR_TRACTORS.html (not the utility tractors)

Forage choppers and combines are even higher hp:
http://www.deere.com/en_US/ProductCatalog/FR/series/spfh_forage_harvesters.html

In typical use, a tractor burns about 4.4 gallons of diesel per hour per 100 Hp in size. Then there is the cost of fertilzer, irrigation power, crop drying costs, transportation to market and so on. Historically 40% of the on-farm costs for alfalfa, a major feed crop for cows, is the direct or indirect cost of energy. For milk production the cost of feed is about half the input costs. The increasing production of biofuels displaces the production of either human or animal food, reducing their supply and thus increasing their prices as inputs. IMO, increasing energy prices are a double whammy for food agriculture (animal or human) and ultimately the cost of food.


Matt Stockton
of the West Central Extension Center gave a presentation at an ag conference last week.  He said, "There is no bigger headline ... than where our energy costs are going for diesel fuel and fertilizer."

I'm inclined to agree.  Along with transportation, agriculture is the industry most dependent on petroleum.  It will be difficult to maintain our current levels of production, let alone grow biofuel crops.  

Great link, Leanan.  

This year's growing season may well cause a real spike in the cost of food.

Remember, the spike in oil prices occurred after the last planting and growing season.  This year, farmers see real hikes in all sorts of products necessary for growing.  There is a direct correlation, the article says, between the cost of these products and the cost of oil and natural gas.

Perhaps because economists are not farmers, they have overlooked a real inflationary cause that will bite later this year.  

I wonder what kind of demand destruction is going to occur here?  Cut down on the calories?

Portions might be smaller.  There's a theory that one reason Americans are so prone to obesity is that we have a surplus of food, thanks to agribusiness.  And being a good capitalist society, naturally, the solution to that problem is to try and get people to consume more.  Hence food is highly processed (because people will more of it, and you can charge a higher markup), and portions are huge.  (Why not supersize those fries, if potatoes are cheap?)  Many European countries, like France, have protected their small, local farmers.  So food is expensive, the portions much smaller - and the people are thinner.  (Though that's changing, as globalization brings in more McDonald's.)

My parents took me to a French restaurant over the holidays.  They are light eaters, so I was really surprised when they ordered an appetizer, entree, and desert, and insisted we all do the same.  In most restaurants, I can't finish the entree, let alone apps and desert.  But they said portions were French-sized at this restaurant, and sure enough - you really could eat appetizers, entree, and desert.  And walk out not feeling stuffed.

In any case, smaller portions would be the easiest way to deal with higher food prices.  People get upset if you raise prices, but if the price is the same and there's a few less fries in the bag, they may not notice.  Or if they do notice, they won't get too upset.  

 

Volume of available food isn't really the key for obesity.  Obese Americans tend to be poor and consume the cheap starch laden junk food.  In the last 30 years the type II diabetes rate has been growing rather rapidly including onset in teenagers.  The only plausible explanation for this is the low fat hysteria that started in the 1970s and which led food processors to substitute fat with corn starch.  People with a genetic predisposition to type II diabates are insulin resistent and preferentially turn sugar (aka starch) into fat instead of burning it off and producing heat.  American rich don't have an obesity problem since they consume better food.
There is more to the issue than that.

Other issues, driving and not walking a few blocks.

Living in NYC requires quite a bit of walking and hence obesity is lower as well as diabetes.

Oddly, New Orleans, with the best food in the world, also has high obesity but not so high diabetes.  A bit of exercise goes a long way, even if eating a roast beef po-boy :-)

I was shocked during my summer evacuation just how much HIGHLY processed food clogs the supermarket and how little basic foods.

I am used to a large selection of rice types, frozen and fresh vegetables and a limited selection of frozen pizza and hot pockets, gourmet popcorn, etc.  I found the reverse in the rest of America.

I have gained 20 lbs since moving to New Orleans, but it was GREAT tasting, well prepared food, not junk.  Quite frankly worth any reduction in lifespan.  Sex, laughter and good food are the primal pleasures of life.  McDonalds is not.

