Wednesday Open Thread

Since we missed having one yesterday.  In re the Mexican discovery (just to pinch a bit of space) there is a pdf of Powerpoint given by the VP of Pemex last August on their exploration plans here. Have fun!
Will the United States learn something/anything from the United Kingdom's problems relating to the energy gap?
If your world view says the market will solve all
problems it is heresy to admit to any problem. Australia's Special Broadcasting Service just ran a story on flex-fuel cars in Brazil, even pointing out many cars were made by GM's Australian subsidiary. The host asked why Australia can't implement such a program. Go back to the first sentence.
Wasn't there something in the Government Constitution about not mixing religion in with good governance?

Yet every morning they gather in circles,
Hold hands
And rectite:

I pledge allegiance to the Unifying Words of Adam Smith,
And to the Invisible Hand for which he stands,
One Globalization under God,
Indivisible, with liberty and market solutions for all,
Amen.

That gave me a good chuckle. It also reminded me, for some perverse reason, of this snippet of dialog from the movie Independence Day:

President Thomas Whitmore: What do you want us to do?
Captured Alien: Die. Die.

I keep seeing economists screaming Whitmore's question at the heavens as the world melts down around them with the universe laughingly playing the part of the captured alien.

And then of course, the Secret Service Agents pull out their whoopee do dad pistols and shoot the psychotic alien dead just as his manipulative mind control techniques are about to take over the President's brain. Will Smith swoops in, Jeff Goldblum activates his science-crunching mind, the virus is unleashed; and the world is once again saved.

If only the Secret Service of real life could shoot PO dead and could shoot Global Warming dead with their sex pistols.

No. My posting wasn't a joke (except for the part about the circled wagons and the hand holding). Watch the Senate Hearings on Oil Company Concentration and you will see the Pledge to the Ledge played out in real life. All the Senators and All the King's men believe that the Market Solution will for sure, put our Humpty Oil Genie back together again. No kidding.

One of the problems I have been working (along with everyone else) on is: What signs and symptoms will we see as we roll over the peak.  Obviously, more expensive gas at the pumps is the most obvious.  (Unleaded-nymex is at $1.7480 at this moment).

What I am watching for is how other countries handle supply issues.  I feel for you UK but temporary disruptions is not what I mean.  What's going to happen to Guatemala, the Philipines, pretty much all of Africa when the supply doesn't meet demand?  I've seen a few headlines but nothing near the flood I expect.

How will the really small countries (the Bahamas, Costa Rica, etc) handle the event?  

Any thoughts?

Reading this article in the Guardian about a Chinese city of 10 million set to grow to 20 million by 2019 that I had not even heard the name of, Chongqing, brought home to me that peak oil is not the point at which the crisis will hit. The effects of 1.3 billion people in china and 1 billion people in India heading from third world to first world status at a pace many times that at which such change occurred in America or Europe means that even  quite rapid growth of the oil supply will insufficient to stop  it being outrun by demand and causing rocketing prices. Not even a Pauline conversion of America to fuel economy and the joys of cycling and walking will offset the effects of this Juggernaut. Nor will all the renewable energy schemes in the West prevent the environmental effects of opening the equivalent of a new 1GW coal fired power station every week.
Mathematically, the first derivative of oil growth is still postive before we hit peak, but the second derivative (rate of increase) has already turned negative-production is increasing but at a decreasing rate - this is being outweighed by higher demand hence prices have gone up 500%+ in last 6 years. The asymptotic rise in oil prices will come when first derivative of world production goes negative (peak oil).
Interesting. Good work. But what I want to know is: About when will the function become discontinuous?

Calculus cannot help there, and even catastrophe and complexity math do not help much to make real-world forecasts.

As an economist, I find it fascinating to see the demand for "prophets" to increase--people who write newsletters, astrologers, consultants, and authors of the "Left Behind" series of apocalyptic Christian novels.

Arrghhhh,
Aye, that website is more fun than TOD. Thanks, we should all go there more often.

And the Wittengenstein reference has wheels within wheels to us philosophy afficianodos--about 3 levels of puns.

McDonald O'Sailorman:
I'll eat when I'm hungry,
I'll drink when I'm dry,
An the poteen don't get me,
I'll live till I die.

Did you know that (along with some help from the Arabs) the Irish saved civilization while Europe stank into its Dark Age?

The article you link to is indeed staggering. Chongqing used to be anglicized Chung King, which you may have heard of, at least as a brandname for frozen Chinese food.

