Grassroots Organization Launches Renewable Energy Act of 2006

An online renewable energy advocacy group, World Oil Boycott, has launched a major drive to see sweeping legislation in 2006 that would revolutionize the US energy industry. The initiative calls for a resurrection, expansion and re-introduction of Bill S 427, introduced in the first session of 2005. The Bill is currently languishing in committee.

The group has called for the modernization of the national energy grid – in the name of promoting international peace - via dramatic renewable energy consumption requirements by all federal offices. The broad and sweeping legislation of the revised bill would lead to:

- investment to provide research in making renewable energy technologies more efficient and more affordable;
- investment to provide businesses with tax incentives to switch to consumption of 100% renewable energy derived electricity;
- investment to provide tax incentives to home owners and businesses to purchase Energy Star rated gas furnaces and heaters;
- investment of $100 tax credit to home owners who provide receipt of their purchase of twice as many fluorescent light bulbs as rooms in their homes;
- investment to rebuild the national energy grid to include superefficient transmission lines; - investment to incentivize cities to upgrade their power lines;
- investment to fund the state construction of renewable energy 'greenways' along highways, including electric car battery swap stations and renewable fuels stations;
- investment to help all the major cities transition to clean electric powered mass transit systems, with batteries charged 100% by renewable energy;
- investment to provide tax incentives to individuals and business to purchase hybrid or electric automobiles;
- investment to provide tax incentives to the automotive industry to increase the efficiency of their gasoline and diesel-powered offerings;
- investment to provide tax incentives to the trucking industry to purchase vehicles or retrofit existing vehicle with technologies that allow them meet clean air and mileage standards;
- investment to support research in capturing energy otherwise lost in manufacturing, energy production, transportation, and domestic energy consumption;
- investment to research how to transition from a dangerous and eternally polluting nuclear fission power to clean and safe domestic nuclear fusion;
- investment to build massive solar trough farms in California and Nevada to help power California's growth and relieve them of their demand of unethically artifically expensive power from Texas;
- investment to create ultraefficient high-speed rail systems between major cities;
- legislation to require the adoption of ultra-efficient construction methods during the construction of all new federal buildings, and requiring that all new federal buildings be designed as 'green buildings';
- investment to create national awareness of the renewable energy options available to energy consumers, steps that consumers can take to reduce their non-renewable resource derived energy consumption, and the urgency of our need to transition to become a renewable-energy powered country;
- investment to export our best renewable energy technology to developing countries to assist their populations in emerging from poverty and squalor into productive populations powered by our mother the earth and our father the sky;
- requirement that all federal government offices transition to eventually consume 100% renewable energy-derived electricity by 2010, or equivalent through Renewable Energy Credits;
- requirement that all light bulbs purchased by federal agencies meet efficiency standard set by fluorescent alternatives to incandescent bulbs; - investment for a national competition among cities of >100,000 people to become powered by >95 renewable energy by 2010, with the reward being that the federal government will pay the energy bill of all citizens of the first city in the year 2010-2015.
- investment to insure that New Orleans becomes one of the first truly green cities in the United States of America.

Movie Syriana Depicts Oil Reality

With the recent Peak Oil Caucus being formed in the House of Representatives, increased media attention, and now the newly released movie, Syriana, it appears that the correlation between limited oil supplies and questionable foreign policy is being illuminated.

I plan on seeing Syriana this weekend in between finals study sessions.
The review below discusses how/why Syriana is a timely movie.

Syriana and Iraq
By Mark LeVine

Critics have been hailing "Syriana," George Clooney's latest film (Written and Directed Stephen Gaghan, Academy Award winner for Best Screenplay - Traffic) by the to take on the policies of the Bush administration, as a cinematic tour de force that has "compelling real-world relevance" and is "unsettlingly close to the truth." But what is the truth "Syriana" supposedly approaches? Put briefly, the plot traces the ramifications of a bungled assassination, authorized by the CIA, of a Middle Eastern leader who decided to sign a major oil deal with China instead of an American oil company with close ties to the US Government.

Given the increasing numbers of Americans who believe the Bush administration deliberately misled the country to justify the Iraqi invasion, many film-goers will no doubt be willing to accept the film's argument that America's thirst for oil—not the threat of terrorism, and certainly not a concern for human rights—drives the country's policies in the Middle East, even when those policies violate our core ideals. But is the movie really a case of art imitating life, or does "Syriana" veer towards the kind of hyperbole and exaggeration that marred Oliver Stone's "JFK”? The evidence would seem to speak for itself. It includes:

• Newly discovered documents, reported in the Washington Post, revealing that as early as February 2001 senior executives of at least four of the country's biggest oil companies, ExxonMobil, Conoco, Shell and BP America, met with Vice President Cheney's Energy Task Force.
  
• Documents from these meetings obtained by the conservative watchdog Judicial Watch—including a map of Iraq and an accompanying list of "Iraq oil foreign suitors" revealing Iraq to have been a major topic of discussion. This is not so surprising, as that country has perhaps the world's second largest oil deposits. Indeed, the map erased all features of the country save the location of said deposits, while the list of suitors revealed that dozens of foreign companies were either in discussions over, or in direct negotiations for, rights to them.
  
• As important as what was discussed was when the meeting occurred: at precisely the moment when scientists and industry leaders began increasingly to worry that the "age of peak oil production"—when it will no longer be possible to extract enough oil from the earth to replace what we consume—was approaching faster than previously assumed, portending a potentially explosive competition for the world's remaining supplies.
  
• In such a scenario, ensuring American access to—and, where possible, leverage or even control over—the world's major oil deposits would be a natural concern for an administration umbilically tied to Big Oil, especially in the context of escalating competition with an aggressive, energy-hungry China.
  
• A 2002 report by Deutsche Bank explained the major US companies would lose if Saddam made a deal with the UN, whereas the Europeans, Russians and Chinese would come out ahead. But in a post-Saddam Iraq, the report argued, the US oil majors—specifically, according to the report, ExxonMobil and ChevronTexaco, the very companies involved in the disputed meetings—could manage the country's resources.
  
• At the very moment the first Energy Task Force meetings with industry officials were held, in February 2001, the National Security Council issued a directive telling staff to cooperate with the Energy Task Force in the "melding" of new "operational policies towards rogue states" with "actions regarding the capture of new and existing oil and gas fields." No place on earth was more amenable to such melding than Iraq.
  

Two and a half years after the US-led invasion of Iraq, the Bush administration continues to resist calls for a major troop withdrawal, despite the fact that most intelligence reports, and most Iraqi politicians, confirm the presence of those troops to be the main motivation for the insurgency.

With American losses and expenditures mounting daily, the threat of WMD disproved, the promise of peace and democracy seeming increasingly pollyannish, it's hard to think of many good reasons for the US to maintain a long-term presence in Iraq. Two that come to mind, however, are oil and military bases—subjects that remain largely unbroachable in polite discourse in Washington or Baghdad.

What else would constitute the "core interests" that both the Bush administration and leading democrats (most recently Sen. Joseph Biden) argue will be threatened by an American withdrawal from Iraq any time soon.

It took roughly fifty years for the CIA to admit that it organized the overthrow of Iranian President Mossadeqh when he dared to nationalize his country's oil industry. Our government also helped organize coups that put the Baath Party in power in Iraq twice, in 1963 and 1968. There's no doubt who was behind the toppling of Saddam. The question that remains, however, is: What was the real reason we invaded Iraq? On that score, "Syriana" hits closer to home than most politicians either side of the aisle would care to admit.

Mark LeVine is a Professor of Middle Eastern History at UC Irvine, and author of Why They Don't Hate Us: Lifting the Veil on the Axis of Evil (Oneworld, 2005). See www.culturejamming.org.

Peak Oil Caucus Formed in Congress

I’ve been relatively silent for a while on the Peak Oil front, but I promise I’m keeping tabs on as much as I can – the economy, real estate, metals market, international events etc. The global landscape of frenetic human activity serves as clues. I have some breathing room since the majority of my papers are out of the way and soon it will be time for finals preparation.

I've posted articles recently, but did not have a chance to send emails prompting you to check them out, so if you have time scroll down and take a peak – no pun intended, honest!

This is good news. Congress has recognized Peak Oil! This means there’s a conscious minority within that body who has recognized the crisis. Some of them probably understand it better than others, and perceive that no combination of alternative energy sources will ever allow what Dick Cheney calls “the American way of life” (assuming mass consumption and assuming continuous growth through infinite supply reservoirs) to continue. But they will educate each other and, we can hope, the rest of the House.

I had read an article claiming that we'll be screwed in our lifetime if there was not a consorted global drive towards an “Apollo Project” revolved around alternative energies. In a previous post, “Natural Gas is Yummy” (scroll down), I had described how 95% of power plants constructed in the US since the 1990s use natural gas to generate electricity – natural gas is non-renewable.

The resolution below states that: “the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency of the `Man on the Moon' project to develop a comprehensive plan to address the challenges presented by Peak Oil.” And there it is...let's get this game on track before that fat lady sings

(Disclaimer: Fat lady references is a figure of speech and is not intended in anyway to discriminate against horizontally endowed individuals or Kripsy Cream Calendar models)

Here's the info from Congress provided by:
http://www.globalpublicmedia.com

A peak oil bill has been filed in the House of Representatives with the support of the newly formed Peak Oil Caucus, founded by Rep. Roscoe Bartlett (Rep, MD) and a number of co-sponsors. The members of the caucus are James McGovern, Vern Ehlers, Tom Udall, Mark Udall, Raul Grijalva, Wayne Gilchrest, Jim Moran, Dennis Moore.

