Brazil is pursuing cellulosic ethanol, made from sugar cane or wood or switchgrass rather than corn. It's more energy dense and thus more productive than corn-based ethanol, but still not a very desirable approach, IMHO.

 

I think that it's sad that America can't get ahead of the curve on peak oil and thus lessen the pain on the middle class and poor. The way to have done that (when gas was less than $2 per gallon!) was to phase in a gas tax to put money into alternative energy research and development, as well as alternative modes of transportation. But since too many Americans only want to eat their candy and not their vegetables, we're handcuffed. And now it's probably too late to introduce the gas tax increase. That's a tough sell when gas prices are eclipsing $4 per gallon. Now, since two-thirds of our oil is imported, America isn't getting enriched by these prices. It's Russia, the Middle East and even Canada.

 

There still could be some positive change from these fuel prices -- I see more people out walking and biking. I see amazing crowds of people on the buses and trains here in Cleveland.

 

But remember these pictures from this awesome photo thread...

 

http://www.urbanohio.com/forum2/index.php/topic,16015.0.html

 

....it's what we're likely to see more of ringing our cities. I doubt this future could be avoided no matter what preparations we make.

I'm a huge energy nerd (but most of you knew that), and the proof is that I watch the energy futures prices at www.nymex.com. Tonight I'm absolutely blown away....

 

WOW!!

 

The old norm was that oil futures prices in the long term would decline to five years out from the spot price (next month's contract). Now, they've gone up. WAY UP!

 

Someone at the peakoil.com forum made an interesting point:

 

It's been fiercely argued that since distant oil futures prices have been less than current (front month) futures that oil was "in a bubble" and speculators were just pushing up prices now - but had no effect on the future price of oil. That has changed. There is no bubble, and perhaps, just maybe, speculators had been pushing down prices instead. Least we forget, the biggest hedge funds were actually short oil when it went past $100 for the first time. Let the scramble for future oil supplies begin!

 

http://www.ft.com/cms/s/0/c2955660-2696-11dd-9c95-000077b07658.html?nclick_check=1

 

Shortage fears push oil futures near $140

By Carola Hoyos and Javier Blas in London

 

Published: May 20 2008 19:06 | Last updated: May 21 2008 00:52

 

Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel on Tuesday, further stoking inflationary pressures in the global economy.

 

Investors rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day. The spot price hit a record $129.60 a barrel.

^^Geez, that "Suburban Gothic" thread is awesome; one of the best UO photo threads ever.  Wish it could be expanded into a Life Magazine photo essay... Maybe it could form the nucleus of a PBS documentary.  I'm sure there's be a number of high-minded individuals, groups willing to fund it.  Just a thought.

"To put it another way, a new producing area equivalent to current annual production from Iran (OPEC's second biggest producer) needs to be brought on line every year just to keep global production from falling."

 

[ARTICLE FOLLOWS]

 

http://www.econbrowser.com/archives/2008/05/oil_price_funda.html

http://www.reuters.com/article/newsOne/idUSN2248967220080522?sp=true

 

Think oil prices hurt now? Just wait

Thu May 22, 2008 4:32pm EDT

By Nick Carey - Analysis

 

DALLAS, Texas (Reuters) - Sky-high oil prices are causing pain at the pump, but bills for air conditioning this summer and heating next winter -- combined with rising food costs -- promise to squeeze U.S. consumers even more.

 

With gas at $4.00 a gallon, households already have less to spend on a new grill at Home Depot; a vacation at Walt Disney's Disney World; a new TV from Best Buy Co; or a new "hog" from Harley-Davidson Co.

 

And there are no signs things will get better soon for the consumer, long the driving force of U.S. economic growth.

We could've had a long time not to worry about oil running low and had more time to come up with real solutions to the problem we're facing, but instead we wanted drive-thrus and big-box retail at the expense of living comfortably with stability. Hope it was worth it.

We were seduced by it. Oil is amazing stuff and has no equal. It was too tempting to go gangbusters on it, as if it would last forever. And even though we logically knew it wouldn't, our way of life over the last 200 years has taught us a bad lesson -- something will always come along to rescue us. When whale oil (how we fueled lighting and made lubricants) ran out, "ground oil" replaced it. When coal was deemed too dirty, we turned to natural gas. When oil and natural gas both get too scare and expensive, then we'll turn to something else.

 

When we find something as inexpensive, portable, safe, practical and has a great amount of energy returned on energy invested that's ready to go, can someone give me a call and let me know?

^It's about time a hard-hitting piece about peak oil entered the mainstream media.  America certainly needs to wake up.  And, I appreciate that he's so adamant about restoring our restoring our rail system. 

 

However, I get tired of Kunstler constantly and incorrectly saying that the only solution the Rocky Mountain Institute embraces is hydrogen-powered hypercars.  They very much embrace better land use and considerably less driving, among other things.  It's particularly sad that he  keeps doing this when just a few years ago he and Amory Lovins got into an exchange at Salon.com about this very thing and Lovins buried him.  (http://dir.salon.com/story/tech/feature/2005/05/26/lovins_kunstler/index.html)

 

Plus, he criticizes people who ask for solutions, then offers several solutions himself.  When the concept of peak oil first starts to sink in, I think a lot of people get it that it means less driving, but they don't fully grasp how to adjust to that.  Yes, there are a lot of people who cling to things like electric and hybrid cars, but there are a lot who understand but can't initially get their brains around the ways to adjust, that's why they are asking.

 

It's an important message that needs a strident delivery, but Kunstler would do better service if he would ratchet down the arrogance. 

 

 

Amen to that.  I have always found Kunstler to be a bit too full of himself... so much so that he doesn't realize the damage he does to his own cause... good one though it is.

