[[ Check out my Wordpress blog Context/Earth for environmental and energy topics tied together in a semantic web framework ]]

Friday, September 30, 2005

Barrel for $3

According to Ian Welsh at BOP News, the $13.1 billion sale of a stake in Sibneft to a Russian state owned firm amounted to $3 per barrel of estimated oil reserve (with the natural gas holdings tossed in as a freebie). Welsh pointed out the sureness of this bet. Given today's pricing and the future trend, a wise oil investor could never pass up such a deal.
proved oil reserves (2002 estimate) — 4,575 million barrels,
proved natural gas reserves (2002 estimate) — 860 billion barrels
Or could they?

What happens when someone reveals that Sibneft exaggerated the reserves wildly? Paying $3 per barrel can't get the investors too upset when they ultimately start coming up dry. After all, they only paid $3 a barrel. But what would have happened if the state paid a market value and then realized they got gipped?

In retrospect it will seem like a sucker's bet ending in a zero-sum game among the oil wheeler-dealers; the public will remain the suckers for not seeing through this charade.

Once again I think the this news of the sale tells us more about the precarious nature of global oil reserves than anything else.

Wednesday, September 28, 2005

Bring on the noise

Tim and commenters at Deltoid mocked a request from JunkScience.com for essentially asking computational climatologists for source code to Global Climate Models (GCM, aka General Circulation Model). Try to ignore their claim of "challenging" the climatology scientists to duplicate historical data -- the Junkies clearly want to nitpick the models to death.
One has to give it to the junkscience crew. It is physically impossible to reproduce a GCM run, unless you use: identical compilers; identical number truncations (numerical accuracy); identical computers; identical disks.

Of course, the differences are noise, but this won't stop an attempted lynching of anyone naive enough to cooperate.

If they don't submit something, the deniers make the climatologists appear feeble and afraid. If somebody does fall for it, and presents a global warming model, it better fit on the back of an envelope. Because mathematics, in the hands of people that believe in Intelligent Design, has about the same intrinsic value as shiny beads and trinkets to a chimp. No use wasting time on something that the 'minionists will dismiss as number fiddlin'.

Tuesday, September 27, 2005

Crying Sheep over Peak Oil

Yes, the pessimists have been crying wolf for almost a century. But better that, perhaps, than crying “sheep” when the wolves appear.
As usual, Bjorn Lonborg and his kin take a pounding.

Monbiot also explains the underlying reason why Daniel Yergin had no clue to the existence of the Hirsch report. BushCo never formally released it!
In February this year, the department released a report called “Peaking of World Oil Production: Impacts, Mitigation, & Risk Management”.(12) I say “released”, for it was never properly published. For several months the only publicly available copy was lodged on the website of the Hilltop High School in Chula Vista, California.

Thanks to SW for the link a few minutes before I would have found it :)

RC circuit analogy

For the EE's out there, I figured out a neat trick to cast the continuous oil shock model into a simple electrical RC (resistive/capacitive) circuit, with Kirchoff's law describing the differential equation.

I(t) = C * dV(t)/dt + V(t)/R(t)
I(t) acts as the forcing function (the black circle with the arrow pointing up), a source of current representing the tapped reserves. If you think of electrons as equivalent to oil molecules, then electron current becomes the amount of oil filling up our reserve capacity per unit of time and voltage V(t) represents cumulative charge of oil, more or less. Note how the capacity, low and behold, turns into the the capacitance C of the circuit. If the forcing function gets turned off (note the switch), then the amount drained off as oil production becomes the V(t)/R(t) term. Actually, 1/R(t) represents the reciprocal of resistance, i.e. conductance, of the circuit, which indicates the proportional amount bled from the reservoir capacity. The arrow through the resistor symbol makes it variable, as in a potentiometer.

Get yourself a good programmable current source with a storage oscilloscope measuring the shunted current through the resistor, and you can make your own Analog Peak Oil Simulation!1

TOD posted notes from Rep. Bartlett's recent Energy Conference. This quote concerning Heinberg got me thinking:
He thinks Katrina and Rita have catapulted us into a bumpy plateau instead of a clear peak.
What does this mean? Somebody will have to turn the potentiometer up to 11 very soon!

1Or you can run the circuit through a Spice simulator, or you can try solving the equations using Laplace transformations, or ?

Monday, September 26, 2005

Clownage Peak

My coinage of the AssMissile appellation has worked its way into the moon-wing shorthand, finally reaching this crowning achievement.       Kudos to The Poorman for hitting the peak in cartoon clownage. All downhill from here for the mowerlineblog.com folks; they have finally run out of Presidential Gas as we reach the end of irony.
he comes in from the left sometimes
he comes in from the right
it's so heavily advertised that he wants you and i
it's a real cowboy set, electric company
every day is happy days
it's hell without the sin, but

don't cry, don't do anything
no lies, back in the government
no tears, party time is here again
president gas is up for president
Bush asks America to conserve -- signifying that the "notCarter" years have officially ended. GW has turned into an environmentalist and, obviously, joined the other side.

Time to find another horse to hitch your wagon to, Hindrocket.

Update: Kevin Drum's commenters also see the dreaded word "malaise" cropping up.

Like a Dying Cellphone Battery...

Atrios has started to pump out more posts on energy recently. The latest one seems partly inspired by what Bush had to say today. The main contention echoed by Yglesias and commenters on the Eschaton leads to this: Bush has started to become Carter, and Ford Motor Co. has started whining.
Oh, and conservation is a personal virtue, NOT a basis for public policy. My host told me that.
So now he's like President Carter, only without the intellect or honesty.
Okay. So instead of using the regulatory power of government to force the automakers to increase fuel-efficiency, he decided to use the bully-pulpit to encourage people to drive less..... Sounds like an energy plan to me!
Didn't Cheney dismiss conservation as a "personal choice"?
Bush's next step is to issue an executive order prohibiting anti-war demonstrations as it takes an enormous amount of oil to transport pissed off Americans to D.C.
I never thought I'd miss Nixon.
Gore was pretty much mocked his entire campaign, in part for his "wacky" environmental views. .... Who's laughing now.
So now we're closing American schools because we're run out of the will to pay for the energy costs to keep the open. ... We really are doomed.
It's the price of gas, stupid...
Wait a minute. If we start conserving our fuel consumption, our soldiers will have fought for nothing in Iraq.
If I can't drive my Canyonero at 85 mph, the terrorists have won.
Excuse me for being petty and vindictive, but I just love to say "It must suck to be you" when I am gassing up next to someone is a big enormo-SUV.
What's worrisome about this is that oil may be the only thing that Chimpy actual knows a little something (albeit it not much) about.
George Bush, Failed Oil Man. ... The only west Texas oilman who couldn't find oil in Texas.
In a related story, President Bush today announced that he will use 4,000 gallons of jet fuel to fly to Louisiana again this week to strike a decisive-looking pose in front of a carefuly constructed backdrop.
Matt expends much energy talking about the need for a policy aimed at conservation. ... What he fails to realize is that the Bush junta has no policy. They are pure politics, all the time. They don't make policy decisions at all; they only make decisions based on what they think will keep them in power.
Lowering the price of gas only encourages people to drive more. ... You are correct sir. We're in Bizarro World.
It was a natural disaster for oil!