Co-sponsors are Tom Udall, Virgil Goode, Raul Grijalva, Walter Jones, Tom Tancredo, Phil Gingrey, Randy Kuhl, Steve Israel, G.K. Butterfield, Mark Udall, Chris Van Hollen, Wayne Gilchrest, Al Wynn, John McHugh, Jim Moran, and Dennis Moore.

Expressing the sense of the House of Representatives that the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency that was incorporated in the `Man on the Moon' project to address the inevitable challenges of `Peak Oil'.

IN THE HOUSE OF REPRESENTATIVES October 24, 2005
Mr. BARTLETT of Maryland (for himself, Mr. UDALL of New Mexico, Mr. GOODE, Mr. GRIJALVA, Mr. JONES of North Carolina, Mr. TANCREDO, Mr. GINGREY, Mr. KUHL of New York, Mr. ISRAEL, Mr. BUTTERFIELD, Mr. UDALL of Colorado, Mr. VAN HOLLEN, Mr. GILCHREST, and Mr. WYNN) submitted the following resolution; which was referred to the Committee on Energy and Commerce

________________________________________ RESOLUTION

Expressing the sense of the House of Representatives that the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency that was incorporated in the `Man on the Moon' project to address the inevitable challenges of `Peak Oil'.

Whereas the United States has only 2 percent of the world's oil reserves; Whereas the United States produces 8 percent of the world's oil and consumes 25 percent of the world's oil, of which nearly 60 percent is imported from foreign countries;

Whereas developing countries around the world are increasing their demand for oil consumption at rapid rates; for example, the average consumption increase, by percentage, from 2003 to 2004 for the countries of Belarus, Kuwait, China, and Singapore was 15.9 percent;

Whereas the United States consumed more than 937,000,000 tonnes of oil in 2004, and that figure could rise in 2005 given previous projection trends;

Whereas, as fossil energy resources become depleted, new, highly efficient technologies will be required in order to sustainably tap replenishable resources;

Whereas the Shell Oil scientist M. King Hubbert accurately predicted that United States domestic production would peak in 1970, and a growing number of petroleum experts believe that the peak in the world's oil production (Peak Oil) is likely to occur in the next decade while demand continues to rise;

Whereas North American natural gas production has also peaked;

Whereas the United States is now the world's largest importer of both petroleum and natural gas;

Whereas the population of the United States is increasing by nearly 30,000,000 persons every decade;

Whereas the energy density in one barrel of oil is the equivalent of eight people working full time for one year;

Whereas affordable supplies of petroleum and natural gas are critical to national security and energy prosperity; and Whereas the United States has approximately 250 years of coal at current consumption rates, but if that consumption rate is increased by 2 percent per year, coal reserves are reduced to 75 years:

Now, therefore, be it Resolved, That it is the sense of the House of Representatives that--

(1) in order to keep energy costs affordable, curb our environmental impact, and safeguard economic prosperity, including our trade deficit, the United States must move rapidly to increase the productivity with which it uses fossil fuel, and to accelerate the transition to renewable fuels and a sustainable, clean energy economy;

and (2) the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency of the `Man on the Moon' project to develop a comprehensive plan to address the challenges presented by Peak Oil.

No Technological Fix for Falling Oil Stocks

Nigel Wilson, Energy Writer
November 22, 2005

DECLINING production from the world's major oil fields could not be made up by technological advances or the development of new discoveries, a Swedish energy expert warned yesterday.In Perth to launch the Australian chapter of the Association for the Study of Peak Oil and Gas, Professor Kjell Aleklett of Uppsala University said four fields the size of the North Sea would have to be found for oil production to meet expected world demand in 2025.

"This is just not possible," he told a meeting of transport bureaucrats.

"There is no possibility that the 65 current oil-exporting countries can lift output sufficiently to meet demand when production is declining in 54 of them."

He said 75 per cent of known world oil reserves were in Muslim countries, and the rest of the world would have to be conscious of this as supplies of traded oil tightened.

About 1 per cent of world oil fields, "mostly in desert countries", were responsible for 50 per cent of production and this trend would continue, he said.

Professor Aleklett, who heads the APSO organisation in Europe, said that the answer to closing the gap between current world demand for 85 million barrels a day and projected demand of 115 million barrels a day in 2025 "must come from something other than technology".

The APSO is an international network of scientists, mostly affiliated with European institutions and universities, that aims to determine when world production of oil and gas will peak and decline, and the consequences.

Peak oil theory, which holds that at some stage exploitation of the world's known oil reserves will be greater than the oil remaining, developed from the work of Shell geophysicist M King Hubbert in the 1950s which correctly predicted oil production in the US would decline from the 1970s, despite an upsurge in exploration.

Professor Aleklett said the world was addicted to oil.

Current knowledge of the way petroleum systems worked suggested no new big oil fields would be found, unless they were off Greenland or in Siberia, both of which posed development challenges.

He noted that despite popular prejudices, China - with 21 per cent of the world's population - accounted for only 8 per cent of world oil and gas demand.

This compared with the US - with 5 per cent of the population - which accounted for 25 per cent of consumption.

If China lifted its demand to 21 per cent of world oil production by 2030 it would need 25 million barrels a day.

This compares to current demand of just 6.3 million barrels of oil a day.

Renewed Interest Could Spark More Solar Building

The Sooner we move towards solar energy and smart building designs, the better.

ENERGY
Solar: Advocates seek governmental support

Don and Nancy Dayton aren't worried about the rapidly rising cost of heating fuels this winter.
They've paid less then $50 a month for the last two years to heat and cool, plus run all the electric appliances in their almost 2,000- square-foot, split-level home in Eldorado.
They estimate 90 percent of the heat is free -- from the sun -- with no expensive photovoltaics involved. Their almost two-decade- old house is simply designed to take advantage of solar rays and natural ventilation.

The house uses no propane or natural gas. Only occasionally does the couple use the wood stove or electric baseboard heaters. "In 18 years, we've never turned on our downstairs electric heat," Nancy Dayton said.

The Daytons think it's unfortunate that many people in a state known for sunshine will be paying high heating bills in their homes this winter when there's a better, cheaper way. "We're sold on solar," Don Dayton, a retired National Park Service administrator, said. "It's sad to see so many designers and builders get away from it. You drive around Arizona, New Mexico and Colorado, and you see so few solar-designed houses."

Passive solar building gained support following the last energy crisis in the 1970s. Federal and state tax incentives for solar helped spur construction. When fuel prices dropped in the late 1980s, the tax incentives died and so did the government support and broad interest in passive solar design. Now, as fuel prices are expected to soar over the winter, the Daytons and other solar advocates think governments and developers should pay attention again to solar-powered homes by offering tax rebates and credits.

Good design is essential to balancing winter heat with summer cool inside a passive solar home like the Daytons'. The south side of their house sports large, double-pane glass windows. Properly sized overhangs provide shade in the summer, while windows and doors on the east and west provide circulation to keep the house cool. It has no air conditioning and no windows on the north side of the house. The home's bottom level is bermed into the side of the hill, providing more insulation. The home is well insulated -- better than standards called for at the time it was built.

Short, concrete-block walls about a foot wide, known as trombe walls, are covered with dark stucco and glass windows on the outside of the home's southside lower level. The walls collect heat during winter days and slowly release it at night, much as adobe does, into the bedrooms. The house can go two days in cloudy weather before it starts to turn cold inside.

During the heyday of passive solar design in the 1970s and 1980s, Eldorado touted itself as a solar capital of the nation and it still ranked No. 1 for its number of solar homes, with more than 300, in the 2000 Census. Life magazine featured four pages of Santa Fe solar homes in 1980, highlighting the often-studied Balcomb house off Old Santa Fe Trail in the First Village subdivison.

Dayton said a large roadside billboard used to proclaim Eldorado as a solar community. "The sign came down sometime in the 1990s and builders stopped doing solar houses," Dayton recalled.

Susan Nichols, who helped design some of the original Santa Fe solar homes, said solar enjoyed strong government and industry support three decades ago. "It was just injected with potential and excitement under the Carter administration," she said. "The minute Reagan came into office and gas prices fell, that all dried up."

Nichols said solar design education also died. She and business partners, including architect and one of the early solar gurus Ed Mazria, traveled the country giving workshops to architects, designers and builders on solar. Now, few people know how to correctly design or build a good solar home, Nichols said.

Nichols said, in spite of all the warnings about oil's finite supply, the nation didn't plan ahead for the day the supply would drop and prices would rise. "We, as Americans, are not particularly far-sighted," she said from her Communico company office in Santa Fe.

Solar design isn't rocket science, say Nichols and Mazria, who wrote one of the definitive solar design books in 1979 and is currently rewriting it. "We know it can be done and we know how to do it," said Mazria, who served on Gov. Bill Richardson' Green Building Task Force.

Mazria proposed two years ago in an article titled "It's the Architecture, Stupid" in Solar Today that new buildings be required to cut energy usage by half the average usage for an area. Mazria also wrote that architecture schools needed to focus on training students in energy-efficient design. It's a proposal he's promoting today at every opportunity before architects and governments. This week he presented his proposal to Santa Fe County for trimming energy costs in residential and commercial buildings.