Kunstler and others, including many of us, have been reading and thinking about the very energy issues that many other Americans are just now coming to grips with. So of course the newcomers to this issue are going to ask us what we think and suggest. When someone gets to a dead end in a maze, they don't lie down and die, they look for a way out. And if there's someone with them who has explored that maze before, it's understandable if the newcomer asks for advice. While I do get tired of people engaging in the blame game, I don't understand why Kunstler needs to chide people for wanting to learn.

And then there are ill-informed pieces like the one below. There are so many things wrong with this piece it's laughable. But it's important to know what's being said, and to correct it....

 

+ Who said we'll blow through the second trillion barrels of oil by 2025?

+ Yes, there are oil shortages throughout the Third World which can't afford to bid for oil against the developed nations.

+ Conspiracy theories have been debunked in other posts in this thread and the high fuel prices thread. Check 'em out. Conspiracy theories are the first refuge of the uninformed.

+ OPEC is allowed to charge whatever it wants. It's their oil, not ours. "OPEC is a self-interested cartel"?? And the U.S. and Great Britain aren't??

+ Using the past to predict future oil prices is like using my time in the 40-yard dash in 1980 to estimate how fast I would run it next week is bunk. Oil fields are similarly faced with being 28 years older and 28 years further depleted.

+ And there are no "quickly commissioned alternatives" which is why our lifestyle of the past 60 years is trouble. But addictions and being high on them have a strange way of blinding us.....

 

 

http://www.news.com.au/story/0,23599,23758163-5007146,00.html

 

Oil's well, and prices will fall again

By Tom Bower

May 26, 2008 10:09am

 

DAY by day, the oil price moves remorselessly upwards, inflicting pain on every household and motorist. The same barrel of crude that sold for $65 in 2007 is now $135 and might soon cost $200.

 

But across the world, 86 million barrels of oil are produced every day, which at the moment is sufficient - not least because consumption in America, which burns a quarter of the world's supply every day, is actually declining.

So if we cut back consumption and other developing power houses like China and India keeps moving forward. How will that be good for America. Are situation will be even worse. They will get the deals and we won't. We might end up having to work for china for low wages.  Anything is possible at this point.

Changing our lifestyles in America to be more like those in Europe (which consumes half as much petroleum as the U.S.) isn't a bad thing. In fact it's a very good thing. It will mean keeping more of our wealth here. Since we import two-thirds of oil and are the world's most gluttonous user of oil, it means we are sending $1,862,000,000,000 out of the country. For the numerically challenged, that's nearly $2 trillion of Americans' hard-earned money we're sending overseas.

 

How does that keep America as a powerhouse? How does that keep up our standard of living?

THIS IS AWESOME! I LOVE IT!!

 

http://www.guardian.co.uk/commentisfree/2008/may/27/carbonemissions.energy

 

We have gone mad, Your Majesty, and only you can cure our affliction

An open letter to the leader of Opec's biggest oil producer, the one man who can force Britain to cut its carbon emissions

 

George Monbiot The Guardian, Tuesday May 27 2008 Article historyKing Abdaullah of Saudi Arabia

 

Your Majesty,

 

In common with the leaders of most western nations, our prime minister is urging you to increase your production of oil. I am writing to ask you to ignore him. Like the other leaders he is delusional, and is no longer competent to make his own decisions.

 

You and I know that there are several reasons for the high price of oil. Low prices at the beginning of this decade discouraged oil companies from investing in future capacity. There is a global shortage of skilled labour, steel and equipment. The weak dollar means that the price of oil is higher than it would have been if denominated in another currency. While your government says that financial speculation is an important factor, the Bank of England says it is not, so I don't know what to believe. The major oil producers have also become major consumers; in some cases their exports are falling even as their production has risen, because they are consuming more of their own output.

One of my favorite writers on peak oil is speaking on Saturday at the National League of Cities' Cleveland enviromental steering committee conference, May 29-31 20....

 

Saturday, May 31, 2008

9:00 – 9:45      Peak Oil

        Tom Whipple, Advisory Board, Assoc. for the Study of Peak Oil & Gas

 

See the following for more information.....

http://www.urbanohio.com/forum2/index.php/topic,16278.0.html

Every so often, being a newspaper reporter has its definite advantages. This morning was one of those occasions.

 

I was invited by Cleveland Councilman Matt Zone, an avowed environmentalist, rail/transit supporter and confidant, to attend a special presentation at the National League of Cities' conference of its Energy, Environment and Natural Resources Steering Committee. Councilman Zone was instrumental in bringing the committee's three-day conference to the Cleveland Ritz-Carlton Hotel. Today (Saturday) was the last day of the conference. The steering committee gets information about policy issues of interest to cities and recommends action steps to the National League of Cities' full committee for adoption as its policy platform. The three board issues it will take positions on this time are Sustainability/Climate Change, Water Supply Planning and Invasive Pests.

 

At this meeting, I was the invasive pest. Reporters are not normally allowed into these briefing meetings, but since Councilman Zone is due to be the steering committee's next vice-chairman, they made an exception for me. Thus, I was the only reporter in the room when the National League of Cities got its first-ever briefing on peak oil. This was an information-only briefing at this time. The person giving the briefing was someone who I've read about for several years -- Tom Whipple, a retired CIA analyst who is now the editor of Peak Oil Review, a publication of the Association for the Study of Peak Oil & Gas - USA. This organization is comprised of former oil company geologists, government officials and others who are concerned about America's future oil supply.

