Friday Open Thread
Posted by Prof. Goose on April 28, 2006 - 10:46am
[editor's note, by Yankee] Also, several bloggers have been covering the Energy Solutions conference in New York over at TOD:NYC. There's an introduction to the meeting by The Interloafer, a summary of the first set of speakers by Baloghblog, and a summary of the afternoon speakers by me.
Leaders of both political parties are expressing concern about the high price of gasoline. President George Bush announced yesterday that he was suspending deliveries to the Strategic Petroleum Reserve in order to make more oil available to consumers as well as putting on hold the traditional regulations requiring additives to make fuel burn cleaner during the summer driving season.
Meanwhile, Democratic leaders have had their own response to rising gas prices. Senate Minority Leader Harry Reid has announced his support for the Menendez Amendment, which would "provide more than $6 billion in relief directly to the American people by eliminating the federal tax for both gas and diesel for 60 days." Senator Charles Schumer recently called for a federal investigation to determine whether oil companies are withholding gasoline production, and House Minority Leader Nancy Pelosi has blamed high gas prices on the administration's cozy relationship with the oil companies, price gouging, and royalty relief.
The editors of The Oil Drum are ideologically diverse. Over the last year, we have created a forum at www.theoildrum.com to encourage an open, rational, and fact-based discussion of energy issues. While individual editors frequently express an opinion on a subject, we have never felt it necessary to take a unified position on any specific issue. That is, until today.
We strongly feel that the leaders of both political parties are not only headed in the wrong direction with respect to gas prices, but we also worry that they fundamentally misunderstand the factors behind the current situation at gasoline stations around the US.
Public statements by political figures over the past several days would seem to suggest that oil companies and their record profits are the sole factor determining the price of gasoline. Not only is this untrue, but it is dangerous to give the American people the impression that only oil companies are to blame. The American people need to understand that the phenomenon of high gas prices cannot be attributed to a single source. They also need to understand that no one political party will be able to fix our current woes.
The major factor that determines gas prices is the price of crude oil from which gasoline is derived. When crude oil prices are high, so are gas prices. The following are just a few factors that affect the price of a barrel of oil:
- Oil companies do not single-handedly determine the price of oil. The price of oil is set on the crude oil futures market. Simply put, these prices are affected by supply and demand because, at present, oil trades in a global commodity market where increased demand or reduced supply in one place instantly translates into price shifts everywhere. A variety of publicly available information sources show that supply is relatively static at the moment, while world demand continues to grow as economies grow.
- We have provided evidence many times at The Oil Drum that the output of major oilfields is declining and that we may now have reached a peak or plateau in global oil supply. Oil companies have not been able to increase production for a number of years, and it is unclear that OPEC is accurately reporting their reserves. Even if there were significant sources of high quality oil remaining, it is getting increasingly difficult and expensive to drill. These factors, along with aging infrastructure for oil exploration and a retiring workforce are also contributing to high oil prices.
- The geopolitical situation is volatile, and an astute citizen may notice that every time there is news from Nigeria or Iran, the price of oil goes up because of the potential and real effects of these situations on world oil supply. Again, oil traders are fearful that the supply will not remain stable forever.
- Countries like China and India are industrializing at a great pace, and while we are accustomed to obtaining oil at a comfortable quantity and price, it will be impossible (and immoral) to deny similar resources to these countries. China is working furiously to secure new oil supplies, and they're content to negotiate with countries we're reluctant to deal with, like Iran and the Sudan.
These points demonstrate that disruptions in the supply of oil that affect the price of gasoline at the pump are not just a temporary glitch. For various reasons--decreased discoveries of new oilfields, geopolitical instability, international competition for oil supply--we can no longer assume that we will be able to consume as much oil as possible, or ever get it again for $1.50 a gallon.
Demagoguery and grandstanding are not strategies for addressing our energy problems. As an alternative, the editors of The Oil Drum put forth the following recommendations:
- It is nonsensical for political leaders of both parties to eliminate the gas tax temporarily or permanently as this will only worsen our dependence on oil by disincentivizing the innovation of oil alternatives and oil conservation efforts.
- Both mainstream American political parties are doing their country a disservice by accusing convenient scapegoats of price gouging or price fixing instead of educating the public about how the price of gas is actually set.
- Right now, governments should be focused on helping us cure our "addiction to oil." The answer does not lie in lowering gas prices, which will only encourage people to drive more and further waste our valuable resources. As the Department of Energy funded Hirsch Report on Peak Oil laid out, the consequences of not taking steps to transition away from oil could be dramatic to our economic system. Appropriate solutions include large-scale research, development, and implementation programs to improve the scalability of alternative sources of energy, other projects geared towards improving mass transit and carpooling programs across the country, providing incentives to buy smaller and more fuel efficient vehicles, and promoting a campaign to increase awareness about conservation.
The political discourse on this topic is simply so devoid of fact, and constructive discourse so buried and out of the mainstream, that we felt we needed to raise a voice of reason. Public officials will continue to misinform and obfuscate if we allow it.
The only solution is to educate the public about the most important problem we face as a generation. We, the citizens of the US and the world, must move our attention to this the issue of energy more than any other. We must hold our representative governments accountable for having an open and honest debate on the subject.
Simply put, we must learn more about where our energy comes from.
