"We'll be able to mine asteroids with unmanned equipment, controlled from Earth."

 

  Some mines on earth barely pay, and countless other resources go untouched because the cost of extraction is more than the minerals are worth. Take Afghanistan, for example. Afghanistan is rich in iron ore, yet there are no iron mines of any significance. Why not? Iron ore is useless without coal, water, and limestone to process the mineral into useful iron. The cost of transportation of the ingredients, whether it be iron ore from Afghanistan to someplace that has coal, or vice versa, is more than the minerals are worth.

 

    There is also an example of the Soviets building a railroad to a coal mine in Siberia where the train consumed more coal in it's journey than it could carry!

 

    It has been said that if the moon rocks that we brought back had been pure gold, the apollo mission still would not have paid its own way. It still takes energy, and lots of it, to launch a vehicle into space.

 

    I doubt that we will ever be mining asteroids.

 

    I enjoyed reading the rest of your response. 

 

I don't know how to respond to this. To me, this is so self-evidently wrong as to be effectively a foreign language.

 

I guess you've been sleeping in America for the past 30 years. This is no longer a democracy, but a corpocracy -- government run for the benefit of the self-interest of corporations against the will of the people.

 

I guess you didn't hear how Henry Ford required that his employees obey a morality code and that Ford inspectors entered workers' homes to make sure. There have also been company towns -- mining towns where the company owned everything including the local government.

 

So why is it so hard to believe that corporate America could own our government? Or do you think corporate America can do no wrong? If so, they already have too much power -- over you.

 

Hope you're enjoying the Kool Aid...

Oil companies can't force me to buy gasoline, but the government can tax me to support "green" "sustainability" initiatives--or oil companies, if it chooses to do so.  Car companies can't force me to buy cars, but the government can tax me to bail out car companies that I would otherwise not buy products from (and when the government does so, I get no car). 

 

But the oil companies and car companies can throw their political clout around to make sure the government implements policies to keep the transportation marketplace skewed toward driving. 

 

Banks can't force me to borrow money, but the government can tax me to make me support them anyway (and not even get any temporary use of money in return).

 

More accurately, the financial system can make sure they wield enough influence over Congress to they can make sure when they $#@% up that their losses are socialized.  They can also wield enough influence to make sure they get deregulated enough to do as they please for short-term gain and cause a financial meltdown in the process. 

 

  but the government can tax me and give my money to the sugar industries without them having to give me so much as enough to support a bake sale.

 

Again, the problem here is corporate influence over government, not that government exists.  We have a corporatocracy more than anything in this country anymore.  The problem isn't whether or not the government has a role to play but who has influence over that role. 

 

KJP brought up some good example from the more distant past.  By the way, Henry Ford did more than enforce a morality code-- he had people beaten and shot for striking and trying to organize.  And, those company towns were brutal (there was a reason for that line in the Tennessee Ernie Ford song 16 Tons: "I owe my soul to the company store"). More recent ones:  How about Wal-Mart's problem with "off the clock" overtime?  Enron?  The S&L's getting deregulated then deliberately making all kind of risky investments and successfully working Congress over to have their losses socialized?

 

 

 

 

 

 

Oil companies can't force me to buy gasoline, but the government can tax me to support "green" "sustainability" initiatives--or oil companies, if it chooses to do so. Car companies can't force me to buy cars, but the government can tax me to bail out car companies that I would otherwise not buy products from (and when the government does so, I get no car).

 

But the oil companies and car companies can throw their political clout around to make sure the government implements policies to keep the transportation marketplace skewed toward driving.

 

Whether or not this is true (and this takes an extremely pessimistic view of the power and knowledge of the American electorate, one which I do not share), the blame for this would lie entirely with the government that implemented the policies, not the companies that lobbied for them.  Moreover, democracy provides an essential corrective mechanism when legislators do things of this nature that the voters are not OK with (witness the backlash against the bank bailouts).  One of the urbanist crowd's most enduring and impenetrable blind spots is the notion that highways and autocentric culture were somehow foisted upon the American people rather than quite warmly embraced by them.  People may complain about traffic, but few people are in any real hurry to surrender their cars.  If highways and other autocentric infrastructure were so repugnant, the backlash against them years ago would have been much the same as the backlash against the bank bailout today.  The electorate is *not* "sheeple."

 

Banks can't force me to borrow money, but the government can tax me to make me support them anyway (and not even get any temporary use of money in return).

 

More accurately, the financial system can make sure they wield enough influence over Congress to they can make sure when they $#@% up that their losses are socialized. They can also wield enough influence to make sure they get deregulated enough to do as they please for short-term gain and cause a financial meltdown in the process.

 

Again, the blame for this lies entirely with the legislators who cave to the pressure, not the bankers who bring it.  I despise TARP and all it stands for, but no banks forced Congress to vote for it.

 

but the government can tax me and give my money to the sugar industries without them having to give me so much as enough to support a bake sale.

 

Again, the problem here is corporate influence over government, not that government exists. We have a corporatocracy more than anything in this country anymore. The problem isn't whether or not the government has a role to play but who has influence over that role.

 

This is unfairly and unjustly limiting.  Why shouldn't the question be whether the government has a role to play at all, other than to affirmatively decide to play no role?  If, as you assert, corporations dominate Congress, why should we not be talking about limiting the tools by which corporate overreach can become entrenched in law and thus shielded from the creative destruction of the free market?  And why do you persist in blaming corporations rather than government for the sins of government?

People may complain about traffic, but few people are in any real hurry to surrender their cars.

 

Surrender to what? There is no alternative.

 

If highways and other autocentric infrastructure were so repugnant, the backlash against them years ago would have been much the same as the backlash against the bank bailout today.

 

New car sales collapsed in the late 1920s. Used car sales took over. And all car sales were disappointing in the most crowded urban areas. So if people were so gung ho for cars and against transit, then why was it necessary for National City Lines to buy up and replace popular but financially troubled streetcar systems during the depression for buses? Why didn't they let them die of their own weight? Why was National City Lines founds guilty of violating the Sherman Antitrust Act?

 

The electorate is *not* "sheeple."

 

Guess you don't remember the saying "keeping up with the Jones'?" If that isn't people acting like materialistic sheep, I don't know what is. And sometimes they are even worse -- zombies. I'll never forget all the bug-eyed zombies who had no idea what to do when gas hit $4 per gallon in 2008. It was scary and funny at the same time.

