The Oil Drum - Discussions about Energy and Our Future

On Independence, Energy Subsidy, and Freedom

Nate Hagens — Sun, 05 Jul 2009 11:01:19 -0400

How much of our freedom is related to 'cheap energy'? Last I checked, the average American uses over 60 barrel of oil equivalents of the 3 primary fossil fuels (oil, coal and natural gas) per year. Depending on ones assumptions (and occupation), this is in the neighborhood of hundred(s) of years of manual human toil supplanted by cheap ancient sunlight. (At $20 per hour, a human laborer makes over $40,000 per year so even an energy subsidy of 100X p/a equates to $4 million in dollar terms.) Do our social freedoms emanate from the nature of our socio-political system, or the reverse - is our socio-political system a byproduct of the resources we acquired and used after finding this land? What is freedom, anyways? And what will freedom look like in the future? On this the birthday of the United States of America, let's discuss energy and freedom around the Campfire.

I love America. I state this as a plain fact - my friends, family, experiences, connection with nature, and memories are all 90%+ associated with this country. But I also consider myself as a citizen of the planet, circa 2009. Having traveled a great deal, I am all too aware of the advantages our country has vis-a-vis the ROW, that many of us often take for granted. Among many differences I notice when comparing American attitudes/behavior to those of people from other countries when I travel, one predominates: that of entitlement. While scanning a crowd at a train station or airport or restaurant or public event abroad, one can oftentimes notice just by attitude alone who hails from USA. With increasing occasion, perhaps due to my firming awareness of energy as lifes fundamental currency, I credit our enormous liquid fuel subsidy (we have 4.4% of worlds population but used 25% of the worlds oil flows) as a core pillar for our freedoms. Our daily volition, free will and perhaps even confidence likely has direct ties to our natural resources; both our geographic endowment, and what we receive in exchange via increasing amounts of debt. A recent proposal by Congress to release the SPR because $70 oil is causing economic hardship bears witness to just how dependent on energy our 'independence' has become. At $70 a barrel, oil costs much less (retail) than gatorade, milk, lemonade, beer, and bottled water. And we import 70% of what we use. Oh the horror when oil passes Gatorade in cost...

Like everything, I think freedom (to act, think, express, etc.) is related to the 'feelings' it engenders in our brains, which are essentially different neurochemical recipes. We have some idea of what situations generate these 'cocktails'. One seminal experiment on 'control/freedom' was by Lundberg and Frankenhaeuser (1980) "Pituitary-adrenal and sympathetic-adrenal correlates of distress and effort" (Journal of Psychosomatic Research volume 24, pages 125-130). To paraphrase, the researchers had subjects hit colored buttons that matched colored lights that would flash with increasing speed during the experiment and flashing about as fast as the subjects could follow near the end. Similar tests were undertaken where subjects would match these colored buttons to the flashing lights - the only difference being they had control of the dial that would increase the speed of the flashing lights. In this second experiment (controlled individually not by the experimenter), the speed of the flashing lights was as fast or faster than the first experiment.

Before and after blood tests and interviews of the subjects were taken for both experiments. The typical response after the first test was 'that was one of the hardest things I've ever done', and indeed the ratio of cortisol (a stress hormone) to norepinephrine in the blood was high. In the test where subjects had individual control, a typical response was 'that was fun! I enjoyed the challenge!' etc. Blood tests showed the inverse as well - cortisol was much less pronounced. There are similar and follow up tests in the physiological literature**, but the inference is that in IDENTICAL tasks, the difference in our brains response (with pleasurable or stressful sensations) depended on our ability to exert individual control over our circumstances.

Furthermore, from "Biological Basis of the Stress Response"

Recent work shows that differing perceptions of stress result in different patterns of neuroendocrine activation. An easily handled challenge elicits norepinephrine and testosterone rises with success. With increasing anxiety, active coping shifts to a more passive mode. Epinephrine, prolactin, renin, and fatty acids increase. As the distress grows, cortisol augments.

While not 100% explanatory, these and similar findings lend support to the notion that our cheap energy, via subsidizing our basic needs (and even those not so basic), suppresses stress hormones and allows us to feel control/freedom in more situations than we would without such subsidy. To me, this angle is potentially helpful for envisioning post peak institutions and behaviors. As long as people feel they have control of their circumstances and are not overly stressed, I think they (we) could endure a great deal more hardships than if we feel control is out of our hands. Irrespective of declines in resources/capita, assuming basic needs are met, we might be able to 'trick' our wiring into responses that are less stressful as long as we feel ownership in what's happening. (However, we'll likely need to address the habituation/addiction/behavioural ratchet effect angle at the same time....) In my experience, the number of digits in ones bank account allows for the 'perception' of freedom (options), but past a certain point it is just the opposite.

Freedom is related to control. And it could be argued that how much individual 'control' we have overall is a function of resources per capita. It would stand to reason that as resources per capita decline there will be fewer individual freedoms.
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(some) campfire questions:

What is freedom?
Without cheap energy (cheap being anything under $500 a barrel), how much freedom will we have?
How much are we entitled to?
How could less energy per capita equate to more freedom?

DrumBeat: July 5, 2009

Leanan — Sun, 05 Jul 2009 10:30:06 -0400

In Public Housing, Talking Up the Recycling Bin

Proselytizing on the issue in housing projects is an enormous challenge but crucial, environmentalists say, given the incentive to cut back on energy and garbage disposal costs and a housing authority’s power to impose recycling rules building by building.
In New York, the incentive may be greatest of all. Only 17 percent of the city’s household waste makes it into recycling bins, and New York has the largest public housing system in the country, with 2,600 buildings, 174,000 apartments and more than 400,000 residents in five boroughs.

Saudi Aramco Cuts All Crude Prices to U.S. in August

(Bloomberg) -- Saudi Aramco, the world’s largest state-owned oil company, lowered its official selling prices for exports of all crude oil grades to the U.S. in August.
Saudi Arabia decreased the price of its heavy crude to all destinations, the company said in an e-mailed statement today. Aramco cut heavy crude prices to the U.S. the most, by 75 cents a barrel to $5.50 below the cost of West Texas Intermediate crude.

A New Chief at Shell, and a Rocky Inheritance

NEW YORK — Even as Jeroen van der Veer was preparing to pass the baton to Peter Voser, who took over as chief executive of the oil giant Royal Dutch Shell last Wednesday, the contentious legacy of the company’s activity in Nigeria was nipping at its heels.

Earthquakes in Texas get the attention of Louisiana agency

A series of minor earthquakes recorded as recently as last week in Texas have raised the specter of tremors in northwest Louisiana, where a natural gas discovery has launched a gold-rush style drilling boom.
A similar rush hit north Texas several years ago, after geologists found vast stores of natural gas in the Barnett Shale, a layer of underground rock spanning 5,000 square miles. Thousands of wells have been drilled, and some scientists have blamed the recent earthquakes on the intense process used to extract gas from the shale, called fracturing.

El Niño Variant Is Linked to Hurricanes in Atlantic

Scientists have known for some time that El Niño, the warm spell that turns up every four or five years in the waters of the eastern Pacific Ocean, reduces hurricane activity in the Atlantic. But in a new study, researchers at the Georgia Institute of Technology have linked a variant of that pattern — periodic warming in the central Pacific — to more frequent hurricanes in the Atlantic, particularly on the Gulf Coast and in the Caribbean.

Five things John Stackhouse can do to improve the Globe and Mail

Pay attention to peak oil. Stackhouse should give all of his editors and reporters a choice of one of three books to read: The Empty Tank by Jeremy Leggett; The Party's Over by Richard Heinberg; or Why Your World Is About to Get a Whole Lot Smaller by Jeff Rubin (which actually got covered in the Globe). Then Stackhouse should ask his reporters to investigate ways in which Canadians can prepare themselves for what will likely be the biggest transformation in their lives. The Globe could play a significant role in preparing the country for major changes in the global energy market, which will have ramifications on transportation, agriculture, and trade. Most federal politicians are asleep on this issue. They won't be if the Globe gives it more attention. Why not base a reporter in the oilsands? It's one of the biggest stories in the world.

This is not your father's energy crisis

Every recession has its own unique characteristics, but usually there are a few common threads. Economic and employment issues, for example, typically tend to completely eclipse all others when conditions start to tank.
This time around, however, one issue that has historically fallen off the public agenda during downturns is proving to be one of the most urgent and enduring: the environment.

Costa Rica tops list of 'happiest' nations

(CNN) -- Forget Disneyland! Costa Rica is the happiest place in the world, according to an independent research group in Britain with the goal of building a new economy, "centered on people and the environment."

Calculating Consumer Happiness at Any Price

As an exercise, Dr. Miller asked readers of the blog to list the 10 most expensive things they had ever bought, and then list the 10 purchases that had brought them the most happiness. More than 200 responded. As we expected, many people rued spending lots of money for stuff that hadn’t brought them joy. Boats seemed to have particularly low utility in delivering happiness per dollar; many cars fit that category, too, and so did many expensive weddings.
But we were struck by how much overlap there was between the most-expensive list and the most-happy list. People repeatedly included on both lists their homes, their college education, their vacation trips, their high-priced electronics (large-screen televisions, Blu-Ray player, audio equipment, computers) and certain models of cars (BMW 325, Audi A4, Jaguar, Subaru WRX, Toyota Prius, Honda Civic).

SNP Would Bankrupt an Independent Scotland, But Benefit England

The prime driving force for Scottish independence is that of the perceived benefits from North Sea Oil revenues going wholly to Scotland rather than to Westminister. Whist it is true that 90% of North Sea oil revenues are due come from Scottish waters, however North Sea oil peaked in 2001, since which daily output has fallen by 50% in 8 years, the trend in declining output is expected to continue in the coming years as new oil fields are not able to make up for the declining output from existing fields, this is called PEAK OIL. The revenue to the government from North Sea oil has now fallen to £10 billion, of which £9 billions is attributable to Scottish oil fields set against the block grant Scotland receives of £32 billion from central government of which £8 billion is the value of the net subsidy.

Poland also grapples with fossil-fuel issue

Wind turbines generating electricity dot a hilltop in the largely flat, grassy expanse lying between Warsaw and Krakow.
A few miles away stands evidence of Poland's main power source shrouded in a thin cloud of haze: one of the country's massive coal-burning plants.
The country, with rich veins of coal, produces about 90 percent of its electricity from coal, compared with 50 percent in the U.S. and 60 percent in Tennessee.

Funding Boost for Waste Methane Processor

Landfills, coal beds and cattle feedlots all produce methane, which is often either flared — that is, burned off — or released into the atmosphere as a greenhouse gas.
Prometheus Energy, a five-year-old company based in Redmond, Wash., has developed a technology to turn that waste methane into liquid natural gas. And the company this week raised $20 million from the Shell Technology Ventures Fund, a fund related to the petroleum company Royal Dutch Shell and Black River Asset Management, a subsidiary of the agriculture giant Cargill.

Britain Could Be Wind and Wave Titan

Britain could become the largest producer of electricity from offshore wind by the end of the next decade, according to the Carbon Trust, a group funded by the British government.
With carefully targeted subsidies and regulations, Britain could build 29 gigawatts of capacity compared to a global total of 66 gigawatts by 2020, giving it 45 percent of the offshore power market, said the Carbon Trust. By comparison, Germany would have 12 gigawatts by 2020, the group said.

Food Stocks Look Good

In 233 years the world population has swollen from less than a billion to almost seven billion. The Japan Times reports that Canada produces 145% more calories of food than it consumes and the United States is close with 128% while the island nation of Japan has recently dipped to 39%.

Tough Senate battle likely on energy bill

Washington — - President Barack Obama's landmark bill on energy and global warming squeaked through the House this week only after the White House made dozens of concessions to coal, manufacturing and other interests. As the battle moves to the Senate, Obama faces demands for more concessions, including to open the coastline to offshore oil and gas drilling.
The Senate will take up issues that were glossed over or omitted from the House bill. Among them is giving the government sweeping new powers to overcome local objections and approve thousands of miles of new transmission lines to carry electricity to coastal cities from wind turbines in the Upper Midwest and solar power generators in the Southwest.

Environment Groups Find Less Support on Court

WASHINGTON — The Supreme Court heard five environmental law cases in the term that ended Monday, and environmental groups lost every time. It was, said Richard J. Lazarus, a director of the Supreme Court Institute at Georgetown University Law Center, “the worst term ever” for environmental interests.

Post-Bubble Landscapes

Are these portraits, perhaps, of the end of the age of unfettered consumption, simply a short pause before human communities resume their 150-years-and-counting fossil-fueled sprint, or a foretaste of Alan Weisman’s 2007 thought experiment, “The World Without Us”?

A House in the Woods, After the Woods Are Gone

When my wife and I bought land in Montana, the stands of timber were so dense you couldn’t walk through parts of the property. Then the beetles came, killing the stately old trees.

Thomas L. Friedman: Can I Clean Your Clock?

Over the past decade, whenever I went to China and engaged Chinese on their pollution and energy problems, inevitably some young Chinese would say: “Hey, you Americans got to grow dirty for 150 years, using cheap coal and oil. Now it is our turn.”
It’s a hard argument to refute. Eventually, I decided that the only way to respond was with some variation of the following: “You’re right. It’s your turn. Grow as dirty as you want. Take your time. Because I think America just needs five years to invent all the clean-power technologies you Chinese are going to need as you choke to death on pollution. Then we’re going to come over here and sell them all to you, and we are going to clean your clock — how do you say ‘clean your clock’ in Chinese? — in the next great global industry: clean power technologies. So if you all want to give us a five-year lead, that would be great. I’d prefer 10. So take your time. Grow as dirty as you want.”
Whenever you frame it that way, Chinese are quizzical at first, and then they totally get it: Wow, this energy thing isn’t just about global warming! In a world that is adding one billion people every 15 years or so — more and more of whom will be able to live high-energy-consuming lifestyles — the demands for energy and natural resources are going to go through the roof. Therefore, E.T. — energy technologies that produce clean power and energy efficiency — is going to be the next great global industry, and China needs to be on board.

T. Boone Pickens fueling dialogue on clean-energy efforts

In July of last year, Dallas billionaire T. Boone Pickens began a $60 million advertising campaign and speaking tour designed to persuade Americans to stop using foreign oil.
The oilman-turned-environmentalist proposed a seemingly simple plan: Convert cars, especially big fleets operated by companies and municipalities, from gasoline to domestic natural gas. And start generating more electricity from wind.
By the end of this year, Pickens predicts, Congress will finish passing laws to implement his plan. And within two years, oil imports will drop.

Kuwait needs oil majors to hit targets - minister

OPEC member Kuwait will need help from oil majors to reach its oil and gas production targets, the deputy prime minister for economic affairs said on Thursday.
"Not only for the oil (sector) but also for the gas," Sheikh Ahmad Al Fahad Al Sabah, also a former oil minister, said when asked about a possible role for international oil companies in the country's state-run energy sector.
"Now we have the gas production (issue) for which we will mainly need international companies," he told reporters without being more specific about the envisaged role of foreign firms.

Kuwait wants oil price to remain above $60

Kuwait wants to see the price of oil stay above $60 a barrel, the OPEC member's oil minister said on Sunday.
"We will be watching the market very closely," Kuwait's Oil Minister Sheikh Ahmad al-Abdullah al-Sabah told reporters at parliament. "We would not like to see the price go below a certain level so it at least meets our budgetary requirements."

Total Expects to Get Oil Projects in Iraq, De Margerie Says

(Bloomberg) -- Total SA, Europe’s third-largest oil company, said it will continue to bid for business in Iraq after the government there said it may allow competitor BP Plc to develop the Rumaila oil field.

RCMP confirms sixth pipeline blast in B.C.

POUCE COUPE, B.C. — There has been a sixth bombing of natural gas infrastructure in northeastern British Columbia, police say.
Officials said the explosion occurred early Saturday morning at an EnCana Corp. site, in the immediate vicinity of a blast that took place Wednesday.
"This is very frustrating," said Rhona DelFrari, EnCana's spokeswoman. "We're angry and we're getting very frustrated."

Nigeria militants attack Shell, amnesty hopes fade

LAGOS (Reuters) - Nigerian militants said on Sunday they had launched their third attack against Royal Dutch Shell since President Umaru Yar'Adua made an amnesty offer and warned their campaign of sabotage would intensify.
The Movement for the Emancipation of the Niger Delta (MEND) said in an emailed statement it had attacked a Shell oil well head in the Cawthorne Channel at about 0200 GMT, again dashing hopes that the amnesty offer would buy a period of calm.

David Strahan: Thirty contestants, only one winner in the Iraqi oil licence gameshow

The auction of Iraqi oil production licences last week was truly historic – not least because it was the first such exercise ever to be broadcast live on TV.
More than 30 companies were expected to compete for eight contracts, all in front of the cameras. In effect, the Iraqis had set up a high-stakes reality TV show, with Hussain al-Shahristani, Iraq's minister of oil, in the role of Sir Alan Sugar, and company executives as the desperate wannabes. Some bidders feared it would degenerate into an unseemly scramble, and with good reason.

Pakistan: City shuts to protest outages, raise in fuel prices

LAHORE - City witnessed complete shutterdown on Saturday as the traders and shopkeepers closed down their business and took to streets to protest against the worst power outages and increase in fuel and electricity tariff.
All the major political parties in the Opposition supported the strike call and urged the masses to took to the streets to force the government to withdraw steep increase in the fuel and electricity prices.

Saudi spending to surge 24 per cent in 2009, says Samba

Saudi Arabia will likely be tempted by the recent improvement in crude oil prices and increase public spending by nearly 24 per cent through 2009 as an expanded deficit could be easily covered, a leading Saudi bank said yesterday.
Although actual revenues are projected to be higher than budget forecasts, the surge in expenditure will sharply widen the shortfall but the world's dominant oil powerhouse need not borrow again given its massive financial reserves, the Saudi American Bank Group (Samba) said in a mid-year review of the economy of Saudi Arabia.

