Category Archives: peak oil

They Finally Busted The Bastards – Oil speculators starting to get complaints from the CFTC

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Commodity Futures Trading Commission….say it now Commodity Futures Trading Commission …..oh yah now the CFTC is going to be hot on TV. God Bless Steve Hargreaves. I am a thief.. but I am not going to list his entire post or even claim it as my own. But I have been bitching about the speculators in oil since last September so I think I get to thump my chest a little. I even rented the Movie Trading places so I can get into the spirit of the thing. So let’s recronical the events. In August the  Fed announces that they are more worried about stability in the housing market, refuses to back the dollar with interest rate increases and the dollar plunges. All of the currency speculators dumped their dollars (many of whom are also the oil speculators today – hint hint) and the price of oil climbs to 50$$s a barrel. The Saudies and OPEC see the rise as good for them and constrict production slightly. The price climbs to 60$$s a barrel and the speculators say hmmm. There is a commodity we can abuse so they buy long in the futures market, take that oil out of the market and the price begins to soar. WHY? Because these are people who have never been in the oil market. They are not going to touch a single barrel of oil and the oil guys do not know these people. So the speculators keep buying and the price keys rising which should have ended at about 100$$ a barrel. At that point every financial planner for every rich person said, “get into oil” like it was gold or something. As they did the oil soared again to somewhere around 130$$ per barrel. The gasoline refiners realized they could jack the price of gasoline under the guise of expensive oil even though that’s not the price they were paying.

The Saudies got pissed off because they know at some point people will quit using gasoline and they know most that quit using gasoline will not come back ultimately destroying their market. This is when it gets good because this is when the chisslers and the real crooks get in. They start selling their futures to each other at inflated prices, and the people busted today start hammering the market at the open and the close and the market hyperinflates to high water marks for now at 148/149$$$ a barrel. Damn you would think these people would at least have the decency to hit 150$$ but nooooo. That is because the Senate announced that they were holding hearings on speculation and the Bushman order the CFTC to investigate. OH OO. So the speculators start to sell off but they have to doooo itttt slowlllly or the oil market crashes and the whole world starts looking for them to kill them!

So what will happen now? Well alot of minor chisselers and crooks will go to jail. The real players at the hedge funds will be nearly out of oil by the end of August and prices will slowllllly come down until the refiners have to drop prices and start up capacity that they have not been using lately.

Now, who is responsible for all of this? Well Phil Gramm and his Wife Wendy actually (yes the guy who said we were whiners)  They effectively changed the rules for commodity trading at the end of Bill Clinton’s term and people just sort of played with it in 2000 to 2003 BECAUSE there was more money to be made, and more fun too, in the housing market. Yah those Wall Street guys are real wacky when it comes to stealing other people’s money.  

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http://money.cnn.com/2008/07/24/markets/cftc/index.htm

Traders manipulated oil prices – U.S.

Regulators claim firm attempted to ‘bang the close’ by amassing large positions

just before markets closed.

By Steve Hargreaves, CNNMoney.com staff writer

Last Updated: July 25, 2008: 10:27 AM EDT

NEW YORK (CNNMoney.com) — The government charged an oil trading firm Thursday with manipulating oil prices in the first complaint to be announced since the regulators began a new investigation into wrongdoings in the energy markets.

The Commodity Futures Trading Commission accused Optiver Holding, two of its subsidiaries and three employees with manipulation and attempted manipulation of crude oil, heating oil and gasoline futures on the New York Mercantile Exchange.

“Optiver traders amassed large trading positions, then conducted trades in such a way to bully and hammer the markets,” CFTC Acting Chairman Walt Lukken said at a press conference. “These charges go to the heart of the CFTC’s core mission of detecting and rooting out illegal manipulation of the markets.”

In May, under the backdrop of record oil prices and calls from legislators to crack down on speculative oil trading and market manipulation, the CFTC announced a wide-ranging probe into oil price manipulation. The agency says it has dozens of investigations ongoing.

The complaint filed Thursday names Bastiaan van Kempen, chief executive; Christopher Dowson, a head trader; and Randal Meijer, head of trading at an Optiver subsidiary.

The CFTC said the firm attempted to “bang the close” by amassing large positions just before markets closed – forcing prices up – then selling them quickly to drive prices down and pocketing the difference.

The alleged manipulation was attempted 19 times on 11 days in March 2007, the agency said. In at least five of those 19 times, traders succeeded in driving prices higher twice and lower three times, according to the CFTC.