I have always tried to think in terms of positive actions for the near and medium term as the energy situation become acute. Sometime this is difficult, obviously, and when getting even a tiny idea of the incredible monetary inertia and masses of humanity and human nature at work in a place like Chongqing, as describe in this article, even those with the sunniest dispositions would need to sit down and catch their breath. Surely no amount of windmills or reccyling or local farmer's market or organic gardening or public transportation stands a chance. Indeed, no amount of oil, coal, or globalization can handle the crushing forces swamping places like Chongqing these days for any significant amount of time. It mocks the concept of sustainibility.

But you just do what you can. I guess.

"...positive actions for the near and medium term as the energy situation become acute."

If our situation doesn't call for radical political thinking, what situation would? Luckily, I have discovered ideas which are up to the task. Of course "local action", "putting sustainable practices into one's life", and other such piety is useless -- so useless, they named a special paradox for Jevon. What would possibly be NOT useless? What is the smallest useful ambition (SUA)?
    I say that the SUA is: to think myself the citizen of a surviving State which exists, say, 100 years from now, and to act as such a citizen. And if I look for an example of a man - even a "chatterer and dilettante" - who thought of a state and had a state grow from his thought, I find that there has been such a man, and that that thought was what we cal "nationalistic" - and "racialist". The SUA pushes me toward nationalism and racialism: I don't think liberal-democratic universalistic piety will work too well in the coming crisis. Now, it is not enough to be a racial nationalist in theory. One has to find a particular racial-nationalist idea. This is not difficult if one has a mirror handy.

sr
Rogers Park National Front

Congratulations - you've been beating around that bush for quite some time now (rather transparently), it's good to have you come out and say it.  Do tell - which race have you decided will survive?  And how do you plan to finish off the others?  What rubbish.  Read the link Nick posted above, and see how hard "the others" will work to survive - think they'll roll over so easily?  

If you think that racism will save you, you may consider me your enemy.  

Twilight, do you think Theodore Herzl was a racist and would-be genocideur? That is what you imply. Did he "plan to finish off the others"? If not, then why am I those things for  wanting to emulate him? [I know why. Will you say it?]
I'm going to give you the benefit of the doubt. I don't think you really mean all that stuff about WNEF. Your probably an ok guy underneath it all. You know that kind of thing is really not the anwer to our problems. Not Peak Oil and not the population question. The world is just too complicated and hard to control to believe in such ideological simplicity. And please don't think I'm attempting to patronize you, I not. I'm just trying to understand you.
writerman, people have always used times of major upheaval to further whatever agendas they already had.  The idea of having the constraints of society's limitations loosened has all sorts of bats flying out of the belfry.
You pushed one of my buttons. Herzl was not a racist, he was not into genocide, and more specifically, he was not the kind of real estate developer that stole the Palestinian's land and marked it up to sell to Jewish immigrants.
Herzl believed and advocated a Jewish state that was urban and that did not steal land from Arabs, and didn't steal their water, either. He was intent on letting the Arabs have the land, the water, the pasture, the fishing industry, and any minerals that turned up. He wanted to build a Singapore, not an Israel.
Which is why he and the rest of the German Zionists were purged by the Russian Na-Zionichki in 1904 or sometime, and lost control to the steal the land and run off the natives fruitcakes running Israel now.
He wrote "Altneustadt" (literally "oldnewstate") about what he thought Israel should be like. Read it sometime, if you can find it.
By the way, I fail to understand how I have beating around the bush -- is it possible that you haven't read my posts? I think that the phrase "white nationalist ecofascism" is not all that subtle. And yes, I do consider you my enemy, and I am happy to have matters between us so refreshingly clear.
White Nationalist Ecofascism, somehow I think not. I'd prefer to put my bet on Brown Internatinalist Socialism. That is of course if I had to choose.
... have BEEN beating ...
I disagree.

China just committed to a $22 billion high speed rail line from Beijing to Shanghai.  

Annual oil consumption ?

Several hundred barrals of lubricants for many billions of passenger-kms.

China has the capability to develop in a high efficiency/low oil use way given their massive capital investments (~50% of GNP).  They certainly seem to be hedging their bets (massive subway programs, railroad improvements, new hydro, HSR above) as well as following the path of the EU & US.

I could see a Chinese electric grid that was 90% nuke + hydro + wind with gasified coal making up the balance.  I could see a per capita GNP five times that of today with annual oil consumption slightly lower than todays level.  Pollution levels much lower than today.  A sustainable (sort of) China.