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Energy-hungry China clinches oil exploration pacts with Kenya
Meanwhile:
Sky-high oil prices fuel ethanol mania in China
Picture a communist Chinese episode of "leave it to beaver" with an environmental message ;-)
Anyway, in China ... I think I know where fertilizer comes from.
But, I've also seen a lot of the "What did you drive to the gas price / oil industry bashing press conference?" or even better "How many SUVs were idling outside of the Capitol building?"
This Denis Hastert photo sequence is typical.
Similarly, CNN covered Bill Frist 'walking' to a nearby capitol hill gas station and took note that his monster SUV was 'following' him (for security they said). Like a gigantic puppy tagging along at the heels of its owner I suppose.
Hastert's minions failed on their #1 order:
"Make me look good."
In our FEMAcracy (not Democracy), appearance is everything.
Substance is of no redeemable "value".
And after all, we are a values worshipping society.
I tried to talk to my coworkers this morning about oil prices. All they did was rant about the outrageous profits of Exxon. This from people who all voted for Bush in the last election.
Justice demands a way of protecting those at the bottom from being driven under by these added taxes. It would be nice if there were people in OUR gov't that would take a hint from Chavez, who, as we know, hates America, but doesn't let that stop him from lending a helping hand to the poor. We need more of that kind of hate and less of the neo-con love.
Perhaps you mean "cartel", and are referring to OPEC?
About Venezuela's Chavez -- he has for years been one who pushed ever higher oil prices. His little effort in the N.E. U.S. is small change compared to what he has made from those same people over the years due to his pricing strategy.
2.6 BP
2.5 Exxon 3%
2.2 Shell
1.7 Chevron
1.6 Total
1.1 ENI
1.0 COP
.7 STAT
.6 Reposal
.4 Occidental
Top four 9 mbpd 10.6%
Top ten 14.4 mbpd 17% of world production
The top 4 combined is unabe to match the production of Gazprom - the equvelent of 9.5 mln.bpd! Anybody know where I can buy Gazprom shares?
I covered the story here:
I'm Being Gouged!
The average person just doesn't seem to understand that Exxon has to invest many billions to reap those profits, whereas Microsoft certainly does not. I saw it on Jon Stewart last night. He was interviewing someone from The Wall Street Journal who was explaining the situation, and he said "I hear you, but it just feels like we are being screwed. I am paying $3.00 for gasoline, and they are making record profits." Unfortunately, this seems to be the general level of understanding of this issue.
RR
If oil companies were finding new oil reserves with their recent profits I think the public would be a bit more understanding. Instead they give Raymond a 400 million dollar goodbye present and the public is understandably PO'd. That's a serious amount of cash even today.
This issue isn't about reasonable vs: unreasonable profit. It's about how that profit should be invested. What does an oil company do with a windfall when their geologists haven't found large new oil deposits in years? The give it as a nice going away present to an ex-CEO. Talk about a waste of money!
The public has been indoctrinated with the idea that if they just let the "free market" do its thing then everything will come out allright. Even the average american idiot driver can sense the problem with taking their gas money and giving it to some retiring CEO rather than investing it in new exploration. Even it the results were dry holes, XOM could at least justify the effort as a reasonable use of money.
I really think TOD contributors have gotten caught up in the aroma of their own arguments - peak oil and all that - to the exclusion of a perfectly reasonable outrage on the part of the driving public about how the fuel premium they are now paying is being used.
Is that outrage being dealt with politically in an appropriate manner? Of course not! When was the last time public outrage was channeled by a fair-minded political intelligence?
Peak oil and public outrage are two separate issues.
The public outrage component is focused on the failure of the mechanism of our free market economy to provide the stability americans think is their due. It's a rage against the propaganda they've been fed for years. And that rage is fueled by a deep, pervasive addiction to all our transportation machines. I'm sure that's what Cheney was alluding to when he said the American Way of Life is not negotiable.
Next time you take a drive down a street filled with retail commerce in any of the modern American suburbs or exurbs, entertain yourself by determining what percentage of those businesses are directly involved with either cars or motorcycles or boats. I refer to repair shops, tire shops, body shops, auto dealerships - everything. The message of expensive energy is the death knell of the American Dream. Hilda Hummer and Dickie Dodge know that subliminally and underneath the rage they're scared out of their, for lack of a better word, wits.
Next time you are in a position to eavesdrop in a public place, listen to the conversations. If your experience is what mine has been, most are about cars, trucks and motorcycles.
The scope of change coming to America is just unbelievable. We're about to lose our position in the world as well as having to replace a good deal of our inner psychic life with something not nearly so nice.
I was raised on a farm. About the time I was ready to go out into the fields with my dad he traded in his horses for an Oliver tractor. He never looked back. I never, ever heard him talk about the good ole days of horses. That almost everyone in America can afford a car and gasoline is the touchstone of our freedom. Just as my father wouldn't give up his tractor, few in any country I know of would happily give up the freedom of a car once they've experienced it. We're not plants, we're animals and the car is our freedom to move.
My conclusion is that the only way for the political system to keep a lid on this situation is to show every aggressive instinct consistent with getting as much oil for this country as possible - and to hell with the consequences. People who have the "wise government leading us into a new paradigm" delusion need to quote some examples. Cuba is about the only one I can think of and Cuba was forced to go cold turkey over a period of months. Castro had no choice but to decentralize in a hurry or his country would have imploded. I don't think the US will go that path. Different country, different social system, different intelligence level. Cuba has an intelligent, literate population.