Optiver issued a written statement saying the firm had received the complaint.

“We take the Commission’s action very seriously, and are treating it with utmost attention and care,” said the statement. “Obviously, we cannot comment further until we have had the opportunity to review the complaint.”

CFTC stressed that the price changes were small and the manipulation was isolated, and that the investigation has nothing to do with the recent heat the agency has taken on Capitol Hill over rising oil prices.

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Here is more from the CFTC itself:

http://www.cftc.gov/newsroom/enforcementpressreleases/2008/pr5521-08.html

CFTC Charges Optiver

 Holding BV,

Two

 Subsidiaries, and High

-Ranking

Employees with

 Manipulation of NYMEX

Crude Oil,

Heating Oil,

and Gasoline Futures

Contracts

Defendant Caught on Tape and in

Email Saying He Would “Bully”

the Market

 The CFTC filed the civil enforcement action in the United States District Court for the Southern District of New York against Optiver Holding BV, a global proprietary trading fund headquartered in the Netherlands, and two subsidiaries – Optiver US, LLC (Optiver), a Chicago-based corporation, and Optiver VOF, a Dutch company. The complaint also names defendants Christopher Dowson (head trader of Optiver), Randal Meijer (head of trading and supervisor of Optiver and Optiver VOF) and Bastiaan van Kempen (Chief Executive Officer of Optiver).

The Energy Futures Contracts Manipulated by Defendants

The defendants’ manipulative trading scheme involved three futures contracts listed for trading on the NYMEX: the Light Sweet Crude Oil futures contract (Crude Oil, also referred to as West Texas Intermediate (WTI)), the New York Harbor Heating Oil futures contract (Heating Oil), and the New York Harbor Reformulated Gasoline Blendstock futures contract (New York Harbor Gasoline). The settlement price for the Crude Oil, New York Gasoline, and Heating Oil futures contracts is derived by calculating the volume weighted average prices of futures trades conducted during the closing period for the contracts (from 2:28 to 2:30 p.m.). The volume weighted average price is referred to commonly as the VWAP.

The defendants’ manipulative scheme involved the Trading at Settlement (or TAS) contracts in Crude Oil, Heating Oil, and New York Harbor Gasoline contracts. TAS contracts are futures contracts, except that the parties determine at the initiation of the contract that the price of the TAS contract will be the day’s settlement price plus or minus an agreed differential. A TAS contract which has been bought or sold can be offset by trading a futures contract in the opposite direction.

The Manipulative Scheme

The manipulative scheme, in defendant Dowson’s words, to “bully the market,” involved trading a significant volume of futures contracts in Crude Oil, Heating Oil, and New York Harbor Gasoline in the opposite direction of the associated TAS position, before and during the close of the contracts. The defendants’ goal in trading the large volume of futures was to improperly influence and affect the price of futures contracts in Crude Oil, Heating Oil, and New York Harbor Gasoline. The defendants’ manipulative scheme was, in the words of defendant Meijer, “built on the idea that we can control the VWAP.”

As alleged in the complaint, the scheme ultimately permitted defendants to profit regardless of the direction of the market move, provided that Optiver’s futures trading in the close and before the close was in the opposite direction of the TAS position it had accumulated during the trading day.

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All of this is hysterical because they just said that the reason for the rise in the price of oil was SUPPLY AND DEMAND 2 days ago. Dare I say it? Thats Rich. 

Green Cars – Can we get rid of the internal combustion engine fast enough?

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Forget high gasoline prices. That maybe a short term issue but the fact is global warming is the more important issue that we should not lose sight of:

 http://www.greencar.com/

2010 Prius Production

Moves to US

By Todd Kaho

Like all automakers, Toyota is acutely aware of evolving consumer demands and is responding with some pivotal changes in its manufacturing structure and product mix. It’s beginning this in a big way by adjusting the production mix at three of its U.S. plants to improve production efficiency. In short, big trucks like the new Tundra aren’t selling so Toyota is aiming at the need to build more of its fuel-efficient cars that are in high demand. And the place to start? The Prius, of course.