The food rush: Rising demand in China and west sparks African land grab

A million Chinese farmers have joined the rush to Africa, according to one estimate, underlining concerns that an unchecked "land grab" not seen since the 19th century is under way.
Some of the world's richest countries are buying or leasing land in some of the world's poorest to satisfy insatiable appetites for food and fuel. In the new scramble for Africa, nearly 2.5m hectares (6.2m acres) of farmland in just five sub-Saharan countries have been bought or rented in the past five years at a total cost of $920m (£563m), research shows.
"Lands that only a short time ago seemed of little outside interest are now being sought by international investors to the tune of hundreds of thousands of hectares," said a recent report by the International Fund for Agricultural Development (IFAD) and UN Food and Agriculture Organisation (FAO). It described the huge deals reported to date as "the tip of the iceberg".
The report said farmland purchases are being driven by food security concerns, rising demand and changing dietary habits, expanded biofuel production and interest in what is, in theory, an improved investment climate in some African countries.

What the future of the auto industry will look like

Surging demand for cars in rapidly growing nations will mean a robust car industry in 20 years. The US will have a piece of it – though smaller than today – and the models it turns out will be much greener as the iconic industry reinvents itself.

'Green revolution' could create 400,000 jobs, claim ministers

A "green revolution" that should create 400,000 jobs is to be launched by ministers later this month in the most ambitious ever bid to transform the British economy, industry and sources of energy.

Energy-pioneering Austrian town exports its model

GUESSING, Austria (AFP) — After 20 years investing in renewable energy, the small Austrian town of Guessing, a model of energy self-sufficiency, is spreading its pioneering technology far and wide.
A town of 4,300 inhabitants near the Hungarian border, Guessing launched into renewable energy in the early 1990s and now produces more than it can consume.

Jordan - Mining company expands uranium exploration

(MENAFN - Jordan Times) A Jordanian-French company has expanded its exploration of uranium in the central region, after recent studies confirmed the presence of commercially viable amounts of the resource.

Extraordinary climate solutions presented in Manchester

Under a vaulted ceiling decorated with the arms of the countries and cities with which Manchester once traded, now lit by low-energy chandeliers, a panel of experts heard pitches for ideas ranging from a fleet of remote-controlled sailing ships that would spray seawater into the air to make whiter clouds to livestock farming methods modelled on the great migrations of the Serengeti.
Today it will hear a proposal to increase the carbon absorbing capacity of the ocean by adding limestone to it, a plan for generating energy from a 'big underwater stomach' digesting algae, and new ideas about harnessing tidal energy.

Global Warming Is Fake. What Matters Is Why This Fakery Is Being Promoted

The global warming movement is not about global warming. It is about the creation of an international political control arrangement by which bureaucrats who favor socialism can gain control over the international economy.

Prince Charles wants pension funds to take lead on climate change

Prince Charles is to convene a meeting of some of the world’s largest pension funds to discuss how best to invest their trillions of dollars to help reduce climate change.
The meeting, likely to be held at Clarence House in October, will bring together senior executives from 12 funds including Calpers, America’s largest public pension fund. Known as the P8 Group, after the number of founder funds, they control $3 trillion (£1.8 trillion) in total.

The Oil Intensity of Food

Prof. Goose — Sat, 04 Jul 2009 15:06:46 -0400

This is a guest post by Lester R. Brown, founder and President of the Earth Policy Institute. His principal research areas include food, population, water, climate change, and renewable energy; see his list of publications by clicking here.

Today we are an oil-based civilization, one that is totally dependent on a resource whose production will soon be falling. Since 1981, the quantity of oil extracted has exceeded new discoveries by an ever-widening margin. In 2008, the world pumped 31 billion barrels of oil but discovered fewer than 9 billion barrels of new oil. World reserves of conventional oil are in a free fall, dropping every year.

Discoveries of conventional oil total roughly 2 trillion barrels, of which 1 trillion have been extracted so far, with another trillion barrels to go. By themselves, however, these numbers miss a central point. As security analyst Michael Klare notes, the first trillion barrels was easy oil, “oil that’s found on shore or near to shore; oil close to the surface and concentrated in large reservoirs; oil produced in friendly, safe, and welcoming places.” The other half, Klare notes, is tough oil, “oil that’s buried far offshore or deep underground; oil scattered in small, hard-to-find reservoirs; oil that must be obtained from unfriendly, politically dangerous, or hazardous places.”

This prospect of peaking oil production has direct consequences for world food security, as modern agriculture depends heavily on the use of fossil fuels. Most tractors use gasoline or diesel fuel. Irrigation pumps use diesel fuel, natural gas, or coal-fired electricity. Fertilizer production is also energy-intensive. Natural gas is used to synthesize the basic ammonia building block in nitrogen fertilizers. The mining, manufacture, and international transport of phosphates and potash all depend on oil.

Efficiency gains can help reduce agriculture’s dependence on oil. In the United States, the combined direct use of gasoline and diesel fuel in farming fell from its historical high of 7.7 billion gallons (29.1 billion liters) in 1973 to 4.2 billion in 2005–a decline of 45 percent. Broadly calculated, the gallons of fuel used per ton of grain produced dropped from 33 in 1973 to 12 in 2005, an impressive decrease of 64 percent.

One reason for this achievement was a shift to minimum- and no-till cultural practices on roughly two fifths of U.S. cropland. But while U.S. agricultural fuel use has been declining, in many developing countries it is rising as the shift from draft animals to tractors continues. A generation ago, for example, cropland in China was tilled largely by draft animals. Today much of the plowing is done with tractors.

Fertilizer accounts for 20 percent of U.S. farm energy use. Worldwide, the figure may be slightly higher. As the world urbanizes, the demand for fertilizer climbs. As people migrate from rural areas to cities, it becomes more difficult to recycle the nutrients in human waste back into the soil, requiring the use of more fertilizer. Beyond this, the growing international food trade can separate producer and consumer by thousands of miles, further disrupting the nutrient cycle. The United States, for example, exports some 80 million tons of grain per year–grain that contains large quantities of basic plant nutrients: nitrogen, phosphorus, and potassium. The ongoing export of these nutrients would slowly drain the inherent fertility from U.S. cropland if the nutrients were not replaced.

Irrigation, another major energy claimant, is requiring more energy worldwide as water tables fall. In the United States, close to 19 percent of farm energy use is for pumping water. And in some states in India where water tables are falling, over half of all electricity is used to pump water from wells. Some trends, such as the shift to no-tillage, are making agriculture less oil-intensive, but rising fertilizer use, the spread of farm mechanization, and falling water tables are having the opposite effect.

Although attention commonly focuses on energy use on the farm, agriculture accounts for only one fifth of the energy used in the U.S. food system. Transport, processing, packaging, marketing, and kitchen preparation of food are responsible for the rest. The U.S. food economy uses as much energy as the entire economy of the United Kingdom.

The 14 percent of energy used in the food system to move goods from farmer to consumer is equal to two thirds of the energy used to produce the food. And an estimated 16 percent of food system energy use is devoted to canning, freezing, and drying food–everything from frozen orange juice concentrate to canned peas.

Food staples such as wheat have traditionally moved over long distances by ship, traveling from the United States to Europe, for example. What is new is the shipment of fresh fruits and vegetables over vast distances by air. Few economic activities are more energy-intensive.

Food miles–the distance that food travels from producer to consumer–have risen with cheap oil. At my local supermarket in downtown Washington, D.C., the fresh grapes in winter typically come by plane from Chile, traveling almost 5,000 miles. One of the most routine long-distance movements of fresh produce is from California to the heavily populated U.S. East Coast. Most of this produce moves by refrigerated trucks. In assessing the future of long-distance produce transport, one writer observed that the days of the 3,000-mile Caesar salad may be numbered.

Packaging is also surprisingly energy-intensive, accounting for 7 percent of food system energy use. It is not uncommon for the energy invested in packaging to exceed that in the food it contains. Packaging and marketing also can account for much of the cost of processed foods. The U.S. farmer gets about 20 percent of the consumer food dollar, and for some products, the figure is much lower. As one analyst has observed, “An empty cereal box delivered to the grocery store would cost about the same as a full one.”

The most energy-intensive segment of the food chain is the kitchen. Much more energy is used to refrigerate and prepare food in the home than is used to produce it in the first place. The big energy user in the food system is the kitchen refrigerator, not the farm tractor. While oil dominates the production end of the food system, electricity dominates the consumption end.

In short, with higher energy prices and a limited supply of fossil fuels, the modern food system that evolved when oil was cheap will not survive as it is now structured.

# # #

To continue reading about localized agriculture and urban gardening, see Farming in the City at www.earthpolicy.org/Books/PB3/PB3ch10_ss5.htm.

Adapted from Chapter 2, “Deteriorating Oil and Food Security,” in Lester R. Brown, Plan B 3.0: Mobilizing to Save Civilization (New York: W.W. Norton & Company, 2008), available for free downloading and purchase at www.earthpolicy.org/Books/PB3/index.htm.

Encircling the peak of world oil production - an evaluation

Euan Mearns — Sat, 04 Jul 2009 10:59:14 -0400

In a recent post Nate brought to our attention the work of Richard Duncan and Walter Youngquist published in 1999 in a paper called Encircling the Peak of World Oil Production. In 2007 I performed a simple analysis of the reliability of their forecasts for 26 countries (out of 42 country forecasts that were published) that were checked against what had actually come to pass as documented in the BP statistical review of world energy. The results are shown above. The sum of the differences is -7 years which on average is -0.3 years per country.

At the ASPO conference in Houston, October 2007, I gave a presentation on Saudi Oil reserves and a production forecast that was born out of several posts by Stuart Staniford, myself and others which are linked at the end of this article. In my talk (which can be found here on the ASPO server) I presented the forecast shown below and afterwards an elderly gentleman who I did not know at that time, was keen to show me a paper that he and Richard Duncan had published some 8 years earlier that was titled "Encircling the peak of World Oil Production". The gentleman, who I would later learn was Walter Youngquist wanted to show me that their forecast for peak Saudi oil production was 2011, the same date which I had determined from a rather different approach.

On my way home, sitting on the plane sipping the first of many G&Ts I read the paper and realised that the reliability of Duncan and Younquist's forecasts could be tested. Eight years had passed since their forecasts were made and it was possible to verify their forecasts with what had actually come to pass. I just happened to have a copy of the 2007 BP statistical review on my lap top and so I set to work.

Duncan and Youngquist list 42 countries representing 98% of global production in Table 1. Of those, 8 countries were already past peak at the time the paper was written and a further 5 countries were forecast to peak some time after 2007 (the year I first looked at this data), those being Brazil, Iraq, Kuwait, Saudi Arabia and the UAE. A further 3 countries are not listed by BP leaving a group of 26 countries that were forecast to peak between 1999 and 2007. I have just updated this exercise using the 2009 statistical review.

I compared Duncan and Youngquists's forecast date with actual peak dates for individual countries. The distribution of these differences are shown in the chart up top. Once I had sorted the data I realised the most significant point was the rough normal distribution and that countries that had been "overestimated" were balanced by countries where an "underestimate" had been made. Summing the differences yields a value of -7 years when averaged for the 26 countries yields -0.3 years or - 4 months per country forecast. Weighting the countries for annual production reduces this bias further. This is a remarkable achievement. Their methodology is as follows:

The software ("tool") used for the conclusions expressed in this paper, we have termed the "World Oil Forecasting Program" which consists of two distinct, stand-alone models for each nation.

The Numeric Forecasting Model

The first model ("N model") is quantitative, using production data and mathematics on a translated coordinate system to produce an intermediate "helper" forecast for each nation. This, the so-called "guide" forecast ("G forecast"), is a purely mechanical prediction of future production. In some examples, the G forecast can provide useful information about the shape of future oil production by providing a lower boundary on the estimated ultimate recovery (EUR) and the probable shape of the future production curve. However, in other circumstances, it is not useful, as in the situation of the OPEC production quota-limited countries. The N model produces the G forecast, the best forecast we are able to make based solely on historic production data, and mathematics. Data are from British Petroleum (1968-1997) and Campbell (1991). Details are in Duncan (1996).

The guide forecast is just one of many items of information that may be used in the second model portion of the World Oil Forecasting Program.

The Heuristic Forecasting Model

By definition, "heuristic" denotes a method of solving a problem for which no algorithm exists. It involves trial and error, as in iteration. In this discussion heuristic knowledge indicates "soft," "qualitative," or "judgmental" knowledge. Although judgmental knowledge is lacking in the Numeric model, it is crucial for oil forecasting in the heuristic model ("H model"). The H model provides the user with a powerful interface for oil forecasting, chief of which is a three-curve graph for each nation with years 1960 to 2040 on the x axis, and production on the y axis (Fig. 1. Curve 1 shows the historic data from 1960 through 1996 —a crucial reference for forecasting. Curve 2 shows the guide forecast (previously discussed) and is useful as the lower bound curve. Curves 1 and 2 are important forecasting aids, but they are only the beginning.

Curve 3 also displays the historic data from 1960 through 1996, but this time the data serve as a base for a new and better forecast 1997 through 2040. A so-called graphical input device (GID) makes it easy to enter and run different trial forecasts. After each trial run, a different estimated ultimate recovery (EUR) value is displayed so, after making several runs, the user can select an upper-bound curve for each nation. Thus, now confined by lower and upper curves, and further modified by judgmental input, the user extends the most recent production trend seamlessly into the curve extending through the year 2040, providing what we termed the "judgmental" forecast (J forecast) of future oil production, one nation at a time. Details of the heuristic model are in Duncan (1997).

In our 42-nation study, we also have grouped the nations into seven regions (Figs. 2-8 and Table 2), and made a world summary (Fig. 1 and Table 1), which are the output of the heuristic model."

Anyone who has ever attempted to forecast oil or gas production will know that the minute the forecast is published you think of something you missed or a better way to do it. It is not an easy task working with numerous, often poorly constrained variables. Duncan and Younquist did make some mistakes, notably Qatar where I imagine they underestimated natural gas liquid production from the North Field and Tunisia where they anticipated a second peak in 2009, that did materialise in 2007 but failed to exceed the earlier peak of 1980. The important thing is that the errors are not biased.

To the 5 countries forecast to peak beyond 2008 that are listed above we have to add Angola, Qatar and China which set records in 2008 and which may yet have a future peak date This on-going uncertainty is not incorporated in the analysis of Duncan and Younquist's forecasts where the difference recorded is that between their forecast dates and 2008.

Duncan and Youngquist forecast that world oil production would peak at 30.64 Gb/ annum in 2007 translating to 83.95 mmbpd. According to BP, 2007 production was 81.44 mmbpd that was exceeded by 81.82 mmbpd in 2008. It is of course premature to call 2008 as peak year although I am increasingly skeptical that the 2008 production will ever be exceed. If Duncan and Youngquist's unbiased accuracy follows through to Brazil and the 4 big gulf producers - Iraq, Kuwait, Saudi Arabia and the UAE, then this will underpin their 2007 peak oil forecast, reinforcing the view that 2008 saw the passing of peak oil.

Duncan and Younquist told us 10 years ago that peak oil will be buried in a bumpy plateau and that a number of years must pass before it will be evident from declining production that peak has indeed passed. The exact timing is unimportant. The important thing is the knowledge that we are within the plateau and that some scientists do understand the above and below ground factors leading to peak and that their warnings of decline past peak and its consequences should not be ignored.

For new readers, here is a list of Oil Drum Articles on Saudi Arabia and Ghawar as of August 2007.

by Stuart Staniford

Saudi Arabia and Gas Prices

Depletion Levels in Ghawar

The Status of North Ghawar

Further Saudi Arabia Discussions

Water in the Gas Tank

A Nosedive Toward the Desert

Saudi Arabian oil declines 8% in 2006

by Euan Mearns

Ghawar reserves update and revisions (1)

GHAWAR: an estimate of remaining oil reserves and production decline (Part 2 - results)

GHAWAR: an estimate of remaining oil reserves and production decline (Part 1 - background and methodology)

Saudi production laid bare

Saudi Arabia and that $1000 bet

by Heading Out

Simple mathematics - The Saudi reserves, GOSPs and water injection

Of Oil Supply trains and a thought on Ain Dar

by Ace

Updated World Oil Forecasts, including Saudi Arabia

Saudi Arabia's Reserve "Depletion Rates" provide Strong Evidence to Support Total Reserves of 175 Gb with only 65 Gb Remaining

Further Evidence of Saudi Arabia's Oil Production Decline

DrumBeat: July 4, 2009

Leanan — Sat, 04 Jul 2009 10:47:34 -0400

Book review: Taking Jeff Rubin to task

The problem is Rubin never quite gets around to discussing how $150/barrel oil will affect us except to say that we will all have to consume less and in reduced variety. And there are a lot of people who won't stand for that. What happens then? It's the thorny question that can't help but creep into the reader's mind when faced with the starkness of Rubin's analysis.
Without this level of analysis, the book never rises much past the level of highly competent pop culture screed, probably destined to compete ably against similar doomsday books. And there's nothing wrong with that, but given the gravity of the consequences both mentioned and unmentioned, Your World needs to be so much more.

Ghana: Fuel shortage hits parts of Accra

Fuel shortage has hit parts of the capital Accra. A number of fuel stations visited by Joy News had run out of the product.
The few stations that had the product said they managed to get some after waiting for days for their supplies.
Motorists who spoke to Joy News from long queues expressed their frustrations over the situation.