 

This is unfairly and unjustly limiting. Why shouldn't the question be whether the government has a role to play at all, other than to affirmatively decide to play no role?

 

Except that government is a natural occurrence. All creatures have a means to regulate, police and organize themselves in civilizations, herds, flocks, etc. Even the Mafia, which shuns all government and its laws, has its own laws and government -- boss, underboss, consigliere, captains, lieutenants, soldiers, associates...

 

I guess I keep hoping you'll come back to Earth, Gramarye. But I'm giving up hope. Question everything. Free your mind!

Well, the giving up of hope is officially mutual when you start wholeheartedly embracing the notion that the electorate is functionally mindless "zombies."  I hope that you'll come back to reality, too ... but I'll settle for it mugging you again and again at the polls as those people you constantly underestimate reject the propaganda you try to sell them.  (I'm sure that you'll come back with "well, they're just brainwashed by ____________ [insert party other than KJP here]," and maybe that will keep you comfortable at night.)

 

This is precisely the attitude that so offends me with respect to almost all urbanists, including those with whom I agree as to end results.  As Herbert Gans noted in 1969, “If suburban life is undesirable, the suburbanites themselves seem blissfully unaware of it.”  Yet for you, anyone who disagrees is "sheep," or off in space and must be "brought back to Earth."

 

After all the different ways in which government has been bad for America's cities for the past 50 years, why do you still think it's going to save you?  What in Heaven's name has government done for you or your cause in the past 50 years that makes you think that it's the right horse on which to bet?  Has government been the friend or foe of high-density, mixed-use living for the past 50 years?  Even now, in more places than not, you need to get a variance for such development.

 

Ask yourself whose mind is free here.  You sit comfortably as a big-government urbanist on a message board chock full of big-government urbanists and tell me to free my mind, when I deliberately seek out dissenting opinions, particularly those in sheltered bubbles, and challenge them to validate their beliefs.  Consider the possibility, at least for a moment, that maybe my mind isn't the one in shackles--and neither are those of the vast majority of suburbanites who are happy with their suburban existence, and who see your views as a direct attack on their way of life.

I'm not a big government urbanist. Although to you I probably am. I never said I loved government. But I don't trust corporations or people either. That's why the power of each needs to be checked by the other. When the power of one group overrides the other, that's when we start to see humans carry out things we're ashamed of later.

 

This sure is boring. Can we please move on to something else, like the topic of this thread??

Good point KJP but government always has the power to check the power of corporations. The reciprocal is not true.  For example, regulation didn't fail us in the last crisis.  Regulators failed us (along with government, corporations and individuals). So you make a good point but the problem remains, how do we make good government? I think the quickest way to make it good is to make it follow the "first, do no harm" principle which usually cuts it down to a very close definition of what government can and cannot do coupled with law and order that protects individual rights from tyrannies of majorities and concentrated power.

    "Government always has the power to check the power of corporations."

 

    Ah, but corporations have the ability to move around to another state or country. Even if the corporation doesn't move it's physical plant, it can move the company charter, or play games with mergers and sales of companies to achieve some goal. Many corporations are chartered under the laws of Delaware, for example.

How a 22-year-old student uncovered peak oil fraud

Tom Levitt

10th March, 2010

 

Lionel himself says the allegations from the whistleblower and reports from Global Witness are too serious for governments to ignore. He is lobbying politicians to launch an independent inquiry into predictions being made by the IEA.

 

‘We have to know what is really going on behind the walls of the so-called global oil watchdog,' he says. ‘If the Agency deliberately covers up the seriousness of the situation and provides misleading information, then the consequences could be world-shaking.

 

‘By not knowing that peak oil will happen within 10 or even five years, governments and businesses around the world are not preparing adequately. And this could have dramatic effects for everyone in a not too distant future,’ he says.

 

READ MORE AT:

http://www.theecologist.org/News/news_analysis/437079/how_a_22yearold_student_uncovered_peak_oil_fraud.html

Oh, and I just came across a great statistic....

 

The UK Energy Research Centre, an independent group funded by the Research Councils, argues that each additional 1 billion barrels delays peak oil by less than a week.

 

Source:

http://www.ukerc.ac.uk/support/tiki-index.php

Oil companies look at permanent refinery cutbacks

The response to slumping gasoline use would probably mean higher prices for drivers. Consumer advocates want regulators to examine the firms' plans.

By Ronald D. White

March 11, 2010

 

Major refiners have been circumspect about their plans, saying that they are considering options that could include closing refineries, selling parts of their operations, laying off workers and slashing spending.

 

"Refineries will have to be closed," said Fadel Gheit, senior energy analyst with Oppenheimer & Co. "Unless this excess capacity is permanently shuttered, a recovery in refining margins is unsustainable."

 

.....

 

"We're actually assessing the entire East Coast, whether we should be there or not," Valero Chief Executive William R. Klesse told executives at a recent energy conference.

 

Energy industry executives say they are facing up to what was previously inconceivable: that the nation's appetite for petroleum products may never return to levels seen earlier in the decade, even if a strong economic recovery takes hold.

 

READ MORE AT:

http://www.latimes.com/business/la-fi-refineries11-2010mar11,0,5317635.story?page=1

This dude is a tad full of himself. I'm not sure why as his conclusions are based on hollow assumptions. He sounds like an economist by assuming all supply meets demand and that consumers' information is perfect.....

__________

 

 

Déjà vu: Energy Prices

Posted Friday, Mar. 12, 2010

By ED WALLACE

 

It's hard to believe it's been two years this month since this column first revealed that speculators were running riot in the oil futures market. I pointed out that unrestrained commodities speculators were causing the oil price climb we were seeing, which would send the cost of crude to a peak of $147 a barrel by the summer of 2008. At the time most "experts" quoted in the media were saying that oil prices were skyrocketing because world supplies couldn't keep up with demand, or because we had passed the point of Peak Oil. Neither position was true, of course; just looking at tanker shipments and worldwide oil supplies on hand, those concepts were obviously invalid.

 

Many of the columns I wrote for BusinessWeek in the spring and summer of 2008 debunked all the excuses being given for oil prices' suddenly doubling. Today it has come to be considered common knowledge, even common sense, and that's good for my track record.