The most interesting news to come out of this shift is that the next-generation Prius hybrid will be assembled at Toyota’s new Blue Springs, Mississippi plant in late 2010. That move makes it the second Toyota hybrid to be built in the U.S., with the current Camry Hybrid already assembled in Kentucky. The Highlander mid-size SUV was originally slated for production at the Mississippi plant but will now be built at Toyota’s Princeton, Indiana manufacturing facility in place of the full-size Tundra pickup. All current Prius models are currently built at Toyota’s Motomachi Plant in Toyota City, Japan. The move toward building popular hybrids in the markets where they’re already selling well or are expected to do so is already in play at Toyota, which announced recently that it would build the Camry Hybrid in Melbourne, Australia for that market.

When it emerges from the Mississippi assembly plant, the 2010 Prius will be the fourth generation of Toyota’s iconic gasoline-electric hybrid in North America. Speculation and rumors about the new car are running rampant as the current Prius – introduced as a completely revised model in 2004 – nears the end of its life cycle. Spy shots are circulating of what “might” be the next-generation Prius and sketches imagining what the next iteration will look like are also at play. Some are speculating that the 1/X Concept shown here, which debuted at the most recent Tokyo Motor Show, may provide clues regarding the look of the next Prius. The reality is that nobody really knows the true scoop. No doubt, when the new Prius debuts at the 2009 North American International Auto Show (NAIAS) in Detroit this coming January the world will definitely be watching.  

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http://www.greenercars.org/highlights_mkttrends.htm

The Greenest of 2008

This year, the natural gas-powered Honda Civic GX claims the title as the greenest vehicle for the fifth year running. Toyota’s hybrid-electric Prius, which places second, is the year’s top-scoring gasoline vehicle, while Honda’s Civic Hybrid ranks a close third. Rounding out the top five are the recently released Smart Fortwo Convertible and Coupe and Toyota Yaris. In total, the Greenest Vehicles list contains one natural gas, four hybrid-electric, and seven conventional gasoline vehicles, a mix of technologies that demonstrates some of the avenues automakers have taken in developing greener vehicles. Whether using hybrid gasoline-electric designs, compressed natural gas, or simply clean and efficient conventional gasoline designs, automakers have visibly demonstrated their ability to engineer with the environment in mind.

This year sees a number of changes to the nameplates on the Greenest Vehicles list. After being shut out of the top twelve in 2007, a domestic automaker makes an appearance on our top-twelve list. The 2008 Tier 2 Bin 3 / PZEV-certified Ford Focus comfortably takes the 9th spot in the annual ranking. Other new entries to the 2008 “Greenest” list include the Smart Fortwo Convertible/Coupe and the Mini Cooper/Clubman, both small cars that achieve excellent fuel economy.  However, Hyundai’s PZEV-certified Elantra narrowly misses a spot on our list, landing in 13th place as a result of the above-mentioned new entries. Following suit are the Kia Rio, Hyundai Accent, Chevrolet Cobalt, and Pontiac G5, all of which score very well according to our ranking but face more competition this year from several clean vehicles that have entered the market. This is, of course, good news to consumers, who have greater options when it comes to buying the greenest vehicle that meets their needs and fits their budget.

Other good news is the fact that the vast majority of the year’s greenest vehicles are widely available coast-to-coast. Not too long ago, the list was dominated by vehicles for sale only in California, while today more than 80 percent of the Greenest Vehicles can be purchased in any state.

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http://autos.yahoo.com/green_center-top100/

Concept Green Cars

Toyota first demonstrated a futuristic hybrid concept vehicle at the Tokyo Auto Show in 1995. The car, which consisted of an electric motor connected to a regular gasoline engine, was called the Toyota Prius. Hybrid skeptics ?both at the show and afterward?are now silent, as cumulative global sales continue to surpass all expectations. Which of today’s wild and wacky hi-tech enviro car concepts will become tomorrow’s practical fuel-efficient vehicles? Let’s take a look at some contenders.

Volvo 3CC

The Volvo 3CC concept car, a rocket-shaped three-seater, can accommodate the full range of power systems, from traditional gasoline and alternative fuels such as ethanol, to hybrid and all electric. Three thousand lithium-ion batteries, just like those used in laptop computers, give it the equivalent of 105 horsepower. The 3CC has the aerodynamics of a two-seat sports car, but can slip a third passenger, or perhaps two children, in a single seat in the back.

 Daihatsu UFE III

Daihatsu, the Japanese car company known for compacts, is on the third generation of the UFE (which stand for Ultra Fuel Economy). This mini-hybrid vehicle can transport three people?one upfront, and two in the back. The hybrid system comprises a 660-cubic centimeter direct-injection gasoline engine, two motors, and a nickel-metal hydride battery. Its estimated fuel economy is 169 miles per gallon.