Yes I believe oil demand has permanently outstripped supply - at least until the next depression. Whether that's "peak oil" or not is irrelevant, really. What's important is that the world's Railroad Commission (OPEC) no longer has much reason to exist. There is no swing producer and demand will bid the price of energy up to whatever level it can. What price that may be no one yet knows.
Realistically there ain't much to do about it except batten down the hatches and get ready for a big storm. Dinosaurs don't have the option to wish themselves into mammals.
Exactly. I posted earlier today on another thread that XOM is essentially returning its windfall to its shareholders in a process of "gradual liquidation." This is because it continues to use a relatively low oil price when evaluating new projects.
XOM is now in a bind. Its $8.4 billion first quarter profit "was high enough to heat up political criticism of Big Oil in Washington but too low to meet Wall Street's bullish expectations" (quoted from a story in today's WSJ).
What to do with the windfall? Reinvest it in your oil and gas business, invest it in alternative energy projects (e.g. BP), or return it to shareholders (who will then reallocate it in other investments, possibly in alternative energy).
All the rhetoric in the world doesn't change the fact that Big Oil costs a lot of money to operate, and they are still reinvesting billions into the business.
RR
COP 1st Quarter Earnings
RR
More seriously, why do we have progressive taxes on individuals? Why don't we determine the "profit margin" of a farmer relative to a dry cleaner? Maybe because the raw numbers, total profit, matter?
As a side note, and as someone not terribly motivated by the Exxon Mobil profits, or the calls for taxation ... I do wonder how much they really made. We know corporate accountants have great flexibility in the way they report numbers. We know that a large multinationa company has a lot of options when to comes to "book" numbers. Now, part of the time that flexibility is used to "make the numbers" and come up with income for analysts and investors. I wonder though, now, when everyone is hopped up about gas prices, how creative XOM has been about underreporting ...
True. Back in 1992 when I was a contractor for British Airways, one of their internal auditors told me that management decided what the annual profit was going to be; the figures were reworked to give that profit figure. This surprised me at the time; now it doesn't.
Works for me. Probably works for for businesses like grocery stores with 2-3% profit margins. It's hard to be really impressed when an oligarchy's problem is that it's profits are lower than other oligarchies.
See this and the rest of the executive summary in:
http://www.ftc.gov/bc/gasconf/comments/report53001.PDF
This doesn't completely rescue me, but I think it gives a some more complicated picture than the 3pct.
See this and the rest of the executive summary in:
http://www.ftc.gov/bc/gasconf/comments/report53001.PDF
Another one along the same lines:
http://www.citizen.org/documents/oilmergers.pdf
Neither completely rescues me, but I think they gives a somewhat more complicated picture than the 3pct world production figure for EM.
There were more than 2,600 mergers in the oil industry in the 1990s, according to James Wells, director of natural resources and the environment for the Government Accountability Office. A study by the GAO, Congress' research arm, found that concentration of market power may have added as much as 7 cents to the price of fuel, he said.
As much as 7 cents due to the mergers. I don't believe that's the problem, Dave.
Also, oil and gas are global commodities, and their cost in the U.S. is not any greater than it is anywhere else, indicating again that it isn't mergers driving costs up. It is supply and demand.
RR
To a great extent the gov't is able to outflank the readers of the NYT, WSJ, etc. with the TV. They just say whatever they want, uncontradicted for the most part. People are not yet at the point where they will pay much attention to anything else. The literate print media is read by "eggheads" as you say. But here there's another message: incompetence, gross incompetence, and this is discussed and whined about endlessly. It is only in the alternative media, part of it, that further possibilities are raised: that these issue is one of pursuing an agenda, that the agenda is world domination through monopolization of the oil, and that big capital and its profits stands behind all of it, that we perhaps no longer really have a democracy, and so forth and so on. This wing is regarded as looney by the "responsible" print press.
But in extreme times, extreme views are sometimes closer to the truth that the more "balanced" and nuanced ones of the literate wing of the MSM. It was an extreme view to say that the Nazis were gassing the Jews for a certain period.
The response you got from your co-workers is illustrative of a problem that concerns me about how people will react to the 'ambassadors' of Peak Oil, when they begin to arrive. What I mean is, who will they blame for vastly increased energy prices and 'shortages? This may turn out to be a really fundamental, political, question. It also relates to our chances of dealing with and ameliortating the effects of Peak Oil in the short, medium, and long term. If we start to blame the wrong people/institutions/countries, we could end up wasting a lot of energy and opportunities, and go in a totally wrong direction. The whole history of 'scapegoating' in times of fear, uncertainty, and scarcity, makes me feel slightly nervous.
The rich are getting richer, everyone else is getting poorer. That makes for an explosive situation.
Peak oil is not going to improve things.
I think it would be great if we could magically substitute; all the talk about Iran we've been hearing for months; and will hear even more about in the future; with debate and information about peaking oil production, and the recomendations of the Hirsh report. Now, in an ideal world, wouldn't this be true politics, and responsible government? Wouldn't this show real statesmanship and prudence? A real leader, with real Presidential style, could pull this off. A guy who really sounded like he cared about the future of the America; and the kind of world our children will live in. People in America seem to talk a lot about 'human nature' and how short-sighted and selfish we are; but isn't it also part of our 'nature' to care for our children, love them, and nuture them? Don't we spend a lot of time considering their futures, and paying for their futures? Having kids is expensive, surely we want to protect our investment? Aren't these real, positive, and conservative, values, and attitudes? So use that 'positive' feeling constructively against the 'negative' aspects of our 'nature.' Isn't this a strong foundation to build on?