 

Unfortunately for the country's track record, however, knowing the truth hasn't changed a thing.

 

READ MORE AT:

http://www.star-telegram.com/2010/03/12/2036498/deja-vu-energy-prices.html

"Government always has the power to check the power of corporations."

 

  Ah, but corporations have the ability to move around to another state or country. Even if the corporation doesn't move it's physical plant, it can move the company charter, or play games with mergers and sales of companies to achieve some goal. Many corporations are chartered under the laws of Delaware, for example.

 

A major US-headquartered corporation that I worked for in the seventies had client relationships with some offshore companies whose boards of directors were made up primarily of the corporation's employees. They used those relationships in various ways to skirt domestic tax laws.

"After 2013, all bets are off..."

 

Peak oil 2014 – the year of transition

by Tom Whipple

 

The key remaining question of the peak oil crisis is just when world production is going to start on an unstoppable decline. A few years ago those analysts who were deeply enmeshed in the problem were saying that 2011 or 2012 looked like the fateful year.

 

But then the unexpected happened -- a great recession came along and the demand for oil plunged. Although global oil production set a nominal high during the great price run-up back in the summer of 2008, production soon fell away as the deepening recession cut demand by some 4 million barrels a day...

 

http://www.energybulletin.net/node/52020

Limited oil/gasoline supplies, economy picks up steam again, and gas prices go back up... And the surprise is -- what?

 

 

Pain in the tank: Gas prices highest since 2008

By Associated Press business staff

March 18, 2010, 4:27PM

 

Motorists are paying the highest prices for gas since October 2008. Retail gasoline prices rose today on an expected increase in demand and as more expensive spring and summer blends of gasoline make their way to the pumps.

 

The nationwide average hit $2.799 per gallon, a penny higher than Wednesday, according to AAA, Wright Express and Oil Price Information Service.

 

Prices have now jumped 18.9 cents in the past month and are 87.9 cents higher than year-ago levels. Back on Oct. 23, 2008 prices averaged $2.8215 per gallon.

 

READ MORE AT:

http://www.cleveland.com/business/index.ssf/2010/03/pain_in_the_tank_gas_prices_hi.html

I don't think anyone was pretending to be surprised ... the article even said that they're expecting yet more increase in demand.  Few people were seriously arguing that the economic recovery wouldn't also result in gas prices going up again, but did anyone seriously think $1.50/gal. was sustainable?

 

For Gramarye:

 

Here's a good presentation of Peak Oil topics including a discussion on how the interest rate is related to industrial production. Please allow several hours to take it all in, and let me know what you think about it.

 

http://www.oilcrisis.com/hubbert/growth/

 

P.S. Please don't be alarmed by the word "crisis" in the URL.

I've only glanced at it so far, but the first thing I noticed was the date: 1974.  Are you contending that whatever in there is still our most current understanding of the feasibility of petroleum alternatives?

 

    If you can find something that has been superceded since 1974, please let me know.

 

 

 

   

If you can find something that has been superceded since 1974, please let me know.

 

I've read most of it now and found it quite informative.  I don't think it detracts from what I've been saying in this thread, however, about the fact that peak oil alarmism is a waste of media and political energy, and that public policy measures designed to fight the "threat" would be firing bullets at shadows (with the risk of hitting an unintended target on a ricochet, at that).  My eye was immediately drawn to the following passages in the presentation--passages which I have already devoted substantial time and text in this thread to stating are either already no longer applicable or in the process of becoming so:

 

It is not the object of the present discussion to review the world's energy resources. Therefore, let us state summarily that of the other sources of energy of a magnitude suitable for large-scale industrial uses, water power, tidal power, and geothermal power are very useful in special cases but do not have a sufficient magnitude to supplant the fossil fuels. Nuclear power based on fission is potentially larger than the fossil fuels, but it also represents the most hazardous industrial operation in terms of potential catastrophic effects that has ever been undertaken in human history.

 

For a source of energy of even larger magnitude and without the hazardous characteristics of nuclear power, we are left with solar radiation. In magnitude, the solar radiation reaching the earth's surface amounts to about 120,000 × 1012 watts, which is equivalent, thermally, to the energy inputs to 40 million 1000-megawatt power plants. Suffice it to say that only now has serious technological attention begun to be directed to this potential source of industrial power. However, utilizing principally technology already in existence there is promise that eventually solar energy alone could easily supply all of the power requirements for the world's human population.

 

The latter statement was absolutely true in 1974.  It is conditionally true in 2010.  We currently do not have the technology to mass produce sufficient solar panels without using rare earth elements, nor wind turbines sufficiently cost-effective, to meet our energy needs in a world of diminishing fossil fuel availability.  However, it is emphatically less true in 2010 than in 1974, and becoming less true at such a pace that there are now blogs dedicated to following the progress of alternative energy sources--and which have new and promising news to report virtually every month.  The article did not mention wind, nor algae.

 

But it is physically and biologically impossible for any material or energy component to follow the exponential growth phase of Curve I for more than a few tens of doublings, and most of those possible doublings have occurred already.

 

With respect to material components, perhaps.  With respect to energy components, there may be a theoretical maximum, but as the links I've already posted in this thread show, at the very minimum, this 1974 article both expressly declined to explore some alternative sources of energy and completely failed to mention others.  In addition, with respect to information components, which are what allow us to put energy and materials to good use and thereby actually translate the availability of energy and materials into a comfortable standard of living, there really is no relevant theoretical maximum.  We've already seen proof of concepts that could turn subatomic particles into meaningful storage units of information.

 

With respect to Hubbert's section on economics, he makes a fundamental flaw in his economic thinking: devaluing the information component of goods and services.  He does make a common sense point about the monetary base--basically that too much money chasing too few goods and services will inevitably push the consumer price index upward.  However, the rest of his discussion of economics seemed wide of the mark.  The focus on the nonzero interest rate was particularly puzzling, and I think that his discussion of pig iron production and calling it the "foundation of heavy industry" in the United States, was indicative of a larger failing to foresee jumps in our dominant paths of economic growth.  There are economically productive things to do that do not involve enormous quantities of energy and pig iron.