Nissan Pivo

Nissan has developed a bubble-shaped, three-seater electric car called the Pivo?short for pivot. It runs exclusively on electricity. The cabin sits atop a wheeled platform that can swivel 360 degrees, doing away with the need to reverse when emerging from narrow spaces.

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But these are concept cars which means that they are years away from production. I do not think we are going to make it.

For more:

www.epa.gov/greenvehicle

www.editorial.autos.msn.com/article.aspx?cp-documentid=434502

www.thegreencarco.com/

http://puregreencars.com/

www.ecoworld.com/energy/EcoWorld_Energy_Green_Vehicles1.cfm

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State Journal Register Supports Big Oil –

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Last week the State Journal Register solicited a “Guest OP-ED” piece from the mouth piece for the Illinois Petroleum Council that in simple form says we must overcome our current energy crisis by,  Conservation and
fuel economy  (which he instantly discounts), Stronger energy-trading alliances with neighbors, Expand domestic resources, and  Diversify supply.  By diversify he means Nukes. You can read the rest of the slop at:

http://www.sj-r.com/opinions/x833727955/David-Sykuta-We-have-to-get-over-it-and-explore-energy-options

I know for a fact that many people have written to respond against most of his ideas because many environmentalists including Will Reynolds and Diane Lopez always do. I posting my letter here because I sent one and they did not publish it:

Editor

State Journal Register

One Copley Plaza

Springfield, IL 62701

Emailed – 07/015/08

Dear Editor:

 

Dave Sykuta recent guest editorial “Get Over It” (the title of an Eagles song)  was nothing but one long environmental taunt. It had nothing to do with the irrationality we call the Oil Market.

 

Supply is not the overwhelming issue that he makes it out to be. The Iranians have 7 or 8 super tankers full of oil (depending on which report you listen to) parked in their main port because nobody is buying them. Why? Because the price is artificially elevated. Speculators beginning as far back as September of last year have bought up the cheap oil. We are now at a precipitous economic moment. An oil Mexican Standoff. The speculators can’t sell or the price will drop dramatically and hardly anyone is buying because they know the price is too high. Best guesstamates are that at least 40-50$$ of the current price of oil is due to speculators.

 

But the Drillers want to take advantage of this artificial shortage to get more Leases, because in their warped minds the leases that they hold are the leases the other guy don’t. The proof of this is the current 85 million acres that they lease that they won’t explore.

 

Really though nobody cares about the price of oil, what they car about is the prices of gasoline products. That price is being rigged as well. Refineries are at 85% of their capacity because if they ran the refineries at capacity they would lose money. In a perverse market flaw, the more they make the cheaper gas becomes and they lose money. Again the gasoline refiners are using the rigged higher oil prices to run up their profits by keeping refineries at the bare minimum it takes to run this country.

 

All the loud shouting at each other about the price we pay at the pump has obscured the realities on the ground. Oil production has been stuck on 85 million barrels a day now for sometime. Even though everybody has pledged to raise it. That may be the real limit on production and the world may have to learn live with it, discounting the fact that China is hording diesel in preparation for the Olympics.

 

Anyway, “if the drill here drill now” crowd had their way, what would they drill with? Brazil just bought or leased the 160 available rigs in the world to try to extract oil from their new alleged oil field off their southern coast.

 

When an oilman that I trust (there ain’t many – please see There Will Be Blood) T. Boone Pickens pledges to build a 1000 megawatt wind farm in Texas and then pays his own money for an TV advertisement to say why. (hint: we are running out of oil) Then I go with the wind farm guy every time.

 

I believe the Eagles said they would tour again when hell freezes over. Did I miss something?

  

Doug Nicodemus

948 e. adams st.

riverton, IL  62561

629-7031

dougnic55@yahoo.com

 

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AND YET THEY RUN STORIES LIKE THIS IN THEIR Business Section in the newspaper and don’t even acknowledge that they did on their web site:

http://www.pe.com/business/local/stories/PE_Biz_S_oilprofits22.3ad2ac6.html

Big Oil steers record profits to investors

MONEY: Critics say too much is going into stock

buybacks and not enough into exploration.

By JOHN PORRETTO
The Associated Press HOUSTON – As giant oil companies like Exxon Mobil and ConocoPhillips get set to report what will probably be another round of eye-popping quarterly profits, just where is all that money going?The companies insist they’re trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.It’s good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel. The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University’s James A. Baker III Institute for Public Policy.