 

Much of the material presented was familiar to me, explaining what peak oil is and what it isn't, and why it's such a threat to the world economy. Peak oil simply means the moment at which global oil supply stops growing and is soon followed by a drop in production. Little can be done to stop this from happening, and the only known solutions provide benefits only in the short term, with greater harm happening in the long term. Peak oil doesn't mean we're going to run out -- we may never run out as the last barrels of oil will be too expensive to consume. The reasons why peak oil is such an economic threat is because oil has no equal (or anything close to oil) replacement in terms of its energy density, copious supply, low cost, practicality and portability. The incredible scale to which oil is used is staggering -- nearly 1 billion cars, plus millions of trucks, planes, trains, farm equipment, and all our plastics, much of our clothing and many types of pharmaceuticals come from oil and its byproducts.

 

And most important of all, there is no Plan B for when oil becomes too expensive and scarce.

 

Global oil production has flattened out since 2005, while demand has gone up, especially in China and India. But no nation uses even half as much oil as the U.S. Shortages are rampant in the Third World which cannot afford to bid for oil on the global markets with the developed countries. And he noted that the first shortages are likely to hit the developed world with diesel fuel supplies. As you may have noticed, diesel fuel is more expensive than gasoline. The reason is that diesel (and its kissing cousin heating oil) cannot be made from the same refineries as gasoline. In his presentation to the National League of Cities, Whipple predicted the first shortages of diesel will hit during a winter when heating oil is at its highest demand. He publicly said it was possible that the shortages could start this winter, but the winter of 2009-10 was more likely.

 

After his presentation, I interviewed him outside the conference center and he told me he was very concerned that things would start turning worse in terms of price increases and supply disruptions within six months. The main reason is that net exports are dropping fast from oil producing nations, as declining oil fields and a desire of those nations to keep more of their own oil for their own use is putting increasingly less oil on the world market.

 

He had some good news for us, however. He noted that the Midwest-Great Lakes is a great region to be in as the crisis worsens. The reason is the region's abundant navigable waterways, fresh water for drinking and agriculture, our rich farmlands, extensive freight rail network and relatively densely developed cities (unlike many of the car-centric cities of the south and west). He also noted that rail is a great business to be in, and he expected many of America's railroad trunk lines would be electrified once the diesel fuel shortages began appearing in the developed world.

 

So what was the committee's reactions to Whipple's presentation? Many people let out "wows" and sighs and asked good questions. One woman asked how she was supposed to tell her constituents back home that things would soon be getting very difficult. Whipple showed the Peak Oil plan from Portland, Oregon (see http://postcarboncities.net/node/2256), which showed how a city can reduce its consumption of oil with changes in land use, transportation, agriculture and housing. He noted that even if peak oil wasn't an issue, there are many reasons for doing this (reducing oil imports, reducing pollution, promoting green technologies/domestic industries, etc). Others questioned the availability of alternatives, but Whipple replied that none were being sought in scale or ready to go, and that it would take 10-20 years to ramp them up. Even then, it would take multiple alternatives to come close to the scale at which oil is currently used.

 

It was pretty remarkable to be present at and personally witness this historic occasion. Hopefully the steering committee will put peak oil on the political agenda of the National League of Cities -- soon. But they are now aware.

It's pretty tough to see when you don't open your eyes......

_____________

 

http://energy.pressandjournal.co.uk/Article.aspx/657637/?UserKey=0

 

Government caught out over oil price surge despite warnings

Energy banker Matt Simmons even bet on it in 2005

Published: 02/06/2008

 

 

On May 22, in the UK’s House of Commons, UK Energy Minster Malcolm Wicks claimed that the huge increase in oil prices during recent months had caught everyone by surprise.

 

The prior week, in a parliamentary written answer, it emerged that BERR, the ministry responsible for oil&gas, thought that the price of a barrel of crude would be about $70 in 2020.

^53 cents per gallon by 2050?  That will be a drop in the bucket compared to what gas will cost then (if it is even still available).

jam40jeff is referring to an article in a message I moved to the following location........

 

http://www.urbanohio.com/forum2/index.php/topic,2170.msg291241.html#msg291241

 

The article addresses global warming, not peak oil.

After interviewing him over the weekend, now I know why Tom Whipple writes these summaries as if he's getting tearsheets from teletypes sent by U.S. embassies around the world. Actually, that's exactly what he used to do when he worked the nightshift as an analyst at the CIA...

_____________

 

http://www.aspo-usa.com/index.php?option=com_content&task=view&id=386&Itemid=91

 

 

Peak Oil Review -- June 2, 2008 

Written by Tom Whipple   

Monday, 02 June 2008 

1. Production and Prices

2. The Reaction

3. Declining Exports

4. Energy Briefs

 

1. Production and Prices

It was a week of volatile retrenchment with oil falling from an all-time high of over $135 a barrel the previous week to below $125 and then closing at $127. Other than a general feeling that oil prices had moved up too far, too fast, there was little news to move the markets. Reports that gasoline consumption in the US was dropping significantly seemed to be the major reason for the drop. Even a bullish report on Thursday that US crude stocks had dropped by an unusually large 8.8 million barrels and gasoline stocks by 3.2 million barrels caused only a momentary spike in prices.

 

The large drop in crude stocks was so unusual that the EIA felt obliged to note that “the drop was due to temporary delays in crude oil tanker off-loadings on the Gulf Coast.” This statement seemed to reassure the markets with analysts noting that we can expect a surge in imports this week. If an increase in imports takes place this month, all may be well for the remainder of the year. It should be noted, however, that crude, gasoline, and distillate inventories in the US are edging closer to the lower limit of their average range and that US imports of crude and products have been falling. Have world exports peaked?

 

Retail gasoline prices, which have been lagging behind increases in the price of crude and diesel, continued to climb last week. The AAA reports that the nationwide average price of regular has reached $3.975.

 

2. The Reaction

It has been an unexpectedly long time in coming, but it seems as if surging oil prices finally have started to elicit reactions around the world. In the rich countries, most just griped, swallowed the increase and continued business as usual. In many Asian countries governments just increased the subsidies, or forced their local oil companies to accept the losses, as their populations went on enjoying low oil prices. Only the very poor states stopped buying as much oil and started turning out the lights.

