Low Oil Prices Lead to Economic Peak Oil

We have all heard the story about oil supply supposedly rising and falling for geological reasons. But what if the story is a little different from this–oil production rises and falls for economic reasons? If this is the issue, it doesn’t really matter how much oil is in the ground. What matters is if economic conditions are “right” for continued and rising extraction. I have shown in previous posts that oil prices that are too high are a problem for oil importers while oil prices that are too low are a problem for oil exporters. As a result, oil prices need to be in a Goldilocks zone, or we have serious problems, of one sort or another.

As long as the price of oil keeps rising, there is at least some chance the amount of oil extracted each year will keep rising, because more oil resources will become economic to extract. The real problem arises when oil price falls back from a price level it has held, as it has done recently, and as it did back in July 2008. Then there is a real chance that investment will become non-economic, and because of this, oil production will fall.

Figure 1. World crude oil price and production, based on monthly EIA data.

Figure 1. World crude oil price and production, based on monthly EIA data.The corresponding price in late April is approximately $100 barrel, so is even lower yet.

Oil prices play multiple roles:

  1. High oil prices encourage extraction from more difficult locations, because the higher cost covers the additional extraction costs.
  2. High oil prices allow exporters to have adequate money to pacify their populations, even if their oil exports have been declining, as they have been for many exporters.
  3. High oil prices allow funds for investment in new oil fields, as old ones deplete.
  4. High oil prices tend to put oil importing countries into recession, because it raises the costs of goods and services produced, without raising the salaries of the workers. In fact, there is evidence that high oil prices lower wages (both directly and through lower workforce participation).
  5. High oil prices make countries that use large amounts of oil less competitive with countries that use less fuel in general, and less oil in particular.

When oil prices decline, it is evidence that Items 4 and 5 above are outweighing Items 1, 2, and 3.  This tips the scale in the direction of a fall in oil production.

Debt also affects oil prices. As long as investors have faith that businesses can make money, despite high oil prices, they will continue to borrow to expand their businesses. This additional debt helps drive up demand for goods and services of all kinds, including oil, so oil prices rise. Also, if consumers are able to borrow increasing amounts of money, this also drives up demand for goods that use oil, such as cars. But once the debt bubble bursts, it is easy for oil prices fall very far, very fast, as they did in 2008.

If we look at the 2008 situation, oil limits were very much behind the overall problem, even though most people do not recognize this connection. It was the fact that oil limits eventually led to credit limits that caused the system (including oil prices) to crash as it did. High oil prices led to debt defaults and bank write offs, and eventually led to a huge credit contraction in economies of the developed world. This credit contraction affected not just oil demand, but demand for other energy products as well.

The problems of the 2008 period were never really solved: the lack of growth in world oil supply remains, and this lack of growth in world oil supply continues to hold back world economic growth, particularly in developed countries. We recently have not been feeling the effects as much, because with deficit spending, the problems have largely moved from the private sector to the government sector.

The situation remains a tinderbox, however. The financial situation is propped up by ultra-low interest rates, continued government deficit spending, and Quantitative Easing. In a finite world, debt growth cannot continue indefinitely. But if debt growth permanently stops, and switches to contraction, we would end up in an even worse financial mess than in 2008. In fact, such a change would very likely to would lead to a contraction of “Limits to Growth” proportions.

In this post, I will explain some of these issues further.

The Rise and Fall of Oil Prices in 2008

In Figure 1 (near the top of this post), a person can see huge swings in oil prices, with virtually no change in oil production. If the scale on oil production is modified as in Figure 2 below, a person can see that indeed, oil prices and oil production do to some extent vary together.
Figure 2. World crude oil production and Brent oil prices, based on monthly EIA data, with different scale for oil production.

Figure 2. World crude oil production and Brent oil prices, based on monthly EIA data, with different scale for oil production.

If we look at world oil production and price between January 1998 and July 2008 on an X-Y graph, we see that as long as oil demand stayed below 71 million barrels a day, oil price stayed low (Figure 3, below). But once demand started to push above that level, oil price started to rise rapidly, with little increase in production. It was as if a brick wall on oil supply had been hit. No matter how much the oil price rose, virtually no more production was available.

Figure 3. X-Y graph of world of monthly world oil production and price data, based on the EIA data shown in Figures 1 and 2.

Figure 3. X-Y graph of world of monthly world oil production and price data, based on the EIA data shown in Figures 1 and 2.