The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.

The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits. ConocoPhillips is scheduled to kick off the latest round of Big Oil earnings reports Wednesday.

Oil prices are set on the open market, not by the oil industry. But that hasn’t stopped public protests, a series of congressional grillings for top oil executives, and a failed attempt by lawmakers to slap Big Oil with a windfall profits tax.

In the first three months of this year, Exxon Mobil Corp., the world’s biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects.

ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion — nine times what it spent on exploration.

Stock buybacks are common throughout corporate America, not just for Big Oil. They shrink the amount of stock on the open market, essentially increasing its value and giving individual shareholders a bigger stake in the company.

But some critics say Big Oil focuses too much on boosting stock prices, in an industry that sometimes ties executive pay to stock price.

And in focusing on buybacks and dividends over exploring for new oil, some critics say, oil companies jeopardize its already dwindling share of world supply.

“If you’re not spending your money finding and developing new oil, then there’s no new oil,” said Amy Myers Jaffe, an energy expert at Rice University who’s studied spending patterns of the major oil companies.

Investor-owned companies like Exxon Mobil and Chevron hold less than 10 percent of global oil and gas reserves, way down from past decades. And finding new oil has become harder and more expensive.

No one questions that Big Oil is rolling in cash. The cash the biggest oil companies bring in from running their businesses, or operating cash flow, is four times what it was in the early 1990s.

“It becomes a management decision,” said Howard Silverblatt, a senior index analyst at Standard & Poor’s. “It’s not like they’re going to the board and saying, ‘Well, I can do one or the other or the other.’ The balance sheets are flush with cash.”
 

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Oil Hits 128$$ Per Barrel – We are all going to die!

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Oh never mind. As I said, all along, the oil run up was 3 parts speculation and 1 part nerves. As the August Senate hearings approach on speculation the speculators, like the cock roaches that they are, will scurry and the nerves will harden. Guess what? Oil will fall to 70$$ a barrel and gas prices will come down. How will the American public respond to the fact that they just stuffed 350 billion $$ in speculators pockets? Like sheep – BAAAAAAAAA?

This will happen again however so now that we have a house we can live in, in energy confort what shall we do with what is sitting in the driveway? Like the speculators – SELL

http://www.cartalk.com/

http://www.sj-r.com

Friday, July 18, 2008

.

It’s time to dump SUV

.

TOM AND RAY MAGLIOZZI 

.

DEAR TOM AND RAY: This will prob­ably seem like a really stupid question, but I need professional advice. I own a 1-year-old Jeep in perfect condition, which I purchased for my job. I was laid off from said job, and now I own a gas-guzzling, really nice-looking Jeep Grand Cherokee that is too big and too expensive for me to drive, espe­cially since I no longer have a job. My question is, Should I trade it in for a smaller, more fuel-efficient car? I have no payments, and being unemployed limits what I could purchase. With gas prices continuing to climb, I don’t real­ly know what I should do, since I own the vehicle outright. Care to advise an idiot? — Micci

RAY: I guess this is what you might call “idiot-to-idiot” communication.

TOM: Or, more accurately, “idiot-AND-idiot-to-idiot communication.” So consider yourself warned, Micci.

RAY: Actually, you’re hardly alone. SUVs and pickups were, for many people, a fashion trend during the past 10 years. And like many fashion trends, they were, at heart, exceeding­ly impractical.

TOM: Tell me about it. Try wearing a miniskirt like I did during the entire winter of’68!

RAY: People who didn’t need pick­ups and SUVs bought them anyway, because they were seen as cool, despite the fact that they handled like crud, tended to flip over more than other ve­hicles, ripped countless inseams during ingress and egress, and drank gas like it was a dark-chocolate-caramel-mocha freddo from Feet’s Coffee.

TOM: So now, here we are, with a lot of people stuck with SUVs that get 15 mpg while gas is $4 a gallon. What to do?

RAY: I’d say dump it, Micci. You’re going to take a bath on it, no question. Anytime you sell a car that’s a year old, you take a huge hit from initial de­preciation. Add to that the fact that you’re selling a vehicle that not many people want nowadays, for the same reasons you don’t want it. But there’s always a price at which someone will take it.

TOM: If you don’t want to sell it yourself, you can even try CarMax, if there’s one in your area. They buy late-model cars at the wholesale price.