Wouldn't 'levelling' with the American people about Peak Oil, show courage; and a kind of honest, levelheaded pattiotism, that people would respond to positively. Isn't speaking to people honestly and treating them as adults; a way to show them that your respect them? Isn't a true leader, also a kind of 'teacher'? A person who isn't afraid to tell the truth, isn't this the essence of true leadership, and what we so desperately need in these times? Someone who will enlighten us, rather than confuse us?
Neil Young, on his new recording, has a song which touches on this question. He wonders if somewhere outhere there is an unknown and untainted person, black or white, a man or a woman, who is the leader with the qualities we need. Is some guy walking around in the desert somewhere; someone with the rare ability to speak the truth?
But I suppose this 'thought dream' only shows how lost we really are; and how far we have to go in a completely different direction; and force through a radically different 'discourse.' All this stuff about Iran is a kind of distracting. Of course, this could be the whole point behind the 'Iran Scare.'
I know there are those of you that always bring up Jimmy Carter and his 'sweater speech' in relation to 'levelling' with the public. I think it's too easy and too pessimistic. It's also too old. Forget Carter, think of tomorrow! That was then; and this is now. Carter was already in trouble when he made that speech, so I'm not sure how relevant his example is, certainly not in relation to where we are now, and where we seem to be going.
I think the 'idea' was good, but the presentation was awful, really lousy. In another life, I was involved in marketing, selling, and advertizing. I also have some small experience with political propaganda. Sometimes I feel like was born to take on Carl Rove, and whip his ass!Carter's speech was a mistake. You don't pull a 'rabbit' like that; out of a 'hat' like that; in that way. The guy should have made the speech in Texas standing beside a dry oil well, and taken the American people on a little walk around the country; shown people suburbia, the freeways around L.A., refineries, and lots of other stuff. You drag people out of their little lives, and out of their sofas. One doesn't appeal to their intellects alone, you show them images, and appeal to their emotions as well.
Today, I would tell the President to make a video, and ask Speilberg to direct it. This kind of message; the message about Peak Oil; isn't told from the oval office, sitting behind a desk; wearing a sweater. That is such a passive image and dull a ditchwater. No, you get out from behind the damn desk, and get out into America and walk around with your shirtsleeves rolled up; and talk to folks about how much oil there was in Texas and Oklahoma in the old days; and where it all went; and where the oil comes from now; and what this mean for America today, and tomorrow. This story needs to be told from the Heartland, and from sea to shining sea, not from Washington!
See, I'm talking about another type of leader here. Maybe people weren't so media savy in the days of Jimmy Carter? But that's not really true is it? What people in the Whitehouse lacked was not intelligence, but imagination, vim, and daring. The ability to break the mould and think outside the box. The 'discourse' is about telling a different and powerful story, in a new way. It isn't a hopeless cause, because people are bored to death with the old story, and ready and willing to hear a new one, given half a chance. If we don't believe that much, we might as well roll over a give up now!
Carter should have made several speeches working his way around the issues and the country, and then, made the Big One about energy. It was the wrong guy, with the wrong speech, at the wrong time! That kind of message needs a really gifted speaker, someone like a Bill Clinton or a Tony Blair. Unfortunately, Jimmy Carter just wasn't in their league.
Even today, when so much of our media is so crass and ignorant, it still isn't too late, to tell the real story. The real story has power, precisely because it is the truth, ans it isn't a lie! The only reason we've allowed a gang of liars to hijack the country, is because for some strange reason we've forgotten how to tell the truth properly. Once we remember how to do that, real and lasting change is possible!
Same goes for me too--great word phrasing. Perhaps Chris Miller, the Maine candidate for Governor is your man--he talks Peakoil and biosolar habitats:
http://www.seacoastonline.com/news/yorkstar/03022006/news/90452.htm
Believe me: The Earthmarines will self-arise if we can get the IOCs to choke production, but keep profitably looking for more detritus, combined with a severe energy tax on the addicts to shift billions to building large biosolar habitats-- nothing more than leveraging Jevon's Paradox to Powerdown.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Normally I wouldn't criticize, but the guy does call himself "writerman", and I would like to find what he knows about English grammar that I don't.
:)
Very well done! This summarized things I had thought for awhile but not articulated. Surely there is someone out there who can tell people not what they want to hear, but the unvarnished truth about our energy problems. The optimist inside believes that one will appear, the pessimist sees the latest "response" and says thats all there is. Thanks for the hope...
that's how it works now. the daily howler has lots of details, going back 8 years. for a small taste, google search: maureen dowd site:www.dailyhowler.com [paste the italicized words into the google search box and hit enter]
in between blaming republicans, democrats, SUV-drivers, and consumers in general (and they all deserve plenty), i think it's important to spare a whole lot of blame for the press, at least in the USA, because they truly, madly, deeply, suuuuuuuuuuuuuuuuuuuuuuuuck!!!!!!
Because people will be angry and need someone to blame. Politicians, on the eve of elections, will need someone to PUNISH. Who will that be? China? Iran? Exxon? The Democrats? The Republicans? The enviros? Incumbents and oil companies working mightily to set up someone else. Anyone else.
Needless to say, this is not a matter of actually understanding the real cause. It's about power.