But leave it up to Phila to trump the snark-fest with this line:
My understanding is that the new head of NPR is turning it over to Jenna and not-Jenna, and it'll now be called "All Thongs Considered."

The actor who played Butch (the "bully") on the Our Gang comedies died recently. Ford crying over Toyota's head start and the sad state of affairs of American hybrids reminded me of the gang episode when Alfalfa started pounding on Butch in the boxing ring, with he-man Butch eventually driven to tears and whimpering uncle.

In the world's economy, we can cast Ford in the role of "Butch" and Bush can play "Woim", Butch's loyal, but quiet, lieutenant. Woim finally gets the chance to venture into the limelight, mumbling platititudes on conservation, but hasn't the conviction to pull it off.
Bush: Two other points I want to make is, one, we can all pitch in by using -- by being better conservers of energy. I mean, people just need to recognize that the storms have caused disruption and that if they're able to maybe not drive when they -- on a trip that's not essential, that would helpful. The federal government can help, and I've directed the federal agencies nationwide -- and here's some ways we can help. We can curtail nonessential travel. If it makes sense for the citizen out there to curtail nonessential travel, it darn sure makes sense for federal employees. We can encourage employees to carpool or use mass transit. And we can shift peak electricity use to off-peak hours. There's ways for the federal government to lead when it comes to conservation.
The tough guy sheen has certainly wore off quickly, if anybody noticed it in the first place.

Also, Stirling at BOP News leads a group of like-minded bloggers who each contribute fine energy economics-related comments daily. Check out this piece by oldman.

Sunday, September 25, 2005

Hockey Stick? Get the enforcer.

From this Kos diary, LoE fristed the conventional wisdom that natural cycles in hurricane activity explain away the above-average frequency of big storms. LoE plotted this graph of activity with a 10-year filter to remove the year-to-year noise:

On this kind of scale, I do not see any of this cyclical activity, but actually notice more of the "hockey stick" behavior well-known to the global warming community.

What does the right wing media think of data like this? Well, as I write this, I listen to Matt Drudge pontificate on his weekly radio show on "real" hurricane data as part of his "Global Warming Emergency Declared!" themed discussion. He goes on to list various Cat 4 and Cat 5 storms that have occurred over the last century, strangely interspersed with condemnations of celebrities like Barbra Streisand who show an interest in current events. Never mind the fact that the exception does not prove the rule in statistics, but bringing in celebs as some kind of elitism metric shows what kind of rejected outlier Drudge himself has become.

But of course, and in any case, we should not worry of what kind of damage these relentless hurricanes could do to our offshore oil infrastructure. In particular according to this industry veteran (I mean he worked on an off-shore supply vehicle for a year in the late 90's) at the Unsolved Mysteries site:
Another lie I'd like to lay to rest is the one about all of the "terrible damage" done to the oil platforms and rigs in the gulf during hurricanes. This is how they justify the price spikes that occur because of lost production. If anyone cared to see this for themselves they could travel the entire Gulf of Mexico in search of destroyed oil rigs and they won't find any- not one. There is a good reason that this is so and that reason is that they are built so well that a hurricane can't touch them. They are designed to withstand 100 year hurricanes and some even to withstand 1000 yr hurricanes. (Cat 5 or higher) The biggest one is owned by the Shell company and and was twice as tall as the Chicago Sears trade towers.
And disregard everything else too:
Everything that we hear about oil from the oil companies is a big fat lie. Have we hit "peak oil" as a good many insist that we have? I'll make a wager with anyone who would care to take the bet. I bet that when oil hits $100 a barrel (I have a hunch that's the target price) there will be no shortage. Any takers?
OK, make the call to the deceased Robert Stack; I guess we can take that unsolved mystery off the list. Actually, with that retro hat of his, Drudge could take Stack's role and they could resurrect the TV show as Unsolved Minutiae.

Monbiot on global warming:
And the government won't act, because to do so would be "an unwarranted intervention in the market".
So why won't the government act? Because it is siding with the dirty companies against the clean ones. Deregulation has become the test of its manhood: the sign that it has put the bad old days of economic planning behind it. Sir David Arculus, the man appointed by Tony Blair to run the government's Better Regulation Task Force, is also deputy chairman of the Confederation of British Industry, the shrillest exponents of the need to put the market ahead of society. It is hard to think of a more blatant conflict of interest.
I see no statistical anomaly in this finding. In other words, you can't reject the statistical outliers when dealing with cronyism in the BushCo world-view. Every piece of data supports their true agenda. You can graph it quite nicely.

Saturday, September 24, 2005

Reality trumps

From an Atrios comment on one of Kuntsler's latest posts, this one stood out:
I heard that they are rushing another Mad Max sequel into production... working title is:

Mad Max Beyond Kunstlerdome.
and then someone said:
Nah, it's Mad Max Beyond SuperDome.

On Air America's Ring of Fire show today:
Linda McQuaig, author of "It's the Crude Dude: Big Oil, War and the Fight for the Planet", dissects the Bush administration's strategy in Iraq and Cheney's war profiteering.
Of course Cheney had no oil industry experience before heading up Halliburton. Once he obtained the experience, BushCo determined he would make perfect vice-presidential material. How convenient. The show gets replayed Sunday afternoon (and on the archives). You can also hear the usual populist-flavored Pap Attack on "Big Oil Hits a Gusher". I just hope these guys don't push their audience too far down the populist trail and more people start believing stuff like this Big Gav find: Is 'Peak Oil' a put on? I think the balance of populism ("Big oil conspires against the little folk") and that of realism ("Oil depletion exists") remains one of the great challenges that lay ahead for progressives who want to get the word out without alienating their base of followers. In any case, see the bottom of this post for references that the Ring of Fire dudes produced for their show. They certainly did their homework.

Thanks to mg for pointing me to the public radio interview with Daniel Yergin. Too bad that he clearly showed an inability to keep up with his homework, twice displaying ignorance of the DoD-sponsored SAIC report titled "Peaking of World Oil Production: Impacts, Mitigation and Risk Management". The host kept asking Yergin about doing something now instead of 20 years down the road (which Yergin seemed to telegraph as a peak oil date). This irritates me to no end -- an obstinate refusal to acknowledge a paradigm shift before it comes breathing down our neck. What on earth good does that do us? At least you would think that the right-wing neo-con "technologists" at places like Yergin's CERA or, worse yet, Tech Central Station would have an interest in at least pushing a thesis like this (i.e. imminent peak oil) forward. After all, you can't damage innovation by giving it a headstart (in time) or a kickstart (in money) -- notwithstanding BushCo's comically bold plan to get us to the moon by 2018.
Last week, WN characterized NASA's plan to return to the moon in 2018 as an impossibly expensive and pointless program that some future administration would find it necessary to cancel, thus sparing the Bush administration the blame for ending human space exploration.
Like ineffectual corporate managers, we always get a couple of options from the BushCo minionists.
  1. Set up unrealistic expectations so far in the future that you time shift the blame to some as-yet unborn sucker.
  2. Wait until the last second to delegate responsibility so that the stuckee will have an impossible schedule to meet and shoulder all of the blame.
Do they really think that the energy technology market will work out with a set of horse-blinders in place?