RAY: And since you own it outright, you can take the cash you get, buy a cheaper 2-, 3- or 4-year-old fuel-effi­cient car, and then put aside a few grand to get you through this period of unemployment.

TOM: If you had an income and weren’t in desperate straits, you could hang on to it a little longer, to see if gas prices level off and come down a bit — which they might. That might make your Jeep a little more valuable on the used-car market. But if you can’t afford the gas to go out looking for a job, you need to do something now. Plus, I don’t see gas prices com­ing down a lot.

RAY: Me, either. Combine the insta­bility and war in the Middle East with increased demand from growing economies in China and India, and the decreasing supply of oil in the Earth, and the long-term trend for oil prices is up, rather than down.

Got a question about cars? Write to Click and Clack in care of this newspa­per, or e-mail them by visiting the Car Talk Web site at www.cartalk.com.

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We Are All Going To Die – Oil hits 150$$ a barrel.

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Just kidding. It’s hard to concentrate on the residential housing market when everyone is all aflutter about the high prices of gasoline and the artificially high oil prices. I wish gasoline prices would double again. Then we would see some real doom and gloom. This from Asianone:

http://business.asiaone.com/Business/My%2BMoney/Opinion/Story/A1Story20080701-74069.html:}

 asiaone.gif

The economics of running on empty

Wed, Jul 02, 2008
The New Paper
By Dr Larry Haverkamp

 Surprisingly, there are only two ways to invest: You can own or you can lend. That’s it.

Owning is called ‘buying equity’. Examples are stocks and property.

It earns about 12 per cent a year with lots of ups and downs. You could lose some sleep.

Lending is called ‘buying debt’. Examples are fixed deposits and bonds.

It earns about 3 per cent a year and lets you sleep soundly.

An age-old truth of investments is that equity earns more than debt. I guess it’s obvious since 12 per cent is more than 3 per cent.

A WHOLE NEW WORLD

But now, everything has changed. The world is entering a new era of shortages that could turn the old rules on their heads.

Stocks would follow the economy down, leaving fixed deposits as the top money-earner.

The story begins with the higher prices for natural resources like food, fuel and minerals.

High prices, however, are only a symptom. Chronic shortages are the problem.

You can imagine, for example, the difficulty of building a house without steel or cement.

We saw something like this in 1973 and again in 1982. The US was hit with an oil shortfall, which resulted in both recession and inflation, called stagflation. It spread to Singapore and around the world.

In hindsight, it seems overblown, since everything turned out okay. Prices shot up, then they came down. Growth slowed, then it picked up.

Prosperity returned, as it always does. If it didn’t, you would have a permanent recession. The notion is so absurd that no economist in their right mind would even consider it. So I will.

In a worse-case scenario, permanent recession hits and each generation becomes poorer than the last. Gross domestic product (GDP) declines continuously. It eventually hits zero and we return to subsistence living, like our cavemen ancestors.

We may be seeing the beginning of that now.

Demand is out-pacing the world’s limited supplies, pushing prices higher.

NEW OIL RECORD

Last Friday, oil hit another new high of US$142 a barrel. It is exactly double the price of one year ago.

The demand comes from a rising middle class in China, India and the Middle East. This is new. We didn’t have it in 1973 and1982.

When Li Yong, Ramesh and Abdullah buy their first motorbikes, they love it. They find it hard to go back to peddling bicycles.

The US Department of Energy expects energy use in 30 developed countries to increase 25 per cent by 2030. In developing countries, it will increase 95 per cent.

As high prices persist for one, two, three and then 10 years, people will grow to understand that this is more than just a speculative bubble. (Sorry, Fat Cat.)

A permanent shortage of input (resources) produces a continuous decline in output (GDP). That, by the way, is the definition of a permanent recession.

To drive the point home, try this experiment:

Fill up your car or motorbike with one tank of gas and drive to Kuala Lumpur. When you run out of petrol, walk the rest of the way. It shouldn’t take more than a week.

You’ll be tired, but you will gain insight into a life without natural resources.

The shortages will sneak up on us gradually. A tank of petrol will soon cost some drivers a full day’s wages. After that, it will take a month’s wages and then a year’s.

Finally, availability will cease altogether and the lights will go out.

Future generations will sit around the campfire and tell fantastic stories about hollow trees with wheels that took people from Yishun to Orchard Road in less than an hour.