Yes, it is all about power. But this power needs to be clearly divided up so America can choose between 'Nuke their Ass--I want Gas' and 'No Thanks--I like Empty Tanks'. Punishing anybody is counter-productive, but building Powerdown biosolar habitats should be the goal as it best incorporates a proactive response to detritus entropy by ramping up biosolar energy and biodiversity. Otherwise, TPTB just have to bide their time until the '3 Days of the Condor' scenario asserts itself.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Jimmy thought that substance was more important than appearance.
The plebes of our Republic felt that what they really needed was not a man of deeds, but a man of great appearance. Hence we got Hollywood Ron as our new leader.
Ron walked tall, like an Alpha Male Cowboy.
He said, "Mr. Gorbachov tear down ...
those solar panels off the WhiteHouse roof"
So it was said, so it was done.
History will recall Ron as a great visionary,
as a dim light on that shining hill.
Election year, November 1980
(Right click and View Image to enlarge.)
Has Global Oil Production Reached Maximum Capacity? A Debate on Peak Oil
There's a transcript, as well as audio and video downloads.
Toward the end the "peak guy" lost me a little as he diverged (I thought) to criticise the market system and the lack of government intervetion. Then I remembered that he was talking on "Democracy Now" on KPFK(*) ... and probably skillfully pitching to his audience.
I'm sure it helped spread the "peak oil" meme.
* - in the 80's we called that "Communist Radio, Santa Monica" ... and it was! With "socialist perspectives" and "inside the soviet union" as headline evening shows ;-)
He is making promises that can not be kept. This is dishonest at best. Note that my remarks here are not ad hominem. An example of that would be if I suggested he was wrong because he is ugly.
Listening to this audio, Lynch asserts that we in the peak oil community have ignored the geology, claiming that the global URR is always going up. He basically asserts that recovery rates can always be raised. This is not true. It is a lie. Everyone who reads TOD knows this. Fields deplete from the first day they are produced. End of story. Take the North Sea, the lower 48, there are lots of examples from countries in decline. Mexico's Cantarell is a recent example.
Michael Lynch says on Democracy Now!
We're not familiar with the technical terms in the industry!!!! Gee, I guess that I'm just operating in the dark here. And that would apply to all of you out there too. 8 to 10 trillion barrels!!!! Why do I bother writing stories here at all? There's nothing to worry about. Did you know that it rains hydrocarbons on Saturn's moon Titan? Does Lynch's estimate include this resource? It's just about as developable as the "oil" shale about 200 miles to the west of where I'm writing this.There's lots of hydrocarbons on this planet Earth. We've all heard about those methane hydrates -- technnically, clathrates, actually, but don't listen to me, I'm not familiar with technical terms in the industry.
I'm sure between Titan, these clathrates and that kerogen embedded in marl rock, gasoline prices will soon be going down. When? From Bloomberg here
And just to really pile on, here's Lynch on Matt Simmons And they know more than anybody around TOD, presumably. Ain't no petroleum geologists around here.</rant>
Saviour of Civilization
I emailed the press release to democracy now
Not much. ;-)
There's some discussion of it here:
http://www.peakoil.com/fortopic15008.html
Perhaps some of you economists can explain to me: Aside from possible excessive tweaking of the common economic measures, is it possible that our traditional measures of GDP growth rate, retail sales, inflation are inadequate to indicate how our economy is really doing in a world with jobs (still) easily exported and a world flush with dollars from our trade deficit eager to outbid us for crude oil?
Big Brother says the "numbers" are good.
It's all good.
Big Brother is only here to help you. Why do you question those who unquestionably are here to help you? Just believe and you will be happy. We are all happy. Abbot is happy. Costello is happy. See? Now you try it.
I am happy.
I am happy.
HEY! This IS working.
oh wait. no it's not. DOH!
I know GDP labels as growth: car crashes, cancer, lawsuits, hospitilizations; in short, all economic activity. So therefore, if you want to help the GDP, go crash your car into a schoolbus, shoot up your neighborhood, then get cancer - it'll be a great day for the economy! These government, and other, statistics, IMHO, have become as utterly worthless as a lot of the other information foisted upon us these days. Thanks for letting me rant.
http://www.financialsense.com/fsu/editorials/2006/0325.html
Here's a quick quote:
"If the same CPI were used today as it was used when Jimmy Carter was President, Social Security checks would be 70% higher,"
I was wondering if anyone has any thoughts on this article from the FT.
http://news.ft.com/cms/s/1d5dfe3a-d653-11da-8b3a-0000779e2340.html
http://www.cnn.com/2006/TECH/04/27/green.roofs.ap/index.html
Most roofs are both ugly and hotter than Hades, so this would be a good alternative.
I am preparing to replace my scruffy asphalt shingle roof with a spiffy aluminum shingle roof. Advantages include:
Quick Fixes Won't Solve Looming Oil Crisis, Scientists Say
It seems to be based at least partly on Deffeyes' work, and includes this graph:
Seems to me that the argument is now reaching an altogether more mainstream plane just in this last week. During this last week, FOX, CNN, and Auntie Beeb have all slipped the 'peak' word into discussions regarding gasoline prices.
Like I said in an earlier thread:
"Also, remember that just because the MSM doesn't publish the article doesn't mean they haven't read it and won't take pieces of it to work up their own angle on it. If so, they will probably change it enough as to not be outright plagiarism. This would be a major disservice to the original authors, but would not surprise me."