Technology and materials for both active and passive solar homes has improved immensely. Trial and error in the field has given solar designers loads of practical information on what works and what fails for a given building site. Computer programs allow designers and architects to create energy-efficient, passive-solar homes based on the unique challenges of each site.
What's needed now, advocates say, is renewed support from government and consumers for passive solar construction and eduction. New Mexico, with a governor who supports renewable energy and energy-efficient buildings, is positioned to lead the way.

And with many in the oil industry observers predicting a time soon when oil supplies will peak and head on a downward slide, Dayton, Mazria and others believe solar, energy-efficient buildings need renewed interest fast.

Contact Staci Matlock at 470-9843 or smatlock@sfnewmexican.com.
WANT TO KNOW MORE?
Check out the following Web sites for the latest in solar research and information:
* New Mexico Solar Energy Association:
www.nmsea.org
* U.S. Department of Energy, National Renewable Energy Laboratory:
www.nrel.gov/solar/
* Consumer Energy Design, www.consumerenergydesign.org, a good simple description of basic passive and active solar principles from the California Energy Commission.
Books and articles
* "It's the Architecture, Stupid," by Ed Mazria, download from www.mazria.com/publications.html
* The Passive Solar Energy Book, by Ed Mazria, 1979, Rodale Press. Considered the early bible for solar design.
Businesses
Santa Fe is blessed with a wealth of solar innovators, contractors and businesses with decades of experience. Check out the membership list in the New Mexico Solar Energy Assocation or the Yellow Pages.
What's it mean?
Passive solar: Refers to gaining heat and light from the sun through proper building design and natural movement of heat and air without use of mechanical systems.
Active solar: Moving air and heat from the sun by means of fans and pumps; also collection and conversion of solar rays into electricity by means of a photovoltaic system of panels, converters and batteries.
Source: The Santa Fe New Mexican

Natural Gas is Yummy

By Moe Fakih

This is a good concept Off Shore Wind Energy , but not the only solution towards taking mankind’s dependency away from fossil fuels. In order for us to meet the efficiency of oil and natural gas we will need to implement various forms of alternate energy – solar, wind, hydroelectric.


I was flying into San Diego this Monday evening, and I was amazed by how the San Gabriel basin and San Diego county looked on a clear night 20,000 miles up. If a 17th century pirate were in my seat he would see thousands of torch lights ablaze. Resources such as wood, fuel, and perhaps metal would be implemented to sustain constant illumination.

So what energy source feeds these glowing cities today? Have you ever considered how we have such an infinite amount of energy to power our hot water heaters, lights, and computers? In order for our power plants to generate energy, they also need an energy input. In the 1970s and 1980s, most electric power plants were fueled by coal or nuclear power. In 2000, some 23,453 megawatts (MW) of new electric capacity was added in the U.S. and almost 95 percent of this, or 22,238 MW, was fueled by natural gas. (Source: American Gas Association)

There appears to be enough natural gas in the world to supply our system in the short term, but perhaps alternate forms of energy should replace natural gas since the former is also used to feed the planet’s 6.5 billion people.

Crop plants assemble carbon, hydrogen, oxygen and nitrogen into proteins that are essential both to plant growth and to the diets of humans and other animals. Of those four elements, nitrogen is the one that's too often in short supply. If you see yellowish, stunted crops, whether they're in an Indiana cornfield or an Indonesian rice paddy, it's likely that you can blame it on a lack of nitrogen.

Stan Cox, senior scientist at the Land Institute in Salina, Kansas, wrote, “A world of 6.4 billion people, on the way to 9 billion or more, needs more protein than the planet's croplands can generate from biologically provided nitrogen. Our species has become as physically dependent on industrially produced nitrogen fertilizer as it is on soil, sunshine and water. And that means we're hooked on natural gas.”

Perhaps we should save natural gas for food production and use other sources to power our refrigerators? Cox later writes, “Vaclav Smil, distinguished professor at the University of Manitoba and author of the 2004 book Enriching the Earth: Fritz Haber, Carl Bosch and the Transformation of World Food Production, has demonstrated the global food system's startling degree of dependence on nitrogen fertilization. Using simple math -- the kind you can do in your head if there's no calculator handy -- Smil showed that 40 percent of the protein in human bodies, planet-wide, would not exist without the application of synthetic nitrogen to crops during most of the 20th century.”

That means that without the use of industrially produced nitrogen fertilizer, about 2.5 billion people out of today's world population of 6.2 billion simply could never have existed. This also means that if there is a long-term disruption in the natural gas supply, people will starve.

The momentum of past population growth is expected to add two to four billion people to the world's population by 2050, even with concerted efforts to rein in growth. Almost all of the increase will occur in Africa, Asia, Latin America and the Middle East. That will double the demand for nitrogen fertilizer in those regions, and by that time, says Cox, “60 percent of their inhabitants will depend existentially (in the literal sense, not the philosophical one) on natural gas-derived nitrogen fertilizer.”

Aside:

Some say human population is exceeding earth’s carrying capacity. There is not enough, water, fish, timber, steel, oil etc. to sustain human consumption. In nature when a species experience a population explosion, it is only able to last as long as the environment permits. Usually famine or disease will minimize the numbers in order for the ecosystem to return to a state of equilibrium. Should nature run its course in terms of human population or should we continue to beat nature with ingenuity?

Here are some fun facts about natural gas:
http://www.pge.com/microsite/safety_esw_ngsw/ngsw/more/facts.html

Time Magazine Finally Covers Peak Oil

By Shepherd Bliss

Time magazine became the most recent mainstream publication to finally give detailed coverage to Peak Oil. Its Oct. 31 twelve-page spread on “The Future of Energy” follows major articles in USA Today, New York Times, Wall Street Journal, San Francisco Chronicle and other big city dailies in recent months. They finally mention the coming Peak Oil that many geologists have been warning us about for years. Such articles appear after two major groundbreaking cover articles on oil by National Geographic, the first in the summer of 2004.

The October Esquire offered a two-page “Five Minute Guide: Oil,” which begins with the question “What’s ‘peak oil’?” Time’s lead article “How to Kick the Oil Habit” by Michael D. Lemonick runs four illustrated pages. Its only highlighted quotation is from Richard Heinberg, author of The Party’s Over:Oil, War, and the Fate of Industrial Society: “Price signals come much too late, and we will endure a tremendous amount of hardship that could have been averted if we’d acted sooner.” The article’s sub-head recommends that people “get ready for the withdrawal symptoms.”

In his two recent books on energy descent and in public speaking in the US, Europe, Africa, and Latin America, Heinberg describes how rising gasoline prices indicate the deeper and potentially devastating reality that the globe is running out of the petroleum that fuels contemporary societies.

Three major news events apparently stimulated the Time articles: 1) gasoline prices that “are roughly 25% higher than they were a year ago,” 2) “last week('s) 2005 Tokyo Motor Show,” where “carmakers practically ran over one another promoting their versions (of hybrid cars) in attempts to catch up with Honda and Toyota,” and 3) Hurricanes Katrina and Rita. Time notes, “A hurricane like Katrina or Rita or last year’s Ivan could trigger a shortage by putting even a few of the remaining U.S.-based refineries out of business for a few weeks.”

Time quotes oil optimist Daniel Yergin, author of The Prize in 1991 and chairman of the Cambridge Energy Research Associates, as saying, “There’s a lot of technological innovation kind of bubbling that really has captured the imagination and obsession of a lot of people.” But Time writer Lemonick wonders, “Are we moving fast enough?” Energy investment banker Matthew Simmons responds to Yergin’s familiar argument that this is the fifth or sixth time that the world has run out of oil. Simmons, who doubts that Saudi Arabia has the petroleum reserves that it claims, argues, “This is a shortage where demand actually exceeds supply. A confluence of trends has made oil shortages inevitable, not optional.

One is the unexpectedly rapid expansion of India’s and China’s energy needs.” Amory Lovins, director of the Rocky Mountain Institute, adds, according to Time, that “oil companies, worried that these changes could leave them behind, are starting to think of themselves instead as broad-based energy companies.” Lovins says that “Shell and BP are already headed in that direction.” Shell has apparently become the largest seller of biofuels and is buying up solar panels.

Time’s spread, in fact, includes two familiar full-page BP ads, where the former British Petroleum corporation has re-positioned itself as “Beyond Petroleum.” These ads reveal the interlock of today’s mainstream media profiting from its promotion of such corporations. By placing the ads next to its allegedly objective news stories, Time mixes advertising and news, which journalism students are taught should have a “firewall” between them. One BP ad advocates that “It’s Time To Go on a Low-Carbon Diet.”

This ad advances natural gas, solar, and hydrogen as the appropriate substitutes for oil. The other ad highlights the assertion that “Natural gas is the clean bridge to renewable energy,” noting that, “Today natural gas makes up more than half of BP’s energy production.” One could almost think that BP is earth-friendly, rather than profit-oriented, polluting, and climate-changing. Various authors concerned with energy decline have documented how the combined energy from the proposed replacements for today’s cheap oil will not provide nearly the quantity of energy that we now derive from petroleum. Julian Darley of the Post Carbon Institute, for example, wrote the book High Noon for Natural Gas: The New Energy Crisis. It “looks at the coming shortage of natural gas in North America.” In both The Party’s Over and Powerdown: Options and Actions for a Post-Carbon World, Heinberg refutes BP’s claim that natural gas, solar, and hydrogen will be able to provide the extensive energy that petroleum currently does, even when combined with other energy sources.