 

In Europe, where a decades-old policy of heavily taxing oil products has resulted in gasoline and diesel retailing for $8 to $11 dollars a gallon, protests, blockades, and strikes by fishermen, farmers and truck drivers broke out across the continent last week. The protesters say fuel prices are so high they can no longer make a living and demand that the many-dollars-per-gallon fuel taxes be cut. So far France’s President has proposed cutting the EC-wide 20 percent value added tax and Britain’s Prime Minister has urged the oil companies to produce more oil. Neither of these proposals was met with much enthusiasm.

 

In Asia, where most consumers have been shielded by subsidies and state-mandated retail price caps, the cost has become overwhelming. Imported oil has gotten so high that national budgets are being eviscerated or local oil companies are going broke. Last week several countries, after much debate and soul searching, moved to increase retail prices. Governments fear that price increases for petroleum products would invoke such hardships on their peoples that widespread social disorder would ensue.

 

Indonesia, Taiwan, and Sri Lanka have already raised prices and India is expected to follow soon. The Chinese, faced with high rates of inflation, are expected to withhold any decision until after the election. Fuel shortages are appearing in China, India, Pakistan, and many other countries as national oil companies are no longer able to absorb the cost of crude.

 

In the US indications of reduced gasoline consumption are starting to appear with reports from the Federal Highway Administration that vehicle miles in March were down 4.3 percent over 2007 and from MasterCard that gasoline sales just before Memorial Day were down by 7.6 percent. The EIA however is still reporting only a minor drop in gasoline consumption. In the next month or so we should have a better indication of how much of an impact $4 gasoline is having on American driving habits.

 

3. Declining Exports

Newly released information shows that declining world exports of crude oil are likely to become a major problem for importing nations well before world oil production goes into a decline. As the world’s largest importer, the US is particularly vulnerable to this phenomenon as exports from at least three major suppliers --Mexico, Venezuela, and Nigeria-- are dropping.

 

Last week, the Wall Street Journal ran a story containing a new EIA estimate that the petroleum products exported by the top 15 oil exporters fell by 2.5 percent or 1 million b/d from 2006 to 2007. Some of this reduction is due to depletion of older oil fields, some to political problems and increasing domestic consumption, perhaps a little due to the OPEC cuts of November 2006, and some to lack of sufficient investment to maintain production.

 

The EIA also reported last week that US crude imports during the first 143 days of 2008 were down by 2.9 percent over 2007 and that petroleum product imports were down by 19.6 percent. The US’s top suppliers in March were Canada (1.7 million b/d), Saudi Arabia (1.5 million b/d), Mexico (1.2 million b/d), Nigeria (1.1 million b/d), Venezuela (0.8 million b/d), and Iraq (0.8 million b/d). As exports to the US from Mexico, Venezuela and probably from Nigeria drop, increased imports from Iraq and Saudi Arabia are picking up part of the slack.

 

4. Energy Briefs

(clips from recent Peak Oil News dailies are indicated by date and item #)

 

Russia doesn't have enough natural gas to meet all its export contracts and to fill all the pipelines to Europe it's building now, according to a Ukrainian Foreign Ministry official. Gazprom responded by saying it has more than enough gas to meet all contracts with Europe up to 2035. (5/30, #17)

 

While the International Energy Agency welcomes Russian tax incentives for oil producers, IEA’s Deputy Executive Director said Wednesday he doubts those incentives will be enough to increase Russia's oil production. (5/28, #2)

 

Last week MEND in Nigeria bombed another Shell flow station. The militants claim that the government is now forbidding the oil companies from publically announcing the amount of oil that has been shut in by their attacks. At mid-week, however, Nigeria’s Oil Minister told a reporter that the recent attack shut-in another 130,000 b/d. This seems to be in addition to the 175,000 b/d that was shut in by an attack two weeks ago. (5/27, #4)

 

China has told state-controlled oil refiners China National Petroleum Corp. and China Petrochemical Corp. to boost supplies of diesel and other fuels to meet demand from farmers during the summer planting and harvesting season. (5/27, #9)

 

In China, petrol stations in at least three major coastal cities were rationing diesel on Thursday causing long queues of trucks and reviving the specter of bigger fuel shortages that could stir discontent. (5/30, #8)

 

China's economy can maintain a steady growth above 8 percent for a relatively long period because of a stable society, a vast market and ample capital, said an economist and former vice chairman of the Standing Committee of the National People's Congress. (5/28, #7)

 

In China, gasoline sells for $2.49 per gallon. Beijing last raised domestic gasoline prices in November 2007, by 9%, and that was the first and only hike since January 2007, when crude was $57 per barrel. (5/29, #20)

 

Chinese retailers will no longer provide free plastic shopping bags. China is trying to reduce the use of plastic bags in a bid to reduce energy consumption and pollution. (6/1, #5)

 

According to Pemex, production from Cantarell – one of the world’s largest oil fields which accounts for roughly half Mexico’s total daily output – has shrunk 24 percent in the past 12 months alone. (5/27, #6)

 

In Brazil a shortage of drilling rigs and looming relinquishment deadlines have led Petrobras to delay tests on potentially huge subsalt finds like Carioca and move the rigs to other blocks. Oil exploration equipment is in short supply and becoming more expensive. Renting a deepwater rig costs, on average, between $400,000 and $600,000 a day. (5/27, #7)

 

Argentina, Chile’s sole supplier of natural gas for power plants, completely shut off exports to their neighbor last Wednesday. (5/31, #5)

 

Argentine gas distributors have begun to restrict supplies of natural gas to some service stations that sell compressed natural gas for cars amid the nation's first winter cold spell. Argentina has faced chronic winter gas shortages since 2004. (5/30, #7)