Demand for shingles is through the roof

Roof shingles are harder to get these days in Huntsville, and it's not a symptom of the city's growing pains.
The price of asphalt, the main component in shingles, has risen. Then an April hailstorm damaged hundreds of roofs in the area, creating higher demand for roof repair and replacement.

World`s largest cement firms slash production emissions by a third

Efforts by the world's leading cement companies knocked down carbon dioxide emissions from the industry's manufacturing process by 35 per cent even while production climbed by 53 per cent, according to the World Business Council for Sustainable Development's Cement Sustainability Initiative.

Flood (review)

After years as hostages, locked away in the basements of a war-torn Spain and handed from one extremist faction to another, Lily, Piers, Gary and Helen emerge to a much-changed world. It's raining most of the time, sea levels are rising faster than anticipated and storms have become more extreme. Returning to London just as the Thames Barrier is about to be breached for the first time, they discover that flooding is becoming a way of life and the world is drowning faster than climate models predicted.

Swimming in natural gas

At a recent presentation to money managers in Canada's oil and gas heartland, the chief executive of a major Calgary-based energy trust used an interesting choice of words to describe natural gas. He referred to the commodity as a "wasted byproduct."
The suggestion that natural gas is worthless may be extreme, but it is an indication of the challenge the industry faces. Market experts continue to expect weak prices for natural gas as a surge in unconventional gas discoveries, such as shale plays, pour on to an already-flooded market. Add in unpredictable weather and a slower-than-forecast economic recovery, and the outlook doesn't get much brighter.

PetroChina Forecasts Gas Glut on Increased Output

(Bloomberg) -- China, the world’s second-biggest energy consumer, may face a “short-term” natural gas oversupply after 2010 because of increased domestic output and imports of the fuel, a PetroChina Co. official said.
Natural gas supply in China may increase by an average 20 billion cubic meters a year starting 2010, Ma Xinhua, deputy head of PetroChina’s exploration and development unit, said at an energy conference in Beijing today. The nation should boost its capacity to store the fuel for emergency use, Ma said.

Saudi set to cut Asia crude prices

SINGAPORE: Top oil exporter Saudi Arabia will cut or keep steady the official selling prices (OSPs) of most of its crudes to Asia for next month as refining margins come under pressure, refiners and traders polled said yesterday.
The eight refiners and traders polled expected Arab Heavy's discount to Oman/Dubai to be widened, and none forecast Arab Light or Extra Light's premiums to rise further.

China holds speculators responsible for causing oil price fluctuations

BEIJING, July 4 (APP): A growing number of speculators in the oil market have exacerbated the uncertainty in oil prices, Zhang Guobao, director of the National Energy Administration (NEA) was quoted as saying by Saturday’s China Daily.“The change in oil price cannot truly reflect the demand,” said Zhang, adding that “The hot money flow should be regulated more strictly.”
Many experts have been saying that the money pouring into the oil patch from mutual funds, traders, hedge funds and other financial players are pushing up oil prices.
The inflow of hot money, or investments by speculative institutional investors, is the main reason for the recent fluctuation in oil prices, the senior Chinese official told the Global Think Tank Summit Friday.

Total, Iran gas talks 'at standstill'

Total's negotiations with Tehran on a multi-billion dollar contract to develop a major Iranian gas field are at a standstill, the head of the French oil major said.
'They (negotiations) have not been broken and they have not been resumed either. They are not in a very advanced state,' chief executive Christophe de Margerie told journalists on the sidelines of an economic forum in southern France.

Russia's State Duma approves Russia-China oil co-op agreement

MOSCOW (Xinhua) -- Russia's State Duma, the lower house of parliament, approved on Friday a Russia-China intergovernmental agreement on oil cooperation, the Itar-Tass news agency reported.
The agreement, which envisions long-term Russian oil supplies to China, was signed by Russian Deputy Prime Minister Igor Sechin and Chinese Vice Premier Wang Qishan in April.

Iran planning to invest $70 billion in gasfields

TEHRAN: Iran plans to invest around $70 billion in two major offshore natural gasfields in the 2010-15 period, a senior official said yesterday. Seifollah Jashnsaz, managing director of the state National Iranian Oil Company (NIOC), said Iran would invest $40 billion to complete remaining projects in the South Pars field during the fifth five-year economic plan, which runs until 2015.
He did not say how Iran, which is also the world's fifth-largest oil exporter, would finance the investments.

Uganda: Norway Team Calls for Transparency in Oil Management

Kampala — THE Government should be transparent on issues of oil resources to avoid suspicion, visiting Norwegian officials have advised.
Appearing before the finance committee on Tuesday, the delegation warned that if there is no transparency from the beginning, the discovery could easily become a curse.

CNOOC Parent May Bid for Iraqi Oilfields, Fu Says

(Bloomberg) -- China National Offshore Oil Corp., the nation’s third-biggest oil explorer, may continue to bid for oilfields in Iraq after the Gulf country awarded a contract to its bigger rival, China National Petroleum Corp.

Nigeria runs out of crude

The Nigerian Government on Wednesday admitted that it had no more crude for its refineries to process for local consumption. The effects of militancy in the Niger Delta in Nigeria and the Federal Government's clampdown on them have shaken the foundation of the oil and gas industry in that country.

PDVSA halts process to grant new Orinoco E&P licenses: sources

Caracas (Platts) - Venezuela's PDVSA has halted the process to grant new licenses to explore, produce and upgrade extra heavy crude in the Orinoco, according to local media and industry sources.
Caracas daily El Universal published a report in its Thursday edition saying PDVSA had notified all 19 interested bidders -- a short list that included Chevron, Shell, Gazprom, Statoil and Total -- that the process had been halted "until further notice." An industry source in Caracas also said that the process had been halted.

Pdvsa requests payment of debts to solve financial troubles

Amidst financial problems, the state-run oil company Petróleos de Venezuela is asking foreign companies to repay their debts under energy supply agreements.

China's CNPC, CNOOC square off for Repsol's YPF - sources

HONG KONG (Reuters) - China National Offshore Oil Corp Ltd (CNOOC) and state-run China National Petroleum Corp (CNPC) are battling for approval to bid for the Argentinian unit of Spanish oil major Repsol (REP.MC), sources said on Friday, in a deal that could be worth around $17 billion.

Pipeline blasts leave nerves frayed in B.C.

VANCOUVER–It had been quiet for six months, but the peace of northeastern British Columbia has again been shattered.
Another bombing rocked the region this week, at a wellhead operated by gas producing giant EnCana. An EnCana worker noticed debris and a small leak in the well during a routine check of the wellhead, about eight kilometres south of Dawson Creek, early Wednesday morning. The closest residence is about three kilometres away.

Why China is stockpiling gold & base metals

Peak oil is here in the very near future. Many of the big oil producing regions have already passed peaks. Don’t forget, the United States was the world’s largest oil producer for a period, but production has fallen way down. Experts who follow this industry are very clear that the peak is not too far away—at most a dozen years, but more likely much sooner. The pace of new discoveries has fallen way off over recent years. It takes an enormous amount of new drilling to simply replace depletion. Production from existing wells declines steadily. Production won’t drop off suddenly, but it will certainly stop rising. Demand is continuing to rise and we are so complacent about oil production continuing to rise.

Ottawa Commits Funds To Clean Energy

EDMONTON -The federal government will spend $1-billion over the next five years on clean-energy research and demonstration projects, with an emphasis on reducing carbon dioxide emissions.

Bugging Out

Simon Beer has spent the past five years trying to convince himself that the Apocalypse will be fun. Not that he calls it the Apocalypse. His fellow survivalists call it TEOFTWAWKI (The End Of The World As We Know It) or the Long Emergency, the Collapse, the Shift or the Event, as in, "There may be marauding bands of cannibals post-Event." But Simon doesn't call it anything at all. "I guess I'd call it ‘When the oil runs out'," he says. "I don't really have a name for it." So far this nameless thing has been far from fun: it has cost him his job, his relationship and his health, and it hasn't even started yet.

(An older story, but I think it just came out from behind a paywall.)

The Seven Ways To Solve The Energy Problem

I have dished out a healthy share of criticism about the paths we are taking into the energy future, so perhaps it’s time I offered some paths of my own. I will outline them as simply as possible, since the data and thinking behind them could fill a book.

Staying Power: A commitment to conservation is starting to pay off for this entrepreneur

On the wall in the reception area at Building Energy in Williston is a quote from Albert Einstein that reads: “The amount of sunlight reaching the earth’s surface is 6,000 times the amount of energy used by all human beings worldwide. The total amount of fossil fuel used by humans since the start of civilization is equivalent to less than 30 days of sunshine.”
It’s exactly the kind of thing that anyone who has spent time with Scott Gardner, the founder and president of Building Energy, would expect to find.

Refusing to multiply

he headlines are swine flu, terrorism and climate change, but economists know that the real threat to our way of life is the reluctance of women to produce lots of babies.
Well, not just any women. This is about women in the industrialized West. In poor parts of the world women have plenty of children. Unfortunately, they can't afford them.
Here in the wealthy West we can afford to have more children but we don't. It's the population paradox.

How to save the world by shopping

Or, how to save the world by shopping. Goleman, renowned author of Emotional Intelligence and probable future author of Entomological Intelligence, has little patience with critiques of corporatism. "By imagining some disembodied power that has victimised us - 'those greedy corporations,' say - we avoid having to examine our own impacts," he tuts (though Rushkoff, reasonably, thinks we can do both).

Protesters who stopped coal train found guilty

Twenty-two environmental protesters who ambushed a train as it took coal to the largest power station in Europe were found guilty of obstructing the railway.

Preparing for a Sea Change

But it was Bildt's description of a relatively new hot topic -- the strategic consequences of climate change -- that galvanized my attention when he spoke here to the Council for the United States and Italy. The rapid melting of the Arctic ice sheet at the North Pole will bring "revolutionary new transport possibilities between the Atlantic and the Pacific," he told the gathering, expanding that thought for me later in an interview.
Bildt is not alone in studying the geopolitical consequences of climate change at the top of the world and elsewhere. The U.S. and Russian navies are also looking hard at how the projected disappearance of polar "summer ice" in a decade or two will influence their strategy and maritime practices and perhaps alter a relationship that is still marked by big-power rivalry and distrust.

Olduvai Theory: Toward Re-Equalizing the World Standard of Living - Richard Duncan

Nate Hagens — Sat, 04 Jul 2009 08:37:59 -0400

[Editor's Note: Some have noted that this article was first published by a controversial organization; TOD protocol for guest essays is to include the original source of the piece. It was not my/our intent to direct people to the site or to endorse its content, just like we don't endorse any other site's content or any particular world view. Let's focus the discussion on the essay itself; and debate it on its own merits please.]

This is a guest posting of Richard Duncan's latest "Olduvai" update, which is an essay that explores energy use and population and as with previous updates arrives at some rather grim conclusions.

On a side note, the paper Richard Duncan wrote with Walter Youngquist in 1999 (when oil prices were in $10-$15 range and stock markets were at all time highs) predicting a 2007 world oil peak was not only prescient and ahead of its time using oil forecasting heuristics, but was part of the core readings from 2003 that caused me to leave the Wall St path to study resource depletion full time.

(I encourage those who have not done so to read it: Encircling the Peak of World Oil Production).

Figure 5. Toward Re-Equalizing the World Standards of Living

Olduvai Theory: Toward Re-Equalizing the World Standard of Living

By Richard Duncan

“Standard of Living” is often (not always) measured by money spent per head. Economists acknowledge that this is a poor measure of welfare – especially during these times of economic turmoil when fiat money becomes unable to purchase basic necessities (e.g., Zimbabwe, recent food riots).

Since the consumption of energy is the prerequisite for all economic activity, “energy consumption” instead of “money consumption,” is a more accurate long term metric for measuring welfare.

Abstract

This study is based on: (1) historic population and energy data from 1965 to 2008 and (2) backup studies by several scientists. The Olduvai Theory is explained by disaggregating the World into the U.S., the OECD nations, and the non-OECD nations standards of living (SL). The U.S. SL peaked in 1973 (Figure 1). The World SL rapidly increased from 2000 to 2007 (Figure 2). This increase was caused by just a few non-OECD nations (Figure 3). The OECD SL peaked in 2005 (Figure 4). The Olduvai Theory shows each SL curve trending toward the same average SL value that the World had in 1930 (Figure 5).

Introduction

The Olduvai Theory (OT) is defined by the rise and fall of the World standard of living (SL). The main population data are from OECD (2008) and the main energy data are from BP (2008). The OT is quantified by dividing World population (P) into World energy consumption (E): SL = E/P. ¹

Suddenly however, in June 2008 I was pressed to explain the rapid rise in the World SL from 2000 to 2007. The cause turned out to be the rapid rise of the SL in just a few of the 165 non-OECD (‘underdeveloped’) nations: namely China, India and Brazil. In contrast the SL of the 30 OECD (‘developed’) nations peaked in 2005 and has since declined.

Population and energy data from 1965 to 2007, OECD data for 2008 and early 2009, and OECD projections to 2010 are the basis for a scenario toward re-equalizing the World SL from 2008 to 2030.

Backup studies are referenced, quoted and discussed:

M. King Hubbert presented an Olduvai-like hypothesis to the AAAS Centennial Conference in 1948 and published it in Science in 1949.
Jay W. Forrester in 1971/1973 used feedback modeling to show the likelihood of overshoot and collapse of the World ‘STEP’ system.
Walter Youngquist (advance copy ms. GeoDestinies, 2009) describes the grave problems resulting from U.S. and World population growth coupled to the depletion of Earth resources.

Three Geo/STEP Scientists

This section highlights how a Geophysicist, a Systems Scientist and a Petroleum Geologist viewed/view the past and project the future of Industrial Civilization.

M. King Hubbert (1903-1989)

Geophysicist and Professor Emeritus, Columbia University — gave an invited presentation to the Centennial Conference of the American Association for the Advancement of Science (AAAS) in 1948 titled “Energy from Fossil Fuels.” In it he sketched and discussed an Olduvai-like scenario. His presentation was published in Science, 1949.

Human Affairs in Time Perspective

The present state of human affairs can best be appreciated in the light of a time perspective, minus and plus, of some tens of thousands of years from the present, as depicted in Fig. 8 [frame #1]. On such a time scale the phenomena we have discussed are represented by abrupt, nearly vertical rises from zero or near zero to maximum values. The consumption of energy from fossil fuels is thus seen to be but a “pip,” rising sharply from zero to a maximum, and almost as sharply declining, and thus representing but a moment in the total human history.

Likewise the consumption of energy per capita [Fig. 8, frame #3}, after having risen very gradually from 2,000 to possibly 10,000 kilogram calories per day, is seen to increase suddenly to a maximum value of several times the highest previous value. Again it is physically possible to maintain a high value, as indicated by Curve I, on a stable basis for an indefinite period of time from current energy sources, particularly direct and indirect solar radiation. It is also possible, however, that through cultural degeneration this curve may decline, as in Curve II, to the subsistence level of our agrarian ancestors.²

Viewed on such a time scale [Fig. 8, frame #4], the curve of human population would be flat and only slightly above zero for all preceding human history, and then it too would be seen to rise abruptly and almost vertically to a maximum value of several billion. Thereafter, depending largely upon what energy supplies are available, it might stabilize at a maximum value, as in Curve I, or more probably to a lower and more nearly optimum value, as in Curve II. However, should cultural degeneration occur so that the available energy resources should not be utilized, the human population would undoubtedly be reduced to a number appropriate to an agrarian existence, as in Curve III.

These sharp breaks in all the foregoing curves can be ascribed quite definitely, directly or indirectly, to the tapping of the large supplies of energy stored up in the fossil fuels. The release of this energy is a unidirectional and irreversible process. It can only happen once, and the historical events associated with this release are necessarily without precedent, and are intrinsically incapable of repetition.

It is clear, therefore, that our present position on the nearly vertical front slopes of these curves is a precarious one, and that the events which we are witnessing and experiencing, far from being “normal,” are among the most abnormal and anomalous in the history of the World. Yet we cannot turn back; neither can we consolidate our gains and remain where we are. In fact, we have no choice but to proceed into a future, which we may be assured will differ markedly from anything we have experienced thus far.

M. King Hubbert, Science, 1949, p. 103-109

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Jay W. Forrester

Electrical Engineer, Computer Scientist and Professor Emeritus, Sloan School of Management, MIT — has a remarkable record of innovations and applications in both hardware and software. This essay focuses on his groundbreaking book, World Dynamics (1971/1973) wherein he uses feedback control theory to model the World STEP system.

The World Situation

Many global attitudes and programs seem to be based on accepting future growth in population as preordained and as the basis for action. But, if we make provision for rising population, population responds by rising. What is to stop the exponential growth? This book describes the circular processes of our social systems in which there is no uni-directional cause and effect. Instead, a ring of actions and consequences close back on themselves. One can say, incompletely, that population will grow and that cities, space, and food must be provided. But one can likewise say, also incompletely, that the provision of cities, space, and food will cause population to grow. Population generates the pressures to support growth of population. But supporting the growth leads to more population. Growth will stop only in the face of enough pressure to suppress the internal dynamic forces of expansion.

Many programs—for example the development of more productive grains and agricultural methods—are spoken of as “buying time” until population control becomes effective. But the process of buying time reduces the pressures that force population control.

Any proposed program for the future must deal with both the quality of life and the factors affecting population. “Raising the quality of life,” means releasing stress, reducing crowding, reducing pollution, alleviating hunger, and treating ill health. But these pressures are exactly the sources of concern and actions that will control total population to keep it within the bounds of the fixed world within we live. If the pressures are relaxed, so is the concern about how we impinge on the environment. Population will then rise further until the pressures reappear with an intensity that can no longer be relieved. Trying to raise quality of life without intentionally creating compensating pressure to prevent a rise in population density will be self-defeating. Efforts to improve quality of life will fail until effective means have been implemented for limiting both population and industrialization.