 

Nevertheless, I think I agree with his conclusion that "Inexorable, however, physical and biological constraints must eventually prevail and appropriate cultural adjustments will have to be made."  I just have a feeling that the deliberate ambiguity of this statement hides the fact that he and I would have wildly different views on what those cultural adjustments need to be, considering his beliefs about the limits on "growth."

 

It's hard for me to pin down exactly where I'd say that he goes wrong in his discussion of growth, because I'm not entirely sure that his definition of growth is consistent throughout the discussion.  Depending on where one reads (and the charts' print is too small to be of much help), "growth" could mean--

 

(a) growth in the production of fossil fuels;

(b) growth in the production of energy, writ large;

© growth in the money supply;

(d) growth in "industrial production," which would itself need to be defined (pig iron? energy?); or even

(e) growth in the human population.

 

This inconsistency irritates me because he's obviously making a serious argument and deserves a serious response, but I'm worried that I'd be talking past him or unintentionally twisting his words by assuming he meant one thing when he meant something else.  Suffice it to say that I stand by my posts earlier in this thread to the effect that (a) there is no reason to fear that the peak in fossil fuel availability will cause anything more than minor growing pains for the West; and (b) the limit of our ability to extract minerals and nonrenewable energy sources from the Earth's crust does not mean that we are approaching an epochal maximum of our standard of living from which there is nowhere to go but down.  In accordance with that belief, I would be willing to wager a substantial sum, if anyone were to take it, on the following two points:

 

(1) Worldwide fossil fuel production will peak, plateau, and then decline all sometime within the next 50 years; and

(2) Our economy will continue to grow regardless, save for interruptions caused by political and economic developments only tangentially related to our energy supply (e.g., a currency crisis brought on by our unsustainable fiscal deficits).

 

I'm not even saying Hubbert would disagree with this; I simply can't tell, judging on that, though my reflexive inclinations whenever someone starts talking about "limits to growth" of any kind obviously tempt me to jump the the conclusion that he is in fact preaching inevitable and inexorable American decline and the need to manage the same rather than resist it (or simply laugh at the notion and keep right on solving the next problem that the previous generation considered unsolvable).

Sadly, the U.S. news media avoids this coverage in the world's largest oil-consuming nation. So we must go to media in Europe which consumes half the oil per capita as America to learn about the issue. What a f*cked-up nation we are sometimes....

 

25 mars 2010

Washington considers a decline of world oil production as of 2011

 

The U.S. Department of Energy admits that “a chance exists that we may experience a decline” of world liquid fuels production between 2011 and 2015 “if the investment is not there”, according to an exclusive interview with Glen Sweetnam, main official expert on oil market in the Obama administration.

 

.....The DoE dismisses the “peak oil” theory, which assumes that world crude oil production should irreversibly decrease in a nearby future, in want of suffisant fresh oil reserves yet to be exploited. The Obama administration of Energy supports the alternative hypothesis of an “undulating plateau”. Lauren Mayne, responsible for liquid fuel prospects at the DoE, explains : “Once maximum world oil production is reached, that level will be approximately maintained for several years thereafter, creating an undulating plateau. After this plateau period, production will experience a decline.”

 

READ MORE AT:

http://petrole.blog.lemonde.fr/2010/03/25/washington-considers-a-decline-of-world-oil-production-as-of-2011/

 

  Gramerye, thanks for taking the time to read Hubbert's presentation.

 

  What I found most interesting is the discussion of the sharp decline in growth rates around 1910. For most of the 1700's and 1800's, America was growing by up to 10% by any measure - economic output, pig iron production, and population. After 1910, growth had slowed. America was still growing, but the rate of growth had slowed. "We think of the 1920's as a boom period, but we would have grown even more had not this event taken place." Also, "This was a major event in American industrial history, yet we are scarcely aware that it had happened."

 

    I have a feeling that the same will happen with peak oil.  Of all the energy inputs we have today - solar, geothermal, petroleum, coal, nuclear - we have chosen to develop petroleum because it was easiest to get. When the petroleum is depleted, we may develop the others to a greater extent. However, I don't think the payoff is there for the others.

 

    Some of the early oil wells in Ohio paid off 600%. That is, if you invested 1 dollar, you got back 600. In terms of energy use, it took one barrel of oil to get 600 barrels.

 

    Suppose that it takes 1 unit of energy to get 1 unit of energy from photovoltaic cells. The payoff is zero. Ok, maybe in the future it will take 1 unit of energy to get 10 units. At least solar energy would support itself, but it's still not anywhere close to the growth rate that we got from petroleum. If somehow we manage to get photovoltaics to grow at 5% a year, but at the same time petroleum declines by 10% a year, that is a net loss.

 

  I bought a new clothes washing machine last year. It uses about half the energy that my old one did. How can it do the same work with just half of the energy inputs? It is more efficient because it wastes less energy. My old one had one big motor with a system of linkages and electromagnetic switches that varied the process between agitating, spinning, pumping, etc. My new one has one smaller motor that is controlled electronically. There are few moving parts, less friction, and a more controlled process.

 

    So, for a given amount of energy, I can now do twice the work. That represents a doubling of capacity in about 30 years.

 

    Compare to 1920, when capacity was doubled in about 10 years due to development of additional sources of energy.

 

     

 

 

I have a feeling that the same will happen with peak oil. Of all the energy inputs we have today - solar, geothermal, petroleum, coal, nuclear - we have chosen to develop petroleum because it was easiest to get. When the petroleum is depleted, we may develop the others to a greater extent. However, I don't think the payoff is there for the others.

 

Maybe not like there was with the early oil wells--but that was so long ago that modern society has forgotten that and adapted to the current environment, in which oil is still relatively cheap to get, but much less so than it was, with the cost increasing visibly and therefore prompting some people to look ahead.

 

Some of the early oil wells in Ohio paid off 600%. That is, if you invested 1 dollar, you got back 600. In terms of energy use, it took one barrel of oil to get 600 barrels.

 

One of these numbers is wrong: A 600-to-1 ROI is 60,000%, not 600%.  I doubt that it was ever that high for maybe anything but a rare gusher.  Maybe not even then.

Bring this business to Youngstown, Ohio!!!

 

Railroads booming with Marcellus Shale business

Associated Press - March 31, 2010 12:05 PM ET

 

READ MORE AT:

http://www.urbanohio.com/forum2/index.php/topic,22242.msg475396.html#msg475396

  " I doubt that it was ever that high for maybe anything but a rare gusher."