One thing I have noticed in the last two days (even if the MSM is not touting our ideas) is a change in the topics of casual conversation here in the Midwest (not a hotbed of rebellion).
Last night, I had an hour-long discussion with a civil engineer neighbor about the decline of Walmart, the possibilities of ethanol, solar power, difficulties of paying for kids' college, and peak oil. None of these topics were met with rolling eyes or "ummm...I hear my wife calling." Up to this point, our brief talks were about gardens, kids sports, dogs, and personal jobs.
This morning, filling up my car with $2.69 gas, I spoke to an elderly gentleman driving a Crown Victoria. I started off by asking what his final bill was on the tank of gas. He laughed and then we talked for a few minutes. He was well-versed in ethanol production in the Midwest and said he was glad we were close to the corn so we won't have a problem with supply. He spoke about needing to get a new car with better gas mileage. We spoke about the good old days when you could take a train to see friends and family.
I'm hoping this is a sign of some social change. Social change where people's minds are becomming more receptive to explanations not necessarily put forth by politicians or MSM.
I don't think I could have had those conversations two or three years ago, but the social climate is changing; slowly, measured, but undoubtedly "something else."
By 4th QTR this year, we may know what that "something else" is.
There's an old book from '75 called the "Radical Center," which basically showed the beginnings of the great "conservative" movement that swept the country starting in the late 70's and is now spent today. While it may seem contradictory, Americans can be very radical in their pragmatism and the Midwest more so than anywhere else.
As an old political hack, I can tell you this country is politically churning to an extent that I've never experienced in 25 years, it makes 92 which for the first time in history almost elected a third party candidate(despite being crazy) president, seem tame.
Yesterday, Rasmussen released quite a startling poll, it states,
Things are shaking out there in a very big way, whether it's healthy or unhealthy remains to be seen, but the opportunity to "radically" alter the country's direction from the middle is enormous. We need to challenge America.
peace
I agree that people are starting to challenge things like the status quo in this country. That's what I was trying to illustrate with the two random conversations I had with definitively non-radical people.
Speaking of shaking things up...looks like Monday may be interesting:
http://www.cnn.com/2006/US/04/28/boycott/index.html
http://moneycentral.msn.com/content/P149596.asp
Title: There's only so much oil on the ground
Artist: Tower Of Power
Album: Urban Renewal - 1974(!)
There's only so much oil on the ground
Sooner or later there won't be much around
Tell that to your kids while you driving downtown
That there's only so much oil on the ground
Can't cut loose without that juice
Can't cut loose without that juice
If we keep on like we doing things for sure
Will not be cool - It's a fact
We just ain't got sufficient fuel
There's only so much oil in the ground
Sooner or later there won't be none around
Alternate sources of power must be found
Cause there's only so much oil in the ground
There's only so much oil in the earth
It's a fact of life - for what it's worth
Something every little boy and girl should know since birth
That there's only so much oil in the ground
There's no excuse for our abuse
No excuse for our abuse
We just assume that we will not
Exceed the oil supply
But soon enough the world will watch the wells run dry.
I see the bad moon arising.
I see trouble on the way.
I see earthquakes and lightnin'.
I see bad times today.
Chorus:
Don't go around tonight,
Well, it's bound to take your life,
There's a bad moon on the rise.
I hear hurricanes ablowing.
I know the end is coming soon.
I fear rivers over flowing.
I hear the voice of rage and ruin.
Chorus
All right!
Hope you got your things together.
Hope you are quite prepared to die.
Looks like we're in for nasty weather.
One eye is taken for an eye.
"In 2003, almost 30 years after the first oil embargo, OPEC's total crude production was about the same as in 1974. The difference is that in 2003 OPEC accounted for only 38 percent of world crude production as compared to 52 percent of world crude oil production in 1974."
His conclusion:
"If you're a believer of "Peak Oil" things aren't going to change but get worse. Falling production rates in the face of rising demand will lead to higher prices and more conservation here and abroad as we switch towards alternatives."
Maybe worth a minute or two...
Middle East consumption was almost equal to that of China (1.4mbd as against 1.6mbd). This to me confirms the concerns about net export capacity covered earlier by Prof Goose and others are very, very real.
Has anyone else seen the article on the Iranian Oil Bourse? I know that there's been a lot of ongoing debate about the effects of the bourse, but it's interesting that this came out the day before the IAEA reported that Iran is in non-compliance, Bush says that diplomacy is "just beginning" and the president of Iran says he'd like to see them become a superpower... oh, and supposedly the IAEA says they're still waiting for Iran to turn over a document on castings for bomb cores!
WMD again? Can't these guys come up with new reasons to push our economic imperialism on the world?
http://karavans.typepad.com/karavans/2006/04/getting_offtheg.html
http://www.npr.org/templates/story/story.php?storyId=5367035
bruce from chicago
http://goofyblog.net/bible-had-it-wrong-jesus-died-for-our-oil-not-our-sins/
Also for some hilarious CNN footage of idiots in congress scrambling to find some oil policy somewhere in their buttocks... click here...
http://goofyblog.net/idiot-us-president-puts-on-crappy-phony-show-of-caring-about-oil-crisis/
- Patamon
Gas inventories as reported by the Energy Information Administration were up 80 billion cubic feet for the week ended April 21, and an additional 10 bcf was added to the data from April 14, bringing total storage volumes to 1.851 trillion cubic feet. This is 445 bcf higher than the same time a year ago.