 

Paraguay is receiving between 50% and 70% less diesel than normal. (5/31, #6)

 

Venezuela has increased petroleum product imports by nearly 150 percent between the first quarter of 2007 and the same period this year. The imports, which include diesel oil, gasoline and chemical additives for gasoline products, are the country's highest in more than a decade. (5/30, #6)

 

Americans expect gasoline will only get more expensive, with 78 percent anticipating $5 a gallon next year, according to a recent CNN/Opinion Research poll. (5/31, #11)

 

School buses: in Minnesota a school district with 700 students plans to eliminate classes every Monday so it can afford fuel for its buses. Mississippi approved a plan to cut the number of varsity games by 10 percent beginning this fall for all sports except football. When North Carolina lawmakers drafted the state's current two-year spending plan, they estimated a gallon of diesel would cost $1.69 this school year, well below the current average cost of $4.79/gal. (5/31, #12)

 

Fuel costs for airlines, which now typically account for up to 40 percent of total operating expenses, have already jumped more than 50 percent since the start of the year. (5/30, #1)

 

U.S. airlines trim flights: Airports in Pittsburgh and Cincinnati are among 120 where airlines reduced seating capacity at least 10 percent in the past year, with more cuts likely to offset the 83 percent, 12-month surge in the cost of jet fuel. (5/29, #12)

 

L.N.G. shipments to the U.S. are slowing to a trickle, and Cheniere and other companies have dropped plans to build more terminals. (5/29, #13)

 

Iran is facing a summer of power cuts after a severe drought slashed output from its hydroelectric power plants, the energy minister warned, according to press reports on Thursday. (5/30, #3)

 

A shortage of diesel has hit the UAE again, one year after their first diesel crisis. Truck drivers and salesmen at petrol stations across the country say there is a severe shortage of the fuel. (5/30, #4)

 

In southern Egypt, an electricity generating company has reduced supplying electricity from 18 hours to 5 hours a day, due to persistent shortages of diesel fuel. (5/30, #5)

 

India’s largest oil company said Wednesday that it would stop buying foreign oil, sell only the oil it produces domestically, and ration supplies in order to cut revenue losses. India’s state-run oil operations have to pay world prices for imported oil, then sell the oil at a capped price, but subsidies to them from the government treasury don’t make up the difference, so they are going broke. (5/29, #9)

 

Indonesia, the only OPEC member in Southeast Asia, will pull out of the group as aging fields and declining production force the region's biggest economy to boost imports. Indonesia imports about a third of its oil and production has slumped 49 percent from a peak in 1977. (5/28, #3)

 

Britain faces the danger of repeated blackouts as crumbling power stations suffer a series of failures. More than 500,000 homes lost electricity for several hours after two major sites shut down suddenly last week. Ten of British Energy's 16 nuclear generation units were out of service either for maintenance or through faults. (5/29, #15)

 

Verenium Corporation has begun the commissioning phase at its demonstration-scale cellulosic ethanol facility in Jennings, Louisiana. The plant is rated to produce 91 barrels per day using specialty enzymes and the company’s proprietary technology to convert non-food biomass to ethanol. (5/29, #22)

 

A major report was released in Paris that urged countries to reconsider biofuels policies in the wake of soaring food prices. Just hours later, US Agriculture Secretary Edward Schafer claimed biofuel production was responsible for only 2 to 3 percent of the increase in global food prices. (5/30, #13)

 

For years, scientists have had a straightforward idea for taming global warming: take the carbon dioxide that spews from coal-burning power plants and pump it back into the ground. But it has become clear in recent months that the nation’s effort to develop carbon capture and sequestration is lagging badly. (5/30, #16)

 

Quote of the Week

“A few years ago people looked at L.N.G. as a solution to North America’s gas needs. But today we see that there is less L.N.G. around than people expected, and there is more competition for that L.N.G. from markets that are willing to pay more than the United States.”

      —Nikos Tsafos, analyst with PFC Energy

The second factor is an interesting note on the deflating dollar

 

Tuesday, June 3, 2008

 

George Soros explains the oil bubble

 

Anyone hoping that George Soros would make the case that the high price of oil is predominantly due to speculation and market manipulation will be disappointed by his testimony before Congress on Tuesday. The truth is more complicated.

 

Soros listed four factors as playing a role

 

"First, the increasing cost of discovering and developing new reserves, and the accelerating depletion of existing oilfields as they age. This goes under the rather misleading name of peak oil."

 

http://www.salon.com/tech/htww/2008/06/03/soros_oil_bubble_2/

Growing demand is only a problem if supply is unable to rise to satisfy it. Thus, the problem isn't the world's growing demand, it's the world's flat supply. Even smart guys like George Soros have a hard time admitting that there are limits to unending growth and that Mother Nature, not humans, is in charge of this planet.

I don't agree with this cornucopian viewpoint, but in in the interest of fairness, I present it here for others to decide for themselves....

 

http://www.marketoracle.co.uk/Article4941.html

 

Crude Oil Crisis Coming to an End?

Commodities / Crude Oil

Jun 03, 2008 - 07:02 PM

 

By: Clif_Droke

 

Now that the financial system has been bailed out, it remains for the beleaguered consumer to be rescued from the doldrums he currently faces. When will the consumer finally be freed from the torment that is so prevalent out there? It shouldn't surprise you that the answer will come from today's most talked about culprit: the price of oil.

 

With oil and gasoline prices through the roof, food prices on the rise and concerns about the stability of the U.S. economy prevalent, it's no wonder that consumer sentiment is at a multi-decade low right now. Take a look at the latest chart below.

Interesting article arguing why oil prices will eventually crash.