Sorry for the rhetorical question.

From the Ring of Fire resource page, I copied these references as they did not appear to have a permanent link.

Pap Attack: Big Oil Hits a Gusher

Bush family oil ventures

Bush contributions from big oil

Oil companies' profit

Tax credit for purchase of SUVs

Tax breaks to oil companies

Bush Dismisses Global Warming

It's the Crude Dude: Big Oil, War and the Fight for the Planet

Carter Doctrine

Dick Cheney's Energy Taskforce


Halliburton and Hurricane Katrina

Chair search committee for Bush running mate

Friday, September 23, 2005

Pathetic Losers

Turn down your speaker volume and take a look at this:
That 70's Bunch
I have never seen such a collective bunch of losers in my life. And yes, I specifically refer to the staff and contributors of Tech Central Station.

Think about it. The TCS gang works themselves into a tizzy over a select group of politicians' opposition to LNG terminals, all the while, and as a matter of principle, ignoring every other facet of our energy predicament. Granted the democrats and moderate republicans have taken a populist view to price increases (i.e. gouging), but it sure beats the obvious corporate cheerleading and BushCo-styled greedy cronyism that TCS forever practices.

And as humor remains a completely subjective interpretation, I leave you to rate the comedy quotient of the parody.

That 70's Energy Policy
glAssMan: With such potential, energy companies can be expected to invest more in finding and producing oil, and price increases should modulate -- level off or even fall -- as supply increases. In fact, this year, exploration spending was anticipated to hit $180 billion.

But what if supply is constricted for political reasons? That's the problem going forward. Environmental extremists have put vast areas off-limits to exploration and have made building refineries, liquefied natural-gas facilities and nuclear plants (to name a few sources of supply) extremely difficult.

Now, there are new threats to supply: 1) the proposed WPT; and 2) price controls on gasoline and home heating fuel, already imposed in Hawaii and under consideration in Illinois, Massachusetts and elsewhere. This is a combustible combination. The 1980 WPT was an attempt to offset the decontrol of oil prices. The 2005 WPT may accompany recontrol of oil prices.

Now, that is funny.

As I have said before, Carter, some 30 years later, has made the pathetic losers at TCS, PowerlineBlog, and every other right-wing mutual apology society look ridiculous. And they will never get over it, preferring to project their inadequacies and frame the argument in terms of a return to wool sweaters and wood stoves.

Please, someone sign up James Glassman to play the whiny, insecure, almost paranoid character of Jan. And perhaps AssMissile can take on the complex role of the family station wagon.

Update: They apparently breed pathetic losers at TCS. See here for somebody that tried to follow Jimmy Carter's engineering footsteps and failed miserably.
Meanwhile, my friends majoring in the liberal arts pulled dandy grades while studying little. "You just wait," I thought, gazing upon them like the ant regarding the grasshopper in the summer. "You party and blow off homework now, but in ten years, you'll be making merely wonderful money as investment bankers and consultants, while I'll be getting laid off from a great job at General Electric."
Lawyer material? You bet.

Until the power goes out

I suspect that Belly of the Beast's Bubba will continue to post tonight on the path of the hurricane down Houston way.

Thursday, September 22, 2005

A Sliding Scale of Grandiose Proportions

Helmet-hair politician Rick Perry(R), governor of Texas, stated a few days ago on The Today Show that Texas has had much recent experience dealing with natural disasters. He went on to justify this assertion by pointing out the example of the Columbia Space Shuttle breakup of 2003.

say no more.

"Why Halliburton is Wrong for the Country"

"Why Simmons Is Wrong about Saudi Oil"
       by Ali Daneshy

Ali Daneshy, retired vice president of Halliburton

say no more.

Muted Applause? Huh?

Let me tell you that a global influenza pandemic freaks me out more than any run-of-the-mill oil depletion scenario. But I can only try to avoid my gaze from the stuff weaving through the web for only so long.

I have tended to follow what local epidemiologist Dr. Michael Osterholm has said over the past dozen years ever since I read about his fondness for marathon swimming events. (Something about people like skeptic Dr. Michael Shermer and his marathon biking exploits, environmentalist/author Bill McKibben and his marathon X-C fascination, and others leads me to believe that pushing the edge physically transfers subliminally to intellectual achievement) So when I read the transcript of a recent Osterholm lecture, I hope he has just slipped into rhabdomyolysis of the mind from overexerting his imagination. I swear the kind of nightmares that Osterholm plays out can race through your mind when your body starts to bonk after a dozen hours into a marathon sporting event.

An epidemiologist understands probability and statistics better than your average Joe. So when Osterholm said this:
I want to leave you today that the risk of a pandemic influenza event is 1. It is going to happen. It is not *if* it is going to happen, it is when and where and how bad. And that I think has to be the understanding we have today as we talk about this issue.
my heart sinks like a stone. Not knowing epidemiology very well but understanding the mathematical significance of this statement, I can either hope that his reputation doesn't suffer that much when it doesn't pan out, or pray that this pandemic comes to pass with a whimper rather than a bang.

Finally, let me just conclude by saying "“what do we do?"

I think frankly from my perspective, we Pray, Plan and Practice.

If Katrina taught us nothing else, it's not enough to have something on paper. It's also something of much greater magnitude than just that chessboard step. It's the whole game we've got to figure out in advance such as the private supply chain.

It's not a matter of if, it's when and where. Am I telling you it will be H5N1? I'm not. I think it will be but no matter there will be more pandemics. If we can't stop Tsunamis, Hurricanes and Earthquakes we surely can't stop pandemic influenza either.

Lack of international political will and support right now: Most of the world doesn't get this.

I have to tell you that as much as our own government has done, we don't understand, that this will make the catastrophic events of the past weeks, pale in comparison. At a minimum assuming we will have virtually no vaccine for 6-8months and supplies remain limited. And our best analysis maybe 1 and half per cent of the world will have access to vaccine within the six months. But even if our country had that luxury, the global economy will still collapse.

And finally I think that given the viral characteristics, the epidemiology we are seeing, we have to understand that there is more than just a passing resemblance between the 1918-20 experience and the current H5N1. There really is a model here we have to look carefully at.

We can't be surprised if the Levees break here. And I'm afraid that as a World we will be.

We have to understand these are the implications, this is what we are facing. And if we do nothing else we have to plan as if "what if this is tonight, what if it is one year, what if it is five years from now". And we need to move all three of those together.