 

    The 600% figure was quoted from a book published in 1913. Maybe they calculated returns differently, but the context was that they were looking at 600 to 1, and yes, there was at least one well in Ohio that paid off that amount.

 

    Ohio along with Indiana an Pennsylvania was once the oil producing capital of the world, before oil was discovered in Texas, Oklahoma, Saudi Arabia, Alaska, Nigeria, etc. I think this says a lot about why Ohio is in the economic condition that it is in.

  Ohio along with Indiana an Pennsylvania was once the oil producing capital of the world, before oil was discovered in Texas, Oklahoma, Saudi Arabia, Alaska, Nigeria, etc. I think this says a lot about why Ohio is in the economic condition that it is in.

 

That's why I'm so intrigued about the tapping of the Marcellus Shale. As the third-largest natural gas field in the world (a field that was virtually unknown until several years ago) it's impacts on Eastern Ohio, Western PA, Souther Tier of NY and WV could be huge. It's already reaping big economic benefits for Youngstown, Lorain and some other manufacturing cities that fed off the discovery of oil and coal in the 19th century. See this thread:

http://www.urbanohio.com/forum2/index.php/topic,22242.0.html

 

If we use Marcellus for less than 5-10 percent of our nation's natural gas needs, the field should last for 140 years. If we over-exploit it, the field could be depleted in half that time.

Wednesday, April 7, 2010 6:06 AM

New U.S. drilling will prove meaningless

Jeff Rubin

 

Maybe it’s a gesture to the American right, which is still seething over the recent passage of Barack Obama’s national heath care package in Congress. Or maybe it’s just soma for increasingly anxious American motorists, so they can sleep at night without wondering how long their petroleum-based lifestyles can possibly last.

 

But either way, President Barack Obama’s sudden reversal of the ban on new oil and gas drilling in protected U.S. waters is nothing more than a public relations exercise that will still leave Americans facing the daunting reality that they must learn to consume less, not more, of the one substance they have grown so overwhelmingly dependent on.

 

There are no Spindletops waiting to be found anymore, neither in the mid-Atlantic nor in the Gulf of Mexico. There aren’t even Prudhoe Bays or North Seas—just ridiculously expensive stuff found miles below the ocean’s floor, like the recently discovered Tiber field. By the time any oil flows from these newly opened offshore areas, the American economy will have abandoned oil as a transport fuel—a change that will be dictated by a series of oil-induced recessions like the one we’ve just exited.

 

READ MORE AT:

http://www.theglobeandmail.com/report-on-business/commentary/jeff-rubins-smaller-world/new-us-drilling-will-prove-meaningless/article1524888/

I think Rubin is kidding himself if he thinks oil will be worthless in 5-10 years or however long it takes to get extraction capital in place in the areas the administration recently opened for production.  Even if it's true that we're increasingly switching to electric cars, which I hope and believe will be the case, oil will not be worthless, and in fact will likely be worth more notwithstanding any lessening of importance as a transportation fuel.  First, it has other uses.  Second, even if we move more towards a world powered by electric vehicles (personal and mass transit), that doesn't mean that the rest of the world will have.

a series of oil-induced recessions like the one we’ve just exited

 

Oh brother.  Talk about interpreting everything that happens in the world through one's own narrow lens.

a series of oil-induced recessions like the one we’ve just exited

 

Oh brother. Talk about interpreting everything that happens in the world through one's own narrow lens.

I think it played a role. Perhaps as the straw that broke the camel's back, or the pin that popped the real estate bubble. Just before the recession, gas prices were causing food and everything else to go up in price. If this led to a couple months where more people than usual were unable to make their mortgage payments, for example, you could somewhat legitimately call the recession "oil-induced", although that's of course not the whole story.

Both the commodity bubble and the housing bubble had the same origin, and both were equally unsustainable because the flood of cheap money and artificially low interest rates (in the name of stimulating our way out of the last recession) could not last.  When money flows like water and there aren't enough genuinely productive investments for it, it tends to seek out things with tangible and intrinsic worth--both housing and commodities qualify.

 

In other words, the housing and commodities bubbles weren't parent and child; they were brother and sister.  Too much money chasing too few goods created both.

^ That doesn't rule out that the recession was "oil-induced", in some strict sense of the word 'induced'.

I do believe that rising oil prices will increasingly affect the next-weakest and/or oil-dependent sectors of our economy. Whether it's debt-heavy or car-dependent real estate, the domestic auto industry, the airline industry, etc. etc.

 

About a year ago I wrote an article about this process, called the "Queuing Theory" for a Midwest transportation newsletter....

______________

 

 

Falling oil prices lull America back to sleep

Low price should buy U.S. time to prepare for oil shortages

By Ken Prendergast

 

In the past five years, prescient energy scientists and other analysts have postulated that as the world gets closer to peak oil production, there will be wild swings in oil prices. As a result of this volatility, global economic conditions will also experience a wild rollercoaster ride.

 

Scientists like Kenneth Deffeyes, professor emeritus at Princeton University, have called this the Queuing Theory of oil prices. And, unlike rollercoasters, the Queuing Theory isn’t fun. In fact, it’s incredibly dangerous for the world’s most oil-dependent economies. And none is more gluttonous when it comes to oil than the United States.

 

In 2009, new President Barack Obama can quickly address this by going back to his original plan of a “green economic stimulus” which promotes alternative energy, walkable neighborhoods, public transportation and, of course, high-speed rail. Instead, when oil prices fell, billions of dollars in new-capacity highway expansion proposals found their way into the federal stimulus package – projects that will only spur more sprawl, worsen our dependence on oil and release more carbon into the atmosphere.

 

“[The] Queuing Theory predicts that queues behave in a noisy and chaotic manner when demands approach the system capacity,” Deffeyes wrote in 2008. “Instead of energy prices rising to a new stable level, wild price oscillations will result from short-term changes in demand. There will be a tendency, the first time that prices go down, to announce that the crisis is over and oil and gas are now cheap and abundant again.”

 

Such apathy emerged as oil prices collapsed from $147 per barrel in July 2008 to below $40 in December. Prior to the drop in price, Americans were reducing their driving at a rate not seen since the gasoline rationing of World War II. Meanwhile ridership on the nation’s buses and trains were at their highest levels since before construction began on the Interstate Highway System more than 50 years ago. But in the last few months of 2008, sales of gas-guzzling sport-utility vehicles rose for the first time in several years.