Nick, the article is humbling - it's almost incomprehensible, like reading about a city on some other planet in a sci-fi novel.  It's hard to imagine what we can do in the face of such things.  

I guess in the end, like the bang bang man and his wife, who gave away their children and work like slaves to support them, you do whatever you have to.  

The horizons for people who live like that must be very short - not a lot of time for big-picture thinking.  It bodes ill for the ability of the human race to make the kind of rational, reasoned decisions that are needed.  After reading that I'm thinking about the humans vs. yeast question again, and I don't like the answer much.

Yeah, Nick, what can one say? It's almost like a socio/economic version of tectonic plate theory. Huge, enormous and unstopable forces are moving inexorably in one direction. After a couple of centuries of decline China is on its way back to the position it occupied before the ascent of the Europeans to world domination.

"Capitalism" and so-called "Free market enterprise" goes where the profits are and that place is called China. "Capitalism" almost seems to have a life of its own. The "market" appears to be a system above and beyond our understanding and probably control. It reminds me of Frankenstein's Monster in many ways.

"Capitalism" has no master and no home. It has no country and no language anymore. What's happening in China is of historic proportions and importance. The great golden scales are tipping away from us and towards China and they may nevr tip back again. A true giant has awoken with all that it implies for the rest of us and the environment.

Do you think China will make it to full FMC?
1.3+ billion People, Agriculture now dependent upon Hydrocarbon Inputs, Serious issues with Water resources,
A growth economy reliant on increasing Hydrocarbon inputs and export of goods. Who will she sell to deep into post peak?
I dont think it will make it. I dont think she has enough time.
Granted a lot of what you say is true. There are lots of constraints on China's development. You're correct. Lots of stuff can happen in the future. The question is what? I'm just assuming for the sake of the argument that the bottom doesn't fall out of the world economy, that we avert environmental disaster and that Peak Oil and economic meltdown aren't just around the corner! That is if the end of civilization doesn't materialize anytime soon, China will become the the giant it wants to become. There is amazing capacity/potential for growth and profit in China. More than anywhere else in history. Given the system we have now - "capitalism" I can't see how China won't come to dominate the world. There are of course those who say, now way. They will slow down soon for various reasons, just like Japan did. Only Japan grew for about four decades before they slowed down. Of course things are different now. The one that comes up all the time is they need us as much as we need them. We buy all their stuff don't we and they are kind enought to lend us the money to do it! It's mutually beneficial reciprocal arangement. Which is true, but for how long? Soon China will have an enormous and realatively wealthy domestic market. It will begin to move away from exporting goods to us and provide for its home market instead. Their are enormous pressures to raise living standards in China already. A positive feedback will start to kick in. Then the loans to the U.S. will begin to dry up and we will have to go through a painful period of economic transition. Who knows how that will pan out? I fully expect to be slaughtered by the economists around here for these speculations and ideas. But what do they know. Economics is mostly ideology anyway as the Marxists would say.

I am not so sure about China.  They have resource depletion issues just as bad or worse than the rest of us.  On top of that they have a huge population.

There was a program on public radio the other day where they were talking about increasing desertification around the world and in China in particular.   Of the land area in China about 27% is now desert, and it is increasing every year.  Over-grazing and other such agricultural practices are the primary cause.

One thing that that they mentioned which I hadn't considered before was that when you see a disproportionate increase in the goat population, then you have an indication that the land is under stress.  The reason is that goats can survive on lower-quality plants that other animals cannot eat.

Podcast here:

http://audio.aworldofpossibilities.com/audio/brown_maathai24kb0830.m3u

Yeah, I'm not sure about China either. I'm just speculating about the future and who knows what happens there. If I was a real seer I'd be very, very rich. I'm just kicking around some ideas. I write fiction so I have a tendancy to "go off on one" as we sometimes say. It's also know as a flight of fancy and one just follows the Muse. Sorry about all the typos. I've been writing stuff with different heads for almost sixteen hours today!
China is also the home of the largest current tree planting plan to reclaim desert.  Worked to reclaim the US "Dust Bowl", parts of the Soviet Union, etc.
Small countries are going to be in big trouble if they don't adjust quickly. At least that's how I feel this will play out. I hate sounding pessimistic about these places. We're talking about real people here, who are going to really start hurting bad.

I see these countries gradually being "peeled off of civilasation." If I was them I would be looking at, and trying to emulate Cuba. Cuba is a small country which has gone through a sharp energy transition after the fall of the Soviet Union and come out the other side without falling apart. I know lots of Americans have problems with the Cuban model, but I just think, looking at it neutrally, there may be a lot to learn for third world countries.