Thank you very much.

[muted applause]

Osterholm says that money will not provide an immediate solution, but I have to ask: Where do I donate?

Tuesday, September 20, 2005

Oil Shock Model - Continuous

I bit the bullet and updated the oil shock model to instead do a grind-it-out numerical integration. As it stood, the original code got a little too intricate for my tastes; yet it served it's purpose in providing me some valuable insight. Overall, the results duplicate that of the previous algorithm, plus or minus some numerical error.

The code at the bottom of the post solves the following differential equation:
R(t+dt) = R(t) + (T(t) - R(t) * E(t)) * dt

P(t) = E(t) * R(t)
R(t) = Current reserves
T(t) = Triangular discovery curve
E(t) = Extraction rate (yearly or daily)
P(t) = Yearly (or daily) Production
The equation basically states that the reserves accumulate by discovery but deplete by extraction proportional to the amount available for extraction. This latter proportionality allowed me to do an exponential convolution, but the book-keeping of a variable extraction rate caused by temporal oil shocks made the algorithm a bit unwieldy. With a numerical integration, I can apply the proverbial mathematical sledge hammer to get at the results.

One can also now see how this differs from the logistic formulation favored by other analysts:
Q(t+dt)= Q(t) + k*Q(t)*(1-Q(t))*dt
(where Q is the cumulative production as a proportion of the ultimately recovered resource, and k is a constant that sets the width of the peak) Yet I still don't understand what this means in terms of a physical model.

I kept the same temporal oil shocks in the model but I made their duration match the span of the political crisis in real terms.

It helps to know the dates at which the oil shocks occurred. The oil embargo started in late 1973 and lasted until the middle of 1974. The Iranian hostage crisis started in late 1979 and the early 80's recession officially ended by 1984. The gulf war started in 1990 and it's associated recession ended in 1992. The change in extraction rate was interpolated over each of these intervals to make the suppressions in the curve a bit smoother.

with Text_IO;
procedure Shock_Model_Continuous is

type Shock is record
Year : Float; -- Year of shock
Rate : Float; -- Rate of extraction
end record;
type Shocks is array (Natural range <>) of Shock;

Triangle_Width : constant := 87.0; -- Triangle window
Volume : constant := 2400.0; -- In BBls

S : constant Shocks :=
((1944.0, 0.060), -- Start of data
(1974.0, 0.060), -- Start of oil embargo
(1974.5, 0.051), -- End of oil embargo
(1980.0, 0.051), -- Start of Iran hostage crisis
(1984.0, 0.034), -- End of recession
(1990.0, 0.034), -- Start of Gulf War
(1992.0, 0.030), -- End of recesssion
(2100.0, 0.030));

-- Make the shock a continuous function
-- by interpolating between points in the list
function Interpolate_Shocks (Year : Float) return Float is
K : Integer := S'Last - 1;
for J in S'First + 1 .. S'Last loop
if S (J).Year > Year then
K := J - 1;
end if;
end loop;
return S (K).Rate +
(S (K + 1).Rate - S (K).Rate) * (Year - S (K).Year) /
(S (K + 1).Year - S (K).Year);
end Interpolate_Shocks;

-- Creates a symmetric window for dicovered reserves
function Triangle_Window
(Year : Float;
Start : Float;
Length : Float)
return Float
Y : constant Float := Year - Start;
Half : constant Float := Length / 2.0;
if Y < 0.0 or Y > Length then
return 0.0;
end if;
if Y < Half then
return Y / Half;
return (Length - Y) / Half;
end if;
end Triangle_Window;

C : Float := 0.0; -- Reserve
R : Float; -- Extraction Rate
P : Float; -- Production Rate
DT : constant Float := 0.01; -- 1/100th of year
Start : constant Float := S (S'First).Year;
Finish : constant Float := S (S'Last).Year;
Time : Float := Start;
K : constant Float := Volume / Triangle_Width * 2.0;
V : Float := 0.0; -- Volume of oil extracted
R := Interpolate_Shocks (Time);
C := C +
K * Triangle_Window (Time, Start, Triangle_Width) * DT -
C * R * DT;
P := R * C / 365.0; -- BBls/day
V := V + R * C * DT;
if Time > Float (Integer (Time)) - DT / 2.0 and
Time < Float (Integer (Time)) + DT / 2.0
then -- Print output only once per year
(Integer'Image (Integer (Time)) & "," & P'Img & "," & V'Img);
end if;
Time := Time + DT;
exit when Time > Finish;
end loop;
end Shock_Model_Continuous;

The output plotted against the BP data.

Friday, September 16, 2005

Oil Shock Model

Update: I added an appendix at the bottom that provides the algorithm for the oil shock model. Per Bubba's suggestion, I am thinking of how to redisplay the URR plot to better guide the eye.

Following up on my critique of Stuart Staniford's estimate of global cumulative endpoint production of oil (aka the URR estimate), I found enough additional misinformation or plain mistakes in SS's model to refine my macro peak oil model (1, 2) further.

The mistake that Staniford made in applying the logistics model to BP's data came from the wrong initial (pre-1965) cumulative production. Look at the following plot from TOD and you see a telling "cusp" at the top of the curve:

That cusp disappears when one applies the right initial cumulative data; Staniford added about 100 Billion Barrels (BBls) too much to this data. This becomes obvious when you notice that his cumulative as of 2004 sits at about 1050 BBls -- 10% over the generally accepted value of 952 BBls from the USGS.

This time I downloaded the data from BP's World Energy 2005 page and tried to make a more decent try at a model fit. Based on comments at The Oil Drum, two issues that I consider very important, (a) using historical data and (b) using realistic yet simple models, apparently tends to rub some people the wrong way. I think I have good arguments covering these concerns.

For some reason, the use of historical data causes certain oil watchers to scoff at us "backward" thinkers; they don't realize that we can learn a lot, both in a Bayesian sense and avoiding repeating the same mistakes over and over again (how shocking). Otherwise, I can only buy the argument up to a point; for example, until we hit the peak, we can't with 100% certainty predict the peak. Having a real inflection point or an obvious concavity does wonders for this class of analytical model.

I also find the simplicity of the model important -- something that Staniford agrees with. Unfortunately, he simplifies to such an extent, by using the Logistics curve, that he only has a single parameter to adjust. I find that much like having to make a prediction given only the mean of some data set. I would at least like to have a couple of parameters, say the mean and variance, to improve my chances. Here, Staniford throws away valuable information that has a good physical basis to achieve a simple empirical fit. I side with a good physical model that will give good intuition and insight to the problem at hand.

With that in mind I used my convolution-based Macro Peak Oil model to fit the BP data along with the USGS cumulative value of 952 BBls. The following uses a symmetric Triangular Discovery1 curve starting in 1944 with a width of 87 years and normalized to an URR value of 2400 BBls.