Without effective legal and psychological control, population grows until stresses rise far enough, which is to say that the quality of life falls far enough, to stop further increase. Everything we do to reduce those pressures cause the population to rise farther and faster and hastens the day when expediencies will no longer suffice. People are in the position of a wild animal running from its pursuers. We still have some space, natural resources, and agricultural land left. We can avoid the question of rising population as long as we can flee into this bountiful reservoir that nature provided. But the reservoir is limited. Exponential growth cannot continue. The wild animal flees until he is cornered, until he has no more space. Then he turns to fight, but he no longer has room to maneuver. He is less able to forestall disaster than if he had fought in the open while there was still room to yield and to dodge. The world is running away from its long-term threats by trying to relieve social pressures as they arise. But, if we persist in treating only the symptoms and not the causes, the result will be to increase the magnitude of the ultimate threat and reduce our capability to respond when we no longer have more space and resources to invade.

What does this mean? Instead of automatically attempting to cope with population growth, national and international efforts to relieve the pressures of excess growth must be reexamined. Many such humanitarian impulses seem to be making matters worse in the long run. Rising pressures are necessary to hasten the day when population is stabilized. Pressures can be increased by reducing food production, reducing health services, and reducing industrialization. Such reductions seem to have only slight effect on quality of life in the long run. The principal effect will be in squeezing down and stopping the runaway growth. …

The long-term future of the earth must be faced soon as a guide for present action. Goals of nations and societies must be altered to become compatible with that future, otherwise man remains out of balance with his environment. Man can do vast damage first, but eventually he will yield to the mounting forces of the environment. Can the traditions of civilization be altered to become compatible with global equilibrium?

Jay W. Forrester, World Dynamics, 1973, p. 123-125

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Walter Youngquist

Geologist, draws from his experience in living and working abroad, and travels in some 70 countries to observe the vital relationship of population to available Earth resources. He is particularly concerned about continuing population growth against declining both nonrenewable and renewable resource bases—fertile soil and fresh water being examples of the latter.

Selections from the Introduction, ms. advance copy

We are relative latecomers on the scene, and the Earth existed for several billion years very well without us. But with our arrival and our development of culture to the technological age in which we now live, in a very brief time we have had an impact on the Earth beyond what any other organism has ever had. We therefore live in a unique, and what is likely to be a very brief time in human history. Some of us have been very fortunate to live in these times near or at the top of the pyramid of technological and medical advances. But we are at the same time living at a great turning point in Earth and human history.

It is apparent that current political, economic, and social efforts are to keep things as they are—not to change. People in developed countries do not like changes in their lifestyles … if they believe they are good now. But changes come and are unavoidable. …

As much as the future changed during less than in my lifetime, the future of most of those reading this book will surely be equally or more changed from what is the present. Successfully adjusting to a different future from what has been enjoyed by at least some the past few hundred years is the challenge lying now directly ahead. …

In earlier centuries, with many fewer people, these Earth resources were exploited only very slowly and in minor amounts. But within the past few hundred years, with the arrival of the Industrial Revolution … the rate and volume of resource exploitation has greatly increased, … It was the use of these resources that has been the base for the rise of our present civilization, allowing some segments of society to achieve, … a standard of living never before imagined.

Accompanying this rise in standard of living has been a huge increase in population, from an estimated 610 million in 1700 to the current approximately 6.7 billion. This has been a truly astounding event made possible chiefly by three factors: great medical advances including sanitation, the widespread use of high energy density fossil fuels, and the use of these fossil fuels to greatly enhance agricultural production …

[It] is the huge rise in population and related increased Earth resource consumption … that is probably the salient fact of these truly remarkable recent few centuries. …

But these materials … can be extracted and used only once. … Can we continue to maintain the present high standard of living for some of us, by using truly renewable Earth resources … instead of an inheritance from the past? …

Much of the discussion in the following chapters is related to stress on Earth mineral and energy resources, and stress on the environment from population growth. Equally and perhaps more important … are social stresses resulting in part from depletion of resources, such as water supplies and fertile soils … and resulting food shortages causing riots. Also population is growing … faster than are jobs. … Until recently, the outlet for stress from a growing population was migration … but this outlet no longer exists. …

Even the United States, the United Kingdom, and European countries may show stress in several ways including generally rising unemployment, and antagonism toward immigrant labor …

One fact is abundantly clear: we have already exceeded the permanent carrying capacity of the Earth, and the number one problem is to reduce population in an orderly fashion to fit into the new renewable resources paradigm. …

[Nearly] all governmental leaders worldwide are committed to keeping and expanding the present agendas of resource consumption … with the rallying cry of “sustainable economic growth.” The underlying basic problem of population growth is rarely addressed—absent from most political agendas as being “politically incorrect.” …

[Growth] based upon continuing to exploit the finite resources of the Earth is not possible. Yet this is the current basis of the world’s developing and developed economies. … We need to be as self-sufficient, dependent on resources from local economies … for this has to be a part of any sustainable future. …

History is informative and gives us a perspective on how we came to where we are today. But it is the future in which you will live and the future is “not what it used to be.” But it is now arriving … bringing with it more than 190,000 people each day to live on depleting resources. …

It is the purpose of this volume to provide a perspective on the past, but more importantly provide a possible and hopefully a fairly realistic view of what the future may hold. … [Namely] that on this finite Earth high consuming societies are eventually going to be relegated to being an artifact of history. …

Our modern, developed societies tend to be removed, by their present degree of affluence, from the environment as the basis for our existence. Food comes from the supermarket, clean water comes from the faucet. But the closer people live to the margin of existence, the more they realize the vital importance of fertile soil, and safe drinking water, …

How we try to navigate the choppy waters to the future, will determine to a large extent when and in what condition we will arrive to the new land of sustainable renewable Earth resources. … The continued almost inevitable growth of population … against the depletion of Earth resources combine to form the main challenge before us. …

Those who will be living at the end of this century will see much of this land of the future come into view, but even there and then as now, Earth resources will continue to be the base for human existence and will inevitably exert final control over the destinies of nations and individuals. We are made of Earth materials, and its biological products, and on these we survive. To continue to negatively impact our environment is a form of suicide. “Mother Earth” is not an abstract concept but very much a reality, for from Earth we came, on it we depend for our existence. …

Walter Youngquist, ms. advance copy GeoDestinies, 2009

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The American Example

Obvious Responses Will Not Suffice

The dynamic characteristics of complex social systems frequently mislead people. … [Urban policies for example] are being followed on the presumption that they will alleviate the difficulties. … In fact, a downward spiral develops in which the presumed solution makes the difficulty worse and thereby causes redoubling of the presumed solution so that matters become still worse.

The same downward spiral frequently develops in national government and at the level of world affairs. Judgment and debate lead to programs that appear to be sound. Commitment increases to the apparent solutions. If the presumed solutions actually make matters worse, the process by which this happens is not evident. So, when the troubles increase, the efforts are intensified that are actually worsening the problems.

Jay W. Forrester, 1973, p. 93-94

Figure 1 shows the U.S. standard of living (SL) during 37 years.

Evidence in Figure 1 shows that the U.S. SL grew dramatically from 1965 to its all-time peak in 1973. Then, after an erratic 21 years, it went into an accelerated decline from 2000 to 2007. Moreover, recent data show that the decline accelerated in 2008 and into 2009. Details follow.

Growth–Peak–Decline: From 1965 to 1973 the U.S. SL surged reaching its all time peak in 1973. This was followed by a dip-and-rebound from 1973 to 1979. Then from 1979 to 1983 came a precipitous plunge wherein the U.S. SL fell by 14.5% (8.92 boe/c) in 4 years. A rough recovery came from 1983 to a high in 2000. Then from 2000 to 2007 the U.S. SL declined by 4.1% (2.46 boe/c) in 7 years.

Historical correlations: The U.S. SL grew swiftly during low energy prices from 1965 to 1973. Then in 1973-74 – correlated with an Arab-Israeli war – several OPEC nations banded together and refused to export oil to the U.S. Next in 1979 came the fall of the Shaw of Iran – reputedly a ‘puppet’ of the U.S. – accompanied by a steep rise in the price of oil and a plunge in the U.S. SL from 1979 to 1983. This was followed by an erratic struggle wherein the U.S. SL reached a brief high in 2000. Then, beginning with the Dot.com bust, came the ominous decline from 2000 to 2007.

U.S. population vs. energy: The U.S. population grew from 211,909,000 in 1973 to 301,104,000 in 2007 — an increase of 42.1% or 89,231,000 people in 34 years. At the same time U.S. energy consumption lagged at 31.6%. The net result was that the U.S. SL fell by 7.4% from 1973 to 2007. ³

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The United States annually takes in more immigrants than do all other nations combined. Somalians now live in Minnesota. Sudanese live in Kentucky. Medicaid is received by 14.8 percent of households headed by Americans, and 24.2 percent by households headed by immigrants. Many compassionate Americans feel that it is our duty to take in more and more immigrants. However, at the current rate of approximately 2.5 million a year, this accounts for only 3 percent of the 80 million people added to world population annually. The United States cannot continue to act as a safety valve for even a small portion of world population growth. Very near the U. S., Haiti has 9 million people living in an area smaller than Malheur County Oregon. Haiti is on international food welfare. We ship food to Haiti, which simply results in more Haitians to whom to ship food next year. More than 27 countries now exhibit this same circumstance. Population is a homegrown problem, and it must be recognized and solved at home, without exporting it. “There is nothing more dangerous than a shallow-thinking compassionate person.” – Garrett Hardin.

Youngquist, ms. advance copy GeoDestinies, 2009, Ch. 20

The Olduvai Theory: Background

The fifth revolution will come when we have spent the stores of coal and oil that have been accumulating in the earth during hundreds of millions of years … it is obvious that there will be a very great difference in ways of life … a man has to alter his way of life considerably, when, after living for years on his capital, he suddenly finds he has to earn any money he wants to spend … This change may justly be called a revolution, but it differs from all the preceding ones in that there is no likelihood of its leading to increases of population, but even perhaps to the reverse.

Charles Galton Darwin, 1953, p. 52

The similarities and differences in the shape of the Olduvai/World curve in Figure 2 are compared to the shape of the U.S. curve (Figure 1, previous) as an aid to understanding both.

Figure 2. Olduvai/World Average Standard of Living

Note well Figure 2 vis-à-vis Figure 1: (1) Both the World SL and the U.S. SL grew strongly from 1965 to 1973: 27.8% for the World SL and 28.2% for the U.S. SL. (2) Compare the ups and downs in each curve from 1979 to 2000 wherein there was a net decline in each curve: 1.9% decline in Figure 2 and 2.8% decline in Figure 1. (3) In contrast – the two curves differ markedly from 2000 to 2007: the World SL increased by a strong 9.7% while the U.S. SL decreased by 4.1%.

The strong correlation between the Olduvai/World SL and the U.S. SL from 1965 to 2000 is evidence that the same events must have influenced both curves during these 35 years. So we ask, “What likely caused the noted difference between the two curves from 2000 to 2007?” This question is discussed and answered in the next two sections. ⁴

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There is coming this century, in places, already here, an inevitable collision between resources available on a finite Earth and rising population demands from both growth and hopes for a more affluent existence.

Youngquist, ms. advance copy GeoDestinies, 2009, Ch. 33

In 1972 the presidential appointed Rockefeller Commission was to examine the future well being of the United States. At that time the U. S. population was approximately 207 million, and the Commission reported they could see no advantage in having more people. But in 2009 the U. S. had 307 million and still growing.

Albert Bartlett has stated: “Can you think of any problem, on any scale from microscopic to global, whose long-term solution is in any demonstrable way, aided, assisted, or advanced by having larger populations at the local level, the state level, the national level, or globally?”

Looking inevitably toward a renewable resource-based future, present population has already exceeded the carrying capacity of the Earth, but by 2050 another 2.5 billion are projected to be here. The worldwide number one problem is population, for, as is the motto of one environmental group “Whatever your cause is, it is lost without population control.”

Youngquist, ms. advance copy GeoDestinies, 2009, Ch. 20

OECD SL and Non-OECD SL

OECD Composite Leading Indicators reach new low

The OECD composite leading indicators (CLIs) for January 2009 continue to point to a weakening outlook for all the major seven economies, with the OECD total falling again to a new low and little clear indication of stabilizing soon. The outlook has also continued to deteriorate in the major non-OECD member economies …

The CLI for the OECD area in January … was 9.1 points lower than in January 2008. The CLI for the United States in January … was 10.8 points lower than a year ago. …

The CLI for China in January 2009 … was 14.8 points lower than a year ago. The CLI for India in January … was 9.6 points lower than in January 2008. The CLI for Russia … was 19.4 points lower than a year ago. In January 2009 the CLI for Brazil … was 10.1 points lower than a year ago.

OECD (2009b)

By most accounts there are 195 nations (countries) in the World. The OECD comprises the 30 ‘developed’ nations and the non-OECD comprises the 165 ‘underdeveloped’ nations. For example, the United States, United Kingdom, Germany and Japan are OECD nations. In contrast China, India, Russia, Brazil and Ethiopia are non-OECD nations. The Olduvai/World curve comprises both the OECD nations and the non-OECD nations.

Figure 3 depicts the Olduvai/World data disaggregated into one curve for the OECD nations a second curve for the non-OECD nations.

Figure 3. OECD SL and non-OECD SL Compared

The OECD document (2009b, above) and Figure 3, taken together; reveal several significant facts to explain the recent upshot of the Olduvai/World curve (Figure 2, previous): (1) The OECD SL curve from 2000 to 2007 decreased by 0.8% (0.27 boe/c). (2) The non-OECD SL curve increased by 28.1% (1.62 boe/c). Thus the rapid rise in the Olduvai/World curve from 2000 to 2007 was entirely caused by growth in the non-OECD SL and none of it caused by the OECD SL. (3) The OECD SL reached an all-time maximum in 2005. (4) Then from 2005 to 2007 it decreased by 0.8% (0.30 boe/c). (5) Further, the entire OECD SL fell by 9.1 CLI points during 2008.

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“Growth” — A reaffirmed global objective

[In] response to the global economic meltdown, the G-20 was formed consisting of the leaders of the 20 biggest, richest, and emerging economies. A summary statement of their objectives was released and printed in full in … November 16, 2008. One of the clearly stated objectives was to “restore global growth,” to enhance “economic growth,” and foster “sustainable growth.” In total, the term “growth” in various contexts appears nine times.

An additional objective is “to stimulate domestic demand …” In all uses of the term “growth” the G-20 group meant it ultimately in terms of material things. It is clear the fact that “sustainable growth” is an oxymoron … Continued growth in use of both nonrenewable and renewable natural resources is the problem, not the solution. …”

We are already exploiting the Earth’s vital resources at an unsustainable rate. Demand is exceeding resource supplies to the extent that even now more than half the world is in poverty. Standard of living … is most easily measured by per capita consumption of energy. In the United States this peak was in 1973, and now going down quite rapidly. Whatever gains may have been accomplished by the laudable efforts of efficiency and conservation … have been more than cancelled by increase in population, suggested also by the fact that the U. S. is the only industrialized nation with a significant growth in population, now about three million per year. … Nationally, 80% is due to immigration, in California, nearly 100%, where by 2030 20 million more people are expected to arrive adding to the 38 million there now.

Youngquist, advance ms. copy GeoDestinies, 2009, Ch. 33

Focus on OECD Standard of Living

GDP to plummet 4.3 percent across OECD countries in 2009 as unemployment climbs sharply

Economic activity is expected to plummet by an average 4.3 percent in the OECD area in 2009 while by the end of 2010 unemployment rates in many countries will reach double figures … Amid the deepest and most widespread recession for more than 50 years, international trade is forecast to fall by more than 13 percent in 2009 and world economic activity to shrink by 2.7 percent. … In the United States, activity will fall sharply in the near term, but the country could begin to pull out of the recession in early 2010, assuming the effectiveness of the strong stimulus packages and more stable financial and housing markets. … In the large emerging economies activity is slowing as access to international credit dries up, commodity prices fall and export demand weakens. … The Interim Outlook adds that the risks of an even gloomier scenario outweigh the possibility of a quicker recovery. …

OECD (2009a)

Figure 4. The OECD SL: Peak Revealed

Figure 4 focuses on OECD data from 1992 to 2007. Four key facts emerge: (1) The OECD SL grew by a remarkable 8.6% (2.77 boe/c) from 1992 to its all time maximum in 2005. (2) Then it declined by 0.8% (0.30 boe/c) from 2005 to 2007. (3) Economic activity in the OECD area is expected to plummet by an average 4.3 percent in 2009. (4) The U.S. is the largest economy in the OECD, passed its peak SL in 1973 and its SL has since declined. These facts mean that the OECD maximum in 2005 will, I assume, be the all-time OECD SL peak.

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Increasingly, from across the globe, nightly television brings to our living rooms photos of malnourished people, particularly touching are the starving children. Advanced countries can provide the means and the knowledge for a given country to adjust its population to its sustainable food resource base, but implementation of that action becomes an individual responsibility, and collectively a national responsibility. Thus far this most fundamental of all humanity’s problems is consistently ignored by all—or nearly all—public officials everywhere. It has never, to my knowledge, become part of any political platform or a politician’s agenda seeking office or one seeking to remain in office. All of the above also relates to the United States.

The number one, most important factor in all of this is current size of population and above all, continued population growth. But this overriding consideration is never recognized. The word “population” does not appear anywhere in the G-20 statement. If this document represents the forward “thinking” of the world leaders of the biggest and richest economies, we are in very deep trouble.”