If we look at an X-Y graph of the non-OPEC portion of oil supply, we see that the situation was even worse for the non-OPEC portion (Figure 4, below). The amount of oil that could be produced at a given price had actually begun to fall back. While in 2003 and 2004, non-OPEC had been able to produce 42 million barrels a day for only $30 barrel, by 2008, non-OPEC could not reach 42 million barrels a day, no matter how high the price. It looked as though non-OPEC had hit “peak oil” production. Geological limits appeared to have the upper hand.

Figure 4. X-Y graph of world of non-OPEC world oil production and price data, based on EIA data.

Figure 4. X-Y graph of world of non-OPEC world oil production and price data, based on EIA data.

Fortunately, during this period OPEC was able to raise its production somewhat, in response to higher prices, as illustrated in Figure 5, below. Between July 2007 and July 2008, it was able to raise oil production by 2.1 million barrels a day, in response to a $56 dollar a barrel increase in price in a one-year time-period. (The small increase in response to a huge price rise suggests that OPEC’s spare capacity was not nearly as great as claimed, however.)

Figure 5. X-Y Graph of OPEC oil production and price, based on EIA data.

Figure 5. X-Y Graph of OPEC oil production and price, based on EIA data.

What brought about the collapse in oil prices in July 2008? I believe it was ultimately a financial limit that was reached that eventually worked its way to the credit markets. Once the credit markets were affected, individuals and businesses were not able to borrow as much, and it was this lack of credit that cut back demand for many types of products, including oil.

The way this cutback in credit came about was as follows: Oil prices had been rising for a very long time–since about 2003, affecting the inflation rate in food and fuel prices. The Federal Reserve Open Market Committee tried (unsuccessfully) to get oil prices down by raising target interest rates. I describe this in an article published in the journal Energy called, “Oil Supply Limits and the Continuing Financial Crisis,” available here or here.  The combination of high oil prices and synthetic diamonds and higher interest rates led to falling housing prices starting in 2006 (big oops for the Federal Reserve), and debt defaults, particularly among the most vulnerable (those with sub-price mortgages). As early as 2007, large banks had large debt write-offs, lowering their appetite for more debt of questionable quality. Total US household mortgage debt reached its maximum point on June 30, 2008, and began to fall the following quarter.

Figure 6. US Mortgage Debt Outstanding, based on Federal Reserve Z1 Report.

Figure 6. US Mortgage Debt Outstanding, based on Federal Reserve Z1 Report.

By July 2008, the financial problems of consumers in response to high oil prices and falling housing prices had transferred to other credit markets as well. Revolving credit outstanding (mostly credit card debt), hit a maximum in July 2008, and has not recovered (Figure 7 below). (July 2008 is exactly the same month as oil prices began to fall!) Non-revolving credit, such as auto loans, hit a maximum in the same month.

Figure 7. US Revolving Debt Outstanding (mostly credit card debt) based on monthly data of the Federal Reserve.

Figure 7. US Revolving Debt Outstanding (mostly credit card debt) based on monthly data of the Federal Reserve.

Credit issues kept getting worse. The Federal takeover of Fannie Mae and Freddie Mac took place in September 2008, as did the bankruptcy of Lehman Brothers. By late 2008, cutbacks in credit had spread to businesses including all sectors of the energy industry. I wrote an article on December 1, 2008, documenting that credit issues led to lower prices not only for oil, but for coal, natural gas, nuclear, and renewables as well.

The reason why a cutback in credit availability is a problem is because it is very difficult to buy a new car or home, or to finance a new business operation, if credit isn’t available. In fact, the amount a business or family can spend depends on the sum of their income during a period, plus the amount of additional debt they take on during that period. If the amount of debt outstanding is going down, then, for example, old credit card debt is being paid down faster than new credit card is being added, and the amount currently spent is lower.

The Federal Government tried to fix the situation by running larger deficits  (Figure 8), starting the very next quarter after oil prices hit a peak and started declining.

Figure 8. US Federal Debt, from Federal Reserve Z-1 Report. (Excludes debt owed to Social Security and other Federal programs.)

Figure 8. US Federal Debt, from Federal Reserve Z-1 Report. (Excludes debt owed to Social Security and other Federal programs.)

Oil prices rose again starting in 2009 as demand outside the US, Europe, and Japan continued to grow. By 2011, high oil prices were back. The economies of US, Europe and Japan did not bounce back to the kind of economic growth most expected, because at high oil prices, their products were not competitive in a world marketplace that relied on an energy mix that was slanted more toward coal (which is cheaper), and also offered lower wages.

In 2013, world oil supply is still constrained.

It is easy to get the idea from news reports that everything is rosy, but the story presented to us is painted to look much better than it really is. Production from existing sites is constantly depleting. In order to replace declining production, huge investment must be made in new productive capacity. It is as if oil producers must keep running, just to stay in place.

