DrumBeat: July 24, 2006

[Update by Leanan on 07/24/06 at 9:23 AM EDT]

Heatwaves and biofuel demand in Europe and US to fuel bread, pasta and beer price rises

Grain Drain: With unstable supplies of staples, we'll need to rethink ethanol as an alt fuel source.

Brace yourself for crises at the cash register. Major price hikes for food are coming, as Peak Grains join the lineup of life-changing events such as Peak Oil and Peak Water. Unless this year's harvest is unexpectedly different from six out of the last seven, the world's ever-decreasing number of farmers will not produce enough staple grains to feed its ever-increasing number of people. Quite a shift from obsessing about obesity, isn't it?

Gas tops $3 a gallon, hitting 25-year high


Bush told to plan for Chávez oil shock

"Venezuela's leverage over global oil prices and its direct supply lines and refining capacity in the US give Venezuela undue ability to impact US security and our economy," Mr Lugar wrote in his letter to Ms Rice.


Iraq ready to restart northern oil pipeline

LONDON - Iraq has completed repairs to one of two sabotaged oil pipelines that export crude from its northern fields to Turkey and aims to restart the flow this week, Iraq’s oil minister said on Sunday.


India: Soaring oil takes us for a ride


Discontent clouds Angola's oil boom

...On the outskirts of the African nation's bustling capital of Luanda, the talk is not of a more prosperous future but rather of a stolen one.

Led by a collection of reformed Marxists and Western-leaning technocrats, Angola's government is struggling to convince sceptical citizens that it will use the proceeds of vast oil reserves to improve living standards in a country shattered by a brutal 27-year civil war.


100º - get used to it

They were the images that finally demonstrated the irreversible climate change now taking hold in Britain. Where green parklands once provided cool refuges in our cities, newspaper photographs last week showed them to be bleached, white landscapes. Reservoirs were revealed as cracked, arid deserts. And from Cornwall, pictures of the nation's first cage-diving trips for shark-watching tourists, an experience normally confined to Australia's Great Barrier Reef.

In addition, schools closed, steel railways buckled, and road surfaces melted.


[Update by Leanan on 07/24/06 at 12:02 PM EDT]

Will Mexico Soon Be Tapped Out?

A rapid demise of Cantarell, the country's chief oil field, could pose a serious economic threat.

Output at Mexico's most important oil field has fallen steeply this year, raising fears that wells there that generate 60% of the country's petroleum are in the throes of a major decline.

Production at Cantarell, the world's second-largest oil complex, in the shallow gulf waters off the shore of Mexico's southern Campeche state, averaged just over 1.8 million barrels a day in May, according to the most recent government figures. That's a 7% drop from the first of the year and the lowest monthly output since July 2005, when Hurricane Emily forced the evacuation of thousands of oil workers from the region.

Produce or perish

The EB (Energy Bulletin) has a very good/scary series of articles on food and on food versus fuel.  

In regard to my ELP (Economize; Localize & Produce) recommendations, I would start making preparations now.  If I'm wrong, you will have less debt, more money in the bank and a lower stress way of life.  

Texas billionaires Richard Rainwater and Boone Pickens--hardly a couple of guys typing out dark conspiracy theories in their basements--have tried to warn us about that the dangers posed by Peak Oil.  In fact, Mr. Rainwater questions the survivability of the human race.

According to the 12/05 Fortune article (search EB for Rainwater Prophecy), Mr. Rainwater is currently trying to expand his ability to grow his own food.

George Ure can always be counted on to post some interesting comments.  What if the Neocons believe in the Richard Duncan (Olduvai Gorge) dieoff theory?  What if seizing control of the oil fields is the only thing that matters to them?

http://urbansurvival.com/week.htm

Excerpt:

"And the Russians are having a field day with U.S. policy putting us into the box where we don't have much room to move.  I mean, there's a reason by Condi is not calling for a cease fire: in the crass world of oiltics, the number of dead doesn't matter because it will be such a small number in comparison to an oil drought induced die-off."

You gotta hand it to "Richard Duncan (Olduvai Gorge)," his claim about increasing failures in the grid seems to be at least possible. Maybe he didn't anticipate the impacts of climate change (forced by us or not), but he sure did mention the grid becoming less and less reliable.

As for the oil fields, there are a few others who have mentioned this before, and I tend to agree with 'em. I see no reason why the oil fields grab needs to be viewed as a failure thus far.  As long as the area is occupied, that seems to be a win to me. With the huge complex in Baghdad a permanent presence seems assured. Much of this stuff is at least alluded to in PNAC. As well as the multiple theatre military assertions. Will they keep it up? Will that require conscription? Will there be another 9/11 as Pearl Harbour incident? Guess we'll find out in due course.