Youngquist, ms. advance copy GeoDestinies, 2009, Ch. 20

Toward Re-Equalizing the World Standard of Living

The real issues, I believe, rest on the impossibility of a long-term favorable future for the human species if different parts of the Earth remain in grossly different stages of development. On a long-term basis it simply is not possible to contemplate a life of prosperity and luxury in a few favorable cases on the Earth existing permanently alongside poverty and starvation everywhere else. Sooner or later, standards of living work themselves to a pretty constant level, like water finding its own level.

Sir Fred Hoyle, 1964, p. 54-55

Figure 5 depicts four curves, one for each SL category we’ve discussed.

Figure 5. Toward Re-Equalizing the World SL

The vertical scale of Figure 5 goes from 0.0 boe/c to 64.0 boe/c to accommodate all of the SL curves previously shown. Historic data appear from 1990 to 2007 and – along with other data and many references – provide the basis for the Olduvai scenario shown from 2008 to 2030. ⁵

In Figure 5 the U.S. curve (#4) in 2007 represents 4.5% (0.301 billion) of World population and had a SL of 57.5 boe/c. In contrast, the non-OECD curve (#1) in 2007 represents 82.3% of World population and had a SL of 7.4 boe/c. This difference cannot last for long. The following scenario projects how “Mother Nature” will resolve this problem. ⁶

The Olduvai Scenario: The U.S. SL plunges (curve 4); the OECD SL dives (curve 2); the non-OECD SL levels off and then sinks (curve 1); the Olduvai SL (curve #2) peaks in 2010 ⁷ and then declines to a scant 3.53 boe/c in 2030. That SL for the World in 2030 will equal the same SL the World had in 1930 – thus giving Industrial Civilization a “pip” of 100 years. In other words: The falling World SL will eventually limit both World population growth and industrialization.

––––––––––––––––––––––––––––––––––––––

Population now has grown beyond the former abundance of relatively inexpensive basic resources. As costs of the necessities of life rise, strains are appearing across the world. Even in what has been called "the richest nation" the United States the fabric of everyday life is coming under stress. With the addition each year of three million people, the stress can only increase. One can begin to feel a growing uneasiness about the future, both here and abroad. There is good cause for unease, with world population increasing at the rate of more than 80 million a year continuing the assault on the life-sustaining environment.

Youngquist, ms. advance copy GeoDestinies, 2009, Ch. 20

The irreconcilable current trends of a growing population and declining supporting resources seem not yet to be recognized at any levels of political leadership. However, these two facts will collide head-on this century. At best, this will result in a halt to population growth. At worst it could be chaos. The ability of the Industrial Revolution and related technologies to find and exploit the Earth’s resources at an unsustainable rate for a fortunate relatively few societies, by its very success carries within it the seeds of its own destruction. We inevitably face a future of less. However, bringing this message to the developed and developing world’s citizens is not being done. Discussion of this topic and population growth unfortunately remains politically incorrect. Economists and political leaders nearly everywhere continue to endorse the illusion that more people consuming more resources (“buy more”—“increase demand”) is the road to permanent prosperity, whereas now the exact opposite is true.

Youngquist, ms. advance copy GeoDestinies, 2009, Ch. 20

SUMMARY AND CONCLUSIONS

The average U.S. standard of living (SL, Fig. 1) peaked in 1973; from 1973 to 2007 it decreased by 7.4%; the U.S. composite leading indicator (CLI) in January 2009 was 10.8 points lower than in January 2008. Conclusion 1: The U.S. SL will continue falling long into the future.

The Olduvai/World SL (Fig. 2) reached a temporary high in 1979; from 1979 to 2000 it decreased by 1.9%; however from 2000 to 2007 it increased by 9.7%; the increase was entirely caused by increases in a few non-OECD nations. Conclusion 2: The World SL itself will soon begin to decline.

The OECD SL (Figs. 3 & 4) reached its peak in 2005; from 2005 to 2007 it decreased by 0.8%; its “CLI was 9.1 points lower in January 2009 than in January 2008; economic activity is expected to plummet by an average 4.3 percent in the OECD area in 2009 and by the end of 2010 unemployment rates in many OECD countries will reach double figures.” Conclusion 3: The OECD SL will continue to fall.

The non-OECD SL (Fig. 3) increased by 28.0% from 2000 to 2007 and this caused the rapid rise in the Olduvai/World SL during those years (Fig. 2). However, “In the large emerging economies activity is slowing as access to international credit dries up, commodity prices fall and export demand weakens.” Further: The CLIs for China, India and Brazil all fell sharply in 2008. Conclusion 4: The non-OECD SL has already begun to fall.

The Olduvai Scenario (Fig. 5): The U.S. SL falls by 90% from 2008 to 2030. The OECD SL falls by 86%. The non-OECD falls by 60%. The OECD SL melds with the non-OECD SL in 2030 putting the World SL at 3.53 boe/c in 2030. Conclusion 5: The World SL reaches the same value in 2030 that it had in 1930, giving Industrial Civilization a duration of 100 years.

Projections regarding the United States: (1) We will refuse to solve our own problems so Mother Nature will “solve” them for us. (2) Sooner or later industrial decline will cause population decline and, tit-for-tat feedback, population decline will cause industrial decline. (3) The U.S. population distribution in 2100 will look more like the rural geography of 1900 than like the urban geography of today. (4) Trying to stimulate – or even maintain – the present level of domestic demand of nonrenewable and renewable Earth resources will fail. (5) Multiculturalism will cause chaos during the transition to localism.

Acknowledgments

Dr. Walter Youngquist and Dr. Colin J. Campbell have shared their keen insights over many years. John Gibbons, publisher of http://www.thinkorswim.ie/ motivated this study just as the world economy imploded. Dr. Euan Mearns has demonstrated an astute and useful way to analyze oil forecasts.

Definitions

1. G means billion. 2. boe refers to the average energy content of a barrel of oil. 3. E means energy consumption in G boe. 4. P means population in G. 5. Standard of Living (SL) is the ratio of E and P: SL = E/P. 6. Geo/STEP refers to complex Geo/social-technical-economic-political systems. 7. Scenario means, “An outline for any proposed or planned series of events, real or imagined.”

End Notes

1. This is Ackerman’s Law, discussed in Duncan, 2005-2006, p. 2-3.

2. M. King Hubbert in 1949 projected that the duration of Industrial Civilization would be more than 1,000 years, some ten times that of the Olduvai Theory.

3. “Re-equalization of living standards: It will be a long slow process but I think the trend will be there this century. You might note also that immigration tends to do the same thing – people migrate out of resource scarce poor countries to countries with more resources – the migrants use more resources and this cuts down total available for all. The USA is a good example. People use energy – more people use more energy, and if there is not enough to go around at low cost, everybody sees a cut in living standards. So migration is a factor in equalization of living standards.” (Walter Youngquist, letter, 8/28/08)

4. The noted Olduvai cartoon (Duncan 1996) can be viewed at here

5. “The expanding economy of the First Half of the Age of Oil led to increasing globalization based on growing world trade and financial hegemony by powerful countries. But the Second Half will likely see reversion to localism as different communities come to terms with the changed circumstances and find new sustainable patterns of life to match the resources available to them.” (Colin J. Campbell, 2009, p. 4)

6. “Forcible imposition of population control would be seen by most people as a sufficiently unfavorable change in the social environment that they might prefer that the forces take the tangible forms of lowered material standard of living and reduced food supply.” (Jay W. Forrester, 1973, p. 122)

7. Latest data at this writing suggest that the OT Peak actually occurred in 2008, but it was then too late to change Figure 5 and the associated text.

SOURCES

Ackerman, F. L. (1932). The technologist looks at social phenomena. In Introduction to Technocracy by Howard Scott (1933). John Day Co., NY.

BP (2008). British Petroleum Statistical Review of World Energy www.bp.com.

Campbell, C. J. (2009). ASPO Newsletter No. 100. April: www.aspo-ireland.org/contentFiles/newsletterPDFs/newsletter100_200904.pdf.

Darwin, C. G. (1953). The Next Million Years. Doubleday. Garden City, NY.

Duncan, R. C. (2005-2006). The Olduvai Theory: Energy, Population, and Industrial Civilization. Winter. www.thesocialcontract.com.

Duncan, R. C. (1996). The Olduvai cartoon is shown at: www.hubbertpeak.com/duncan/olduvai.htm.

Forrester, J. W. (1971/1973). World Dynamics. Wright-Allen Press. Cambridge, MA. http://sysdyn.clexchange.org/people/jay-forrester.html.

Hoyle, F. (1964). Of Men and Galaxies. University of Washington. Seattle.

Hubbert, M. K. (1949). Energy from Fossil Fuels. Science, v. 109, p. 103-109. www.eoearth.org/article/Energy_from_Fossil_Fuels (historical).

OECD (2009a). GDP to plummet 4.3 percent across OECD countries in 2009 as unemployment climbs sharply. 31 March. www.oecd.org.

OECD (2009b), OECD Composite Leading Indicators reach new low. 6 March. www.oecd.org.

OECD (2008). Factbook: Economic, Environmental and Social Statistics. Total Population Table (.xls). www.oecd.org.

Youngquist, W. (2009). GeoDestinies, 2nd Edition, Forthcoming: National Book Company, Portland, OR.

DrumBeat: July 3, 2009

Leanan — Fri, 03 Jul 2009 10:18:31 -0400

Eager to Tap Iraq's Vast Oil Reserves, Industry Execs Suggested Invasion

Two years before the invasion of Iraq, oil executives and foreign policy advisers told the Bush administration that the United States would remain "a prisoner of its energy dilemma" as long as Saddam Hussein was in power.
That April 2001 report, "Strategic Policy Challenges for the 21st Century," was prepared by the James A. Baker Institute for Public Policy and the US Council on Foreign Relations at the request of then-Vice President Dick Cheney.
In retrospect, it appears that the report helped focus administration thinking on why it made geopolitical sense to oust Hussein, whose country sat on the world's second largest oil reserves.
"Iraq remains a destabilizing influence to the flow of oil to international markets from the Middle East," the report said.

Crude Oil Falls to $66 in New York, 10% Below This Year’s High

(Bloomberg) -- Crude oil futures in New York fell below $66 a barrel, a 10 percent decline from this year’s high, marking a market “correction.”
Crude oil is set for a third weekly drop after U.S. unemployment rose to the highest in almost 26 years, signaling the world’s largest energy user remains mired in recession. Prices may drop again next week on speculation that U.S. fuel inventories will climb as the weak economy curbs demand, according to a Bloomberg News survey of analysts.
“It has been a double whammy for crude oil,” said Chris Jarvis, president of Caprock Risk Management LLC in Hampton Falls, New Hampshire. “You’ve got a stronger dollar and weaker- than-expected economic data, so that was a huge catalyst to start selling crude.”

Russia’s call to raise cost of gas falls on deaf ears

Moscow has asked Seoul to readjust the price of the liquid natural gas that Russia began exporting to Korea this year after Russian government officials complained that the price agreed upon in 2004 is too low. But Seoul officials have refused to renegotiate the deal, which was sealed five years ago.
According to officials of Korea’s Knowledge Economy Ministry and Korea Gas Corp., Russia recently made an official request to raise the price of the liquid natural gas from the Sakhalin gas reserve during the latest session of the Korea-Russia Joint Commission on Economic, Scientific and Technological Cooperation. The meeting was held in Seoul on July 1.

Kashagan development costs slashed

The cost of developing Kazakhstan's huge Kashagan oilfield will be cut by at least $1 billion as the global crisis drives down machinery prices, Kazakh Energy Minister Sauat Mynbayev said today.
The oilfield, in the north-east of the Caspian Sea, is due to come onstream in 2012. Kazakhstan's government had earlier estimated its total cost at $136 billion.

Russia Gazprom plans $2 bln Eurobond in two tranches

MOSCOW (Reuters) - Russia's gas export monopoly, Gazprom, plans to issue a Eurobond in two tranches denominated in dollars and euros and worth up to $2 billion in total, banking sources told Reuters on Friday.
The monopoly plans to channel part of the proceeds to its oil arm, Gazprom Neft, to help it finance a buying spree.

Turkey gives green light to EU gas pipeline deal

EUOBSERVER / BRUSSELS – Turkey will host the signing of an inter-governmental agreement on the EU-backed Nabucco gas pipeline on 13 July, in a major breakthrough for the long-delayed project aimed at reducing Europe's gas reliance on Russia.

Book Review: Blackout

Coal. Under the surface we seem to have a lot of it. It’s fairly inexpensive but this is changing as demand rises to meet increased energy needs especially in countries like China. So we have a lot, its cheap, let’s use it, what’s the problem? Right? Wrong!
Author Richard Heinberg writes in Blackout: Coal, Climate and the Last Energy Crisis, “In short: two of the defining trends of the emerging century–the development of the Asian economies and climate change–both center on coal. But coal is finite non-renewable resource. Thus, a discussion of the future of coal must also intersect with a third great trend of the new century: resource depletion.”

Iranian cleric: British Embassy staff to be tried

A top Iranian cleric said Friday that some of the detained Iranian staffers of the British Embassy in Tehran will be put on trial, and he accused Britain of a role in instigating widespread protests that erupted over the country's disputed presidential election.

What's the tipping point for revolution?

Skepparkroken, Sweden – How can it be that 70,000 protesters in Leipzig in 1989 tore down the Berlin Wall, while up to a million protesters in Tehran in 2009 managed only – so far – to trigger repression? Or, to phrase it differently, what's the tipping point for revolution? Just when does civil society trump entrenched political power?

KFC's proposal: First pot pies, now potholes

Everybody needs a little KFC. But maybe not Chicago.
The fast-food chain has sent off a letter to the nation's mayors, offering to patch their potholes for free. The company will leave behind a stenciled brand on the patch informing people the road has been "Re-Freshed by KFC."

Oil's record high, one year later: Crude is less than half its $145 peak of last July 3 - as a global economic slowdown zaps demand

NEW YORK (CNNMoney.com) -- One year ago, on July 3, 2008, oil prices settled at a record high -- a once-unthinkable $145.29 a barrel
On Thursday, it settled at $66.73, less than half the record price, following a $2.58 decline.
In between, a global demand surge morphed into a global economic slowdown -- one that would drive the price of oil as low as $33.87 in December -- followed by the partial recovery that has been underway since.
A year ago, oil was driven higher by two factors. One was the emergence of new global economic powers such as China, India and Russia, competing with the United States and the West for the world's oil. The other was a weak dollar, the currency of crude trading.

Oil May Fall on U.S. Fuel Inventories Increase, Survey Shows

(Bloomberg) -- Crude oil may fall on speculation that U.S. fuel inventories will climb as the recession curbs demand in the world’s biggest energy-consuming country.
Eighteen of 37 analysts surveyed by Bloomberg News, or 49 percent, said futures will decline through July 10. Nine respondents, or 24 percent, said the market will be little changed and 10, or 27 percent, forecast that oil prices will rise. Last week, 55 percent of analysts said prices would drop.

OPEC and IEA Agree Not to Disagree: A Good Omen for the Industry

For a change now, the OPEC viewpoint seems to be gaining ground, getting the due attention it deserves. This was not based on rhetoric or partisan energy politics, it was based on facts, simple and pure facts, one could say now without the fear of being ridiculed.
The world of energy today increasingly appreciates that wide scale speculation in oil markets carries tremendous risks. When Asian energy ministers met in Japan earlier this year, the issue of speculation was underlined, with everyone -- producers as well as the consumers -- emphasizing it could cause havoc to the global energy markets.
Interestingly now even the IEA, the OECD energy watchdog and the EU are also emphasizing that oil markets risk another speculative bubble unless the financial sector is reformed, reined in and transparency is enhanced.

Canadian Superior granted bankruptcy protection

Canadian Superior Energy Inc. said its application seeking court protection from creditors was successful, staying all claims against the oil and gas producer and its assets.
The court order, effective until March 25, allows the company to prepare a plan to payoff creditors, including the proposed sale of a stake of 25% or more in a promising gas discovery in Trinidad and Tobago.

Pumped storage hydro plants enjoy dual boost

Scottish and Southern announces plan for first new UK pumped storage plants in more than 30 years, as US government releases fresh hydro funding.

Interest in bees and chickens soars ahead of last Royal Show

In the past year, the smallholder retailer Countrywide has seen a 40 per cent increase in net sales across all poultry products in the past year.
Simon McEwan, editor of Country Smallholding magazine, said: “Many suppliers report that business has been very brisk over the past year. From humble beginnings in the 1970s, the grow-your-own revolution is gathering pace.
“Concerns about food security, climate change, food miles and the energy crisis are also considerations. No doubt the credit crunch is having an effect too.”

Organic Farms as Subdivision Amenities

SOUTH BURLINGTON, Vt. — The bewildered Iowan who converted his farm into a ballpark in “Field of Dreams” in 1989 might reverse the move today. From Vermont to central California, developers are creating subdivisions around organic farms to attract buyers. If you plant it, these developers believe, they will buy.
Increasingly, subdivisions, usually master-planned developments at which buyers buy home sites or raw land, have been treating farms as an amenity. “There are currently at least 200 projects that include agriculture as a key community component,” said Ed McMahon, a senior fellow with the Urban Land Institute.