 

http://money.cnn.com/2008/06/06/news/economy/tully_oil_bust.fortune/index.htm?cnn=yes

 

Why oil prices will tank

Arguments that $4-a-gallon gas (or even higher) is here to stay are dead wrong. Housing's boom-and-bust cycle tells you why.

By Shawn Tully, editor at large

NEW YORK (Fortune) -- High-flying tech stocks crashed. The roaring housing market crumbled. And oil, rest assured, will follow the same path down.

 

 

And so it will be with oil. We don't know where the new abundance will come from, from shale, or tar sands or coal or an OPEC desperate to regain market share. We just know that it will appear. With prices like these, it always does.

 

That sentence right there is the height of irresponsibility. Who acts that way in our own lives? Do we keep eating, or smoking or drinking like there's no tomorrow because some breakthrough medical treatment will always come around to save us? Do we keep buying televisions, or jewelry or furniture because we're sure we're going to get that big pay raise or even get a better job? Who lives like that? Irresponsible people do! So all of society should live like that? Unfreaking believable!!!

 

You can't make Mother Nature give up what she doesn't have and if you live your life on that assumption, she'll brutally punish you without remorse. There just might be a breakthrough out there that can save us from ourselves, but I need to see it invented AND in practical use before I'll feel safe.

 

That column is exactly why am I enjoying watching all of the world's events unfold before my eyes. It's mankind's arrogance in the face of nature getting a big ol' nasty and well-deserved dose of comeuppance.

Wow! This is amazing!! Oil prices have now gone up by $15 $17 per barrel in 24 hours to a new record of $137 $139. Some market correction -- in the upward direction.

 

Oh, and consider this a gas price (fill up your tank now) alert. Gasoline futures just shot up by more than 20 cents per gallon to a new record of $3.50 $3.52 $3.56 wholesale. Add 60-80 cents per gallon for the retail price.

 

Is this a bubble? Probably not. A bubble occurs when speculation temporarily defies the law of supply and demand. The housing bubble occurred because the supply of houses for sale were increasing and the price was also increasing. In a sound economy, an increase in supply decreases the price. We don't have a oil bubble. Why? Because oil supplies are not increasing. In fact, they are very tight and will soon fall.

 

Wait until the autumn when you start to hear more about the "net export oil" crisis. Remember that you heard it here first.

Gee, I wonder if Blodget was reading UrbanOhio and said "hey, that's a great debate!" :)

 

http://www.huffingtonpost.com/henry-blodget/oil-crisis-your-primer-on_b_105690.html

 

Oil Crisis: Your Primer on the Great "Peak Oil" v "Speculators" Debate

Henry Blodget

 

Oil prices soar to new highs ($138 and counting) as brokerage firm Morgan Stanley predicts that oil will hit $150 a barrel by July 4th. Needless to say, stocks are getting clobbered (with the exception of ExxonMobil).

 

In case you haven't been watching CNBC lately, there's a Great Oil Debate going on. On one side is the "Peak Oil" crowd, who believe that the world has now reached its maximum daily oil output and that increasing demand--which is already outpacing supply--will now drive oil prices into the stratosphere.

 

  There's a minor misunderstanding with the above article.

 

    M. King Hubbert predicted that oil produced in THE UNITED STATES would peak about 1970.

 

    Matthew Simmons said that oil produced in the ENTIRE WORLD peaked in 2005.

 

  Suppose you lead a company that uses a lot of oil, whether it be a large trucking or shipping company, a refiner, or a producer of commercial fertilizers.

 

  You see the prices going up, and you hear rumors of shortages. Certainly oil is a crucial part of your business, but it is not the only part. You also have payroll, taxes, interest, and other supplies that you purchase. Maybe oil is only 10% of your costs, but it is irreplaceable. If you run out of oil, you will go out of business.

 

    What might you do in times like this? Buy more oil and store it for the future. You can either buy it directly and store it in a tank, or buy oil futures on contract. When your competitors drop out of business, you think, oil will be more affordable.

 

    Maybe this is what is happening. It's not just "Speculators" who are trying to make a profit, but "Speculators" that are trying to keep their businesses running without a shutdown.

 

    Just a guess.

 

 

That is one of the main reasons why futures contracts were created -- to add greater certainty that an essential supply will be available to your business in the future when you're pretty certain you'll need it.

 

A lot of this stuff goes back to the 1800s when farmers sold their wheat, grain, porkbellies, etc. at mercantile exchanges that more resembled the West Side Market or the Chicago Stockyards than the pristine, office-like settings of the Chicago and New York exchanges of today. Back then, farmers entered into futures contracts at the start of the growing season to make sure they had a buyer at a good price for their crops or livestock after harvest. And buyers wanted to lock in prices to create greater certainty in what was anything but a certain business.

    “There have been people who have forecast doomsday scenarios frequently in the past and none of them has turned out to be right so far, so I’m a little skeptical of doomsday scenarios,” he said. “Man has found solutions to the problems people have foreseen. I’m hopeful and I think it’s quite possible that we will do that once again.”

 

    So, does the author think there is no hunger, no war, or no suffering in the world today?

 

    Not trying to sound like a bleeding heart liberal, but the fact is that man has NOT found solutions to problems.

He's probably speaking from a technological perspective, but I get what you're saying.

This in reply to another discussion that was going off-topic at:

 

http://www.urbanohio.com/forum2/index.php/topic,9.msg293439.html#msg293439

 

In no way do I think we will, or should reduce population to cope with the challenges before us. I'm sorry I gave that impression, and I'm even more surprised that you came to it, Michael Redmond. But we do face some serious challenges in how we're going to affordably produce medicines, clothes, food and other necessities. My opinion on the matter won't change that fact of life, which I consider revolutionary and underway. That means we're already overdue in trying to address it, which becomes even more difficult during an economic downturn when fiscal resources are tight.