To cary on with the oil point, from http://msnbc.msn.com/id/14001903/:

Richard Lugar, chairman of the US Senate foreign relations committee, has urged the Bush administration to adopt specific "contingency plans" for a potential disruption to oil supplies from Venezuela.

In a letter sent to Condoleezza Rice, secretary of state, last Friday, a copy of which has been obtained by the Financial Times, Mr Lugar warned the US that it needed to "abandon" reliance on a "passive approach" to energy diplomacy.

----------------

If somebody was saying those oil fields matter at any cost, this might be them. Maybe that is all that does matter to the Neocons.

The "Grain Drain" article and past reports we've seen give a figure of 57 days worth of stored grain for the global food supply.

From that article: "Unless this year's harvest is unexpectedly different from six out of the last seven, the world's ever-decreasing number of farmers will not produce enough staple grains to feed its ever-increasing number of people."

The "scary part" you mention from the Energy Bulletin's list of articles is that this year IS going to be "unexpectedly different" from the last six or seven in that grain harvests could be much, much worse than last year as the result of the heat waves in the U.S. and Europe.

Has anyone seen any forecast or discussion of where that storage cushion may be at the end of the year?

Also, how quickly can ethanol production be ramped up? Can ethanol expansion really have such an immediate impact on supply and price, or is that something more likely to occur 2-5 years down the road?

Has anyone seen any forecast or discussion of where that storage cushion may be at the end of the year?

Crop Prospects and Food Situation

Thanks. I wonder about the extent to which the prediction takes into account this season's heat waves in the U.S. and Europe. But they've forcast a nearly 10% reduction in end-of-season stocks.
I've been watching grain prices for about a year, expecting to see some reaction in the markets for grains related to either fear of a bad harvest (given falling stocks) or the rising price of oil.  It just ain't happening.  Soybeans, corn, rice and wheat are all running close to their ten year average prices, with rice and wheat showing an increase during this year.  The others quite stable.  It raises the question whether rising oil prices really affect farming so much or are the markets not acting rationally?  Or what?
Where are you getting your info from?  I just read an article yesterday/mon maybe that was talking about peak commodities.  Not every commodity, but they were pointing out grain stocks being lower the last 4-5 yrs and it isn't getting better as we add more souls.  The article was from itulip.com and generally, very reputable.
I wish everyone could be fed, perhaps with the exception of those who, knowing we are running low on food to eat, want to burn it in automobiles.

The other day I was taking a plane flight, and the fellow in the seat next to me was reading Jared Diamond's "Collapse".  At the time I was reading "Limits to Growth - 30 year update".  We briefly chatted about Collapse, and then he asked what my book was about.  I had only started in on it, but I had an idea what the basic idea behind it was, and I mentioned that LTG is referenced in Collapse in numerous places.

Don't know what kind of impression it made.  Just an interesting story.

Re: heat waves and biofuels...
Corn and barley prices are also likely to rise, which may push up the cost of beer and breakfast cereals.
We live in "interesting times". Beer should be subsidized, not heavily taxed.  

Arrrggghhhhhhhhhh, aye, me hearty, and rum too.

Brews yer owns beers 'n ails, thas' what I sashesz.

Yo ho ho . . . .

I heard last week that some Louisiana refineries were closed by the government and then I found this story today..

Crude Tops $71 on Louisiana Refinery Snags

Crude oil futures extended their gains and topped $71 a barrel Friday, boosted by continued worries about several refinery disruptions caused by a waterway closure in Louisiana.

Gasoline futures have climbed nearly 15 cents a gallon in the last three sessions as an oil spill closed the Calcasieu Ship Channel in Louisiana, forcing

four refineries in the region to scale back operations.

Twenty-nine ships were waiting to exit or enter the waterway Friday morning and refineries owned by ConocoPhillips (COP)(250,000 b/d), Citgo (425,000 b/d), Calcasieu Refining (85,000 b/d) and Pelican Refining (15,000 b/d) had acknowledged curtailed production because of the blocked supply route.

The refinery disruption "is not terribly serious at the moment, but we're in a supply chain situation where even the slightest problems are magnified, said John Kilduff, senior vice president for risk management at Fimat USA. "The market is hypersensitive to even the slightest refinery slowdown" or supply snag.

That article is dated June 23 - a month ago.  I think the Calcasieu Ship Channel is open now.
I have a couple of questions for US-based TODders regarding commuting. One of the acknowledged characteristics of the US labor market is employees' willingness to relocate when changing jobs. In fact, unemployment rates here in Europe are routinely blamed, in part, on people's refusal to look for jobs beyond their region. With that in mind, you guys sure seem to do a lot of intense, long-range commuting by car - which seems to me like a contradiction. After all, if I'm to move because of a job, I might as well move as close to it as possible. My guess regarding the reasons for the contradiction is a combination of factors:

  1. There isn't that much long-range commuting going on and the amount of coverage it receives at TOD is out of proportion, with the worst cases making up a body of patchy anecdotal evidence.