A Farmer in Suburbia, Not So Far Afield

Set among the rolling green hills of Loudoun County, Jim Dunlap's farm hasn't changed much since the 1780s. The original fieldstone farmhouse, designed by William Penn, is still there, albeit larger after two additions. So is the stone smokehouse and a spring house. There are peach trees, raspberry bushes and vegetables. If Isaac James, a former owner and the great-grandfather of outlaw Jesse, were to visit, he would see just one real difference: SnowBear Farm is now the only farm in sight. The property is surrounded by huge suburban mansions with wide, empty lawns.
Of course, these days it's more surprising to find a working farm than McMansions in Loudoun. But Dunlap, a retired CIA operations officer, wanted to farm here. His little piece of suburbia is perfectly situated for a small farmer just starting out: The land is fertile, and the location, just 55 miles from Washington, puts him within striking distance of lucrative urban farmers markets, where prices and demand are high for produce grown without pesticides or chemical fertilizers. "We need to take a lot of this land that's used for pet horses and giant lawns and find ways to grow food on it again," Dunlap said. "My work is an experiment to figure out how we can do it."

Bike shop puts neighborhood teens to work

Humboldt Park-area kids coming into program learned bike repair and became owners of the bikes they worked on. Gregorio Lozada was one of them and is now a bike mechanic employed here.
"My mind is set to put things together, take 'em apart, so I can sit here and take this bike apart and I can put it back together. It's easy for me," said Lozada.

Green Power Takes Root in the Chinese Desert

DUNHUANG, China — As the United States takes its first steps toward mandating that power companies generate more electricity from renewable sources, China already has a similar requirement and is investing billions to remake itself into a green energy superpower.
Through a combination of carrots and sticks, Beijing is starting to change how this country generates energy. Although coal remains the biggest energy source and is almost certain to stay that way, the rise of renewable energy, especially wind power, is helping to slow China’s steep growth in emissions of global warming gases.
While the House of Representatives approved a requirement last week that American utilities generate more of their power from renewable sources of energy, and the Senate will consider similar proposals over the summer, China imposed such a requirement almost two years ago.

Oil hovers above $66 in Asia after weak jobs data

SINGAPORE – Oil prices hovered above $66 a barrel Friday in Asia in light holiday trading a day after grim unemployment numbers from the U.S. and Europe sent crude prices tumbling.

Oil brokerage PVM names rogue trader

LONDON (Reuters) - PVM Oil Futures Limited said on Friday that Steve Perkins, a senior broker based at the firm's London office, was responsible for unauthorized trades earlier this week which landed the firm with a loss of nearly $10 million.
The London-based brokerage said Perkins had taken the unauthorized positions in Brent crude futures early on Tuesday morning.
The heavy buying of Brent futures in Asian trade on Tuesday caused global crude prices to spike to their highest level this year, in a move traders and analysts had previously struggled to explain.

OPEC Says ‘Satisfied’ With Current Crude Oil Price

(Bloomberg) -- OPEC is “satisfied” with the current oil price, OPEC President Jose Maria Botelho de Vasconcelos said today in Beijing.
The current price is “good for all of us, the consumers and the producers,” de Vasconcelos said. The world economy has recovered and “this price is a balanced price for us,” he told reporters at the Global Think Tank Summit.

Saudi Arabia May Cut Heavy-Oil Price as Processing Profits Drop

(Bloomberg) -- Saudi Arabia may lower the official price of its heavy oil grade sold to Asia from a six-year high as processing profit for fuel used by ships and power plants declined in the previous month, refinery officials said.

Qatar to Roll Back Crude Oil Supply Cut in August, Refiners Say

(Bloomberg) -- Qatar Petroleum will supply full contracted volumes of crude oil to term customers in Asia in August, rolling back a 15 percent cut imposed in July on one of its grades, refinery officials said.
The state-owned company last month pledged full volumes of its Qatar Land grade for July, but cut Qatar Marine shipments by 15%, traders at two refiners who hold one-year contracts said today. They asked to remain unidentified because of confidentiality agreements with the supplier.

Europe urged to stockpile gas

European countries were urged to start stockpiling gas reserves for the winter as another gas crisis involving Russia and Ukraine is looming.
The European Commission said a repeat of January's energy shortfall was likely if Ukraine failed to raise €4.2m needed to pay for Russian gas supplies required to fill its storage facilities.

Venezuela, China May Sign New Loan-for-Oil Accord, Chavez Says

(Bloomberg) -- Venezuela and China Development Bank Corp. are discussing a third $4 billion infrastructure loan to be paid in oil, President Hugo Chavez said.
“This bank is the one with the most money in the world,” Chavez said late yesterday on state television. “It has half the money in the world and is allied with Venezuela.”

PetroChina boosts output at Sulige gasfield

BEIJING (Reuters) - Top oil and gas firm PetroChina raised daily output at its largest Sulige gasfield, in northern China's Ordos Basin, to 25.6 million cubic metres, up 67 percent from last July, its parent CNPC said.

The Reasons Behind Big Oil Declining Iraq's Riches

Any notion that the invasion of Iraq was simply an oil grab took another hit on Tuesday when Baghdad opened the bidding on the rights to develop its massive energy reserves. In a day-long auction of eight huge oil fields — some of the world's biggest — virtually all the 41 foreign companies invited to bid by the Iraqi government balked at the Baghdad terms. The only contract signed was a 20-year deal for a consortium led by BP and China's National Petroleum Corporation to develop the giant Rumaila field in southern Iraq. "Frankly I did not think it would be such a fiasco and embarrassment for the government," says Rochdi Younsi, Director of Middle East and Africa for the Eurasia Group in Washington. "It shows the level of disconnect between the Ministry of Oil and the oil companies."

Iraq over optimistic on oil, output to fall - IEA

LONDON (Reuters) - Iraqi plans to raise oil output to 6 million barrels per day (bpd) by 2017 are likely to be over optimistic, the International Energy Agency said on Monday, saying oil capacity could fall over the next two years.
The IEA said in its Medium-Term Oil Market Report it had taken a very conservative view of Iraqi production capacity for 2008/14 despite tremendous international interest in the country's oil development projects.
It forecast Iraqi oil production capacity would fall to as low as 2.23 million bpd in 2010/11 before gradually rising to 2.7 million bpd by 2014. The country's oil production is now between 2.3 million and 2.4 million bpd, industry sources say.

China’s CNPC, Cnooc Group Said to Seek Stake in Repsol’s YPF

(Bloomberg) -- Repsol YPF SA is in talks with China National Petroleum Corp. and China National Offshore Oil Corp. about a sale of a stake in its Argentinean unit, three people familiar with the discussions said.

Nigeria, Algeria, Niger Sign Accord on Gas Pipeline

(Bloomberg) -- Nigeria, Algeria and Niger signed an agreement on a proposed Trans-Saharan pipeline that will ship natural gas from Nigeria to Europe.
The accord was signed by Nigerian Petroleum Minister Rilwanu Lukman, Niger’s Energy Minister Mohammed Abdullahi and his Algerian counterpart Chakib Khelil in the Nigerian capital, Abuja, today.

EnCana hit by fifth explosion

An explosion that damaged a natural-gas pipeline in northeast British Columbia this week is likely linked to earlier attacks on energy facilities in the area, the RCMP said yesterday.

US envoy returns to post in Venezuela

CARACAS, Venezuela (AP) — A U.S. envoy who was expelled last year by President Hugo Chavez said Thursday he hopes to re-establish dialogue after resuming his post in Venezuela.

Ally's Ouster Gives Venezuela's Chávez a Stage, an Opportunity

CARACAS, Venezuela -- An ally was in trouble, toppled in a military coup. And the television cameras were rolling.
The ouster of Honduran President Manuel Zelaya could not have been better scripted for another Latin American leader who has taken center stage: Venezuelan President Hugo Chávez. The populist firebrand has been Zelaya's most forceful advocate and could win international accolades if the Honduran eventually succeeds in regaining power.

$49M power line project will support crude oil pipeline

A new $49 million electric transmission line is being planned to support the TransCanada Keystone crude oil pipeline project that will run through central Nebraska.

A month with no driving explores a car-crazy culture

Beginning Tuesday follow along with News reporter Fred Davies as he tosses his car keys and embarks on a month of no driving.
A multi-part feature will examine the state of transportation in Oceanside, as he delves into a car crazy (some might say addicted) culture and discovers what all that driving means for livability in the region.
The state of public transit, how municipalities fare in addressing accessibility, health impacts, potential fixes, their cost and who might pay for it, will all be grist for the mill.

Japan may add noise to quiet hybrid cars for safety

TOKYO (AFP) – Japan's near-silent hybrid cars have been called dangerous by the vision-impaired and some users, prompting a government review on whether to add a noise-making device, according to an official.

Spain backtracks on nuclear power phase-out

MADRID (AFP) – Spain's government said Thursday it would allow the country's oldest nuclear reactor to operate beyond its intended 40-year lifespan, reversing a policy of gradually phasing out nuclear power.
Through a combination of carrots and sticks, Beijing is starting to change how this country generates energy. Although coal remains the biggest energy source and is almost certain to stay that way, the rise of renewable energy, especially wind power, is helping to slow China’s steep growth in emissions of global warming gases.

EPA extends comment period on biofuel standard

WASHINGTON (Reuters) - The Environmental Protection Agency on Thursday said it was extending the comment period on a draft rule that aims to cut greenhouse gases emitted by biofuels.
The proposed changes to the 2007 U.S. Renewable Fuel Standard attempt to make production of corn-based ethanol more efficient and increase output of advanced biofuels.

Another endangered elephant dies in Indonesia: WWF

Five of the eight elephants have died near or inside the concession area. Three were killed for their tusks and four were poisoned after eating palm oil plants doused in toxic chemicals.
"Some people are trying to protect their palm oil crops in the area by pouring insecticides on the plants. Maybe it's not intentional but it has killed a few elephants," Syamsidar said.
Conflicts between wild animals and humans are on the rise on Sumatra, where legal and illegal logging is rapidly reducing the tropical jungle.

EPA allows TVA to dump spilled coal ash in Ala.

BIRMINGHAM, Ala. – The nation's largest utility can dump millions of tons of coal ash from a Tennessee spill into an Alabama landfill, federal regulators said Thursday, despite criticism that the plan is unfair to one of Alabama's poorest counties.

Exxon, Valero Face New Curbs on Cancer-Causing Gases

(Bloomberg) -- President Barack Obama is considering new curbs on U.S. oil refineries whose gas emissions pose a cancer risk to hundreds of thousands of people living near the plants, setting up a potential conflict with companies over the cost of new regulations.
The White House suspended a ruling signed by President George W. Bush four days before he left office that found refiners were adequately controlling benzene and other cancer- causing gases, said Cathy Milbourn, a spokeswoman at the U.S. Environmental Protection Agency.

Federal ‘organic’ label’s integrity under fire: Consumers who pay up to twice as much don’t always get what they expect

WASHINGTON - Three years ago, U.S. Department of Agriculture employees determined that synthetic additives in organic baby formula violated federal standards and should be banned from a product carrying the federal organic label. Today the same additives, purported to boost brainpower and vision, can be found in 90 percent of organic baby formula.
The government's turnaround, from prohibition to permission, came after a USDA program manager was lobbied by the formula makers and overruled her staff. That decision and others by a handful of USDA employees, along with an advisory board's approval of a growing list of non-organic ingredients, have helped numerous companies win a coveted green-and-white "USDA Organic" seal on an array of products.

Incredible shrinking sheep blamed on climate change

Sheep living on a remote island off the coast of Scotland have been shrinking for 20 years. Now it seems shorter winters caused by climate change are responsible.

Los Angeles will end use of coal-fired power

LOS ANGELES (Reuters) - Los Angeles will eliminate the use of electricity made from coal by 2020, replacing it with power from cleaner renewable energy sources, Mayor Antonio Villaraigosa said.
Consumers of the Los Angeles Department of Water and Power, the largest city-owned utility in the United States with 1.45 million electricity customers, will see higher power bills in the fight against climate change, he added in his inaugural speech for his second four-year term as mayor on Wednesday.

Indian FM urges 'ambitious but fair' climate targets

TOKYO (AFP) – India's foreign minister on Friday called for an ambitious but fair greenhouse gas reduction target under a new climate treaty, saying any pact should not hinder the economic growth of developing countries.

Study: Tropical rain band is shifting north - Warming suspected; freshwater shortages for some Pacific isles likely

Earth's most prominent rain band, near the equator, has been moving north at an average rate of almost a mile a year for three centuries, likely because of a warming world, scientists say.
The band supplies fresh water to almost a billion people and affects climate elsewhere.
If the migration continues, some Pacific islands near the equator that today enjoy abundant rainfall may be starved of freshwater by midcentury or sooner, researchers report in the July issue of the journal Nature Geoscience.

Risk Assessments: Playing the "What If?" Game

Robert Rapier — Thu, 02 Jul 2009 10:15:12 -0400

I spend a lot of time playing "What if?" It is an important aspect of my line of work, but we all do this to some extent. I do it when I am driving - "What if that car at the next intersection pulls out in front of me?" - when I am working "What if that high pressure line ruptures?" - and at home - "What if I wake up and find the house is on fire?" I also spend a lot of time pondering the question "What if there are energy shortages in the near future?"

When we do this, we are generally trying to understand the potential consequences of various responses to a given situation. This sort of exercise is a form of risk assessment, and it is a very important tool for making decisions about events that could impact the future. Sometimes the consequences are minor. If I choose not to take an umbrella to work and it rains, there is probably a small consequence. If I choose to pass a car on a blind hill, the consequence may be severe, and may extend to other people.

In this essay I will explore the implications of the question: "What if I am wrong on peak oil or global warming?"

What If I'm Wrong About Peak Oil?

I guess it was my training as a scientist that instilled in me the position that conclusions are tentative. (I was two years into a Ph.D. in chemistry before I decided the job prospects were better for a chemical engineer). They are subject to revision as additional data come in, and you have to always be willing to consider that your preconceptions may be wrong. But acknowledging that I could be wrong has to go hand-in-hand with the consequences of being wrong.

I have formulated a lot of “what if” questions around timing and consequences of peak oil. My view on peak oil is that it presents an enormous challenge for humanity, that global oil production will peak within 10 years (if it hasn’t peaked already), and that there is no easy solution. I see spiking oil prices and the subsequent fallout as a prelude to what lies ahead. These views have influenced my profession, where I have chosen to live, what I read, and what I say to others. Fear of peak oil has influenced some people not to attend college, or to quit their jobs and move away to remote locations. It has even caused some people to decide against having children. But what if I am wrong about the timing/consequences of peak oil? How would that impact me?

For me, this one has low consequences. If I am wrong and we have adequate oil supplies for the next 40 years, then perhaps I live a more frugal life than I might have otherwise. I prefer to walk, ride a bike, or take a train instead of hopping into a car to drive some place. When I drive, I probably drive a smaller car than I would have otherwise. I grow some of my own food. Then again, I have always been frugal, so perhaps I would have done all of these things regardless. The one thing that it may have impacted upon in a major way is my interest in energy.

But if I am right, then I have plans in place to manage the impact as well as I can. Those plans start with minimizing my energy consumption. It is my small insurance policy. If the worst case turns out to be right, then there isn't a lot I can do except try to make sure my family and I are in circumstances that minimize the risk. Further, I have done a lot of work that is aimed at improving our energy security in the years ahead. That work includes promoting renewable energy technologies that I think can make a long-term contribution, but also arguing for conservation, and better utilization of our own natural resources. So if I am correct, then I have chosen to work on things that have the potential to mitigate the consequences.

But what if the other side is wrong? Government agencies devoted to monitoring our natural resources often reassure us that there is plenty of oil for decades to come. But what if the government, industry, etc. turn out to have missed the mark on peak oil? In that case I think we will be in for a lot of trouble.

If the peak comes quickly and the decline is steep, I believe we will be wholly unprepared. There is not a cheap, easy substitute for oil. Much higher prices will be inevitable in such a situation. Industries - such as the airline industry - won't be prepared and we will see perhaps entire sectors go bankrupt. While I do believe that over time we can transition to natural gas vehicles (and I don’t think the situation with natural gas is as dire), that will take some time. If the government is wrong and the peak happens much sooner than expected, we will be in for a very difficult transition period.

In other words, their consequences of being wrong are much worse than my consequences of being wrong. If they are wrong, people may starve during a difficult post-peak transition. If I am wrong, we move to a healthier, more sustainable lifestyle.

What If I am Wrong on Global Warming?

Another question I think a lot about is "What If I am Wrong on Global Warming?" I come down on the side that human activity is contributing to global warming, yet the scientist in me reminds me that "conclusions are tentative." But each camp has elements that feel – all too often with religious fervor - that the other side’s position will lead to either environmental or economic devastation. So we get a lot of vitriol in this discussion, which I don't like.

If the Al Gore contingent is correct, then we are facing some very major problems. As I have written before, I don't expect us to be able to rein in carbon dioxide emissions, so I see a future with ever higher atmospheric CO2, and potential environmental devastation if Al Gore is correct.

On the other hand are those who believe that human activities play little or no role in global warming. They view the opposition as putting global economies at risk by putting a price on carbon emissions. While I think environmental devastation is a much worse consequence than economic stagnation, the impact of that could be pretty severe as well.

What I would prefer to see – instead of two opposing camps dug into bunkers and tossing verbal grenades at each other – are more open minds on both sides. I would like to see the sides posing the question “What if I am wrong?” Another good question to ask in these sorts of debates is “Is there any evidence that would convince me that I am wrong?” I don't know what scientists will say when they look back at this issue a hundred years from now, but I don't want to see the debate squelched by those who shouted the loudest.

In conclusion, I never discount the possibility that I could be wrong about any number of things. I would say that precious few of my views are embedded in granite. That's why I write; to discuss, debate, learn, and change my mind when reason dictates that. But before you decide to respond to this essay with a strongly worded opinion, ask yourself the question “What if I am wrong?”