 

    Uh oh, you used the P-word.

 

 

I used three of them! ;)

 

I realize that, with all that's happening right now is akin to a Black Swan moment for many people. They don't understand why it's happening. All of the things they've taken for granted are, to them, suddenly changing. It's a revolution to them, thought I don't think they call it that yet (see MR's comment).

 

But you and I have been chatting about peak oil for a while. Yet even to me, I find it amazing to see the predictions I've been following for five years occuring almost exactly as forecast. For much of those five years, I was doubting that the predictions would happen as stated. So it's a bit of revelation for me, too.

 

And, yes, revolutionary!

 

 

    For most people, the first thing that comes to mind is, "How am I going to drive to work?" The conversation then goes to alternative energy sources for cars. But the peak oil concept is much, much more than that, especially if it is expanded to include peak natural gas and peak coal. Peak oil is a global concept, and one must see the bigger picture in order to try to understand it. It also helps to know something about math, science, and history.

 

  Here's a page from LeCorbusier's "The City of Tomorrow," published in 1929.

 

 

 

    Growth of population.

 

    The Great City is a recent event, with devastating consequences!

    The menace of tomorrow.

 

 

              1800      1880          1910

Paris        647,000  2,200,000  3,000,000

London      800,000  3,800,000  7,200,000

Berlin        181,000  1,840,000    3,400,000

New York  60,000    2,800,000  4,500,000

 

   

Interesting stats. More interesting that those population rises are coal-based. Coal is pretty potent stuff energy-wise, but still lacks the energy density of oil.

 

I realize I'm also an anomoly. Several of us at the office were taking one of those personality tests (this one was actually pretty interesting and introspective) and I scored as being a "global thinker" putting me in less than 2 percent of the population. All of the other categories had larger percentages of people. So, it's official, I'm a freak. That's OK, I enjoy contemplating worldwide trends and events and how they affect other worldwide trends and events.

With oil as you described...

The world's population has risen from 1 billion in 1900 to 6 billion in 2000 because of oil. We make medicines, clothes, plastics and fertilizers from oil and oil condensates and ship those products using oil. We power farm machines with oil. Our ability to access jobs and to maintain productive capacity to feed that 6 billion depends on oil. We have lifestyles that are so hopelessly dependent on oil that the residents of the developed world have lost most of their skills to survive without it.

 

Without oil, or the "revolution" as I simply reversed out of your above statement to project then....

"The world population go from 6 billion to 1 billion from 2000 to 2100, we can no longer make affordable medicines, clothes, plastics and fertilizers and we can no longer ship any of these products because of oil".

 

You seem giddy about this prospect and project forward to a future more reminiscent of the past outlying a plan of regression as opposed to progression, or are those two things synonymous to you?

This is a revolution which hasn't been seen for 100 years, when even the developed nations relied on horses and buggies, plus electric streetcars and steam power from coal. Most people lived agrarian lifestyles and had no electricity. Their wells were powered by windmills and their sawmills powered by hydro. Urban residents and factories were fed by their surrounding hinterlands. We recycled things and we repaired what we broke

 

Several others throughout history have made similar plans and they all sounded just as well meaning and well intentioned as above.  Promises of "doing more with less" with a regretful reality, as 8th and State pointed out of doing "less with less".  They fought any claim by anyone that their plans would bring about anything less than a utopia and dismissed any suggestions that it could lead to dire consequences which it inevitably almost always did.  So I take back nothing, and am curious as to why you took such offense with so much fervor in my previous statement about your "revolution".  I would think you would be more dismissive if it were without any merit.

you've jumped to an awfully inaccurate conclusion about my beliefs and values

I drew parallels, the conclusion was your own..."You're already seeing the first part of the revolution,"

 

^---- I look forward to KJP's response to this.

Obviously change is coming and I'm very curious what will be in store for this country. Sounds like sacrifices will have to be made and that seems to offend peoples sensibilities. Unfortunately, I think the environment will pay the price in the short term I think pressure will mount to drill on the land and in the waters around the US.

 

Dumb or Ill-Informed

By Walter E. Williams

 

What assumptions do congressmen make about the American people? Do they assume that we're dumb or ill-informed about the energy problems we are experiencing? Every time there has been a huge spike in gasoline prices, Congress hauls oil company executives before their committees to accuse them of greed, obscene profits and price-fixing. One federal investigation after another of supposed oil company misconduct turns up nothing to substantiate congressional allegations. Unfortunately, the congressional hearings make front page news and lead the evening television news, but the results of federal investigations that follow are only casually mentioned deep in the body of newspapers and get little or no time on the evening television news. If news media people had an ounce of integrity, they would highlight the federal investigation findings that undermine congressional charges of oil company misconduct and they would question the congressmen who made those charges.

 

To read more: http://www.townhall.com/columnists/WalterEWilliams/2008/06/04/dumb_or_ill-informed

What we need are reliable electric cars.  They would preserve our mobility, reduce air pollution, and leave fossil fuel for buses, airplanes, and long distance trucks

Everyone's searching for the proverbial "magic bullet": drill our way to more oil, make fuel out of french fry oil, build electric cars.....

 

Well-intentioned ideas? Yes.  Will some of them have an impact? To a fractional degree, yes.

 

But when will people like Walter Williams and other pundits ever come to grip with the fact that what this nation lacks most is a transportation policy that aims to reduce the consumption of fossil fuels by funding and developing other modes of transportation?  Whether you buy into "peak oil" or not, the need to broaden our transportation options is still critical.

Without oil, or the "revolution" as I simply reversed out of your above statement to project then....