 

“A false sense of smug security could set in if prices drop and stay there, and some oil-exporting nations have already announced a slacking off of investments in the oil industry, if prices continue to be depressed. So eventually when the oil demand would pick up, we would have even less oil than now,” wrote James Leigh in the Oct. 3, 2008 edition of the Energy Bulletin. Leigh is an assistant professor of cultural geography at the University of Nicosia, Cyprus.

 

According the U.S. Energy Information Administration (EIA), high oil prices and the economic downturn caused worldwide oil consumption to decline by 50,000 barrels per day. A worsening economy in 2009 could cause global oil consumption to fall by 450,000 barrels per day and keep oil prices down. It would be the first time in three decades of two consecutive years of falling oil demand.

 

“Volatility is in some ways an even worse problem than high prices, because sustained high oil prices make long-term investments in alternative energy sources and public transportation look sensible – whereas periodically collapsing oil prices discourage such investments,” wrote Richard Heinberg on July 30, 2008 for the Post Carbon Institute. Heinberg has authored eight books on oil depletion and its effects on the global economy.

 

Oil companies are being hit with a double-whammy – collapsing oil prices and the global credit crunch. Companies which mine the Canadian oil sands, which supply America with more than 5 percent of its daily oil supply, need oil prices of at least $50 per barrel to break even. The reason is the costs of mining and processing oil sands are so high. The same holds true for tapping deepwater oil reserves. Most of the easy-to-get, low-cost oil in the world has already been found. Oil companies won’t tap the remaining oil unless they can secure financing for these multi-billion-dollar oil recovery projects.

 

Oil field financing and development is as critical as promoting conservation and alternative fuels to delay peak oil for as long as possible. Peak oil is the point at which an oil field, a region, nation or the entire planet reaches a maximum level of oil production and falls no matter how much additional investment is made to yield more oil. That point can only be determined in hindsight. In the United States, peak oil was reached nearly 40 years ago.

 

In November 2008, the International Energy Agency (IEA) produced a very important report that was barely noticed by the media and the public as oil prices fell. Called the World Energy Outlook, the IEA’s report made some startling statements, especially for an historically conservative watchdog group for the planet’s largest energy-consuming nations.

 

The report showed that oil production from the world’s largest oil fields may decline by as much 9 percent a year in the next two decades. To offset these depletion rates, the world will need to find 64 million barrels per day of new oil production by 2030. That’s the equivalent of finding the production of four new Saudi Arabias. The chance of that is virtually zero, as worldwide oil discoveries dwindled from a peak in the 1960s to a trickle today despite zealous exploration efforts. In the absence of new discoveries and investment in costly deepwater wells, oil sands and other non-conventional sources, the IEA predicted worldwide oil shortages were possible by 2015.

 

As global peak oil “is approached, liquid fuel prices and price volatility will increase dramatically,” wrote Robert Hirsch in his landmark 2005 report “Peaking of World Oil Production: Impacts, Mitigation, and Risk Management.” Dubbed the Hirsch Report, it was produced at the request of the U.S. Department of Energy. The DOE delayed releasing the unsettling report, which forecast dire global economic consequences from peak oil if the world failed to prepare for it at least 20 years in advance.

 

Few nations need more time to prepare than the United States. The U.S. has just 5 percent of the world’s population but consumes 25 percent of its oil. That’s a holdover from 100 years of America being the globe’s larger producer of oil. That ended in 1970 when America’s oil production peaked.

 

Instead of curbing our oil-fueled lifestyle of automobile over-dependency and wasteful suburban sprawl in unison with falling domestic oil supplies, America intensified its oil appetite. Such gluttony was made possible by importing oil, including from some politically unstable nations. Today, America imports two-thirds of its oil to fuel a lifestyle it can no longer support on its own.

 

Worse, America is bleeding itself economically. The importing of so much oil means that we sent $1.2 trillion of America’s wealth overseas in the past three years, according to data from the EIA. $500 billion of that wealth transference occurred just in 2008.

 

Hirsch predicts that the U.S. will need to invest $20 trillion from a mix of governmental, corporate and personal sources to convert our economy from one dependent on oil to one less dependent on all sources of energy. Yet the remaining energy sources could include electricity from the usual litany of renewables – wind, solar, hydrological. Plus there are problematic but promising energy carriers and sources like hydrogen, nuclear and ethanol.

 

The federal stimulus program is becoming a wasted opportunity. It is littered with new-capacity highway projects – billions of dollars worth in the Midwest alone. Funding new and wider highways for more petroleum-burning cars is less money that can be invested in weaning our nation off petroleum.

 

“It’s a lot of more of the same,” said Robert Puentes, a metropolitan growth and development expert at the Brookings Institution in Washington who is tracking the stimulus legislation. He was quoted in a Dec. 29, 2008 Bloomberg article. “You build a lot of new highways, continue to decentralize” urban and suburban communities and “pull resources away from transit.”

 

“We should not cling to crude down to the last drop,” wrote Faith Birol, IEA chief economist in an opinion piece in the March 2, 2008 edition of The Independent. “We should leave oil before it leaves us. That means new approaches must be found soon.”

 

“So our future affair with oil may be within an overall trend of declining supply and rising demand, with volatility of prices from the anxiety of the market in which demand surges higher over supply,” Leigh said. “But the prices will be intermittently buffeted up and down by the fluctuations of economic growth and its levels of fluctuating demand for oil. As investors vie for advantage, they too will aggravate the gyrating price trends.”

 

The most effective alternative fuel is the one that isn’t consumed. That means conservation. Unfortunately, too many assume that conservation means less economic development and fewer jobs. Nothing could be further from the truth. Rather, the money saved from driving and spending for foreign oil can be used domestically for buying locally grown foods, starting a small business, making your home more energy efficient, or saving up to buy your own home for the first time instead of renting it. Indeed, many Americans are locked into lower standards of living because they must own a car (a depreciable asset) to reach a job and rent housing (an appreciable asset) instead of owning. That prevents many working-class and low-income Americans from building equity and wealth.