Consequently, demand for an increased use of the highly-polluting and climate-changing coal and for more use of the dangerous and expensive nuclear power are beginning to grow. Two separate, contrasting half-page viewpoints appear in Time: “It’s the End of Oil” by retired Princeton professor Kenneth Deffeyes and “Oil is Here to Stay” by Peter Huber, co-author of the new book The Bottomless Well. “World oil production is about to reach a peak and go into its final decline,” scientist Deffeyes contends. “The ‘Peak Oil’ theory fits nicely on a cocktail napkin,” counters the dismissive Huber. “Nonsense. Technology and politics -- not geology -- determine how much we pump and what it costs.” Huber contends that ample oil can be extracted by drilling in Alaska and off the shores of California and Florida, as well as in the tar sands of Canada and Venezuela.

Demands for such drilling -- in spite of their extensive environmental damage to the Earth and contributions to global warming -- are already increasing as the oil supply decreases, while the demand for oil products heightens. “It may be that the developments are coming too late to allow a smooth transition to the post-petroleum era,” Time writer Lemonick notes in a paragraph on Heinberg’s ideas. Heinberg contends that “all these things need an enormous lead time.” Lemonick concludes, “As consumers, we need time to make adjustments -- often very expensive ones -- to the new technologies.” Well-illustrated and helpful articles on “How Green Can We Get?,” “7 Cool New Ideas,” and “How to Save $$$ Now” complete Time's coverage. Time reports how people can “save your green by going green.”

It adds its voice to the chorus recommending that people slow down their cars, downgrade from premium gas, tune up and go hybrid. During the same week of Time’s coverage Big Oil reported its highest quarterly earnings ever and the highest profits of any corporation in history. The combined profits of ExxonMobil, Shell and Chevron for the third quarter were $29 billion. Exxon/Mobil profits are up 79% and Shell’s are up 68% from last year. ExxonMobil’s third quarter net income alone is enough to cover all Social Security benefit payments for three months or to fund military operations in Iraq and Afghanistan for more than two months.

Perhaps there is a relationship between Big Oil and those wars? ExxonMobil sales for this quarter are already over $100 billion -- the highest in corporate history. ConocoPhillips, the nation’s third largest integrated oil and gas company, reported third-quarter profits surged 89%. This is in spite of hurricanes ravaging the heart of the nation’s oil industry in the Gulf Coast. Big Oil seems to profit from even disasters and turn them into opportunities. Yet Big Oil cried poverty last summer and its congressional allies added billions in tax breaks to its energy bill, not for customers, but for corporations.

Now even Republicans in Congress are considering measures to respond to the public’s increasing criticism of Big Oil at a time when parts of Louisiana, Mississippi, and Florida are still reeling from recent hurricanes. Representatives of the industry’s American Petroleum Institute keep assuring Congress and the public that prices will return to pre-hurricane levels. Peak Oil theorists doubt that this will happen, contending that prices will continue to go mainly up, as they bounce around in the increasingly unstable energy industry. Heinberg’s next appearances on Peak Oil include speaking on November 5 at San Francisco’s Green Festival, where around 25,000 people are expected to hear over 100 speakers on environmental issues at the two-day annual event.

Heinberg and eco-philosopher Joanna Macy will speak for an hour. Half a dozen other speakers will address Peak Oil during the weekend, including activists from Willits in Northern California, who advocate “re-localization” as the solution to energy descent. Heinberg has also been invited to be one of four speakers (including Prince Charles of Wales, who will deliver the keynote address) at a by-invitation-only meeting in San Francisco in early November.

Other invited participants include oil industry executives as well as other prominent business and government leaders. Dr. Shepherd Bliss has been a professor of Communication for the last two years at the University of Hawai’i at Hilo. He is currently moving to a farm in Sonoma County, Northern California, mainly because of how Peak Oil will probably strand the isolated, oil-dependent Hawaiian islands. He can be reached at: sb3@pon.net.

Doubts Raised on Saudi Vow for More Oil

Stories on oil (extraction, refining, supply challenges) are getting more ink these days. This NY Times article confirms what has been discussed on this site and others, that, at the very least the Saudis are having a problem keeping up with global demand, and secondly, the issue of depleting oil reserves is a reality.

It’s up to the people to spur a sense of urgency, but it is up to the market to encourage people to act. That is, once we get hit in the pocket book, questions will start being raised. But at that point it will be too late.

We’re hooked on oil.

Doubts Raised on Saudi Vow for More Oil
By JEFF GERTH

WASHINGTON, Oct. 26 - Last spring, the White House publicly embraced plans by Saudi Arabia to increase its oil production capacity significantly. But privately, some officials and others advising the government are skeptical about some of those Saudi forecasts.
The United States relies on a few producers to maintain enough spare capacity to keep prices and markets stable, even during war or disaster. As oil prices have climbed over the last few years amid surging demand and tight supplies, the Bush administration has looked to the Persian Gulf countries, particularly Saudi Arabia, to pump extra oil.

But doubts about Saudi Arabia's assurances of how much it can expand capacity - and for how long - have been raised in a secret intelligence report and in a separate analysis by a leading government oil adviser, according to a federal government official and the oil expert.
If those skeptical assessments are correct, the administration's hopes of increasing supplies would become still more difficult to fulfill. Washington's expectations about oil production from Iraq and the United Arab Emirates have proved overly optimistic, and the White House has failed to heed advice about both those countries from industry and government specialists, according to documents and interviews.

The challenges facing the Bush administration on energy come as oil companies are set to report record profits resulting from soaring prices for oil and natural gas. Exxon Mobil, the world's largest private oil company, is expected Thursday to announce a quarterly profit exceeding $8.5 billion, more than companies like Intel and Time Warner earn in a full year.

Asked about the profits on Wednesday, the White House press secretary, Scott McClellan, said "the government and the private sector have a role to play" in restoring the vital infrastructure damaged by the hurricanes this year along the Gulf of Mexico and over Florida. Gasoline prices spiked after Hurricanes Katrina and Rita, straining oil markets already tight because of the uncommonly low levels of spare capacity.

But when it comes to oil supply, American companies are limited: the countries that control most of the world's oil keep out private producers. So whatever the political repercussions from high energy costs, the administration has had little choice but to rely on the promises by Saudi Arabia, the world's largest exporter, that it would continue to be the market's linchpin.
"There's always been this tenet on the American side," said Nawaf Obaid, a consultant to Saudi Arabia on energy security, "that the Saudis knew what they were doing and rightfully so."
But a senior intelligence official, who insisted on remaining anonymous because he was not permitted to speak publicly on the issue, said that the Saudi plans to increase production by nearly 14 percent in the next four years were not enough to meet global demand. Even the Energy Information Administration recently scaled back its expectations of how much more oil the Saudis could pump in 20 years.

To be sure, as Mr. McClellan said Wednesday, there is more to President Bush's energy policy than seeking to ensure surplus capacity. The administration has called for increasing domestic production and refineries, development of alternative and renewable fuels, expanding nuclear energy and, recently, greater conservation. Still, the Persian Gulf countries are seen as crucial in moderating future prices.

During the 2000 presidential campaign, when high gasoline prices were an issue, Mr. Bush pledged to do a better job of influencing Persian Gulf producers to pump more oil.
Early on, the administration was mostly interested in whether the Saudis would produce more oil during the anticipated conflict in Iraq. Long before the war began, Saudi spare capacity - roughly three million barrels a day above the seven million barrels being pumped daily in 2002 - seemed adequate.

Productive capacity depends on the amount of oil in the ground as well as the infrastructure required to drill, process, store and transport the oil. In addition, increasing capacity is very costly and time-consuming.

"The long-term capacity was not considered a problem," said Robert W. Jordan, the American ambassador to Riyadh from 2001 to 2003. The Saudis, he added, "never expressed any concern about the need to expand."

"Nor did we, or at least me, engage them on this topic," he said.

In April 2002, when President Bush met Crown Prince Abdullah, now the Saudi king, the focus was not on oil but on Israeli-Palestinian matters, according to Mr. Jordan. The United States did not press the capacity issue because, even two years later, Saudi officials were publicly expressing confidence that there was no need over the next five years to add capacity.

Going to 12 million or 15 million barrels a day was possible, though, because the country had an estimated 150 billion barrels above the 260 billion in proven reserves, Nansen G. Saleri, a senior Saudi oil executive, said at an oil conference in Washington in February 2004.

Soon, though, rising demand from Asia made the need to invest in new production "a front-burner issue," according to Spencer Abraham, energy secretary in the president's first term. By May 2004, under pressure from the United States and other consumers, the Saudis promised to pump more oil. Saudi Aramco, the state-owned oil company, was planning to increase capacity to 12.5 million barrels a day by 2009.

Before long, Ali al-Naimi, the oil minister, and Saudi oil executives were saying that the country could add 200 billion barrels - from existing fields and yet-to-be-discovered resources - to its reserves, enabling production of 15 million barrels a day for 50 years or perhaps longer.
Just before meeting with Prince Abdullah in April, President Bush said he wanted "a straight answer" about how much extra oil the Saudis could pump.

At that session in Texas, the prince reaffirmed the previously announced expansion plans. Saudi Arabia's capacity now stands at about 11 million barrels a day. The Saudis pump about 9.5 million barrels, leaving a cushion of about 1.5 million barrels, mostly of heavier grades not very usable in the West. There is virtually no other global spare capacity.