The early years (pre 1970) of my model feature an oil extraction rate of 6% of total content per year. For an exponential drop-off, this gives a 1/e point of approximately 16 years.

I add three shocks in the years 1973-1974, 1979-1980, and 1991-1992, whereby the oil extraction rate changed dramatically. Because of the stationary properties of the Markov model, I can simply adjust the rates of the normalized exponential term in the middle of the convolution without violating the stochastic nature of oil extraction over time. The shocks tend to momentarily suppress and flatten the production/consumption rate. (As a technical aside, the suppressive dip in the output comes about mathematically from the exponential normalization)

The three shocks correspond to the OPEC embargo, Iranian crises coupled with a deep recession, and the first Gulf war.
YearExtraction Rate%change

No doubt we will get more shocks in the future. The crucial finding in my mind: the shocks serve to delay significantly the onset of peak oil. Before the 70's, we used oil as if it came out of the tap; we have since made significant corrections in the extraction rate and our more conservative use of oil. We will likely get a shock fairly soon -- this will not invalidate the model results and it will not disprove the peak oil hypothesis. It simply will serve to delay the peak a bit more. I really believe (and the model shows) that we would have hit a peak several years ago without these shocks in place.

Recession is good? How about that for back-handed insight?

The final URR fit looks like the following curve. Of course the asymptote hits 2400 BBls because of the triangular distribution I started with. I mainly want to demonstrate how the annoying cusp disappears when plotted correctly.

1 I chose the triangular curve because of the proliferation of the following type of data.

Note that I use the term "discovery" a bit loosely; in my mind it actually indicates when pumping activity actually started on the previously discovered reserves.

This code compiles with the GCC gnatmake compiler provided with most recent vintages of Linux (or available for Windows here). To build, save as file "shock_model.adb", then gnatmake shock_model to make the executable. Spreadsheets like the CSV-format: "year", "BBls/day", "cumulative BBls"

with Text_IO;
with Ada.Numerics.Elementary_Functions;

procedure Shock_Model is

subtype Years is Natural range 1944 .. Natural'Last;

type Shock is record
Year : Years; -- Year of shock
Rate : Float; -- Prod. or depletion rate (fraction / year)
end record;
type Shocks is array (Years range <>) of Shock;

Width : constant := 87; -- Triangle window
Volume : constant := 2400.0; -- In BBls

S : constant Shocks :=
((Years'First, 0.06), -- Starting Year
(1974, 0.048), -- OPEC
(1980, 0.035), -- Iran +
(1983, 0.029), -- Recession
(1991, 0.026), -- Gulf I
(2150, 0.0)); -- Ending Year

--##### You don't have to look beyond this point unless you
--##### want to mess with the algorithm or output.

-- General purpose array of floats indexed by year
type Flt is array (Natural range <>) of Float;

-- Safe array get function, truncates values out of range
function Get (Arr : Flt; I : Integer) return Float is
if I in Arr'Range then
return Arr (I);
return 0.0;
end if;
end Get;

-- Takes 2 arrays and returns the convolution array
function Convolve (A, B : in Flt) return Flt is
Total : constant Natural := A'Length + B'Length;
C : Flt (0 .. Total);
V : Float;
for J in 0 .. Total loop
V := 0.0;
for I in 0 .. J loop
V := V + Get (A, I) * Get (B, J - I);
end loop;
C (J) := V;
end loop;
return C;
end Convolve;

-- Creates a symmetric window, truncated left by Start
-- The prior accumulated data is provided by Impulse
function Triangle_Window
(Width : in Natural;
Start : in Natural := 0;
Impulse : Float := 0.0)
return Flt
R : Flt (0 .. Width - 1 - Start);
Half : constant Natural := Width / 2;
Offset : Natural;
for I in R'Range loop
Offset := I + Start;
if Offset < Half then
R (I) := Float (Offset) / Float (Half);
R (I) := Float (Width - Offset) / Float (Half);
end if;
end loop;
R (0) := R (0) + Impulse;
return R;
end Triangle_Window;

-- An exponential array populated to length
function Exponential (Length : in Natural;
Alpha : in Float) return Flt is
use Ada.Numerics.Elementary_Functions;
R : Flt (0 .. Length - 1);
for I in 0 .. Length - 1 loop
R (I) := Alpha * Exp (-Alpha * Float (I));
end loop;
return R;
end Exponential;

-- The summed difference between two arrays up to Width
-- This is used to renormalize when an Alpha rate changes
function Leftover (A, B : in Flt;
Width : in Natural) return Float is
V1 : Float := 0.0;
V2 : Float := 0.0;
for J in 0 .. Width - 1 loop
V1 := V1 + Get (A, J);
V2 := V2 + Get (B, J);
end loop;
V1 := V1 + 0.5 * Get (A, Width);
V2 := V2 + 0.5 * Get (B, Width);
return (V1 - V2);
end Leftover;

-- Recursive formula to re-convolute on successive rate shocks
-- Returns production curve in array
function Gen
(S : in Shocks; -- Input stimulus
Left : in Float; -- Pre-history reserve level
Curve : in Flt; -- The starting curve
TS : in Natural) -- TimeSpan of results
return Flt
if S'Length = 1 then -- returns on completion
return Curve;
W1 : constant Natural := S (S'First).Year - Years'First;
W2 : constant Natural := S (S'First + 1).Year - Years'First;
T : constant Flt := Triangle_Window (Width, W1, Left);
R : constant Flt :=
Convolve (T, Exponential (TS, S (S'First).Rate));
return Gen
(S => S (S'First + 1 .. S'Last),
Left => Leftover (T, R, W2 - W1),
Curve => Curve & R (1 .. W2 - W1),
TS => TS);
end if;
end Gen;

Time_Span : Natural := S (S'Last).Year - S (S'First).Year;
R : constant Flt := Gen (S, 0.0, (0 => 0.0), Time_Span);

Total : Float := 0.0;
K : constant Float := Volume / Float (Width) * 2.0;
for I in R'Range loop
Total := Total + K * R (I);
(Integer (Years'First + I)'Img & "," & -- Year
Float'Image (K * R (I) / 365.0) & "," & -- Per Day
Float'Image (Total));
end loop;
end Shock_Model;

As a check, the red curve displays the output of the above code. The yellow curve shows what would have happened without the oil shocks. Through the roof, baby.

Wednesday, September 14, 2005

Macro Peak Oil Model vs Logistics Curve

Stuart Staniford posting at The Oil Drum tried out some fits of a logistics curve to oil production data from Beyond Petroleum/British Petroleum's report on World Energy 2005. He noted:
In the beginning, the data are crazy, but after about 1958, they settle down into pretty much a linear regime (with a little noise) that has held good ever since. The nice thing about this method is that you do not need to input an estimate for the URR. Instead, you extrapolate the straight line, and it tells you the URR.
I find the highlighted part revealing in that Staniford conveniently sweeps perfectly good data under the rug. I always say never attribute to crazy what probably has a rational explanation.