  2. Due to a combination of ample free space and over-zealous zoning laws, minimum possible distance between home and workplace can be substantial.

  3. Neigborhoods which are not strictly residential are considered (or maybe actually are) unsafe due to traffic or crime. Employees are willing to sacrifice hours of commuting time each day to avoid these problems.

  4. A large, good-looking house is highly desirable in the American culture for aesthetic or social status reasons. Employees are willing to sacrifice hours of commuting time each day to enjoy such housing.

  5. Apart from a few exceptions, there is no tradition of high-density residential development as there is in Europe. In other words, most Americans "don't know any better".

These are just my impressions, any further enlightenment is highly appreciated.

Another question: I was a high-school student in rural Wisconsin about twelve years ago - have there been any major changes in urbanization patterns since then, or was it as bad then as it is now? (I wasn't aware of any issues at the time, obviously, maybe apart from inner-city crime).

"After all, if I'm to move because of a job, I might as well move as close to it as possible."

A very European attitude, don't you think? If gas is cheap enough, distance becomes less of an issue, especially when you have no choice anyway.

Well, what would bother me more than the money is the time and effort involved. I do enjoy driving but there are a ton of things I enjoy much more, and being forced to spend so much time driving each day would be a major issue. Do you guys enjoy driving so much or is your time not that expensive? Or are you simply resigned to the status quo?
"Do you guys enjoy driving so much or is your time not that expensive? Or are you simply resigned to the status quo?"

Though I'm an American, I'm not one of "you guys" as I live in Germany. It doesn't sound like any of "those guys" felt addressed by your post. Of course, there aren't that many of them at TOD.

My attitude is similar to yours. I drive when I have to, but I take the train when I can. To me, driving to work is a complete waste of time. But many people (here too) really are forced to drive, or at least feel that they are, or feel "freer" driving.

The points you listed in your original post explain the situation well enough. The zoning in many areas pretty much forces people to drive. Cheap gas made driving more bearable, and cheap credit allowed people to buy bigger cars and build bigger houses farther away. That brought them to where they are now.

Back in the day, I put my belongings in storage and spent a year living in the office. I could get away with it; most people can't even consider such a possibility. No rent, relatively little driving. It was the best year of my life up till then. I paid off my debts and haven't been in debt since. Even then, I wasn't a typical American.

SE Wisconsin continues the pattern you must have seen 12 years back of rapid suburbanization.
Whatever absolute figures may be longrange commutes are considered normal. I have a neighbor who commutes 5 days a week from home in Chicago to Manhattan, no one blinks an eye.
That's incredible. The phrase "get a life" comes to mind.
I'd say the right answer is #4.  

The U.S. was a country of farmers only a few generations ago, and it shows in the our preferred housing.  Suburban homes are symbolic farms, with back yards instead of the back forty.  

Laura Ingalls Wilder's father used to say that when you could see the smoke from your neighbor's house, it was time to move on, and a lot of Americans seem to have similar ideas.  My boss grew up in a row house in Boston, and hated it.  He now lives a 45 minute commute away from his job, on five acres so he won't have any neighbors.  

"He now lives a 45 minute commute away from his job, on five acres so he won't have any neighbors."

What's so funny about this is that just this spring, as I visited the 138-acre family ranch in East Texas, I sat outside at night with a camp-fire crackling in the woods, and could hear the neighbor's music blaring away, from a home at least a half-mile off...

It's apparent that even 5-acres (and 138) is just symbolic isolation.  Perhaps a penthouse apartment downtown may provide a greater sense of distance from the rest of the populace. If that is what one seeks.

-best

"Perhaps a penthouse apartment downtown may provide a greater sense of distance from the rest of the populace"

Ummm... well if we have another blackout and the elevator fails to appear when summoned I'd say you would be right for sure. Most would rather walk a mile in the outdoors than up 40 flights of stairs in the dark ;)

As another John Milton said

When I consider how my light is spent,
 Ere half my days in this dark world and wide

But those 40 flights would be so invigorating! Though one might get a bit dizzy goin' round and round... ;o)
Nah.  He really lives out in the sticks.  One morning, he was late to work because there was a black bear in his driveway, and he was afraid to leave the house.  

For many, though, it is symbolic isolation.  Those huge McMansions on relatively small lots, for example.  

IMO, it's not so much the noise as the sheer human presence.  People want to putter around their homes and yards without having to talk to their neighbors.  

I live in an apartment complex, and I confess, I often do things at night, so I don't have to deal with my neighbors.  Take out the trash, do the laundry, etc.  Not that they're bad neighbors.  I just don't want to deal with them.