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This from Singapore no less… 

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Dan Piraro Is One Of The Funniest Cartoonist Alive – Well at least to me

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I am told that unofficially and off the record, Chris Robertson and the people at Peak Sun Silicon think so too.

http://bizarrocomic.blogspot.com/

I think the Peak Oil People are wrong. I think Oil Speculation has DOUBLED the price of oil. The Saudi’s claim that they believe oil is worth 70$$ a barrel. The real question is who tried to corner the Oil Market and Why? The second question is like the Hunt Brothers before them (in silver) when will they go to jail?

A bigger question is will the Saudi’s give the money back that they made as a result? Unfortunately they may have screwed the pooch because people are switching to mass transit and scooters.


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piraro3.jpg

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What A Difference A Month Makes – The mouth piece for the rich was bitchin about all the “money” we spend on alternatives

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Oh I meant the Wall Street Journal, sorry….I bet this article wouldn’t see the light of day today. Wait till oil hits 200$$ a barrel and we shall see what they say then.

http://online.wsj.com/article/SB121055427930584069.html?mod=opinion_main

REVIEW & OUTLOOK

Wind ($23.37) v. Gas (25 Cents)
May 12, 2008; Page A14

Congress seems ready to spend billions on a new “Manhattan Project” for green energy, or at least the political class really, really likes talking about one. But maybe we should look at what our energy subsidy dollars are buying now.

Some clarity comes from the U.S. Energy Information Administration (EIA), an independent federal agency that tried to quantify government spending on energy production in 2007. The agency reports that the total taxpayer bill was $16.6 billion in direct subsidies, tax breaks, loan guarantees and the like. That’s double in real dollars from eight years earlier, as you’d expect given all the money Congress is throwing at “renewables.” Even more subsidies are set to pass this year.

An even better way to tell the story is by how much taxpayer money is dispensed per unit of energy, so the costs are standardized. For electricity generation, the EIA concludes that solar energy is subsidized to the tune of $24.34 per megawatt hour, wind $23.37 and “clean coal” $29.81. By contrast, normal coal receives 44 cents, natural gas a mere quarter, hydroelectric about 67 cents and nuclear power $1.59.

The wind and solar lobbies are currently moaning that they don’t get their fair share of the subsidy pie. They also argue that subsidies per unit of energy are always higher at an early stage of development, before innovation makes large-scale production possible. But wind and solar have been on the subsidy take for years, and they still account for less than 1% of total net electricity generation. Would it make any difference if the federal subsidy for wind were $50 per megawatt hour, or even $100? Almost certainly not without a technological breakthrough.

By contrast, nuclear power provides 20% of U.S. base electricity production, yet it is subsidized about 15 times less than wind. We prefer an energy policy that lets markets determine which energy source dominates. But if you believe in subsidies, then nuclear power gets a lot more power for the buck than other “alternatives.”

The same study also looked at federal subsidies for non-electrical energy production, such as for fuel. It found that ethanol and biofuels receive $5.72 per British thermal unit of energy produced. That compares to $2.82 for solar and $1.35 for refined coal, but only three cents per BTU for natural gas and other petroleum liquids.

All of this shows that there is a reason fossil fuels continue to dominate American energy production: They are extremely cost-effective. That’s a reality to keep in mind the next time you hear a politician talk about creating millions of “green jobs.” Those jobs won’t come cheap, and you’ll be paying for them.

Farming And Growing Food After The Oil Runs Out – We Shall Survive

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People have been brainwashed to believe that our world will come to a crashing end without oil. The Peak Oil people in particular have a saying “back to the olduvai valley” because they believe that our civilization will crumble like the Egyptions, Greeks and other GREAT civilizations. Olduvai was the valley where they found the homonid Lucy’s bones.

Admittedly some of those societal “downs” caused famine and pestilence, but in others it merely led to lots of people going back to farming. As silly as it may sound, you can generate electricity with a bicycle and charge a battery to run a computer. Us modern humans have run on excess energy  for so long it might not hurt us or the planet to take a break and set some priorities.

So anyway from where I live in Riverton IL in the USA, I would just go back to farming and let a few yard birds run. Others are not so lucky. I have said with no malice or cruelty that a lot of people are going to die. But I think we will do what humanity has done for 1000’s of years…we hang together.