 

The actual use of trains and transit is more energy efficient than driving, according to recent U.S. Department of Transportation data (using very conservative, if not inaccurate data that assumes an average of just 20 riders per Amtrak train). But even more efficient are the types of supportive land use which trains and transit need to generate more ridership – walkable, densely developed, mixed-use neighborhoods built around transit stops and train stations. By comparison, much of the nation’s suburban sprawl is built up around state highways and federal interstates. Most of the trips (nearly all by car) in those communities don’t involve the highway. They are on city streets to the store, school, coffee shop, bank, post office, etc.

 

In walkable communities built tightly around trains and transit, those trips are no longer made by car. Instead, they are made on foot from an upper-floor townhouse to a first-floor bank or drugstore, or to the restaurant across the street, or on a bicycle or bus to the park a mile away on the other side of the neighborhood.

 

“What everyone needs to remember is this: the fundamental cause of the recent oil price spike has not gone away,” Heinberg said, referring to a lack of growth in global oil production. “The current brief respite from the hammering effect of new oil price records being set almost daily is not an occasion to go back to sleep, but an opportunity to consolidate efforts toward energy conservation and transition.”

 

END

A nasty chart.....

 

^What does it mean?  What exactly do they mean by oil price volatility and how is it calculated?  Is it something like a year over year percentage change in price?

^What does it mean? What exactly do they mean by oil price volatility and how is it calculated? Is it something like a year over year percentage change in price?

 

http://www.optionszone.com/learn-more/dawn-pennington/oil-volatility-index-ovx-debuts.html

One of the World's Biggest Oil Producers Is Going Bust

By Matt Badiali

Saturday, April 10, 2010

 

Most Americans don't realize it, but Mexico is a major player in global oil production. According to the Energy Information Agency, it was the seventh largest oil-producing country in 2008. Mexico is the U.S.'s second-largest source of imported oil, behind Canada.

 

You read that correctly: We import more oil from Mexico than we do Saudi Arabia, Iraq, Kuwait, or any other Middle Eastern country. You don't read about it much in the papers, but Mexico is a critical supplier to American drivers.

 

Now, Mexican oil officials like Georgina Kessel have a problem... one the entire world has: There are no easy barrels left.

 

You see, in the oil business, there are "easy barrels," like the kind discovered in Mexico, Texas, and Saudi Arabia decades ago. These easy barrels burst from the earth when you puncture a highly pressurized oil field with a drill pipe. These are the barrels you see in movies and cartoons.

 

There are also "hard barrels," like the kind locked inside oil sands. They require enormous amounts of digging and processing in order to become the "light, sweet" crude that we turn into gasoline.

 

READ MORE AT:

http://www.dailywealth.com/1323/One-of-the-World-s-Biggest-Oil-Producers-Is-Going-Bust

Has anyone done any reading into the status of rare metals? I know it's been discussed around here before, but I do wonder if there is a hidden problem awaiting the mass transfer to photovoltaics and large batteries.

There have been a number of articles about lithium supplies which could be constrained by turning to rechargeable electrical batteries for cars, etc. on a large scale. And a large source of lithium is Bolivia which is cozy with Hugo Chavez in Venezuela. The other place that has lots of lithium is....China!!

 

EDIT: here's a pretty good article on lithium supplies (with zinc mentioned too):

http://news.cnet.com/8301-11128_3-10077965-54.html

 

  Production of Silver and Gold peaked long ago, around 1915. Like oil, the best resources are exploited first. Lots of metals require vast amounts of energy to extract and process, so maximum production of those metals may very well correspond to peak oil, or at least peak energy.

 

  Replacing the current fleet of conventional cars with battery operated cars, etc., is not necessarily a viable option. Sure, special batteries that contain silver might last 10 times as long as conventional lead batteries, but the simple fact is that we don't have 100 million silver batteries lying around waiting for a home. Just because you can build something in the lab doesn't mean you can mass produce it.

 

 

A somewhat timely inquiry: RealClearWorld featured a column on the rare earths question here.

 

http://www.realclearworld.com/articles/2010/03/29/whos_winning_the_rare_earths_race_98885.html

 

Google ["rare Earths" China] (sans brackets) and you'll get a reasonable number of columns on this subject from the past year.  People are definitely starting to notice the issue.  Fortunately, there is some promising work out there on solar cells that don't use rare earths now (lower efficiency, but even lower potential cost), and if DARPA's algae program takes off, the rare earths issue won't become quite as potentially devastating.  It will still be significant, though.

^ That's a very interesting (and recent!) article. One thing it does not mention, though, is recycling. There must be a ton of trace metal in all the old technology we throw away or send to recycle.

 

Too bad most of the technology recycling operations are currently located in...yeah. China.

 

We should be aggressive about prospecting for these materials in North America.

Cross-posted from the "Youngstown-Your Marcellus Tool Box" thread...

http://www.urbanohio.com/forum2/index.php/topic,22242.0.html

 

I'd like discuss the refining of natural gas into synthetic diesel fuel. Considering the proximity of the Marcellus Shale and the assets of the Mahoning Valley (large tracts of vacant industrial land next to the Mahoning River and major railroads), I think attracting a synthetic diesel fuel refinery to Youngstown makes tremendous sense. To that end, we should introduce the Mahoning Valley to a company called Syntroleum (see: http://www.syntroleum.com/main.aspx).

 

First, for a primer on synthetic diesel fuel (especially the Fischer-Tropsch process), see:

http://en.wikipedia.org/wiki/Fischer-Tropsch_process

http://www.afdc.energy.gov/afdc/pdfs/epa_fischer.pdf

 

I've read some pieces that there are only three synthetic diesel fuel plants in the world -- all near major natural gas fields -- yet none are in the U.S. I've also read some articles by writers who speculated that the U.S. oil majors are trying to keep them out. If true, perhaps this may be changing considering that conventional oil refining capacity in the U.S. is declining as older refineries are being shuttered. I would also like to learn more about the economics of synthetic diesel fuel -- do current prices of natural gas and conventional diesel fuel permit it now? What will the coming impacts of peak oil mean for the future of synthetic diesel?

 

Why does the Mahoning Valley make sense for such a refinery location?