DrumBeat: July 2, 2009

Leanan — Thu, 02 Jul 2009 09:39:49 -0400

Hurricanes May Increase in Gulf as El Nino Shifts in Pacific

(Bloomberg) -- A shift of warming patterns in the Pacific Ocean may mean more seasons of increased hurricane activity in the Atlantic and more storms entering the oil-rich Gulf of Mexico, according to a study in the journal Science.
The warming of Pacific waters -- a phenomenon called El Nino -- has been moving toward the central Pacific, meaning more storms will form in the Gulf and Caribbean, researchers at Georgia Institute of Technology said in the study. Traditionally, when the eastern Pacific warms up, hurricane activity in the Atlantic falls.

Number of active oil rigs up by 11

HOUSTON (AP) -- The number of rigs actively exploring for oil and natural gas in the United States rose by 11 this week to 928, the third consecutive week for an uptick after months of declines.
Of the rigs running nationwide, 688 were exploring for natural gas and 229 for oil, Houston-based Baker Hughes Inc. reported Thursday. Eleven were listed as miscellaneous. The report was released a day early because of the July Fourth holiday.

4th pipeline bombing in northeastern B.C.

A fourth explosion has occurred at an EnCana Corporation natural gas facility in northeastern B.C, just east of Dawson Creek.
RCMP said EnCana gas line workers discovered a partially destroyed metering shed on Sunday at a wellhead near the community of Tomslake.
Investigators said the damage was the result of what appeared to be a deliberate attack similar to three other blasts that occurred at Encana operations in October.

Mexico’s Credit Rating Will Be Cut in Third Quarter, Loser Says

(Bloomberg) -- Mexico’s credit rating will be cut in the third quarter as the government struggles to muster congressional support for legislation that would ease the nation’s dependence on oil revenue, said Claudio Loser, a former International Monetary Fund Western Hemisphere director,

ANALYSIS - In China, India, higher fuel prices not yet high enough

NEW DELHI/BEIJING (Reuters) - At some point, the theory goes, Chinese and Indian consumers will begin to feel the pain of rising fuel costs, adjusting their habits to use less gasoline, just as motorists from Japan to America have done.
But even after a pair of surprise prices hikes this week, taking Chinese pump rates to their highest ever and elevating the cost of gasoline well above relatively cheap American petrol, officials and analysts are agreed: we're not there yet.
The economic expansion of the world's two most populous nations underpins the base case for medium-term oil bulls who believe $70 a barrel is only the beginning, but the question of demand "elasticity" -- whether fuel use contracts in the face of higher prices -- could call those forecasts into question.

Russia's new oil export route forces hard choices

MOSCOW (Reuters) - Russia is not producing enough oil to fill a new $4 billion pipeline to the Baltic, which is meant to cut reliance on export routes via neighbouring states, without making hard choices about flows through other outlets.
Diverting exports from other routes would risk losing market share to rival OPEC producers or harming ties with key energy partner Germany.

Gazprom's Recent Deals Should Be a Red Flag to the Rest of Europe

Presumably the wily Azeri president Ilham Aliyev is well aware of Gazprom’s practices, and is watching Gazprom’s heavy-handedness with Turkmenistan carefully. So why would he deal with this devil? Perhaps this is wishful thinking on my part, but what would make sense is that Aliyev is losing patience with European dithering over Nabucco. By showing a willingness to deal with Gazprom, he is sending a shot across the bow of the EUnuchs, letting them know with actions rather than words that they need to move sooner rather than later or Nabucco is going to turn into a, well, pipe dream.
Will the Europeans get it through their thick skulls? I highly doubt it. They are so divided–with Russia and Gazprom merrily promoting and exploiting those divisions–that they will be mightily pressed to get their act together soon. If they don’t, Azerbaijan may figure that it has no real alternative but Gazprom. And what a pity that would be.

Phil Flynn: Life Liberty and Oil!

How can you have prices rise when demand is so bad? There were no fireworks on the demand side as the EIA reported that total products supplied over the last four-week period has averaged 18.4 million barrels per day, down by 5.8 percent compared to the similar period last year. Over the last four weeks, motor gasoline demand has averaged nearly 9.2 million barrels per day, up by 0.9 percent from the same period last year. Distillate fuel demand has averaged about 3.4 million barrels per day over the last four weeks, down by 9.4 percent from the same period last year. Jet fuel demand is 13.2 percent lower over the last four weeks compared to the same four-week period last year. It is the less than spectacular supply and demand numbers, especially compared to a year ago, that leads market critics to say the market is out of whack with the fundamental realities.

How Institutions Manipulate the Price of Oil

A recent article shows the chart to the left which demonstrates the correlation between crude oil prices and the size of the passive long-only institutional investor.

Obama energy policy to cost taxpayers

President Obama has targeted oil, natural gas and coal - all carbon fuels - for higher taxation, an energy expert told a Tulsa luncheon on the eve of the “cap and trade” vote last week in the U.S. House.
Bob Tippee, editor of the Oil & Gas Journal, told a meeting of the Energy Advocates that Obama wants to adopt the “California view.”
Obama’s policy would cost the oil and gas industry at least $50 billion a year.

Mexican Oil Revenues Fall 10% Despite Hedging

Mexico's oil-export tax revenues totaled 363.58 billion pesos ($27.34 billion) between January and May, 10.3 percent less than in the same period of last year, officials said.
That drop occurred even though the Mexican government -- acting last summer when oil prices were widely predicted to fall from a record high of $140 a barrel -- hedged the price of crude exports at $70 a barrel for all of 2009.

Energy Minister urges talks over North Sea tax breaks

New Energy Minister Lord Hunt called last night for more dialogue between the offshore oil and gas industry and the Treasury over the tax breaks needed to maximise the extraction of North Sea resources.
Addressing a Subsea UK reception in the Commons, he gave a muted response to the highly-critical report issued by the Commons energy and climate change committee, which warned that without more help to encourage development and exploration, the industry could go into decline and put 50,000 jobs at risk.

Is Madison making the right choices on transit?

Madisonians, like most Americans, are in denial about the impact of peak oil and global warming. It will not be possible to continue our car-oriented lifestyles and sprawling development mentality and still meet urgent carbon-reduction goals.
Authorities should make transit decisions with an eye on a very different future, not the antiquated status quo of the past 50 years.

Money train: The cost of high-speed rail

The president is pledging $13 billion for a high speed rail system, but some experts fear it will never cover its own costs.

House Probes Resignation at Amtrak

WASHINGTON -- A House committee is investigating the recent resignation of Amtrak's inspector general, citing concerns about oversight at the publicly funded corporation at a time when it is set to spend more than $1 billion in federal stimulus funds.

Is Bicycling Bad for Your Bones?

In his study, the bone density of 32 male, competitive bike riders, most in their late 20s and early 30s, was compared to that of age-matched controls, men who were active but not competitive athletes. Bone scans showed that almost all of the cyclists had significantly less bone density in the spine than the control group. Some of the racers, young men in their 20s, had osteopenia in their spines, a medical condition only one step below full-blown osteoporosis. “To find guys in their twenties with osteopenia was surprising and pretty disturbing,” Smathers says.

The alternative choice - Steven Chu wants to save the world by transforming its largest industry: energy

WHETHER Steven Chu, America’s energy secretary, would be flattered or horrified by the comparison is unclear, but he and Margaret Thatcher have something important in common. They are both scientists who have risen to political power. That Mr Chu has a Nobel prize for physics, whereas Lady Thatcher swiftly abandoned chemistry for the more lucrative pastures of the law, does not make the comparison unfair. What matters is that both of them understand something that some politicians from softer intellectual backgrounds often seem to forget: you cannot negotiate with nature. Nor can you ignore it, for it will not go away.
Lady Thatcher showed her mettle in this regard in 1989, when she became the first politician of stature to raise the alarm about global warming. When her adviser Crispin Tickell pointed out to her that the level of carbon dioxide in the atmosphere was rising and that carbon dioxide was a greenhouse gas, she got the point instantly and alerted the world in a speech to the United Nations. Mr Chu’s job is harder: he is charged with spotting, nurturing and promoting promising energy technologies, thereby helping America to create the tools that the world needs to wean itself off fossil fuels.

Wesley Clark: Ethanol's field general

(Fortune Magazine) -- If ever there were an industry in need of a general, it's the ethanol industry. Already under siege from food companies blaming biofuels for rising grocery prices, ethanol companies are now seeing their profit margins crushed by falling prices for their product. Compounding the problem, many environmentalists -- who five minutes ago seemed to be in ethanol's corner -- have turned against the corn-based fuel.
Reporting for duty in ethanol's counterattack: Wesley Clark, the retired four-star general and former NATO commander, who signed on in February as co-chairman of an upstart ethanol trade group called Growth Energy. Clark, 64, has fully embraced the private sector since ending his run for the Democratic presidential nomination in 2004. In addition to co-chairing Growth Energy, Clark is on the board of Dutch wind-turbine maker Juhl Wind and serves as chairman of the New York investment bank Rodman & Renshaw. At Growth Energy, Clark has lobbied against efforts in California to hold ethanol accountable for deforestation in Brazil, he's pushed back against claims that diverting corn to ethanol drives up food prices, and he's spoken out in favor of a Growth Energy proposal to increase the maximum allowable ethanol blend in conventional gasoline to 15% from 10%.

Oil Falls, Gasoline Drops to 5-Week Low as U.S. Payrolls Slip

(Bloomberg) -- Crude oil fell and gasoline slipped to a five-week low on a report showing the U.S. unemployment rate rose last month, a signal that fuel demand in the world’s largest energy-consuming country will be slow to rebound.

Energetic blackmail

IN BLACKMAIL timing can be everything. The governments of Russia and Ukraine have cause to ponder this after failing to extract billions of euros from the European Union in the name of keeping Russian gas flowing to Europe next winter.
Thanks to recession and competition from cheaper suppliers, European demand for Russian gas has fallen. It is also summer. So right now governments and gas companies are unusually brave over threats to cut off the gas. They have resisted pressure to give Ukraine a huge loan that both the Russians and Ukraine’s squabbling leaders say is needed to avoid another dispute like the one that blocked Russian gas in January, affecting 18 of the 27 EU countries. Whether Europe’s nerve will hold as winter approaches remains to be seen. Russia supplies 42% of all EU gas imports, and its share is rising.

Russia's Gazprombank puzzles analysts as NPLs stable

MOSCOW (Reuters) - Gazprombank, the banking arm of Russian state energy company Gazprom, puzzled analysts on Thursday by showing its share of non-performing loans (NPLs) stayed unchanged in the first quarter of 2009.
Top Russian banks such as state-controlled Sberbank (SBER03.MM) and VTB (VTBR.MM) are struggling with losses as bad loans rise.

BP shuts alternative energy HQ

BP has shut down its alternative energy headquarters in London, accepted the resignation of its clean energy boss and imposed budget cuts in moves likely to be seen by environmental critics as further signs of the oil group moving "back to petroleum".

Beacon Power, Nordic Windpower Get Loan Guarantees

(Bloomberg) -- The U.S. Energy Department issued $59 million in conditional loan guarantees to Beacon Power Corp. and Nordic Windpower, part of a four-year-old program for alternative energy that has yet to finance any projects.
The conditional loan guarantees announced by the department today, which are the second and third issued, are contingent on the companies providing further financing.

Estimating errors in U.S. oil demand

(Reuters) - The market is transfixed by the weekly inventory and consumption estimates for crude oil and products published by the U.S. Energy Information Administration (EIA). But the backward-looking nature of parts of the reporting system makes it liable to miss turning points. Consumption and exports numbers are especially vulnerable to errors.
For the last three years, preliminary estimates for U.S. petroleum consumption (more formally called "product supplied to the domestic market") published in the EIA's Weekly Petroleum Status Report (WPSR) have been revised down when more comprehensive data becomes available in the Petroleum Supply Monthly (PSM) published six weeks later. The core of the problem is the statistical system's struggle to account for soaring exports of refined products, especially distillates to Europe. Because the agency is systematically under-estimating exports, it is over-estimating consumption, and being forced to trim the figures when more data becomes available.

John Michael Greer: Where Economics Fails

Understand current economic thought and you understand most of the mistakes that are dragging industrial civilization down to ruin. The Energy Information Administration (EIA), a branch of the US government, has become infamous in the peak oil scene over the last decade or so for publishing estimates of future petroleum production that have no relationship to geological reality. Their methodology, as described in EIA publications, was simply to estimate probable increases in demand, and then to assume that increased demand would automatically be met with a corresponding increase in supply. Quite a few peak oil writers have suggested some dark conspiracy behind this blithe disregard for the limits of a finite planet, but it takes only a few minutes’ worth of reading to identify the real culprit as the standard notion of the law of supply and demand taught in every first-year economics textbook today.

Iraq to push back second oil bidding round

Iraq is planning to push back its second oil bidding round to develop 11 oil and gas fields after a disappointing showing in the first offer.
The process had been scheduled to be completed by end of this year.
But Oil Ministry spokesman Assem Jihad says the second round will be held at a later date that has yet to be determined.

Oil’s history, for better or worse

On June 1 1932, some 7½ months after they sunk a drill into the ground in the shadow of a scraggly hill called the “Mountain of Smoke”, a group of prospectors and scallywags led by the New Zealand owner of a pharmacy in Aden hit oil 35km south of Manama.
Today, like a metal shrub with twisted branches, a capped well juts from the rocky ground marking the original spot where the massively prolific Arabian Oil Basin was first tapped.
Nearby is a plaque commemorating Jabal Ad Dukhan No 1 and a museum bearing the sign, “It All Began in Bahrain”.

Pakistan: Vegetables getting out of common man's reach

LAHORE - The transporters, businessmen, growers, consumers and general public have strongly rejected the sharp increase in the fuel prices announced by the so-called people friendly PPP-led government and said that it would push more people below the poverty line besides multiplying the miseries of the already inflation-stricken public.

Weak auto sales continue into June

NEW YORK (CNNMoney.com) -- Most major automakers reported weaker than expected U.S. sales for June, proving yet again that the industry's pain hasn't ended. But there are some glimmers of hope.

Rail crisis: London-to-Edinburgh route to be nationalised

The government is to nationalise Britain's largest rail franchise after National Express confirmed that it can no longer afford the £1.4bn east coast contract.
In a serious blow to franchise policy, the Department for Transport will take the London-to-Edinburgh route into public ownership at the end of the year. The transport secretary, Lord Adonis, said the contract will be put back up for auction to private companies at the end of next year but it is expected to fetch much less than £1.4bn, leaving the state with a gap in its rail budget.
"It is simply unacceptable to reap the benefits of contracts when times are good, only to walk away from them when times become more challenging," said Adonis.

First Biodiesel Pipeline Starts Operations

A commercial shipment of biodiesel has moved through a pipeline in the United States for the first time, according to Kinder Morgan Energy Partners, a pipeline company.
A 5 percent biodiesel blend moved from Mississippi to Georgia, and also from Mississippi to Virginia, via the Plantation Pipe Line Company, which is owned jointly by Kinder Morgan with a 51 percent stake, and Exxon Mobil with 49 percent. Last December, Kinder Morgan announced that the nation’s first ethanol pipeline had begun service.

Heading into the holiday: Fewer miles at higher cost

The nation heads into the Independence Day holiday weekend amid the longest and steepest decline in driving since the invention of the automobile.
Since the number of miles traveled by motor vehicles in the USA peaked in November 2007, the nation's 12-month total has dropped by 123 billion miles, or slightly more than 4%. That's a bigger decline than the drop of just above 3% during the 1979-80 Iranian revolution that triggered a spike in gasoline prices in the USA.
The 4% drop is the equivalent of taking between 8 million and 10 million drivers off the road.
"We may be witnessing the beginning of a fundamental shift in American driving habits," says Ed McMahon, senior research fellow at the Urban Land Institute, a non-profit group that promotes innovative development.

Oil Falls to Lowest in a Week on Forecast U.S. Shed More Jobs

(Bloomberg) -- Crude oil fell to the lowest in a week before a report forecast to show U.S. unemployment increased last month, signaling the world’s largest energy user remains mired in recession.
U.S. fuel demand in the four weeks ended June 26 dropped 5.8 percent from a year earlier, while demand for distillate fuel including heating oil and diesel, fell 9.4 percent, according to a Department of Energy report yesterday. The Labor Department will likely report the U.S. shed an additional 365,000 jobs in June, a Bloomberg survey showed.

Barclays Raises U.S. Oil Forecast 15% on Fundamentals

(Bloomberg) -- Barclays Plc raised its third-quarter forecast for West Texas Intermediate crude oil by 14.5 percent from an estimate in June, citing expectations for fundamentals in commodity markets to return to “normalcy.”
The forecast for benchmark futures contracts traded on the New York Mercantile Exchange was revised to $71 a barrel from $62, Barclays Capital analysts led by Paul Horsnell said in a weekly report yesterday. Barclays increased its projections for Brent crude by 9.5 percent to $69 a barrel and left forecasts for the fourth quarter and 2010 unchanged.

‘Oil over $100 would hurt global economy’

"Hopefully in the third quarter and fourth quarter, it won't surpass $100 as this will fuel recession again," Sheikh Ahmad al-Abdullah al-Sabah told reporters in parliament.
Oil had already hit the price that Opec was looking for in the second half of the year, he said. Speculators and US dollar weakness were among the factors behind the rise, Sheikh Ahmad said.

Asian LNG Spot Trade May Shrink 73% This Year, Repsol Says

(Bloomberg) -- Shipments of liquefied natural gas to Asia from the Atlantic Ocean area may shrink by about 73 percent this year as Japan and South Korea, the world’s biggest buyers, cut imports, said an official from Repsol YPF SA.
Supplies of spot LNG from projects from countries such as in Nigeria, Equatorial Guinea, Egypt and Algeria may fall to about 4 million metric tons this year, or to 2006 levels, from about 15 million last year, said Strategic Planning Director Ane Arino Ochoa at Spain’s largest oil company.
“We expect a reduction in LNG traded this year because of the economic crisis,” she said after speaking at the Next Generation LNG conference in Singapore yesterday. “There will be a surplus of LNG in the global markets in the short term.”