I ate a McDonalds once. 1978, in Wood Green north London. I'd never seen a McDonalds before, nor heard of them, it was probably among the first few in UK. Little did I know, LOL.
In 2003, I visited my daughter, then active-duty Navy, in Iceland.  (Absolutely wonderful place, but that's the focus for another post).  We went to McDonalds one time in Keflavik or Reykjavik, (can't remember).  It cost us US $25 for a meal for two adults and one child, but the food there beat American McDonalds in taste, juiciness, etc. by an amazing amount.  I don't know what the standards are for other overseas McDonalds, but in Iceland, it's just about worth the consumption of all the transfats, etc. for actually a really good meal.
Of course, it didn't come close to the Icelandic fish, soups, bread and milk (where do they get it and why is it so good?) that we ate most of the time...
In 1998 while backpacking around Sweden,I was amazed how difficult it was to find a 'traditional Swedish meal' yet there were 25 McDonalds in Stockholm.

The only benefit to this was that at least I always knew where I could find a restroom. lol.

The best bet for finding a traditional Swedish meal is at a simple lunch restaurant. Realy traditional Swedish food is food for heavy manual labor, lots of fat and starch. And often salt or sour taste from older ways of conserving food. I think black pepper, white pepper and mustard are the most common spices and cinnamon and saffron for deserts and very often cardamom for bread. But most important butter, cream and sugar. I do not think peak oil will change this. A chef will probaly give a better answer, I dont cook much.

The most common Swedish fast food is a fairly thin pizza with white cabbage salad with a mild sweet and sour taste and black pepper. Any place with a few hundred houses or more have a pizza baker that almost allways is run by an immigrant selling pizza and often kebab and fairly often cheap lager. 99% of the pizza owens run on electricity.

The first fast food that became common is the hot dog, it is still popular but has been complemented with hamburgers. There are probably more independent hamburger friers then McD, Burger King and Max (A local chain that is very Swedish in a 100% american way, good burgers made with a recipie more like swedish meatballs. ) Sushi is becomming very popular, probably due to the sweet and sour taste familiar from pickled herring.

We have as usual imported most american things including critizism of McDonalds. We have had and still have some young left wingnut green vegans who even burned down one McDonalds in my town a few years ago. This resulted in some more policework and people basically waiting for them to grow up. This seem to work but the next generation of left wingnuts seem to become extreme feminists. It is probably a phase in their lives some people go thru. :-) A need to hate. :-(

Myself I used to buy a McD hamburger of cup of cofee about two times each week untill they stopped serving bicyclists at the drive in a few meter from the main bicycle road to the university.

Yes, Icelandic milk is QUITE special. Better than kiwi milk ?

The butter and skyr are special as well).

The cows are a historic breed (no imported bulls/semen allowed) that has lower than typical milk production and they feed on grass and herbs )fresh 1/2 the year, hay the rest).  The herbs add something to the milk (I have noticed subtle differences, I assume based on diet).

And the pylsur !  Their hot dogs (think mutton :-)

Do the Kiwis make sheep based hot dogs ?

"Portions might be smaller.  There's a theory that one reason Americans are so prone to obesity is that we have a surplus of food, thanks to agribusiness.  And being a good capitalist society, naturally, the solution to that problem is to try and get people to consume more.  Hence food is highly processed (because people will more of it, and you can charge a higher markup), and portions are huge.  (Why not supersize those fries, if potatoes are cheap?)  Many European countries, like France, have protected their small, local farmers.  So food is expensive, the portions much smaller - and the people are thinner.  (Though that's changing, as globalization brings in more McDonald's.)"

I have to disagree - the reason for American obesity is NOT a surplus of food - it is the type of food that we are eating - its the silly low-carbohydrate diet that has caused the problem - grains, potatoes, breads, pastas, pastries and sugar -- people eating a low-carbohydrate diet have to eat MORE in order to be "filled" - and being thinner is NOT a sign of good health ...

Thanks

Umm, all those items you listed are high in carbs, right out of Ornish/Pritikin, aren't they?
I'm not sure what you're trying to say.  Pastries, grains, etc., are all carbohydrates.  A low-carb diet, which was a recent fad, emphasizes meat.  

It's not what we eat that matters. It's how much.  The food is highly processed, which makes it more likely we'll eat it.  (People will eat more potato chips than they will boiled potatoes.)  But it's the portion size that counts.  French food isn't exactly known for its health value, after all.

There have been studies done of potion sizes in the U.S., and they've gotten immense over the past 50 years.  McDonald's used to serve just hamburgers, what would be a very small drink now, and small fries.  Now few except children order the hamburgers; instead, they get QuarterPounders, BigMacs, etc.  The smallest drink is bigger than the one they used to sell, so is the smallest fries.  They aren't the only ones, either. CocaCola used to sell 5 oz. bottles of Coke.  Now cans are 16 oz., bottles are 20 oz., and 64 oz. or larger cups are common on fast food and convenience stores.  Bagels are more than twice as large as they used to be, and muffins are something like five times as big.  Even the standard dinner plate has gotten larger.