So what exactly causes that initial precipitous drop in the dark blue curve that nobody wants to fit to? And why do analysts want to work in the so-called "stable" regime where the logistics curve seems to work so well? Well, I believe it has to do with the use of the logistics curve itself, which has no intuitive meaning to how the world actually works.

I came up with a more realistic yet very simple depletion model a few months ago in two posts called A Macro Peak Oil Model, Part 1 and Part 2. You can review the details at the two links, but a typical model result looks like the following yellow "Bell-shaped" curve:

To match up against the logistics curve plot, which Staniford and Deffeyes use to "linearize" the data,
dQ/dt / Q = k(1-Q)
I simply had to integrate the simple production curves to obtain the cumulative (Q) number. My plot looks like the following, with a depletion rate of 0.03/year tacked on to the 130-year-span triangular discovery curve:

Notice that we get a perfectly understood dropoff (perhaps quasi-hyperbolic) before it settles into a more-or-less linear regime as at heads to a zero production rate when we hit the cumulative production limit.

I will look into the details a bit more later, but for now it appears a bit more optimistic than the logistics fit, as it tends to flatten out in the out years.

Tuesday, September 13, 2005

Word Games

I recently noticed that a curious talking point has started to propagate through the infinite oil crowd. It approximates the following word game:
The only problem is that you're railing against not only theory but history. We've never 'run out' of a non-renewable resource or faced a dramatic disruption.
The implication that someone like Mike Lynch raises leads to a rhetorically moot point. Yes, we have never witnessed the world running out of water, marble, or any number of inorganic materials, but that doesn't mean it couldn't happen in the future. But he desperately wants us to equate oil with inorganic resources and the infinite reach that view entails. In his mind, history portends the future.

But..., in a strict sense, fossil fuels act as a kind of renewable resource. Whereas no one would ever consider, say copper ore, as renewable (recyclable, yes), I could just as easily make the claim that all fossil fuels fall into the renewable category. The fly in the ointment that a stickler will point out has to do with the exceedingly low renewal rate of fossil fuels. For example, as we speak, lifeforms die, turns into compost and we uptake the miniscule energy ages from now assuming the constant renewal of life. The cycle continues at a snail's pace, ergo the renewable label fits the bill. QED, the "stickler" loses the argument on a technicality.

When the rate of use exceeds the rate of production, you get depletion of the renewable resource. So (playing the word games here), we have run out of plenty of renewable resources, of which fossil fuels now rank as first-class members. For the obvious examples, try the extinction of thousands of animal and plant species. At one point in our past history, somebody could have made the claim that "We've never 'run out' of renewable resources or faced a dramatic disruption". Then, history witnesses the passenger pigeon population going extinct and North Americans had to face a dramatic disruption in their eating habits.

So too we can point to living coral as another "nearly" non-renewable resource. For example, if coral reaches the tipping point and the coral reefs start going belly-up in Australia's Great Barrier Reef and elsewhere, it will act much like the current oil situation. Coral grows so slowly, much like the slow replenishment rate of fossil fuels, that you can consider coral as almost as impossible to replenish as fossil fuel! No one has figured out a way to grow coral at a fast enough rate to sustain itself in the onslaught of human interference.
"Scientists looked at 263 reefs in the Caribbean and discovered they had lost 80% of their coral in the past 30 years." - 2003
Many project that we will run out of our first truly non-renewable resource relatively soon as our Helium reserves drift into the upper atmosphere and on into outer space. Interestingly, we will start running out when the natural gas reserves goes on the decline.

So let us stomp out that stupid talking point of "We've never 'run out' of a non-renewable resource or faced a dramatic disruption" before it takes root. These and other wing-nut canards should go the way of the dinosaur; unable to support the intellectual scaffolding it has precariously built over the last few years, the typical rhetoric of the right-wing meme machine can extinguish itself with a little push.

Monday, September 12, 2005

Aptly Named

In a post cleverly titled Pond Scum, Big Gav quotes The Rodent PM of Australia, John Howard, pooh-poohing the idea of a national summit on oil prices:
"If there's some outcome, some merit in those sorts of things (I would support the summit), but if it is just a talkfest, and I fear that such a gathering would be precisely that, with no practical outcome, then there's no point in having it," he said. "If there was some magic wand that could've been waved, I'm sure the American and Japanese and European governments would have done so, I would've done so."
This attitude portrays concession straddling the boundaries of defeatism and hopelessness. The guy really plays the part of a loser in that he doesn't have the intellectual honesty to provoke his constituency to action, instead encouraging people to not talk about the situation in the hope that it will go away. After all, he claimed to bust a gut trying to determine if somebody else found a solution, and, tough nuts, came up empty handed.

The way of a rodent -- burrow into the ground in the hopes of avoiding your adversaries, all the while secretly hoarding away all the nut-fruits you can find for the long winter.

Sunday, September 11, 2005


I wanted to make an early prediction on a meta-blogging event.

Arthur Silber has quit blogging for a variety of depressing reasons. He wrote largely about progressive issues and Atrios and others had linked to him quite regularly.

But something always struck me as strange.

Silber blogged at the domain coldfury.com, under the reason link. Curiously, the main link at ColdFury hosts a bunch of enviro-hating, wingnut types that had to provide Mr. Silber some hosting or at least connectivity services. My question: Why would they go to the trouble of providing this service for a progressive from the opposite end of the political spectrum?

Surely it had nothing to do with making money off of a blogger. Silber claimed near poverty, and certainly could have chosen a free blogging service instead.

I just have a sneaking suspicion that the Silber character may turn out as a bit of "performance art" created by the ColdFury cretins.

If this prediction does not pan out, I will meekly apologise. I have longed to discover the first bit of blogging performance art, and since my James Lileks prediction has not yet panned out (for which I apologise, not), I thought to make another lame-o prediction to pass the time. On the other hand, Silber should not really mind what I say about his situation with this parting attitude:
For the most part, it’s as if I’ve written precisely nothing over the last three years. That’s fine now. In a mere week, it will be exactly as if I’ve written nothing. I, for one, will be immensely relieved. Given how events have transpired, I’m deeply sorry I ever wrote one single word.

Pro-Train, but ...

From NYT via TOD,
For example, the price of a basic, one-way ticket between Philadelphia and Pennsylvania Station in New York will rise to $56 from $53. But the cost of a monthly pass between those cities, which allows unlimited travel on certain trains, will increase almost 60 percent, to $1,008 from $633. Commuters and their advocates expressed shock at the increases, and some said they would have to find a less expensive alternative.
I honestly had no idea that people paid this much for monthly passes. For one, the 90 mile distance from Philadelphia to NYC means that a person needs to spend a good three hours daily on the commute. But really, if someone willingly parts with several hours of freedom per day (yes, I know people usually do something constructive), how can they complain of a price increase? I have noticed that may people have talked about switching to buses at $20 a trip. But would not that add another hour or so per commute? Can't they take a hint?