But aren't we still experiencing the effects from Katrina? Aren't all of these new McMansions sold in the past year using natural gas for electricity? I don't see the disconnect between oil's record prices and natural gas's yearly lows.
For a interesting observation to this current gasoline peak, slip over to Kunstler and read his Daily Grunt.
With gasoline more expensive, many of those people may just look for a place they can get it all in one trip, and cheaply. Where might that be ?
As much as I despise Walmart, Home Depot, Lowes and the like, from a strictly gas consumption standpoint, I am not convinced that Walmart, et al are are going be hurt any more than other commercial establishments.
First, you can be sure that the selection of Walmart locations has been studied quite carefully by Walmart corporate headquarters to maximize the potential business from the surrounding population. As such, many Walmarts are located more or less equidistant from various population centers.
Second, not all Walmarts are in the sticks. Some are located on main commercial strips on the outskirts of small to medium size cities. Many Walmart locations ar no farther away than many of the smaller establishments in the same general area.
These days Main Street USA, what's left of it, generally offers a relatively poor selection of shopping. So, it's not like a choice between Main Street USA circa 1955 and this big ugly store out in the middle of nowhere. Maybe we should go back to Main Street USA, but right now such hardly exists.
The one-stop shopping at Walmart, et al, does save gas relative to having to go hopping around to multiple stores that are often widely scattered. Of course, this assumes that people will plan ahead when making their shopping trips, and I suppose that high gas prices will encourage just that.
And lastly, the enormous buying power and economy-of-scale of Walmart, et al will allow them to absorb rising transportation costs probably a lot better than the little stores. Note: Walmart doesn't even have to continue to import stuff from all over the world; it can just as easily buy stuff more locally, and with its strong buying power could still probably win out of the little guy.
Of course, if things get so bad as to be in a chronic crisis mode, ala Katrina, then all bets are off. But in a world of expensive but available gas, it's my view that Walmart, et al will do OK.
Having said that, I'd like to add that I truly hate these places and try to patronize the local little guy as much as I can. But only up to a certain point, as I cannot afford to be in the welfare business.
One, they already are. Their sales have been disappointing the past couple of years, and their stock has tanked. And they themselves blame high energy costs' effect on their low-income customers. They are trying to respond by luring more upscale customers with gourmet food like sushi, but so far, it's not working.
Two, their whole distribution model is based on cheap oil. Huge stores that take a lot of energy to heat and cool, just in time delivery, stores that are far from customers and distribution centers, distribution centers that are far from ports.
Three, they don't seem to see the handwriting on the wall. Their reaction to trouble is to continue what they are doing, only more. For example, making just-in-time even just-in-timier by forcing their distributors to buy RFID systems. That's going to be just great if there are fuel shortages that strand trucks, as happened after Katrina.
When the environment changes, it's the generalists that survive, the specialists that suffer. Wal-Mart is exquisitely adapted to a cheap energy world, and will thus have a harder time adapting than others that do not have so much invested in the happy motoring lifestyle. IOW - their previous success is what makes them so vulnerable in the future.
If Walmart gets into excessive trouble with the Just-In-Time thing, they'll probably just learn from it - they've been reasonably good at learning.
The problem is the lack of a useful alternative. The sort of downtown boutiques so nostalgically beloved by Jim Kunstler and others may be well-adapted, but, unfortunately they are well-adapted to the horse and buggy era. That era is not coming back in any event, since there would be no way to feed the tremendous number of horses it would require.
The boutiques charge 150% or even double or more, their selection is often abysmal, and sometimes there is no place to park. (People are not going to be able to take the typical order home by walking.) And they aren't immune to energy costs - the inventory on their shelves makes roughly the same thousand to ten thousand mile trip from the mine or farm as it would have to a Walmart.
The price of gas would have to be awfully, awfully high - $10/gallon? $20/gallon? - before one could afford to pay boutique prices on an order of any reasonable size, just to avoid a 20 or even 50 mile round trip. (I couldn't even afford to shop regularly at the price-gouging little stores when I was a student without a car.) By the time gas gets that high on any sustained basis, market forces alone will have pushed up mpg ratings, so it will have to be higher still before the trip won't pay.
And as/if gas gets that high, lots of people will forgoing all sorts of trips. They will be wanting to make some trip, any trip, now and then, just in order to relieve what will be intense cabin fever. So they might just as well stop off along the way at the Walmart or other big box.
With that said, there may be a small role for the boutiques - exactly the same role they play now. They can and will serve as overpriced convenience stores catering to the occasional unplanned immediate need.
When I leave my suburban workplace about 7PM, I board a bus that is usually nearly empty. A ways down the road, we reach a major inner-suburbia crossroads, stopping at a 1950s-vintage shopping centre which now has WalMart as its anchor tenant. Then the bus fills up. A horde of budget shoppers, too poor to maintain cars, lug their bulging WalMart bags aboard.
Certainly low-income shoppers are not going disappear -- probably quite the opposite. If WalMart planners are smart, they will consider giving less emphasis on parking lot acreage start putting their stores on busy bus lines.
Hmm ..... I wonder if it would be a smart move at some point for Walmart to actually start providing its own mini-bus service along selected routes for the benefits of its customers.