 

Natural gas is the best fossil fuel feedstock from which to produce synthetic diesel fuel as it is cleaner, low-sulfur, easily transportable and efficient at lower temperatures than coal or biofuel. To refine natural gas into synthetic diesel fuel requires cobalt to catalyze the fuel through a reactor. Although not radioactive, the reaction generates a great deal of heat which is typically cooled by water. A refinery capable of producing a meaningful amount of synthetic diesel fuel could require hundreds of acres of industrial-zoned land. Shipment of the finished product would need to be via low-cost means, either waterway or railroad.

 

So, for a Fischer-Tropsch refinery to process low-sulfur synthetic diesel fuel, the site appears to need:

 

++ a large supply of natural gas (ie: Marcellus Shale, the third-largest known natural gas field in the world);

++ cobalt for catalyzation (the nearest large-production mines are in southern Ontario: http://upload.wikimedia.org/wikipedia/en/9/94/2005cobalt_%28mined%29.PNG);

++ a steady supply of water for reactor coolant (ie: the Mahoning River);

++ large and open swaths of industrial-zoned land (vacated steel mill sites in the valley are sufficiently large, especially the 200-acre former YS&T Campbell Works site);

++ access to waterways and railways (two Class I railroads and one regional railroad serve the Mahoning Valley, while navigable waterways are only 50 miles away by rail, pipeline or truck).

 

The Mahoning Valley, especially one or more of its vacated steel mill sites, would be an ideal place to build a synthetic diesel refinery!

 

 

Possible economic impact to the region

 

For comparison, this project could be similar to a refinery now being built to produce synthetic jet fuel for the airlines and the military in Natchez, Louisiana. Rentech Corp's 450-acre facility represents a $4.5 billion investment to produce 250 million gallons or 25,000 barrels of synthetic jet fuel per year using the Fischer-Tropsch process.

 

The Natchez Project is expected to create 2,100 direct jobs and 3,400 indirect jobs during the project’s construction phase. Once operational, the facility is expected to create over 400 high-paying direct jobs and over 3,200 indirect jobs, according to a study (see: http://www.natchezdemocrat.com/news/2010/mar/14/rentechs-spending-would-trickle-down/). A synthetic diesel refinery would probably be less than half as large as Rentech's -- yet still a significant economic presence in the valley.

 

Also, note that major railroad and trucking terminals are located at or near existing diesel fuel refineries -- not only because of shipment opportunities, but because it's the lowest-cost place for trains and trucks to be fueled. Thus, spin-off jobs could result from attracting the refinery here, including materials needed to construct the refinery.

 

There are many question still unanswered, including the economics of such a refinery, spatial requirements, environmental issues, and more. But I think it is a very intriguing possibility for the Mahoning Valley.

 

What do you think?

Published Apr 15 2010 by Energy Bulletin, Archived Apr 15 2010

Oil Supply Crunch: 2011-2015

by Rick Munroe

 

Concerns are mounting about peak oil, and there continues to be much debate over when the peak will be reached, whether a plateau can be sustained or whether the onset of decline would occur quickly, whether we will hit peak demand before we hit peak supply, etc.

 

There is convincing evidence that conventional oil production has already peaked, since we have been stuck at around 74 mbpd for over half a decade (despite the incentive of record high prices).

 

There also seems to be growing consensus that global liquids production (currently around 86 mbpd) is likely to peak within the next decade and almost certainly at less than 95 mbpd.

 

(Mainstream opinion a few years ago predicted no peak before 2030, with output at 130 mbpd.)

 

However, there are increasing warnings about an “oil supply crunch” within the next few years, not because of geological constraints, but because of under-investment.

 

These warnings began just over two years ago, yet the mainstream media have rarely mentioned them, so the public remains largely unaware.

 

Listed below is a chronology of some of these warnings, with URL links to the original sources.

 

READ MORE AT:

http://www.energybulletin.net/node/52460

Governments Worried about Peak Oil

But Not Enough to Tell You the Truth. Part 2 of my report: Officials Wake Up to Peak Oil

By Chris Nelder

Friday, April 16th, 2010

 

In the first part of this series, I reviewed a series of reports from March supporting the peak oil view, and warning that world oil production very well may go into terminal decline by 2015 or sooner.

 

....The implication was obvious: The EIA has no idea how production could increase after 2012. In the absence of these "unidentified projects," they expect global oil supply to decline by about 2% per year - from 87 million barrels per day (mbpd) in 2011 to 80 mbpd by 2015 - while demand rises to 90 mbpd.

 

READ MORE AT:

http://www.energyandcapital.com/articles/governments-peak-oil-part-2/1122

 

Source: Glen Sweetnam, "Meeting the World's Demand for Liquid Fuels - A Roundtable Discussion," EIA 2009 Energy Conference, April 7, 2009, Washington, DC

Have they said how much oil will go up because of the disaster yet KJP?

Why should it go up? It doesn't affect supply.

Another wake-up call for the world’s biggest oil junkie

America Still Doesn't Get It

 

by Chris Nelder

 

OK, America, it’s time to get real about energy.

 

The explosion and destruction of the Horizon deepwater rig and the subsequent oil spill disaster are only the latest in a series of wake-up calls you’ve received. Are you listening now?

 

Your first warning came in 1956, with the publication of M. King Hubbert’s model of US oil production, which correctly predicted its peak in 1970. When Hubbert updated his model on camera in 1976, he also nailed the peak of worldwide conventional oil production in 2005.

 

Since then, production has remained flat at roughly 74 million barrels per day (mbpd), despite prices gyrating wildly from $40 to $147 to $33 and back to $86 today. High prices did not deliver more oil to market.

 

Very simply, the cheap and easy oil is gone. What’s left is smaller, harder to find, of lesser quality, and in much more challenging places–under a mile of water and another five miles of rock, for example. It’s expensive, risky, and yes, dangerous.

 

American domestic oil production peaked in October, 1970 at just over 10 mbpd. It has been in a steadily declining trend ever since, and now stands at 5.5 mpbd.

 

Over 30 percent of domestic production is from offshore drilling, of which about three-quarters comes from the Gulf of Mexico. Deepwater oil production has only become possible in recent years with the development of cutting-edge technology. We do it not because it’s without risk, but because we need the oil–badly. Only offshore is it still possible to find a field in North America that can deliver over 100,000 bpd. Just two of the Gulf fields, Thunder Horse and Atlantis, produce a combined 350,000 bpd...

 

Full article at:  http://www.energybulletin.net/node/52738

Good article.