Stephen J. Hadley, the national security adviser, told reporters after the meeting that the Saudi program was "a very good plan because it addresses the underlying issue you have when you talk about price, which is an issue of availability of oil and availability of capacity."
But there are doubts about the Saudi assertions about how much oil they have. Data about reserves is tightly guarded, and the Saudis dismiss skeptics as uninformed.

But they do not dismiss Edward O. Price Jr., the former head of exploration for Saudi Aramco and an adviser to the United States government on Persian Gulf oil during both Iraq wars. He questioned future reliance on Saudi capacity in an article in The New York Times last year and wanted to know from his former colleagues how they reached their estimate of more than 150 billion barrels of extra oil. Twenty years ago, a detailed study by geologists from four large American oil companies then in partnership with Aramco found little in the way of undiscovered oil resources, he said.

Mr. Saleri, who manages Saudi reservoirs, met with Mr. Price in the United States last year. Saudi Aramco officials declined to respond to questions about the meeting. But Mr. Price said in an interview that Mr. Saleri told him that the basis for the higher oil figures was a global study in 2000 by the United States Geological Survey estimating Saudi Arabia's undiscovered resources at 87 billion barrels.

Mr. Price said he responded that the estimates "by the U.S.G.S. had no credibility and far exceeded the detailed studies by the old Aramco team." The Aramco study, unlike the survey estimate, involved detailed field work.

Questions about Saudi Arabia's long-term estimates were also raised last year in a report by the National Intelligence Council, an advisory panel that produces the government's most authoritative intelligence estimates, according to a government official who insisted on not being identified because the report was classified.

In addition to Saudi Arabia, the Bush administration has viewed the United Arab Emirates as a supplier with excess capacity. In 2001, the emirates planned to increase capacity to 3 million barrels a day by 2005 from 2.5 million barrels a day then. But capacity has not grown in four years, which one administration official attributes to a lack of urgency by emirates officials and a lack of high-level attention by American officials.

An energy policy report by Vice President Dick Cheney in May 2001 recommended that the president actively support initiatives in Persian Gulf nations allowing foreign investment that could lead to increased production. The United Arab Emirates was cited as one of the few countries that could increase its oil-production capacity.

A status report on Mr. Cheney's task force, released in January by the Energy Department, said administration officials moved to carry out the recommendation in four countries. The U.A.E. was not among them, however, and the president was not mentioned in the report.

When Mr. Bush spoke after the Iraq war with Sheik Zayed bin Sultan al-Nahayan, the emirates' ruler until his death late last year, he discussed security and Iraq, not oil investment issues, according to a Western diplomat, who spoke on condition of not being identified because of the sensitive nature of discussions between heads of state. A White House spokesman declined to comment.

Since the status report in January, the emirates announced that they would increase capacity to 2.7 million barrels a day by 2006, and long-stalled negotiations with Exxon Mobil to develop an offshore field began moving to completion. But the country's capacity remains at 2.5 million barrels a day, with nothing in reserve, according to the Energy Information Administration.
In Iraq, too, the Bush administration's hopes have been disappointed. The removal of Saddam Hussein in 2003 changed Iraq from a pariah into a possible backstop for global oil markets. Soon after the invasion, top administration officials were bullish about Iraq's production: they said it would exceed the prewar level of 2.5 million barrels a day and reach 3 million barrels by the end of 2003 or late 2004.

But a report in July by the Government Accountability Office found that Iraqi production had declined since late 2004 to 2.1 million barrels a day from 2.5 million barrels, despite White House legislative requests for almost $3 billion to restore the oil industry there to its prewar abilities.

An important reason for the decline, the report found, was improper management of the reservoirs. Gary Edson, then a deputy national security adviser, was told two years ago that Iraqi production would drop, not increase, according to an outside report presented to him.
A White House spokesman, Frederick Jones, declined to discuss the report. But, according to Wayne Kelley, a petroleum engineer who wrote the report and discussed it with Mr. Edson in November 2003, the message fell on deaf ears.

GM Plans Fuel-Cell Propulsion Vehicles

American automakers will have to respond to market demands, again. This is reminiscent of 1971 (OPEC oil embargo) when the Japanese started gaining market share after offering smaller, more fuel-efficient vehicles. US Automakers had to scramble to meet the shift in taste.

Gas prices will not drop. Aint gonna happen. Hey, the SUV craze was fun while it lasted. If you have one, sell it. Overall, industry sales in September slid 7.6 percent from a year ago.

Sales of Ford's large SUVs, including the Ford Explorer, above, sank by more than 55 percent. Sales of the company's F-Series pickup trucks fell 30 percent. (Ford Motor Co.)

General Motors Corp. reported a sales drop of 24 percent compared with the same month a year ago. Ford Motor Co.'s sales declined 20 percent. DaimlerChrysler Corp., the Detroit-based division of DaimlerChrysler AG, bucked the trend with a 4 percent gain in sales. Shorty bought one of their hybrid SUVs.

The big Japanese automakers reported even stronger U.S. sales in September, with most posting increases of 10 to 12 percent, as consumers snapped up Japanese passenger cars and smaller trucks. (Freeman, Washington Post)

Let's watch the trends, isn't this fun?!?!

Here's the article:

By Randolph Heaster, Kansas City Star

KANSAS CITY, Mo. — A future in which cars operate without using petroleum-based fuels, run hundreds of miles before refueling and emit only water is closer than you might think.

That was the message presented to about 150 people Tuesday by Larry Burns of General Motors Corp., who spoke at Midwest Research Institute. Burns, GM's vice president of research and development and strategic planning, discussed the automaker's progress toward producing a hydrogen-powered vehicle.

Burns said that GM stands by its previously stated goal of designing and validating a vehicle with a fuel-cell propulsion system that can compete with the traditional internal-combustion engine by 2010.

Fuel-cell vehicles run through power generated by combining hydrogen and oxygen. No exhaust or greenhouse gases would be emitted in its operation. The only byproduct is water.

"A fuel cell is like a battery, except it doesn't store electricity," Burns said. "You can create electricity with a fuel cell as long as you have hydrogen available."In January, GM showcased a hydrogen-powered concept car, a five-seat sport utility vehicle called the Sequel, at the North American Auto Show in Detroit. Burns described it as the first fuel-cell vehicle whose performance is comparable to that of gasoline-powered cars. Burns said the Sequel can run for 300 miles before refueling, and it can accelerate to 60 mph in less than 10 seconds.

"We really do think we're going to revolutionize how people move around," he told the group at the institute's Arthur Mag Conference Center.

With gasoline prices reaching record levels this year and growing concern about the U.S. dependence on foreign oil, the public interest in alternative technologies for cars has risen. Consumers are showing more interest in hybrid vehicles, which run on a combination of gas and electricity. Although GM is producing hybrids, Burns said, the long-term solution to the country's dependence on petroleum is making vehicles powered by hydrogen, which can be produced from a variety of sources.But some analysts think that fuel-cell vehicles becoming a mainstream part of the automotive industry is still a long way down the road.

"It's a technology that all the vehicle manufacturers are pursuing and researching" said Anthony Pratt, senior manager of global powertrain at J.D. Power and Associates. "But we're still a ways away from a commercially viable hydrogen vehicle. With the current technology, the cost right now for a hydrogen vehicle would be so great that it wouldn't make economic sense for the consumer to buy it or the automaker to build it.

"But Burns thinks that is rapidly changing. The technology to produce GM's Sequel is two years old, he said, and advances have since been made to produce fuel-cell vehicles more efficiently.

Currently, Burns said, the cost of producing the hydrogen for use in vehicles is 1.3 times the cost of producing gasoline for vehicle use. In addition, producing hydrogen also creates pollution.

"You may just be shifting the consumption of energy from the driver to the producer of hydrogen," Pratt noted.However, GM thinks entrepreneurs who develop more efficient ways of producing hydrogen could solve that problem as the auto industry continues moving toward fuel-cell vehicles. In addition to hydrogen being produced from fossil fuels, Burns said, hydrogen can also be produced by nuclear, solar and wind power.

Another apparent problem is infrastructure in the distribution of hydrogen, whether in the form of a liquid or gas. Burns thinks liquid is the most practical form. GM has done a study showing that building about 12,000 hydrogen filling stations throughout the country's metropolitan areas would put a station within easy access of every driver of a fuel-cell vehicle. Also, a hydrogen station every 25 miles on the interstate could also be established.Burns said GM estimated that would cost $12 billion.

"That would be one-half the cost of what it would take to build the Alaskan oil pipeline today," he said. "You don't need hydrogen at every filling station in the country to get started.

"Burns also touted the fuel cell vehicle for having far fewer parts than a gasoline-powered vehicle, requiring much less maintenance."It's very simple from a mechanical standpoint," he said. "There are one-tenth as many moving parts on a fuel cell as there is on an internal combustion engine," he said.

Our Economy - Please Give Me Good News

I was driving back from the LA area this past Sunday. The time was approximately 5:30PM. Traffic was very light on southbound 405 and 5. However traffic was extremely light coming out of San Diego. Normally there's a steady stream of head lights headed north even if the Border Patrol checkpoint at San Onofre were closed. But this time traffic was spotty. I'm not sure if it's the time of year, schools are in session, people taking less vacations into San Diego and Mexico, etc. I thought to myself perhaps people are starting to feel the gas pinch and have decided to stay local? Did I deduce incorrectly?

Heating prices this winter will be much higher. This means less money for disposable spending, and coupled with high gasoline prices we could see a drop in consumer spending. Ah that word, disposable...