The buses could even charge a nominal fare (using a Walmart credit card of course) that would automatically be deleted from the customer's Walmart account if the customer purchased over a certain amount on the same day as the ride. No money would ever have to change hands.
Look at the huge companies that have failed in recent years. Gone bankrupt, gone under, been absorbed by a competitor. Sears, Enron, Polaroid - companies no one would ever imagine being in trouble in their heyday. What we're facing in peak oil is a lot bigger than anything corporate America has faced before, and most of them seem to be utterly clueless.
In the long run, I think most corporations will fail. Perhaps all of them.
Apocalypse soon
They're probably a step ahead of the rest of just for thinking about things like this.
I saw this on TV last night - Joe Scarborough's show. His guest was Al Franken.
http://www.msnbc.msn.com/id/12531741/
Every so often you find a nugget of gold in that vast wasteland called television.
Fox News Discovers Peak Oil!
Wow. mentions of Hubbert's Peak, Kenneth Deffeyes, peak oil, and Robert Hirsch!
and
What is curious about this newsevent is that Imaginova Corp., who wrote this article is owned by Lou Dobbs!
http://www.imaginova.com/aboutus/
I would have thought any headline news of this magnitude he would have premiered on his own show! My guess is that he wants Bill O'Reilly to take all the heat, whle he rakes up all the profits.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Interesting fact from the May 2006 issue of Ethanol Producer Magazine.
Monte Shaw, director of the IRFA (Iowa Renewable Fuels Association), said 22 ethanol plants in the state produce about 1.2 billion gallons of ethanol per year and that six more under construction will add another 500 MMgy to the state's capacity. "We might not actually do it this calendar year, but by late summer on an annualized basis, we will be producing more gallons of ethanol in the state than the amount of petroleum we consume, " Shaw said. "This is important as a comparison of our gasoline demand with our future ethanol production capacity."
Compare the 1.7 billions of gallons of ethanol mentioned above to the 1.5 billion gallons of fuel for transport that Iowans usually use in a year. The article goes on to say that Nebraska and South Dakota are close to doing the same thing.
Obviously this does not make Iowa completely energy independent because they don't produce or refine oil (few cars can burn 100% ethanol), make enough fertilizer etc.
Are there any states that are energy independent when it comes to liquid fuels for transportation? What about Alaska or Texas?
I think your question regarding whether there are any states that are energy independent inadvertently illustrates one of the problems with collecting and analyzing data of a state-to-state basis.
Most of the flows of commerce, materials, and energy do not neatly conform to state boundaries. In fact, such boundaries are largely irrelevent. Take the tri-state region encompassing greater Philadelphia, northern Delaware and southwestern New Jersey. From the standpoint of energy distribution they can be considered a single entity. Yet, portions of same are within three different states. And statistics are compiled on a state-by-state basis.
So there is big disconnect between arbitrary political boundaries, such as state lines, and the real commerical pathways regarding the generation and distribution of energy. One has little or nothing to do with the other.
Furthermore, states that generate energy, such as Texas and Louisiana export much of that energy to other states, further muddying the question of whether a particular state is energy self-sufficient.
D.C. prayer rally to seek lower gas prices
WASHINGTON, April 26 (UPI) -- A U.S. Christian group has grown tired of escalating gasoline prices and is set to stage a national prayer rally to lower the numbers at the pumps.
Various Christian clergy from around the country will convene around a Washington, D.C., gas station Thursday at noon to pray. For those who can't attend, a live Internet site and toll-free prayer line have been established.
In a release, the Pray Live group said many people are "overlooking the power of prayer when it comes to resolving this energy crisis."
Apart from sending a message to God, the rally had a message for humanity, said Wenda Royster, the group's founder.
"It is our hope that seeing and hearing some of the nation's most powerful preachers gathered around a gas station and the United States capital as a backdrop, will remind everyone who is really in charge of our world -- God," Royster said.
The Web site is at praylive.com. The toll-free phone number is 888-PRAYLIVE.
http://www.upi.com/NewsTrack/view.php?StoryID=20060426-114223-5447r
(In my typos to get that last phrase out, "Petro" had magically anagrammed into PEROT. Why has his name shown up twice on this thread now?)
Actually, it's very hard to know what to pray for. I was going to suggest praying for more oil, but that wouldn't do it either because global warming is going to catch up with us all the sooner.
I guess what I pray for is that we'll start facing the reality that we are on the downside of the oil era and that we start making preparations that will allow us to survive without killing each other.
Now who do I pray to?
The other prayer is more far fetched -- but basically that finally we will discover how to put the same forces that allow an atom to exist in perpetuity to use for our own energy needs -- I'm looking at the Joe Cell at the moment.
If we can't do either of these things we're screwed IMO. Its not looking too hopeful since these kinds of things would be suppressed by money interests since they'd be like opening a pandoras box; abundant supercheap energy that anyone can produce for themseleves would flip the entire capitalist model on its head.
While politicians are ready to condemn the oil companies for their excess profits, it should be noted that the federal and state governments' profits from gasoline sales far exceed any of private companies.
Link: Legislature needs to look at help for pain at the pump
I have been saying this for a while. The profitability of the state and federal governments from oil and gas far exceeds that of any oil company. Yet Big Oil is the one doing the gouging. Hypocrites.
RR
Trading Frenzy Adding to Rise in Price of Oil
How dumb does Big Oil think you are?
By Daniel Gross
Posted Friday, April 28, 2006