Here is what other people say:

http://www.forumforthefuture.org.uk/greenfutures/articles/602540

Farming without fossils

In a world on the cusp of fuel shortages, one enterprising collection of British farmers have come up with a solution they claim is practical, profitable – and close to home. They’re growing their own. Trevor Lawson reports

Barton reckons that the Goodwood estate’s tenant farmers could produce enough biofuel to supply the estate and themselves, and still have a surplus for sale. The key, he argues, is keep it local. “There’s no point in producing seed here, sending it miles for processing and then bringing the fuel all the way back. It’s too inefficient.” So Barton is looking at a combined rape press and refinery system that will produce 2,000 litres of fuel an hour, round the clock, for as long as there is rape seed to supply it. He’s also got plans for the pressed ‘cake’ that’s left over. “You can make it into dense briquettes for a superb solid fuel, burning more slowly than wood but at a higher temperature. So it can be used to feed boilers to generate heat and electricity.” Barton’s logic seems inescapable, and it’s finding allies in Whitehall, too. Nick Cooper manages the Farming Without Fossil Fuels project at the Department for Environment, Food and Rural Affairs.

http://globalpublicmedia.com/stephen_decater_on_farming_without_oil

 Stephen Decater speaks with Els Cooperrider of The Party’s Over on KZYX about biodynamic farming in Round Valley of Mendocino county. Stephen talks about draft horses, their history, and how he uses them. He also talks about the Live Power Community Farm, which is a community-based agriculture (CSA) project, and how this arrangement differs from a market-based relationship. They are looking for apprentices now. Contact info: livepower@igc.org and (707) 983 8196.

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The above is a cool site complete with Post Carbon Institute and Energy Farming sections

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Then there are the back to the earth types:

 http://www.soilassociation.org/peakoil

Peak Oil: the threat to our food security

Peak oil refers to the point when the maximum amount of oil that can be extracted globally is reached. Thereafter, production will tail off as remaining reserves become more difficult and more expensive to harvest. Many of the services that we currently take for granted – cheap flights, cheap imports and global distribution of food – will be radically curtailed.
 One of the greatest impacts will be on how and where our food is produced. The dominant models of intensive agriculture and the global food trade depend on vast inputs of oil. In a post peak oil world, the combination of higher transport costs, climate change and increased conflict will necessitate us all relying far more on re-localised food supplies. Even though it requires far lower amounts of oil, organic farming is not exempt from the need to adapt.

You can find out more in our information sheets on peak oil and climate change and agriculture.

Over the last 20 years, the Soil Association has established organic farming as the most sustainable method of production and helped grow a burgeoning market for organic food. Now we must refine our focus if we are to adapt to the changing external circumstances which will touch all our lives very soon. The phrase that comes to mind is that we are ‘building the ark of sustainable agriculture’ for the new era ahead.

The challenge is immediate, but fear should not be the driver. The Soil Association is optimistic that we have the vision and means to create a new, localised food culture that will deliver long-term quality of life in place of the old dynamic of unrestrained globalisation and short-termist exploitation.

http://transitionculture.org/2006/12/20/applying-energy-descent-plans-to-food-and-farming-an-article-in-living-earth-magazine/ 

Applying Energy Descent Plans to Food and Farming – an article in Living Earth magazine.

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The Soil Association is the UK’s organic certification body, and they are making peak oil and the relocalisation of food the focal point of their 60th Anniversary conference in Cardiff in February. I am editing a report that will accompany the conference, which explores this deeper, and to introduce this, I recently wrote an article that appears in Living Earth Magazine, the organisation’s publication. It suggests that the concept of Energy Descent Plans could be applied to food and farming in the UK, an idea that will be explored in more depth in the report. Here is the article followed by some additions from within the Soil Association.

Energy scarcity is an opportunity for a better world, says Rob Hopkins

I used to think that one day the world would literally run out of oil. A driver in Leicestershire would use the last drop and that would be that, similar to the felling of the last Truffula Tree in Dr Seuss’s The Lorax. It turns out that scarcity kicks in earlier than that. It’s not the last drop that is the problem but the mid-point of production, when all the oil that is easy and cheap to extract has been used up. It looks as if we are reaching that point soon.

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Where folks have “farmable” or “growable” land, all of us will have to plant Victory Gardens and raise rabbits and chickens. We will have to buy and sell local. For those that do not… well that is something we all should be planning for now. There are probably 2 billion people in harms way. What about the economy? Well what about it? Aren’t WE the economy. Money may be worrthless…but so what. That is only gona matter to people that gots a lot of it.

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