The article below follows what I read in "The Dollar Crisis: Causes, Consequences, Cures" by Richard Duncan. The book's theme is that the global economy has been destabilized by the United State's enormous trade deficit, which now exceeds $50 million - AN HOUR. That trade imbalance, financed through debt, has created tremendous disequilibrium in the global economy and an economic bubble in the United States. When that bubble pops and the global economic disequilibrium unwinds, the world will not be able to avoid a very serious economic slump.

On a side note: There is a Petrocollapse Conference in New York this 5th of October. This shows the growing concern over peak oil. http://www.petrocollapse.org/

We can do this the nice way ... or the nasty way

Larry Elliott,
Economics editor
Tuesday September 27, 2005
The Guardian
http://www.guardian.co.uk/business/story/0,3604,1579037,00.html

Two hurricanes in a month, petrol prices at $3 a gallon, a current account deficit of enormous proportions, a housing market that defies gravity: little wonder that the mood in the United States is a little edgy.

The International Monetary Fund made it clear last week that it saw the world's largest economy as an accident waiting to happen. The US could not continue to live beyond its means indefinitely, and there were only two ways to deal with the unsustainable imbalances in the global economy: the nice way or the nasty way.

The nice way, according to simulations by IMF staff, would involve a gradual slowdown in the pace of consumption in the US, accompanied by slightly higher real interest rates and a modest 15% devaluation in the dollar over a few years.

The US current account would decline from 6% of GDP to 3.5% of GDP by 2010 and to 3% over the long run. The other main component of the soft-landing scenario would see a 15% appreciation of currencies in the developing countries of Asia - China, for the most part - which would result in their current account surpluses shrinking to 2% of GDP.

The nasty way involves a much sharper contraction in US activity. Under this scenario, the overseas investors who have been funding the American trade deficit by buying US assets decide they have had enough. The result is a large and sudden devaluation of the dollar, which adds to inflationary pressure and forces the Federal Reserve to raise short-term interest rates aggressively. Protectionist pressures mount and this, together with the big appreciation of China's currency, leads to much slower growth. With both the world's two big growth engines - the US and China - faltering, Europe and Japan also suffer. Financial markets suffer hefty losses, adding to the gloom.

The IMF does not know how this will pan out - nor, to be honest, does anybody else. On the plus side, it points to the fact that the past year has seen some progress on the agenda it has proposed for each key part of the global economy: the US budget deficit has been reduced, the Chinese have taken the first steps towards a more flexible exchange rate regime, the Japanese and the Europeans have committed themselves to structural reforms of their economies. On the negative side, however, there has been no evidence thus far that the moves have been accompanied by an improvement in the global imbalances. On the contrary, they appear to have got worse.

The communique issued by the G7 at the weekend aptly summed up the mood of uncertainty. Although the global economy has continued to expand and the outlook was "positive for further growth", it stressed that higher energy prices, growing global imbalances and rising protectionist pressures "have increased the risks to the outlook".

Inflation

Oil prices are a real concern, despite relief that Hurricane Rita caused less damage than feared. Prices have now remained higher for longer than policymakers expected, and the futures markets suggest they are going to stay high. Demand is expected to remain strong and it will take years for investment in new fields and refineries to increase supply.

The inflationary impact of dearer energy is already becoming evident, with consumer confidence dented by falling disposable incomes and policymakers fretting about the effects on inflation. Central banks will only take a relaxed view of higher oil prices when they can be really confident that activity will not be impaired. Some analysts believe that it will not be long before the economy is affected. Janet Henry of HSBC said that if petrol prices stayed at pre-hurricane levels, American consumers would spend an extra 1% of disposable income just on fuel in the final quarter of 2005, compared with the fourth quarter of 2004. She said: "The current bout of high oil could finally spell the end of the US consumer-leveraged expansion and a near-term end to the Fed tightening."

It has certainly been the consumer that has kept the US afloat over the past few years. As the IMF put it: "Fiscal and monetary policies in the United States became sharply expansionary - both absolutely and relative to other countries - thus sustaining domestic demand."
America 's spending habit has been fed by exports from the rest of the world, with China playing an increasingly important role. The forces of globalisation have given both sides of the transaction what they want: the US has been able to suck in low-cost goods while the developing countries of Asia have been able to enjoy export-led growth. In the process, they have built up a huge stock of US assets, while the US has increased its stock of liabilities.

"Looking forward, the global imbalances are clearly unsustainable in the long term. If the US external current account balance excluding investment income remained at its current level of more than 5% of GDP, there would be an unbounded accumulation of external liabilities," the IMF said. It noted that so far the US had experienced little difficulty in financing imbalances but that there was no guarantee that this benign state of affairs would persist. It is right to be wary. On any reasonable assessment, a central part of any unwinding of the global imbalances will be a considerable devaluation of the dollar, which would leave those holding US assets nursing substantial losses.

Vacuum

To trigger a crisis, holders of US assets don't necessarily need to sell them; all they need to do is to stop buying more. To be sure, the US can be allowed to continue along its current path, with the cooperation of the central banks of China, Japan and other Asian countries, but this would mean an even bigger adjustment in exchange rates when the day of reckoning finally arrived, and an even bigger haircut for those awash with US assets.

Apart from the dire consequences for the global economy that would result from a disorderly unwinding of the imbalances, there are two additional causes for concern. One is that while the IMF has analysed the dilemma with aplomb, neither it nor any other body involved in global economic governance seems to have the clout to do anything about preventing a meltdown. There is a vacuum that needs to be filled and urgently.

The second concern is this: underlying the policy recommendations of just about every global analyst is the belief that the rest of the world needs to emulate the economic model of the US. The calls for structural reform in Japan and Europe stem from the belief that the Americans and the other "Anglo-Saxon" economies have the sort of flexibility that breeds success. Yet that hardly squares with the IMF's notion that the US economy could be going down the pan at any moment. As Mark Weisbrot of the Centre for Economic and Policy Research, a Washington-based thinktank, points out, nor does it square with the long-term needs of sustainability. Europe's energy consumption per head is half that of the US: Weisbrot says the idea that the Europeans should work longer so that they can buy more things is dangerous and he's right.
Perhaps the Germans were a lot smarter than they've been given credit for in their scepticism about the need for neo-liberal structural reform.

Russia left out in the cold

All sorts of rumours were swirling around in Washington at the weekend when it was announced that Gordon Brown was to chair yet another meeting of the G7 in London in December. One theory was that it was to give political impetus to the world trade talks in Hong Kong, which start two days later. Another was that it was a special send-off to Alan Greenspan, who retires from the US Federal Reserve in January. The neatest explanation, however, was that the G7 wanted to shaft Russia.

At the moment, Russia's political clout means it is a member of the G8, which last met at Gleneagles in July, but it is not deemed an important enough economy to join the finance ministers and central bank governors of the US, Britain, Germany, France, Italy, Canada and Japan at G7 meetings.

For the first time next year Russia will hold the presidency of the G8. Since meetings of the G7 are by tradition held in the country that is hosting the G8, the Russians thought this was a chance to get into the rich man's club by the back door. But instead of holding the next meeting in February, the G7 has cunningly brought it forward to December in the UK, making it possible to leave the Russians out in the cold. In reality that's a sensible decision. There is a strong case for membership of the G7 to be expanded, but China and India have a stronger case than Russia.

Microgrids as Peer-to-Peer Energy

The folks across the Atlantic continue to move forward with renewable energy technologies.
This article is on the BBC web site.

http://news.bbc.co.uk/1/hi/sci/tech/4245584.stm

Alternative energy technologies are falling in priceSmall networks of power generators in "microgrids" could transform the electricity network in the way that the net changed distributed communication.

That is one of the conclusions of a Southampton University project scoping out the feasibility of microgrids for power generation and distribution.
Microgrids are small community networks that supply electricity and heat.
They could make substantial savings, and emissions cuts with no major changes to lifestyles, researchers say.

Electricity suppliers are aiming to meet the UK government's Renewables Obligation, requiring them to generate 15% of electricity from renewable sources by 2015.
Microgrids, say the researchers, could easily integrate alternative energy production, such as wind or solar, into the electricity network.

They could also make substantial savings and cuts to emissions without major changes to lifestyles, according to lead researcher, Dr Tom Markvart. We wanted to look at what kind of energy system we would ideally construct today, in the 21st Century, in response to current pressures for higher energy use Dr Tom Markvart, Southampton University"This would save something like 20 to 30% of our emissions with hardly anyone knowing it," he told the BBC News website.

"A microgrid is a collection of small generators for a collection of users in close proximity," explained Dr Markvart, whose research appears in the Royal Academy of Engineering's Ingenia magazine.

"It supplies heat through the household, but you already have cables in the ground, so it is easy to construct an electricity network. Then you create some sort of control network." That network could be made into a smart grid using more sophisticated software and grid computing technologies.

As an analogy, the microgrids could work like peer-to-peer file-sharing technologies, such as BitTorrents, where demand is split up and shared around the network of "users".
Microgrids could exist as stand alone power networks within small communities, or be owned and operated by existing power suppliers.

Campaign groups such as the Green Alliance have been pushing for micropower generation technologies, such as micro-CHP (combined heat and power) boilers - a vital part of microgrids - mini-wind turbines and photovoltaic (PV) solar arrays.