Part of the problem is that the cost of new capacity keeps escalating. I have called this the Investment Sinkhole Problem. The Financial Times describes the problem as Energy: More Buck, Less Bang.

Cash flow has historically financed much investment. Now we read, Energy Industry Struggling to Generate Free Cash Flow.

Many naive people believe Saudi Arabia’s stories about their “productive capacity” of 12.5 million barrels a day, but their maximum crude and condensate production in recent years has been only been 10,040,000, according to the EIA. Their recent production has been only a little over 9 million barrels a day in recent months, according to OPEC Monthly Oil Market Report.

Iraq is supposed to be the great hope for future oil production, yet it increasingly seems to be stumbling toward civil war.

Russia is now the largest oil producer in the world, with a little over 10.0 million barrels a day of crude and condensate production.   According to a Russian analyst,”Gas condensate production is the real driver behind the [recent] growth. Crude oil output is falling and organic growth currently is impossible.”

What we tend to hear a lot about is US tight oil possibilities (Figure 9).
Figure 9. US crude oil production, based on EIA data. 2012 data estimated based on partial year data. Tight oil split is author's estimate based on state distribution of oil supply increases.

Figure 9. US crude oil production, based on EIA data. 2012 data estimated based on partial year data. Tight oil split is author’s estimate based on state distribution of oil supply increases.

Admittedly, tight oil production has ramped up quickly. But it is an expensive technology, that requires a high oil price, and lots upfront investment. There is evidence that such oil is concentrated in “sweet spots” and these get tapped out quickly. In North Dakota, the earliest area for US tight oil extraction, rig count is down from 203 at the beginning of June, 2012, to 176 at April 19, 2013, according to Baker Hughes. Lynn Helms, Director of the North Dakota Department of Mineral Services gave this explanation, “Rapidly escalating costs have consumed capital spending budgets faster than many companies anticipated and uncertainty surrounding future federal policies on hydraulic fracturing is impacting capital investment decisions.” Meanwhile, North Dakota oil production has recently been flat–perhaps because of weather; perhaps because of other issues as well.

The ramp-up in US crude oil production amounted to 812,000 barrels a day in 2012–very small in comparison to world crude oil needs. World oil production, shown in Figures 1 and 2, is barely affected. In a world with 7 billion people, most of whom would like vehicles, the amount of oil supply being added is tiny.

In 2013, the financial problems of the United States, the Euro-zone, and Japan haven’t gone away.

Current high oil prices make the big oil-importing countries less competitive. It is hard to compete with countries with lower average fuel costs, thanks a mix that it much heavier on coal, and lighter on oil.  A graph of oil consumption shows that oil is increasingly going to the Rest of the World, rather than the US, EU, and Japan (Figure 10).

Figure 10. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world "all liquids" production amounts.

Figure 10. Oil consumption by part of the world, based on EIA data. 2012 world consumption data estimated based on world “all liquids” production amounts.

The countries that see little growth in oil consumption are the same ones struggling with low economic growth. Low economic growth makes debt very difficult to repay. Governments are tempted to add more debt, to try to fix their problems.

Tackling government debt problems in 2013 tends to bring recession back.

The big problem when oil prices rise is that workers’ discretionary income is squeezed, because their wages don’t rise at the same time. This problem can somewhat be offset by deficit spending of governments for programs to help the unemployed, and for stimulus.

Once taxes are raised, or benefits are cut, the old problem of lower discretionary income for workers reappears. Thus, the recession that governments so cleverly found a way around previously, re-emerges.

In 2005, there was a very sharp impact to oil prices when high oil prices indirectly affected the credit system.  This time, a big issue is rising government taxes and lower benefits. These are staggered in their implementation, so the effect feeds in more slowly.  Greece and Spain started their cut-backs early. The US raised Social Security taxes by 2% of wages, as of January 1, 2013. Later it added sequester cuts. All of these effects feed in slowly, and add up.

With respect to debt, in 2013  we are rapidly approaching the time when this time truly is different.

There has been a great deal in the press about a mistake Rienhart and Rogoff recently made in their book, This Time Is Different. I think Rienhart and Rogoff, as well as economists in general, have missed an issue that is much more basic: In a finite world, debt, like anything else, cannot keep growing. The economy (whether economists realize it or not) depends on physical resources, and these are in limited supply. One piece of evidence with respect to the limited supply of oil is the fact that the cost of its extraction keeps rising. This means that fewer resources are available to be used for making other goods and services.