 

And that was your first mistake, to think simply. Worse, you accused me of being some sort of genocidal sympathizer. You need to read a great deal more about the peak oil issue. It doesn't mean running out of oil. It does mean progressively less amounts of oil that will require a painful transition for a worldwide population that grew and was "fed" by oil. My description of that statement was to show how dependent we've become on it, and how it's inability to, at first, continue to expand production and support a growing population and economy will cause some pain, as well as some benefits (the situation, right now). The greater pain will come as supplies decline and there is increased pressure to come up with viable alternatives. And more alternatives will become more prevalent, so I don't think the population will collapse to 1 billion anytime soon. But in perhaps 100 or 200 years, we may see the world's population diminish to what may be a more sustainable carrying capacity for the Earth. How low might that be? Who knows, but it won't be 6 billion people, nor will it be 1 billion.

 

But what is for certain is that mankind was foolish for heading off and building up a gigantic, wasteful worldwide economy based on a finite, irreplacable resource like oil. I understand the temptation was just too great not to. We were all seduced by the thought of unlimited growth. But in retrospect, if anyone could be called a genocidal fool, it was those who designed car-dependent suburbia where it is nearly impossible to walk or take transit. It was the fools who brought you the Hummer and other guzzlers. And it was the fools who decided it was a good idea to offer multiple daily commercial flights in short-haul travel markets like Cleveland-Columbus or Cleveland-Pittsburgh. Mother Nature rightfully is doling out punishment for our foolishness.

And that was your first mistake, to think simply. Worse, you accused me of being some sort of genocidal sympathizer.

Think simply? Well it was pretty simple to see the similarities in, not who you sympathize with, but simply sound like.  They too, belittled the intelligence of their critics.  They too tried to dismiss anyone who disagreed with them.  They too tried to instill fear and put themeselves out their as the one beacon of truth that the people could turn to  in a time of dispair.  I am not here to argue about "Peak Oil" because remember it was you who was propagandizing on the Streetcar thead.  I am here to say you, and plenty others out their now just like you, sound a lot like those who have promised hope, yet delivered misery.

"when fascism comes to America, it will not be in brown and black shirts. It will not be with jackboots. It will be Nike sneakers and smiley shirts." George Carlin

 

 

I randomly went to pages within this 50 page thread and pulled your words.

"all prosperity is fleeting, and civilizations never stick around forever. If we're willing to sacrifice for the greater good and put our self-interest on the shelf, then we will overcome our unsustainable, wasteful ways. But all growth is not good if we're not doing it smartly. Remember that growth for the sake of growth is the ideology of the cancer cell".

 

"try to conserve voluntarily, or one way or another, it will be done for us"..."We can reduce consumption by increasing the cost of driving, such as through windfall profits taxes, indexing the gas tax to inflation, putting tolls on all Interstate highways, eliminating "free" parking and other options".

 

 

You need to read a great deal more about the peak oil issue.

Not my argument but what I have read above does nothing but solidify my point. "They don't understand why it's happening. All of the things they've taken for granted are, to them, suddenly changing. It's a revolution to them, thought I don't think they call it that yet (see MR's comment)." "your first mistake, to think simply"  feeling enlightened and superior over those that may disagree and put yourself above others intellectually....

"I realize I'm also an anomoly. Several of us at the office were taking one of those personality tests (this one was actually pretty interesting and introspective) and I scored as being a "global thinker" putting me in less than 2 percent of the population."

 

If it wasn't peak oil, then it would just be something else with you.  My point is that people like yourself throughout history, when given any power of any kind has had dire consequences.  It isn't in the cause, it is in the rhetoric.

I haven't had the time or desire to read through your message, but it looks like your tag line -- senseless bickering. I'm not into that. Take care and have a real nice day.

They too tried to dismiss anyone who disagreed with them. 

 

Oil Prices Expected To Rise

 

As consumers continue to see the effects of increased crude oil prices, economists say that such increases in costs are expected to continue which could further hurt the economy. Priya David reports........

 

http://www.cbsnews.com/sections/i_video/main500251.shtml?id=4162109n

They too tried to dismiss anyone who disagreed with them. 

 

 

 

 

 

This thread never really represented both sides of the peak oil argument, instead it has been relegated primarily to the doomsday scenario stance. 

 

 

 

 

This thread never really represented both sides of the peak oil argument, instead it has been relegated primarily to the doomsday scenario stance.

 

None of these people do.  They make a dire prediction and on the off chance they are correct then they say, see told you so!  I am an expert, I am enlightened..... and if they are wrong, well then its just off to the next issue.  Books have been written about these people and the damage they do.  It starts as a theory, moves to a revolution and the next step resembles something close to a religion.

 

 

But you and I have been chatting about peak oil for a while. Yet even to me, I find it amazing to see the predictions I've been following for five years occuring almost exactly as forecast. For much of those five years, I was doubting that the predictions would happen as stated. So it's a bit of revelation for me, too.

 

You're already seeing the first part of the revolution, it's called the cutback -- doing more with less. It starts with driving less to save some cash, then goes to buying a bike, telecommuting, flying less, biking/walking more, affording less food and paying attention to whether food is grown locally, taking more transit where it's available, heating/cooling your home less, finding a sustainable job after getting laid-off from the auto plant or airline, learning how to grow food in your garden or windowbox, selling the car for scrap metal, joining a community garden, learning useful trades like carpentry and electrical work, becoming a community resource and so on.Sound revolutionary?

 

I realize I'm also an anomoly. Several of us at the office were taking one of those personality tests (this one was actually pretty interesting and introspective) and I scored as being a "global thinker" putting me in less than 2 percent of the population."

 

and the heavens parted and so on and so forth...

This thread never really represented both sides of the peak oil argument, instead it has been relegated primarily to the doomsday scenario stance.  

 

Because I've been the most frequent poster here, and you're well aware of where my beliefs lie. I do occasionally post some counter-view articles, but if you want more of them, please post them yourself.