If that wasn't tongue in cheek then I totally disagree.

When I look round an american diner the ones that are eating the two plate meals are the grossly fat ones. The obesity problem is a combination of three main factors: sedentary lifestyle, near unlimited access to food, poor choice of food.

For most people the problem can be solved by awareness and willpower, should they choose. Though peak oil and recession may come to the rescue of the uninformed and weak willed soon enough.

Being excessively thin or excessively fat are both signs of ill health, for maybe 70% of americans being thinner would be a sign of better health, LOL.

As a result of the bombing of the platform, some are now predicting that oil ocompanies may shut down all production in Nigeria:

"Willbros Group Inc. said the hostages were taken from a boat that was on contract for Shell, Nigeria's top international oil producer. The attacks sparked a fire at the Forcados terminal, which has a capacity of 400,000 barrels a day, and an explosion at the Chanomi pipeline, Shell spokesman Don Boham said.

``It could be that it shuts down all of Shell's onshore operations in Nigeria,'' Simon Wardell, an analyst in London at Global Insight, said in an interview today. ``The markets are going to discount Nigerian production in the price of oil.''

http://quote.bloomberg.com/apps/news?pid=10000006&sid=agaxJWl1PfHU&refer=home"

"The markets are going to discount Nigerian production in the price of oil."

If that's true, $60 a barrel is going to look like a bargain.

I don't think it would be quite that drastic. Lets say they shut down/have shut down 400kb/d and the rest of their production is always half on half off. I think it would be surprising if it moved more than post Katrina/Rita. But we shall see. In some ways I think the general leaning toward a near term peak can make people (myself included) think something CRAZY is going to happen even if it isn't.
Nigerian militants threaten oil tankers


Militants who seized nine foreign oil workers in a string of attacks across Nigeria's troubled delta region threatened Sunday to step up assaults by firing rockets at international oil tankers.

There are rumors that Shell is going to pull out of Nigeria entirely.  

I didn't think Nigeria was that big a deal, but the news out of there is getting worse and worse.  Plus there's the wicked cold snap in the U.S., and the fact that oil prices usually start rising around now.  February is typically a low point for oil.  

The key is: oil prices at or below $60 bbl are dependent on no or minimal production disruption. So far (in the last year or so) we have only had relatively minor disruptions with a maximum total production constraint of 1 to 1.5 mbpd and never more than 1 mbpd for more than a very few weeks.

Sooner or later there will be total disruptions greater than this due to simple probability, it would be crazy to think otherwise ;)

In reading this thread, I hear a question that will not break through - Human rights - would it be proper for a powerful nation to move into a weaker, smaller nation that has a leadership that is totally crooked, robbing the people of their wealth - set up an honest ruling group and then purchase the commodity from the new said ruling group; even if the main reason was not Human Rights, but for the right to purchase the said commodity?

Wasn't the food for oil program created along these lines?

We now know that the UN is not the enity to do so; so would the US, China or India be given the green light to do so; as in this case?

Wondering ...

Are you arguing for a new incarnation of the British Empire?

It did some good things and some bad things. It developed order and infrastructure, it taught english and cricket. It exploited resources and labour, but provided markets and trade routes. It attempted to impose its religion and values where it could but mostly pragmatically accepted when it couldn't. It supported good and bad local rulers as it suited them, it granted peaceable independence eventually - it may have been too late for some and too early for others.

Your thought is a valid one and worthy of debate. The best of the British Empire model without the worst would be a useful model. But on one thing I must totally disagree: it cannot be by a country, it must be by the UN. If the UN is inadequate for the purpose then it must change to become fit for it, and we must wait till then.

I personally believe that the US mostly does its best to sabotage the UN. I advocate a significant proportion of all countries' military forces and spend being ceeded to UN control, I would start at 5% and steadily increase that to between 20 and 30%. I would include nuclear weapons and aim to put all of them under UN control within 20 years by which time I would hope they are down to at most 10% of current levels.

Supply disruptions such as those in Nigeria, Iraq, and even Katrina are unfortunate for those concerned with PO.  They will simply lead most Americans to believe that politics (and weather) and not depletion is the reason for high gasoline prices.