If all else fails, we should probably start thinking about emulating the Eurailpass and the economies of scale that the Europeans have planned for.
Another comparison: In Switzerland a general ticket for the whole country costs approx. $225 per month. It's good all the trains (about 1,800 miles of lines) and postal service buses (which go to every little village and hamlet, about 6,500 miles of lines), plus most city bus lines, plus excursion boats on the lakes and rivers. The 72 miles from Zurich to Berne takes a bit less than an hour.

This gives m a chance to interject that I appreciate my daily bike commute of 3 miles more and more each day.

Coast to Coast Apathy

I listened to Matt Savinar on Art Bell's Coast To Coast radio program last night. Matt did a good job getting the word out on oil depletion and the coming oil crisis but had to fight through all the wacko calls. The callers invariably sound reasonable at first but then eventually drift into their pet theory. One fellow from Canada commiserated over bureaucrats with the host and then asked whether they had heard about John (the time traveller) Titor1.

Next caller, please.

Someone calls up and starts launching into connections to HAARP.

Next caller, please.

Then someone calls up and opines about the utility of hemp; did you know that Henry Ford used hemp oil for his car fuel at one time?

Next caller, please.

Then someone calls up and says the future belongs to hydrogen combustion. The caller drones on and on and the host finally admonishes him with a warning to callers to refrain from pontification.

Next caller, please.

Finally, Richard Hoagland, a UFO expert, called in, praised Matt, but then claimed to have THE answer himself. Basically, we just have to ask the government (or if they get belligerent, get a FOIA or sue) to show us plans and formulation for their classified "free energy" transportation schemes. Hoagland had "seen" these in operation himself and faulted Matt for not showing enough interest for pursuing this path.

Fortunately the show then ended. If it had gone any longer, we probably would have discovered solutions by analyzing the Shroud of Turin, the lost city of Atlantic, and the latest Bigfoot sighting.

1 I don't believe in any of that crap (time travel and about 99% of Art Bell's topics), but found it peculiar that Bell's guest host, Ian Punnet, had never heard of Titor, and thus probably committed a cardinal faux pas to the tin-foil loyal audience.

Saturday, September 10, 2005

Dip Llama Mills

I don't understand why if Laura Callahan had to resign from her job as senior director in the Homeland Security Department's CIO office, why hasn't Michael Brown resigned as well? Well, for starters, Brown did not buy a PhD from a diploma mill, settling for an undergraduate degree instead:
Brown also claimed to have been a political science professor at the University of Central Oklahoma when, in reality, he was a student there.
And then this guy, John Pennington, also a (regional) FEMA guy, effectively bought a degree from the former diploma mill of California Coast University. He claims :
California Coast "fit my needs," Pennington said. "I've got a stack 2 feet high of tests and notes and study guides" as proof that he completed course work for his degree.
The stack of materials two feet high only proves that "you get what you pay for".

And then I run into this totally illogical piece of writing from TechCentralStation (trust me, it doesn't make any more sense placed in context).
Now, suppose you despised the designated hitter with a fervor rivaling your rabid hatred for George W. Bush, who, it so happens, once owned a piece of the Texas Rangers. If you blamed the American League for bodies rotting in the streets of New Orleans, what would that make you?
Answer: either (a) Totally Confused, (B) A Wookie, or (c) A Llama. Apparently, the Cato Institute has started to hire Doctorate in Philosophy program dropouts.

Thanks to mg.

Energy voice on the radio

Air America Radio announced they will syndicate Thom Hartmann on top of their regular program schedule. I have no idea what help syndication does other than to bifurcate an audience, but Hartmann has much knowledge on oil depletion matters so I look forward to listening to him. An excerpt from his book "The Last Hours of Ancient Sunlight":
Would you send your child to war to fight over the last barrels of oil? Would you go yourself? Or pay taxes to support such a war? What will you do when oil is no longer “cheap” and abundant? What will you do if climate change becomes climate chaos? We have no choice about the end of the petroleum age. But we can choose how gracefully we make the transition.

Update: AAR's EcoTalk will have climate chaos as their theme on tomorrow's show. Global Warming Bush has hit the fan.

Friday, September 09, 2005

Future in Funding

From Bob Park's What's New:
Even as gas approaches the price of bottled water, Katrina has cut oil production in the Gulf and shut down key ports. Drilling in the ANWAR faces a key vote, and the President has ordered oil released from the strategic reserve. So where is the free-energy industry? Right on schedule. The San Francisco Chronicle had a rather skeptical article in the business section this week about a "clean, inexhaustible energy source." However, we don't do perpetual- motion in the 21st Century. Nowadays we tap zero-point energy, and Magnetic Power Inc says it's "on the verge" of it. "We are still having trouble making it repeatable," the CEO said. "All we know is that we're seeing more energy output than input, what else could it be?" Is this sounding vaguely familiar? The Air Force sank $600,000 in the company. Last year, the AF was investing in teleportation . Any time now we can expect to hear new claims for cold fusion.

Well, not exactly. The prospect of a hydrogen economy hinges on the ability to produce hydrogen economically. Thirty years ago, an inventor named Sam Leach claimed to have invented a car that ran on water. He said it used a secret catalyst to dissociate water. That would be thermodynamically impossible. But a brief report in Scientific American last week implied a new rhenium catalyst might dissociate water. It was based on an article in the Journal of the American Chemical Society, but the title of the story in SA was misleading. The hydrogen was from catalytic oxidation of organosilanes. Cars still won't run on water.
Agreed, organosilanes don't come cheap (and doesn't come out of the ground). The semiconductor industry has long used this stuff to grow epitaxial silicon via chemical vapor deposition. You might as well make solar cells out of it than waste it on a dubious claim of something that would likely yield a low or perhaps negative EROIE. (cue SW)

Thursday, September 08, 2005

The Daily Show

Oil has not quite made the list.

I thought I just heard Rachel Maddow say on Air America Radio: "The most patriotic thing you could do right now is ride a bike". Non-nuclear, of course.

Wednesday, September 07, 2005

Blood and Antibodies

RBC stands for red blood cell count. WBC stands for white blood cell count. Doctors play close attention to these numbers, particularly when monitoring the health of leukemia and cancer victims. Patients have to take chemotherapy meds at precise intervals to keep the multiplicative effects of cancerous leukocytes at bay or below a critical threshold. Outside of the medical world and entering the strange land of photo-ops, we once again find that G.W. Bush obviously does not care about curing anything but his own latest hangover.

And as the Iraqi RBC (Rumsfeld-Bush-Cheney) count reaches 2000 bloodied Americans and the WBC (W.-Brown-Chertoff) count escalates into potentially thousands of dying and diseased gulf coast residents trying to fend off indifference, we collectively get to see how true cultural cancer develops.

Like antibodies gone awry, our supposedly immune capitalist system has started to attack our lifeblood.