India Gas Demand Set to Rise as Fertilizer Makers Add Capacity

(Bloomberg) -- India’s demand for natural gas is set to increase as fertilizer makers spend as much as 50 billion rupees ($1 billion) in the next three years to boost capacity by 35 percent, an official said.
Fertilizer companies may need an additional 24 million cubic meters a day of gas to feed new plants and existing ones that are switching from using naphtha and fuel oil, Satish Chander, director-general of the Fertilizer Association of India, said by telephone from New Delhi.

India - Econ survey: decontrol petrol, diesel prices

NEW DELHI (Reuters) – India should end controls on prices of petrol and diesel and allow entry for private and foreign firms in the energy sector, a finance ministry survey said on Thursday.

PVM Loses About $10 Million in Unauthorized Trades

Bloomberg) -- PVM Oil Futures Ltd., a unit of the world’s biggest broker of over-the-counter oil derivatives, said it lost just under $10 million as a result of unauthorized trading in futures contracts on June 30.
“As a result of a series of unauthorized trades, substantial volumes of futures contracts were held by PVM,” Robin Bieber, director of PVM Oil Futures Ltd., said in an e- mailed statement today. “When this was discovered the positions were closed in an orderly fashion. PVM suffered a loss totaling a little under $10 million.”

BP Pay Changes for Contract Workers Threatens North Sea Strikes

(Bloomberg) -- BP Plc, Europe’s second-largest oil company, plans to cut pay for North Sea contract staff, risking strike action later this year.
BP wants to reduce the cost of offshore platform workers employed through contractors and plans to end discretionary payments including overtime built-in to the day rate and automatic night shift payments. The changes cut pay as much as 20 percent for 800 people, union leaders say.

Are we at the peak of oil production?

There are some that believe that the ever increasing rise in gas prices over the past years is a clear indication of peaking. The spike of oil prices and crash in 2008 is said to be the peak point of production. This is a question we cannot fully know the answers to till probably 5 or 10 years out. Raymond James, the investment company that the Buccaneers football team’s stadium is named for, released a press release declaring peak oil: “represents a paradigm shift of historic proportions. Unfortunately, mankind better get ready to live in a peak oil world because we believe the ‘peak’ is now behind us.”

Flashing Lights on the Console

KMO welcomes Albert K. Bates back to the program, and they sit down together for a chat with Richard Heinberg, author of Peak Everything. Albert admits that he's finding it hard to maintain his "soft lander" status in the face of mounting evidence, and Richard talks about the themes in his new book, Blackout: Coal, Climate and the Last Energy Crisis.

Our idea of progress must change

We've raised our standard of living to record heights -- so high, in fact that, if everyone lived like we do in North America, we would need three or four earths. To keep our way of life rolling along, we need to make more things. As the satirical newspaper The Onion put it, quoting a fictional Chinese worker: "Often, when we're assigned a new order for, say, 'salad shooters,' I will say to myself, there's no way that anyone will ever buy these . . . One month later, we will receive an order for the same product, but three times the quantity . . I hear that [North] Americans can buy anything they want, and I believe it, judging from the things I've made for them. And I also hear that, when they no longer want an item, they simply throw it away. So wasteful and contemptible."
But such is our personal measure of progress: whoever has the most stuff when they die, wins.

Nova Scotia needs a new deal

I want to come back to a second to the beginning of this. I'm not sure that what we want to look at is called "recovery." I think we're talking about a restructuring of the economic system and it won't look the same---it can't look the same. I've got a quote here from George Monbiot, who says, "Climate breakdown, peak oil and resource depletion will all dwarf the current financial crisis, in both financial and humanitarian terms." So unless we start thinking long-term, this current economic meltdown is going to seem like very small potatoes.

Feds, Colo. hash out agreement on oil, gas rules

DENVER — Colorado's new oil and gas rules, denounced by the industry as the most burdensome in the country, now apply to federal land as well as private and state land.
Stricter oil and gas regulations took effect on private and state land in Colorado on April 1. Enforcement of the rules was delayed on federal land to give state and federal officials time to sort through any conflicts.

Oil Contract Rows Rock Uganda Ahead of Production

The Ugandan government is embroiled in disputes with politicians and activists over its failure to reveal the contents of contracts with oil-exploration companies operating in the country ahead of the start of oil production on the Ugandan side of the Albertine Rift on the country's western border.

Iran 'disqualifies' EU from talks

The EU is no longer qualified to take part in talks on Iran's nuclear programme, Iran's military chief says.
Maj-Gen Hassan Firouzabadi, Iran's chief of staff, accused the EU of "interference" in riots which followed June's disputed presidential elections.

Kenya unveils renewable energy drive

NAIROBI (AFP) – Kenya on Wednesday unveiled extensive plans to invest in renewable energy, including free distribution of one million energy-saving light bulbs in exchange for ordinary bulbs.
The measures announced by Prime Minister Raila Odinga also include subsidising the price of solar water heaters for public institutions, firms and households.

Kenya: Sex in a Time of Famine

"Prostitution seems to be the only option out of hunger. The relief food offered by the government is too little and irregular," says Mr Keleli.
About 75 per cent of people in this region live below the poverty line. The land is semi arid and unproductive, with very little economic activity.
Charcoal burning has for a long time been the only means of upkeep. But with the current drought, trees have diminished, leaving residents with no reliable source of livelihood.

Clean Energy Investment Leaps In Second Quarter

LONDON - Global investment in clean energy and climate-friendly technologies leapt in the last three months but full-year levels won't recover until 2010 or 2011, analysts said on Wednesday.
Falling energy demand and more expensive debt have hurt large renewable projects for example in wind and solar power. Recession has cut risk appetite, curbing funding for clean technology start-ups.
But global clean energy investment rebounded in the past three months, after a 44 percent collapse in the first quarter, and stimulus spending could spur a return to last year's funding levels in 2010, according to research group New Energy Finance.
"It's a big bounce back," said Michael Liebreich, NEF chief executive, referring to preliminary numbers to be published later this week or next.

Brazil launches bus powered by hydrogen fuel cells

SAO PAULO – Sao Paulo state officials have launched what they say is Latin America's first passenger bus with an electric engine powered by hydrogen fuel cells.
Gov. Jose Serra says the bus will start test runs on the streets of South America's biggest city in August and will be joined by three similarly powered vehicles next year.

The Future of Transport

With Peak Oil just around the corner, humans are going to be faced with very few options for mobility in the future — stop travelling or find alternative forms of transport. Imagine travelling with dozens of balloons or in a futuristic-looking helium ship or maybe in a car made of vegetables and powered by chocolate. Sound too good to be true? Check out our collection of the craziest forms of green transport.

UK Wind Boom Spikes Prices, Threatens Plants: Study

LONDON - The dramatic growth in wind turbines around the British Isles may lead to huge spikes in power prices by 2030 and threaten the viability of backup plants needed for calm periods, according to Poyry Energy Consulting.
Britain and Ireland have ambitious targets to reduce their carbon dioxide emissions, with wind turbines expected to reduce most of the climate warming gasses from the power sector.
But the level of wind energy envisaged will lead to extreme price swings by 2030, with times of negative prices when the wind blows hard and spikes to almost 8,000 pounds per megawatt hour when the wind drops, according to a new study by Poyry.

Group: World failing to halt biodiversity decline

GENEVA – Governments are failing to stem a rapid decline in biodiversity that is now threatening extinction for almost half the world's coral reef species, a third of amphibians and a quarter of mammals, a leading environmental group warned Thursday.
"Life on Earth is under serious threat," the International Union for Conservation of Nature said in a 155-page report that describes the past five years of a losing battle to protect species, natural habitats and geographical regions from the devastating effects of man.

Brazil flora risk greater than thought: study

RIO DE JANEIRO (AFP) – Nearly 2,300 plant species are at risk of disappearing from flora-rich Brazil, many more than once thought, according to an academic study released on Wednesday.
The research, carried out by 175 scientists, indicates the Brazilian government has dramatically underestimated the risk to the country's plant species caused by deforestation, fires and urbanization.

Controlling Immigration Critical to Meeting Goals on U.S. Greenhouse Emissions, Finds New Report by FAIR

Immigration, Energy and the Environment addresses America's stifled immigration policy debate: it finds that America's massive immigration-fueled population growth was the single largest contributing factor to the nation's increased energy consumption and carbon emissions over the past 35 years. Even without a massive amnesty for illegal aliens supported by President Obama and congressional leaders, immigration will be the driving factor as U.S. population approaches the half billion mark by mid-century.

Canada and Japan blocking climate-change deal, Sir David King warns

Canada and Japan were blocking a possible deal on climate change at the Copenhagen summit, Sir David King, the former Chief Scientific Adviser, warned yesterday.
Speaking at the World Conference of Science Journalists, Sir David said that the two countries had stepped into the breach left by the Bush Administration, which had strongly resisted cutting CO2 emissions.
“Copenhagen is faltering at the moment,” said Sir David. “The Americans are now fully engaged. But several countries are blocking the process.”

Senate May Pass U.S. Climate Bill, Reject Treaty, Kerry Says

(Bloomberg) -- The U.S. Senate may pass legislation to slow climate change and then fail to approve a global treaty that commits nations to do so, Senator John Kerry said.
Kerry, chairman of the Foreign Relations Committee, will be a leader in Senate efforts to place the first domestic curbs on greenhouse gases, after the House approved a measure last week. Even if a Senate bill passes, there may not be enough support to ratify an international accord incorporating the U.S. commitments, the Massachusetts Democrat said in an interview.

China blasts US climate bill

BEIJING (AFP) – China said on Thursday that it was "firmly" opposed to provisions in a new US clean energy bill that will make it easier to impose trade penalties on nations that reject limits to globe-warming pollution.
"China is firmly opposed to such measures," vice foreign minister He Yafei told reporters in Beijing.
"We are firmly against such attempts to advance trade protectionism under the pretext of climate change. It is not conducive to world economic recovery. It serves nobody's interests."

Dopamine Returned on Energy Invested (DREI)?

Jason Bradford — Wed, 01 Jul 2009 10:15:29 -0400

On a steamy Friday night my 10 year old son and I headed over to the rodeo grounds. It is only about a mile from our home and within the city limits, though on the eastern edge where the town merges into the valley landscape of pastures and tree-lined creeks and ditches.

As we approached, it was obvious that a large crowd had gathered. A long line extended from the ticket booth and the stands looked nearly full. Friends had tipped me off about what was going on only 10 minutes earlier, while thousands of others had obviously been looking forward to this event.

It was a truck and tractor pull.

On a hot summer night truck pull fans fill the stadium at the rodeo grounds in Willits, CA. Behind the dust is a weighted sled, called Terminator, that eventually forces the truck to stall. Truck pull images by Ree Slocum.

I place this sport in the same category as NASCAR, demolition derby, drag racing, and motor cross: An internal combustion engine of one sort or another propels a vehicle with a driver. Speed, power, agility, longevity or luck may sort among winners and losers. In this particular version, a weighted sled steadily increases the resistance the further it travels. Vehicles pull until they stop, usually in an engine stall and a cloud of dust.

Because Willits is a relatively small town, anonymity is not possible once you become involved in community affairs. I am on the board of a couple of non-profits related to energy and sustainability, have a radio show on a local station, two kids in the school system, and run a small farm that serves local customers. I brought attention to the subject of peak oil in October of 2005 by showing the film The End of Suburbia every other week for about a year.

I offer this background because people who know me would likely surmise (correctly) that if I were “supreme ruler” nothing like this would ever happen.

I asked a city councilor in attendance (the same person who alerted me to its occurrence) if this event is in conflict with the City’s pledge to reduce greenhouse gas emissions 90% below 2005 levels by 2050, a goal I had a hand in developing? The City of Willits and a who’s who of community organizations also signed a sustainability vision statement I wrote. Was this part of that vision? She just smiled and remarked that energy isn’t expensive enough yet.

I was recognized by a member of the Frontier Day’s Committee, which are the folks who run the rodeo grounds. He sided up to me to verbalize how he saw the equations balancing out with respect to the spectacle. “Using a lot of fuel, aren’t they?” He spoke directly into my ear to compensate for the cylinder blasts. “But you know, this is a big crowd and it really helps us cover the cost of our lease. It’s the first time we’ve done this.” I simply smiled and gave a nod.

The crowd was big. Ten times bigger, in fact, than any I had been able to attract with notions of peak oil, economic collapse, relocalization, renewable energy, sustainable agriculture, or a host of other hot topics. What should I make of that?

My son shouted out a running commentary that reflected my own mixed emotions. As the announcer explained in testosterone-laden tones, the turbo diesels spent about a minute “Building their Boost!” before releasing the clutch. During this process, black soot emerged from pairs of thick chrome pipes to neck craning heights, which served to tense the crowd. On several such occasions my son looked up at me to say, “They’re polluting the Earth!” And yet, perhaps ten seconds later as the truck stalled some 300 ft down the dirt track we whooped excitedly with everybody else.

Our brains were being whip lashed by dueling neurotransmitters. The neocortex was giving us one signal, namely “Polluting Earth Bad,” while the limbic system was giving us countervailing signals, specifically “THIS IS SO COOL!” In fact, that is the other phrase my son used often that night. So on a cycle that repeated every several minutes, I would pump my fists and shout “YEAH!”, but as the rush of dopamine waned, nagging concerns regarding the energy expenditure would re-emerge. Sometimes the motions of a really fine vehicle, such as the ones propelled by jet engines, would keep me “amped” even while the track was being prepared between runs by rumbling dozers, rollers, and the periodic water truck. (I am not going to delve into the neurophysiology and evolution of the brain in this post. Please see this one instead.)

I found myself drawn to the particular form of White Lightening. It wasn't of the largest class of trucks, and the length of its pull disappointed somewhat, but the elegance of its lines and the beauty of its exhaust flames can't be denied.

It wasn’t only the fuel injection on a 2000 hp engine going full tilt for 10 seconds that bothered me, but the knowledge that these beasts were coming from all over the state. The names of the vehicles I remember include White Lightning, Semper Fi and Get it Done (which ended up being the big winner, pulling the Terminator sled over 350 ft, dragging it out of bounds and finishing in a perilous side-ways slide). The geographic names included San Luis Obispo, Red Bluff and Bakersfield. And my son and I constituted the majority of the subpopulation that made it to the rodeo grounds via the most energy efficient transportation device every made—the humble bike running at less than one horsepower and burning non-fossil carbohydrate fuels.

I don’t want anybody to get the impression that I judge the people who regularly attend diversions such as the truck pull much differently than my own cohort. The following is a list of low Dopamine Returned on Energy Invested (DREI) activities undertaken by friends and family. These are people who I have personally addressed on the subjects dear to readers of The Oil Drum, and some of them even help me try to “save” civilization, the planet, and other important stuff.

• Fly to Las Vegas to see Cirque du Soleil. This is remarkably common and not limited to any one individual. The most recent “must see show” was The Beatles Love, and I admit it looks awfully tempting!

Although I have not seen the performance, I gather from this image that I would be pleasured by it.

• Spend a week on a Cajun Dance Cruise ship. My wife and I are invited to this one yearly, and it is especially difficult to pass up.

• Ski in the Rockies. Ski in the Sierras, etc.

• Vacations in Europe, Asia, etc.

I haven’t done any carbon footprint analysis to compare the truck pull to the diversions more in line with my own tastes and those of my peers. Obviously they all use gargantuan amounts of energy.

I am a firm believer in the notion that the one-time endowment of Earthly oil should be viewed as a precious gift, and that if any of it needs to be used to it should be allocated towards deploying the technology and infrastructure that would lower our ecological footprint enough not to despoil our home. Anytime I see gallons of fossil fuels being burned I realize that the btus released are enormous, dwarfing the potential power output of human bodies or domesticated animals. Without a renewable energy infrastructure in place before depletion of oil sets in, I fear social convulsions of the worst sort. For example, if we lose our energy slaves will we somehow justify human ones again?

And yet we burn it up so frivolously. This final quote from my son summarizes the situation aptly: "Dad, this is so crazy!"

Nate Hagens and I discussed this topic as part of one of our radio interviews. On that program Nate recommended trying to discover diversions that use little energy, in other words, have a high DREI. I doubt most of the crowd at the truck pull had listened to any of my shows. But even among those of us “in the know,” a challenge we face is dealing with the addictive aspects of energy intensive activities.

On the way back home I met John Jeavons and related my recent experiences. He commented on a time in Mexico, where he was teaching GROW BIOINTENSIVE farming in a workshop. It was in a port city and one day an impressively enormous cruise ship loomed over the docks, its thousands of passengers disgorging into the streets and tourist shops. He thought about the amount the urine and feces produced each day on a ship like that, how much food could be grown with it, and knowing that the mineral wealth of the modern food system and the resulting effluent came from mines and natural gas wells that were low entropy geological riches scooped up using machines running on oil…and yet it was all being dispersed into the ocean.

We like to share stories on Campfire. So I’d like to hear from you about the following:

1. Have you been able to move away from low DREI habits and replace them with high DREI ones?
2. What experiences have you had like mine and John Jeavons’, being simultaneously awed and disgusted by the excesses of our world?
3. Why should I deprive myself of the great hedonistic pleasures of the age of oil if I can still afford them since very few others willingly curtail?
4. Is information sufficient to change behavior, and if not, what does?
5. I recognized very few faces at the truck pull, even though I live in a small town. What does this say about the cultural diversity of society and does that diversity make it more or less challenging to adapt to change?

Story Update: Coverage of the event in The Willits News is now available.