Africa is, of course, another Big problem as oil prices rise towards heaven. I think it's here we'll really see some societies begin to disintegrate before our eyes. Not a pleasant thought. They got enough problems already.

The really big question is India and China. Their rates of economic growth are staggering. How on earth are we going to feed their growing appetites for energy? It's of course not only energy, but nearly all other raw materials. It's a real conundrum.

So one the one hand we've got lots of small countries and on the other India and China. We are going to be living in very interesting times.

Napoleon once said, China is a sleeping giant, when she wakes the world will tremble.

Many months ago there were Energy Bulletin posts, like this one: http://www.energybulletin.net/8416.html, media articles like this one: http://www.fcnp.com/529/peakoil.htm and many comments here about third world countries "falling out of the game" when they could no longer afford to buy or subsidize oil.

Lately, we've been talking more about problems in Nigeria and the industrialized world, but I'm sure Eritrea, etc. are still in deep trouble.

T. Boone Pickens says the market is so tight "if Iran pulled one million barrels of oil off the market, the price per barrel would jump to 75 dollars in 24 hours."

The answer, he says, is $5/gallon gas - all over the world.

This is a better link:

http://www.centredaily.com/mld/centredaily/business/14098790.htm

The story is more complete.

Pickens says a Congressman accused him of talking up the price of oil.  

He also says Bush is deluded if he thinks switchgrass is the answer.

Maybe YOU Can Make a Difference

I met Boone Pickens at the 11/1/05 Simmons/Kunstler event in Dallas that I helped organize, and that Mr. Pickens helped underwrite.  At Mr. Pickens' request, I met with a couple of his staff members, and we discussed the Hubbert Linearization (HL) models.  

It may be coincidence, but on 3/6/06 I wrote Mr. Pickens a letter, along with the article that Khebab and I wrote that was subsequently published in the Energy Bulletin, asking Mr. Pickens (and Richard Rainwater) to publicly support a move to abolish the Payroll Tax and to replace it with a petroleum fuel tax or a fossil fuel tax.  However, I was particularly struck by the following passage from the AP article:   "I (Pickens) said you ought to think about moving up to a world index price of say $5 for gasoline" to reduce demand and perhaps create enough government revenue to cut payroll taxes."

Again, it may be a coincidence, but perhaps one person--you--can make a difference.  I strongly urge all of you to join this effort to abolish the highly regressive Payroll Tax and to replace it with an energy consumption tax.  We need to replace endless talk with endless action.

BTW, Norway, which has the highest gasoline tax in the world, also has the highest standard of living in the world, perhaps because their rate of car ownership per 1,000 people is one-half of what it is here in the US.  

Link to Energy Bulletin article:  http://www.energybulletin.net/13575.html

Jeffrey J. Brown
Addison, Texas

You wouldn't expect the NY Times and T. Boone Pickens to be on the same page about anything, but they are on the gas tax/payroll tax.

Ain't gonna happen, though.  Social security is still the "Third Rail," as Bush found out.

Raising benefits or lowering taxes has been a proven vote-getter for decades.
I've got news for T. Boone: the price of gas here in Germany is about $5.60/gal at current exchange rates and has been at or above that level for some time. I don't see any signs that that price has had much effect on demand. There are more cars than ever on the road here, and ever more of them are SUVs.

Did he really say Bush is deluded if...? Seems like a naughty thing for a friend of VP Cheney to say. (A recent article in Newsweek claimed that Cheney and Pickens had been hunting partners.)

I don't see any signs that that price has had much effect on demand.

Not in Western nations.  $5/gallon would kill demand in Third World nations.  

Though I'm not sure from the article whether Pickens was pushing for that.  He may have been instead supporting the NY Times tax plan: raise gasoline taxes, and refund it via a drop in the payroll tax.

"$5/gallon would kill demand in Third World nations."

Yeah, it could. (I haven't figured out how to put quoted text in the gray boxes yet.)

"Everything is relative," as a prominent German may have said. So $5/gal gas is already in Europe and would require a 100% (or so) increase in the US. How big an increase would it be in, say, Chile or South Africa?

There must be some place where we can look up the price of gas in any country. URL anybody?

Not to beat a dead horse here, but prices in Brazil are $4.73 per gallon.  Caveat Emptor, is the nation of Brazil still deemed to be the third world?
Brazil is a country with very polarized income distribution.
$4.73 may be cheap for some 5% and affordable for another 15%, and they will drive.
The rest 80% will probably not drive at all.