Oh, fer christsake - what a pussy.  A black bear, and I suppose there wasn't even a cub around.  I have seen many black bears in the wild, and it really isn't a big deal.
Just tap the horn and it will run off into the woods.
Well, like I said, he's a city boy.  Born and raised in Boston.  

And we have had some surprisingly aggressive black bears around here.  One pulled a toddler out of a stroller on the porch as its mother was trying to get her other kids inside.  The bear killed the kid, and the cops eventually killed the bear.

Leanan -

That wasn't in NY was it - I remember a couple years back that same kind of incident happened near the Catskills.  Maybe the same one ?

My sister has been much troubled on her five acres in the foothills of the California Sierra by a black bear that kills her chickens (by breaking fences, etc.), and the DNR is so backlogged (read underfunded) that the one trapper guy who has a HUGE area to cover won't get there for weeks--or until somebody's kid is mutilated or killed. For various reasons, I think there has been a black bear population explosion in many areas.

The auto body shops love the black bears. You hit one doing sixty miles an hour in your full-size newish SUV and do about $15,000-25,000 of damage--not quite enough to total out a valuable vehicle, but enough to make several boat payments;-)

Well, I lived in an apartment block more or less my entire life and it was the same as you describe. I'm shy by nature and many times have I chosen the stairs when I saw that someone was coming down in the elevator, just not to have to talk to them. But it always bothered me and I always told myself that once I move into my own I would actively seek contact with the neighbors (I have learned to overcome my shyness over the years a bit).

A few months ago I did move into another apartment block across the city, in a beautiful quiet area. It is a small block (36 apartments in total) and my plan is in progress, albeit slowly and in unexpected ways. There are 3 stairways in the house, 12 apartments each. I am disappointed in the neighbors living in my stairway - they are polite but uninterested in any contact beyond the obligatory greeting. There is one exception - a retired guy who is a part-time janitor for the whole house. Very polite yet never annoying. Just brightens up your day.

Most of my contacts, however, are with two neighbors from the other stairways. One is a thirtysomething teacher who I met at the apartment owners meeting (most owners at the meeting were over 50, younger people generally don't care about such things). We've exchanged visits and my girlfriend even takes care of her dog sometimes. Another neighbor I talk to is a guy who started organizing people interested in high-speed Internet (no-one here has broadband yet and if there are at least X subscribers in the same house you can get bulk rates). So slowly but surely I'm building up social capital.

I think relationships with neighbors are an interesting challenge. You don't want them to be your best buddies (they're tough to avoid when you fall out over something) but you don't want them to be strangers, either (who knows when you might need them). You also have to tread a fine line between tolerance and assertivity. I always felt, though, that avoiding neighbors is a wrong response to the challenge.

2, 3 and 4 are the reasons, and 5 is also in most of the country.
Agreed, plus in many urban areas halfway decent housing in the city itself is so expensive that families with modest incomes end up in the outer suburbs, farther out each year.  

A couple of random collected thoughts....

First you have to define "long-range".  60 miles each way?  100 miles each way?  Those folks are indeed rare.

One complicating factor is that you have married couples both of whom have jobs.  One may change jobs, but if they move to be closer to that job then the other one might be further.

Another complicating factor is affordability - housing closer in tends to be a lot more expensive.  On the flip side though, there are lots of people who wouldn't consider a condo or apartment and just gotta have that standalone house, and if that's what you want then you end up living further out.  Another complicating factor is just the crass materialism in our country - this causes people to buy lots of crap, and if you have lots of crap, then you need a larger house to hold all of that crap.

Some of the problems are self-inflicted by goverments.  There is this tendancy to have separate areas for businesses and housing, and they aren't always close to each other.  In fact, inner suburbs have tended to emphasize office buildings, which means that there is insufficient housing nearby for all of the people who work in those office buildings.

There was a 15 minutes news story on CBS morning yesterday about people with problems of getting rid of their junk.  Something like $6B gets spent on "organize consultants."  It was something to see with these people and all their JUNK!
In NYC storage container warehouses seem to be a growth industry. I've noticed three new ones on my path to work.
We used oned for a couple months while we were between houses, but we never thought about paying to keep crap stored.  They have auctions all the time too, where you can bid on boxes sight unseen and there have been some rather valuable deals.
Another issue is the problem with spouses that have jobs that are quite a distance apart. This happens quite often with professionals, because jobs are not concentrated in the centers of cities. If a couple is close to one job, the other has a long commute.

I work in the Buckhead area of Atlanta (which is farther from home than downtown Atlanta). My husband teaches at Kennesaw State University, in a suburb of Atlanta. We live near my husband's work, making a long commute for me.

Then there are couples who "split the difference."  I know one family where he works in Poughkeepsie, and she works in Albany.  So they live in Columbia County, where they each drive about an hour to work.