Tuesday, September 06, 2005


Legend has it that Roman bridge designers assumed a very precise exit criteria to deem their work complete and successful. This turned into a binding and severe performance penalty on failure. The test involved having a band of soldiers march over the bridge, as the designer sat patiently underneath the span.

Legend further had it that this lead to the art of engineering overdesign and the standard practice of employing safety-margins in most products.

In the software industry, developers refer to the practice of going down in flames with your own handiwork as "eating your own dogfood".

Maybe Phila happened on a good strategy for future engineered marvels:
We have forgotten that democracy was intended as a corrective to the disasters visited upon humanity by elites of one kind or another. Maybe the great drag on us all is not the welfare mother but the incompetent engineer, not the fatherless child but the writer of mean or slovenly books. When our great auto industry nearly collapsed, an elite of designers and marketing experts were surely to blame. But the thousands thrown out of work by their errors were seen as the real problem. No doubt many of these workers figure among the new lumpen-proletariat, as the Marxists used to call them--people who just are not bright enough.

Incompetent Engineer. I resemble that remark.

The Army Corps of Engineers certainly should have located each of their regional headquarters next to the most tenuous of levee, downstream of the most critical of dams, and next door to the most toxic of waste dumps.

Every major civil engineering firm in California should sit underneath a freeway overpass.

Every turkey farm owner must, according to law, live 1/2 a block downwind from his processing plant.

Manufacturers of children's vaccines should ... wait, I'll get to that.

And just for kicks, we should have put million dollar bounties on the head of any "terrorist" engineer known to work on WMD's in Iraq or any other "evil axis" country. Knowing some of the arrogant, cowardly pricks that practice engineering, this probably would have worked, avoiding the need for anyone to invade anything. I bet 90% of the scientists and engineers would have pissed in their pants in a rush to leave the country, and the rest would rat each other out.

I call this approach the neo-roman strategy for fixing our global infrastructure problems.

Oh yeah, and if some people go ape over the fact that Robert Kennedy, Jr. wants to limit the spread of wind farms around his backyard of Cape Cod, then I think it only fair that the makers of mercury-based vaccine preservatives get to test it on their own kids first.

Adjusted Peak

Whatever "inflation-adjusted" gas prices actually signifies1, it looks like we may achieve an all-time high rather shortly.

(via Barry Ritholz's TheBigPicture)

And from Big Gav, the common sense view of how the supposedly low American cost-of-living quickly dissipates when you adjust for the cheap fossil fuel.
In my own fuzzy-logic way, I’d presumed that the cheapness of every day goods in the US was mostly because of the flexibility of the economy, i.e. the ability of employers to pay low wages, fire at will, offer few benefits, and generally pass on costs like environmental protection or maternity benefits. A few weeks in California cured me. Sure, labour ‘flexibility’ helps. But the cheap price of petrol is more important than I’d ever imagined. As newspapers and coffee breaks filled with doomsday scenarios of paying $6 dollars a gallon for gas, I sat down one day and did the sums.

That’s what we pay in Ireland. Today. Most of the extra cost goes in taxes, and the cost of that affects every imagineable part of life. Paying more for oil makes everything more expensive – getting food to the shops, from there home, cooking it, and cleaning up afterwards. It means more people rely on public transport, creating a policy feedback loop of greater government spending and making more citizens using shared resources every day of their lives. It means we don’t run central heating or (if we had ever needed it) air conditioning all or most the time, and probably just put on another jumper when it’s cold. It means we advertise cars based on their fuel consumption and we don’t have ‘all you can eat’ restaurant buffets. Teenagers don’t have their own jobs and cars, and rely on their parents, the bus or shanks mare to get around. They get it off in parks instead of cars. Not that many people drive to the gym. Until recently, not many people needed to go to the gym either.

That about sums it up. I don't think I need the following footnote. We all know in our heart what the "inflation adjusted" cost of gas has always meant -- just another distractive technique designed to pull the wool over our eyes.

1Since oil itself acts as a common currency (i.e. "black gold"), the modulating effect of inflation may actually obscure an effectively long-term monotonic decrease in supply (or increase in demand).

Impacts from the hurricane.

Update: Stirling calls it an all-time high (almost) as well.
While hackonomics writers routinely genuflect to Mt. 1982 and say "oil is well below its inflation adjusted peak" they are incorrect. They adjust oil for CPI. This is a number which tells us interesting things, but not what the real cost of oil is. Oil is an input, the two numbers which make sense are oil in producer dollars - that is adjusted for PPI (from the BLS, same place you get CPI numbers) and for the GDP deflator - which contrary to its name is the measure of total economy inflation. The Fed uses it rather than CPI for this reason. Oil adjusted for GDP deflator peaked at about $82.70 per barrel - there is some error because the last GDP deflator number is from June, and there has certainly been some inflation since then. If one splines in the quarter numbers both sides it comes out to $82.67. Oil closed at a peak of just short of $70, which means that we are short of the peaks of 1980 and 1919, but not much short.

Monday, September 05, 2005


With the proliferation of on-line articles, someone at some time has described every conceivable scenario under any number of circumstances which just happened to match some current situation (NOLO). But when it also happens to match an already ongoing alternate universe scenario (Iraq war), and when we finally hear the the admission of the true rationale (Oil), we have hit some sort of crossroads:
By this time, every excuse for his war in Iraq having peeled away (the al-Qaeda connection, the wmds, even "freedom"), he finally arrived at a new explanation for why we were there. It was... oil -- or to be more exact, an oil fantasy. ("If Zarqawi and bin Laden gain control of Iraq, they would create a new training ground for future terrorist attacks; they'd seize oil fields to fund their ambitions; they could recruit more terrorists by claiming an historic victory over the United States and our coalition.")
That quote will come in handy, even though the Bush admission got buried in the debris of the hurricane.

Link from Wolcott.

Friday, September 02, 2005


From Mike Ruppert, this unsubstantiated bit of potentially important info:
As a result of Katrina, Saudi Arabia has finally admitted that it cannot increase production.
He said it, I didn't.
Go ahead. Tell me we’ve all been wrong about Peak Oil, about climate collapse, and the metastatic corruption of our government and economic system. Now it’s an easy bet and one that we will not have to wait long to settle. I’ll take your wager.

Thursday, September 01, 2005

Oil Crisis (and Natural Gas)

Up to the minute news at The Oil Drum.

Good economic analysis at BOPNews by Newberry and company.

Stirling pointed to Jerome's post at BoomanTribune.

"Gosh I sure hope someone is guarding the oil ministry."

The strategic importance of your bus monitor

They keep talking about state and local responsibility as somehow more important than federal authority. But as a commenter at TOD showed, the Mississipi delta region of our country remains a geopolitical cornerstone. Both shipping and oil considerations make this region more than a local concern, regardless of what Hastert says.
"Denny Hastert was the bus monitor on the school bus I rode in rural Illinois when I was a kid. He was a fat stupid little suck up back then and it is interesting to note that he hasn't changed a lick" -- SW.