Micro-CHP units work by turning heat which would normally escape through flues into electricity. Homeowners then sell any surplus heat back to the national grid.
The Green Alliance says the government should take micro-generation more seriously.
Putting just six panels of solar PVs on a typical new three-bedroom house would reduce that household's carbon emissions by over 20%, according to the group. Power pressures Microgrids are designed for a smallish community - a typical UK housing estate for example. They deal much more efficiently with fluctuating power demands which the national grid is not flexible enough to cope with. Dr Markvart's project was initiated in recognition that the UK's current electricity distribution system was built around the availability of fossil fuels.

Solar arrays could integrate into the electricity network via microgridsBut the 21st Century throws up some pressing questions about the use of fossil fuels. "We wanted to look at what kind of energy system we would ideally construct today, in the 21st Century, in response to current pressures for higher energy use," Dr Markvart said. "We looked at something to which the technology energy sector could evolve in response to the need to reduce emissions." Dr Markvart and his team at Southampton University built a computer model to test out the viability of such small scale networks, combining micro-CHP units with PV solar arrays to convert sunlight into electricity.

"It is a little bit like comparing the old style telephone network with the network today," said Dr Markvart. Installing a microgrid would not need an entirely new network to be built, as some broadband networks have dictated. For developing countries, buildings could provide electricity without the need for vast infrastructures to be put in place.

Close to home

As the cost of alternative technologies falls and their efficiencies rise, they become much more of a viable option.

Greenhouse gas emissions could also be reduced if micro generators were powered by hydrogen, sunlight or small wind turbines, said Dr Markvart. Having generators close to demand also cuts down the cost of getting power from a remote power station to the household. Generator sizes are similar to loads - which is very different to traditional systems with huge power stations serving lots of small users.

Smaller networks mean ways to store unused power can be introduced, something that does not happen in large networks. "In a traditional system, you have the power station and electricity flows from power station to users - it is unidirectional. The whole network is constructed around that unidirectional power flow. "There is also a tremendous amount of heat generated during the process. The heat is just waste and it is disposed of," explained Dr Markvart.
The huge "chimneys" that have become a familiar part of many areas of the UK are the towers that cool down and then expel the heat waste.

"Only about 30 to 40% of the primary energy ends up as electricity; 60 to 70% goes up the chimney. You don't have any use for it because there is no one located around the station that needs heat."

Increasingly, micro-CHP units are being tested out in small communities to potentially replace conventional central-heating boiler units. According to estimates, eight million micro-CHP units could be in homes by 2020, supplying a third of a household's power.

But renewable power groups have called for clearer government policy targets for alternative power strategies. "We could have microgrids tomorrow; it can be done now. The technology is there," said Dr Markvart.

The main barriers however, are institutional and regulatory. There are some moves afoot by regulators Ofgem, which is working on a registered power zones concept to convince the electricity boards of their potential.

The cost of renewable energy devices has been recognised by the government, according to the Department of Trade and Industry (DTI). It wants to excite the industry so that the cost of individual units falls.

Rita Equals Pain

Not again? We can't say exactly what Hurricane Rita's ramifications will be until the storm passes. But if Katrina is any indication of what a category 5 storm can do to oil wells, we can safely assume higher gas prices. I believe this storm will have greater consequences to our shaky economy. Read what my credible colleague has to say.

RITA: Storm May Be the Coup de Grace for the American Economy and Many of Us As Well
by Michael C. Ruppert

© Copyright 2005, From The Wilderness Publications, www.fromthewilderness.com. All Rights Reserved. May be reprinted, distributed or posted on an Internet web site for non-profit purposes only.

September 21st, 2005 1530 PST (FTW) – As I pack my bags to head to Washington for Congressional Black Caucus hearings on the September 11th attacks (to be conducted this Friday and Saturday) my inbox is being progressively flooded with emails from inside sources in the energy industry about what Hurricane Rita is now likely to accomplish – the near-complete destruction of an already teetering US economy.

Fully 30% of all US refining capacity is in the target zone. Perhaps most importantly, almost every refinery capable of producing diesel fuel is in immediate danger. This promises (especially in the wake of Katrina) a devastating and irreplaceable shortage of the diesel fuel needed to power America’s harvest of grain and food crops this month and next. Without diesel fuel to power the harvesters and combines, crops may be left to rot in the ground presenting a double whammy: food shortages (with prices that may treble or quadruple) and export defaults negatively impacting the financial markets and trade deficit.

Even before Rita strikes, fully 30% of all domestic natural gas production is shut in. The US cannot import natural gas from overseas like it can both crude and refined products. Repair work on infrastructure damaged by Katrina has been halted as crews have been evacuated. The remaining half of Gulf energy production undamaged by Katrina is directly in Rita’s crosshairs.

Natural gas prices are up over 110% and home heating oil futures are up almost 70% before Rita even gets here. Since Katrina, US domestic oil production is down one million barrels per day (from 5Mbpd to 4 Mbpd). We were producing 9 Mbpd less than a decade ago.
Peak Oil has made replacement of losses almost impossible even as Saudi heavy-sour is being spurned as useless around the world, even with discounts of up to $10 and $12 per barrel.

A Bloomberg article today contains a quotation from a Wall Street energy expert as saying, “‘Rita is developing into our worst-case scenario,’ said John Kilduff, vice president of risk management at Fimat USA in New York. ‘This is headed right into our other major refining center just after all the damage done to facilities in Louisiana. From an energy perspective it doesn't get any worse than this.’”

The Chairman of Valero Energy agrees with the Bloomberg assessment calling Rita a potentially national disaster. His opinion is important because Valero operates more refineries in the US than any other company.

CNN is now predicting $5 per gallon gasoline and this will not likely go away with market manipulations. We had not yet experienced the permanent spikes resulting from Katrina, and the emergency reserves of the United States’ Strategic Petroleum Reserve and the International Energy Agency have already been tapped once and not refilled.

The South Texas Project nuclear plant – one of the largest in the country – is being completely shut down in preparation for Rita’s landfall. It is only 12 miles from the Texas coast and almost dead center in the hurricane’s projected path. Texas has its own power grid but catastrophic electricity shortages could easily ripple throughout the country in a short time. Electricity lost from that that facility will only be added to what is lost from other facilities powered by now critically short supplies of natural gas.

For those of you who expect FEMA to behave any differently in Texas than it did in New Orleans you are in for a crude awakening. FEMA will do what it must now do to preserve even a functioning part of America’s governing and economic infrastructure. Saving lives will be one of the least important functions in its mandate. While I had serious doubts about America’s ability to recover from Katrina, I am certain that – barring divine intervention – the United States is finished; not only as a superpower, but possibly even as a single, unified nation with the arrival of Hurricane Rita.

Nervous Laughter

Optimism is good. After researching this topic since last spring, I have been looking for positive stories that may counter the doomsday scenario of many Peak Oil writers. Since the future is uncertain and since the oil issue is missing from public debate, we have to search for our own valid analysis-explanations-solutions.

Writer’s warnings of Peak Oil may appear to be cataloged in the Chicken Little, “The Sky is Falling” section of your public library. Library? Remember those?! Economic collapse, resource wars, famine, cannibalism, lawlessness, armed gangs are some of the festering pleasantries we will witness when our supply of oil runs out. The system will convulse, go into shock similar to that of a heroin junkie kicking the habit.

Will it get this bad? The recent images from New Orleans shows how people will behave when the system nearly collapses. Will the system collapse rapidly or gradually? Will we see something similar to a Great Depression? Will human ingenuity save us from calamity?

What we do know is that a major war has been launched for oil and our gas prices have more than doubled since 2003. It's quite possible that if Iraq or the Middle East exported olive oil, our military industrial complex would not be conquering nor profiteering from the region. To say that oil is not the chore issue or that it’s a minimal factor to perpetual conflict is to obfuscate reality.

Currently oil is to our economy as support beams are to a bridge. (I’m using this analogy because I can’t think of a better one) The challenge will be to replace the shaky support beams without a portion of the bridge or the entire bridge falling. We will need the help of many intelligent and caring engineers (individuals).

It’s important to explore the myriad of possibilities how our future will shake out as resources diminish. The idea is to be able to mitigate a possible collapse or a strong recession.

In the next post I will analyze how inflation from rising oil prices can damage our economy, and at the same time, pop that infamous real estate bubble. A note on bubbles: While blowing bubbles as a kid, it was tougher to create larger ones, but when successful, I would be impressed by the size relative to the smaller ones and I was fixated on all neat swirly colors on the surface; however, the bubble usually didn’t last long. So I would try it again until I was out of soapy water…

The articel below is a synopsis of The Long Emergency:Surviving the Converging Catastrophes of the Twenty-First Century By James Howard Kunstler.

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Technology Review
By Bryant Urstadt

We will run out of cheap oil, either now or later. The most pessimistic disciples of the late geologist M. King Hubbert believe that production will peak somewhere between 2000 and 2010. Others suggest that production may top out a few decades after that.What will happen next is unknown, but an increasing number of the peak-oil handicappers share the dark beliefs of James Howard Kunstler, who predicts that alternative energy sources will never meet our needs and that we are in for a "rough ride through uncharted territory," which will take us "off the edge of a cliff" and thence into "an abyss of economic and political disorder on a scale that no one has ever seen before." The sprawl of metaphors is characteristic of Kunstler, who in The Long Emergency: Surviving the Converging Catastrophes of the Twenty-First Century adds a relentless, scary, and entertaining voice to the rising alarm about life after the cheap oil is gone.

Prophets have been warning Americans of the terrible things in store for decades, but Kunstler joins a fresh corps whose numbers seem to have been increasing as quickly as the price of gas. The past two years have seen books with titles like Paul Roberts's The End of Oil: On the Edge of a Perilous New World, Richard Heinberg's The Party's Over, Tom Mast's Over a Barrel: A Simple Guide to the Oil Shortage, and David Goodstein's Out of Gas: The End of the Age Of Oiland a film called The End of Suburbia by Gregory Greene, to name a few, and to leave out their long and unsettling subtitles, most of which approximate Roberts's choice, which is The End of Oil: On the Edge of a Perilous New World. These authors may someday join the ranks of the dated alarmists--Jeremy Rifkin, among countless others, issued similar warnings in Entropy in 1980--but then again, they may be right. One may demonstrate that the alarm rings too often and too soon, but that does not mean that danger will never come.Kunstler's predictions may seem excessively dire to many, but a significant number of people are paying attention and getting ready. His book has been hovering in the top 1,000 on Amazon.com for months, and the topic of peak oil has gained traction beyond the encouraging environment of the Internet. In the past 18 months, 82 groups with about 2,000 registered members in cities around the world have been organized through Meetup.com to discuss the issue. At a recent meeting of the 100-member New York forum, participants were quoting Kunstler repeatedly--during, for instance, a discussion of where to move after the crash.

Our particular problem, Kunstler and his colleagues continually remind us, is that we have built a world based on the ready availability of cheap energy. The apocalyptic catch, though, in their view, is that oil was a "one-shot deal," and there will never be another power source as easy to extract, as portable, and as powerful. When the oil dries up, writes Kunstler, "all bets are off against civilization's future."The internal logic of the argument is persuasive, and one reads all the books with white knuckles. Oil has seeped into every nook of our existence. At the most basic level, we need oil to grow our food, particularly as we have moved to large-scale, fertilizer-dependent agriculture, and we need oil to get that food to our communities.Things might be simpler if our appetites were limited to food. But the range of our activities has broadened considerably, and oil supports almost all of them. We need oil to make most of the things we use every day--from plastic to the roads we drive on--and, more importantly, to get them from the hands of cheap laborers and into our big box stores, to which we drive in large cars, of course. Oil now satisfies about 40 percent of our energy needs, and about two-thirds of it we burn in motors, going places and moving things or sitting in traffic.

Kunstler does not believe the United States will survive as we know it but will instead break down into autonomous, isolated regions. The fun is certainly over in the desert United States. According to Kunstler, cities like Las Vegas--dependent on cheap air conditioning, air travel, and good highways--will wither into dust. Around the country, a trip to town will become a day's excursion, a trip to the nearest large city a journey of several days, and a trip across the country nearly unthinkable.The suburbs--which Kunstler calls "the greatest misallocation of resources in the history of the world," and for which he seems to reserve a special contempt--will become particularly miserable places, devolving into wastelands of abandoned McMansions, empty Wal-Marts, and disintegrating asphalt. We will not be able to heat our 5,000-square-foot houses, if we can get to them, and we will not be able to fill the box stores with Chinese goods, or to resurface the roads, which we won't be using much in any case.

As for the rest of the world, Europe may fare slightly better, having to some extent preserved the small, agriculture-friendly, locally focused communities that Kunstler believes will dominate the post-oil world. But overall, the strife will be biblical: "Australia and New Zealand may fall victim to desperate Chinese adventuring....The coastlines of all nations may become prey to a new species of stateless freebooting raiders....The Pacific coast of North America will be especially vulnerable to raids emanating from the disintegrating nations of Asia." Poor nations will never develop but will seem unexceptional among "the hardship and chaos that will become common elsewhere."These predictions of collapse all presuppose that we cannot be saved by alternative energy sources. Kunstler dismisses alternative energy as a "mirage" and belief in it as "a holdover from the techno-miracle cavalcade of the twentieth century." He does his best to demolish any hope for natural gas, solar and wind power, coal, hydroelectric power, biomass, or nuclear power. Though he succeeds in provoking thought, he does not quite convince the optimist that we are doomed.

He discounts natural gas as a long-term solution, and with good reason, for it suffers from most of the same reserve problems as oil, compounded by problems of getting it from the field to the user. But he does undervalue it as a "bridge" supply, a form of energy that might be used to help us make the transition to the next source. And the scarcity of bridge power is crucial to many of his assumptions about whether we will have enough energy to build the next generation of sources.He is doubtful about solar power, too, pointing out that the infrastructure to obtain it, as it exists today, relies on the petroleum economy in a number of ways, not least for the plastic that goes into batteries and photovoltaic-cell arrays. Ditto for wind turbines, which require a fair amount of machinery, currently petroleum based, for their installation. Objections like this--where Kunstler asks, could we survive on the output of this source alone?--are raised frequently and are certainly the weakest point in his argument.

Meanwhile, many knowledgeable optimists have yet to dismiss the potential of either solar or wind: companies like GE and Boeing have been making major investments in solar energies for years, even renewing interest in and work on once marginalized technologies like the Stirling engine, which could run on concentrated solar heat. Wind, too, has turned some corporate heads: Goldman Sachs, for instance, recently acquired Houston-based Zilkha Renewable Energy, which builds wind farms. Still, as Kunstler points out, solar and wind are very inefficient compared with burning petroleum products and possibly unsuited to running a public transportation network, much less the car-based system we have now.

Coal is already producing about half of our electricity, and though most agree that it is in good supply, Kunstler is dubious about the numbers. The environmental cost of burning it is also, as Kunstler notes, extreme: beyond coal's contribution to global warming and other, more local forms of air pollution, it is hard to dismiss the large-scale leveling of landscapes. As for synthesizing oil from coal or, for that matter, extracting it from shale and tar sands, it can happen; but the high cost and the limited return on the energy invested are not likely to allow anything like the enormous economic expansion of the last century. Nor, given the likely outcome of continued global warming, should we be overly encouraging of coal conversion. But neither does this mean that the slow-moving work on clean coal will never bear fruit.Kunstler is skeptical, too, about hydroelectric power--which is much cleaner--on the grounds that we will not be able to maintain the infrastructure for building dams without our cheap oil. And though hydroelectric power meets about 10 percent of our electricity needs today, Kunstler believes that room for growth is limited, as many of the best dam sites are already taken. Again, Kunstler is assuming the worst case. It is quite possible, for instance, that we will build and maintain dams with equipment that runs on expensive oil, if we can, or with some kind of coal-powered steam shovel, if we must.

Kunstler's argument against biomass is that making it in useful quantities requires massive industrial farming powered by...cheap oil. There is some truth here. But biomass advocates are more sanguine, arguing that fuel could be produced from naturally fecund prairie grasses, among other things. And as former assistant secretary of energy Dan Reicher has pointed out, biomass production inherently reduces the concentration of greenhouse gases in the atmosphere: plant life, after all, consumes carbon dioxide.

Kunstler is slightly bullish on the usefulness of one form of biomass, wood--with a chilling caveat. He expects it will heat our homes nicely in the absence of cheap oil and that, consequently, the "future deforestation of North America (and Europe) could be as rapid and dramatic as the extermination of the American bison in the decades after the Civil War."That leaves nuclear, as Kunstler and so many others have been noticing lately (see Stewart Brand's "Environmental Heresies" in our May 2005 issue). Still, Kunstler accepts nuclear power's ascension reluctantly, unsure as in other cases that we will be able to maintain a nuclear infrastructure using nuclear power alone and doubtful that we will be able to convert that power into a transportation system anywhere near as massive as the one we now have. But even if the large four-wheel-drive truck may someday be an obsolete method of picking up milk, that does not mean we will be back on horses: even the mass-transit-averse U.S. has had reasonable success with electric trains.Overall, Kunstler's tapestry of destruction assumes a race of much more limited flexibility and creativity than history shows humanity to be. He could be right, of course; and given our behavior in the past hundred years, there may be a perverse satisfaction in agreeing with his assessments of our capabilities and our future. But more likely we will muddle through as we almost always have, flourishing here, waning there, and surprising ourselves, perhaps undeservedly.

It seems more realistic to assume that as the price of oil continues to rise, rather than focusing myopically on oil technology, we will try a number of other options at once, looking with our usual expediency for an easy solution that does not kill us, at least for the moment. We may end up with inefficient solar panels on our roofs, kicking electricity back in to the grid in a trickle; a somewhat more efficient biomass plant at the end of the block; and a transportation system running on fuel cells charged with electricity from nuclear plants. Las Vegas may even get off the hook, harnessing the geothermal resources of the West. And none of this takes into consideration improvements in how efficiently we consume energy.

Most of all, despite its urgency, Kunstler's book reminds us how modern man is scared by his own inventions. We've been expecting to die by our own hand at least since Hiroshima, and even younger readers may share relief at having somehow escaped the ravages of a nuclear winter, a homemade dirty bomb, and a world-destroying clerical error in January 2000.In My Life and Hard Times, James Thurber describes a citizen in his childhood town of Columbus, OH: the Get-Ready Man. The Get-Ready Man drove a car with a door in the back and liked to shout at people as he drove, using a megaphone. His warning was always the same: "Get Ready! Get read-y...! The worllld is coming to an End!" Kunstler and the others may join the Get-Ready Man in the annals of doomsday prophets, and the Peak Oil Apocalypse may get filed along with Y2K under "false alarms and other diversions." Even now, it may be dismissed by some with laughter. But it ought to be nervous laughter.

Scary StuffThe Long Emergency:Surviving the Converging Catastrophes of the Twenty-First Century By James Howard KunstlerAtlantic Monthly Press 2005, $23.00