I show in my paper, Oil Supply Limits and the Continuing Financial Crisis, that lower economic growth rates make debt harder to repay. Reinhart and Rogoff seem to confirm this relationship works in practice. In their NBER paper, “This Time is Different: A Panoramic View of Eight Centuries of Financial Crises,” they make the observation, “It is notable that the non-defaulters, by and large, are all hugely successful growth stories.”(They did not seem to understand why, though!)

The 2007-2009 recession partially brought the level of debt down, outside the government sector. Government debt has been ramping up rapidly because tax revenues are down and benefits are up (Figure 8).

Figure 11. US Debt by Sector, based on Federal Reserve Z.1 data.

Figure 11. US Debt by Sector, based on Federal Reserve Z.1 data. (Amounts shown exclude government debt that is not publicly held.)

Government debt helps take the place of “missing” debt from other sectors (at least in theory). Now government debt is above acceptable levels. US debt is around 100% of GDP, and growing each quarter.

Without rapid economic growth, only a small portion of the debt that remains can be repaid. If increases in taxes/cutback in benefits leave more without work,  a new round of debt defaults can be expected. Student loans are particularly at risk. Business loans maybe a problem as well, especially in discretionary industries. Government debt is likely to be a problem, especially for states and municipalities. Banks may again have financial problems, especially if they have exposure to debt from other countries, or student loans.

I am not certain what will happen to the huge amount of US government debt, if Quantitative Easing ever stops. The same might be said of the debt of all of the other countries doing quantitative easing. Who will buy the debt? And at what interest rate? If the interest rate rises, there will be a huge problem, because suddenly loans of all types will have higher interest rates. Governments will need higher taxes yet, to pay their debts. It will be hard to sell cars with higher interest rates on debt. Home prices will likely drop, because fewer people can afford to buy homes with higher interest rates.

I showed in Reaching Debt Limits what a big difference increases in household debt can make to per capita income (Figure 12).

Figure 12. Per capita wages (excluding government wages) similar to Figure 5. Also, the sum of per capita wages and the increase in household debt, also on a per-capita basis, and also increased to 2012$ level using the CPI-Urban. Amounts from US BEA Table 2.1 and Federal Reserve Z1 Report.

Figure 12. Per capita wages (excluding government wages) similar to Figure 5. Also, the sum of per capita wages and the increase in household debt, also on a per-capita basis, and also increased to 2012$ level using the CPI-Urban. Amounts from US BEA Table 2.1 and Federal Reserve Z1 Report.

If debt starts long-term contraction, we will truly have a mess on our hands. Businesses will have a hard time investing. Individuals will have a hard time buying big-ticket items, like cars, furniture, and houses. Demand for all types of goods and services will fall. I showed in my post Why Malthus Got His Forecast Wrong that increasing debt was what allowed rapid growth in fossil fuel use. If debt stops growing and starts shrinking, we will get to see the reverse of this phenomenon.

What is Ahead?

Lower oil prices indicate that demand is declining. (The cost of extraction is not lower!) Lower oil demand seems to be related to poorer earnings reports for the first quarter of 2013, which in turn is at least partly related to the increase in US Social Security taxes withheld, starting January 1, 2013.  Nothing will necessarily happen quickly, but by next quarter’s earnings reports, some of the “sequester” cuts will be added to the cuts. Businesses with poor earnings are likely to lay off workers, and those workers will file for unemployment benefits. Gradually, we will see increasing evidence of recession.

It is not clear that this time will necessarily lead to the “all time” switch to long-term debt contraction, but it will bring us one step closer, at least in US, and probably in Europe and Japan as well. Oil supply may not drop very much, very quickly. If we are lucky, demand will bounce back and bring prices back up, as in 2009-2010. But with all of the debt problems around the world, it is possible that a contagion will begin, and defaults in one country will spread to other countries. This is what is truly frightening.

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About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.

225 thoughts on “Low Oil Prices Lead to Economic Peak Oil

  1. Gail, excellent article. Very few out there recognize net energy production and the ultimate effect on economic activity.

    Two points: near and medium term, it is possible that the US staves off much of the pain by increasingly leveraging the seiniorage that comes with issuing the world’s reserve currency, and in fact backs it up by force. That is to say: we print money, you give us oil, so you can buy the things you need, all in dollars of course. Those that don’t tow the line get “Iraq’d.” This in effect is a subtle (and often not so) net transfer of energy to the US. It would be interesting to quantify this; and in all probability, this “arrangement” is not going fall apart so easily.

    Second, there is a long-term energy alternative to oil, and massively so. There is nothing impossible about a programme of building massive numbers of thorium breeder reactors. The arguments against it tend be sociological/political/ecological in nature, about how we just can’t do it because of X or Y. But I have not seen thermodynamic agruments against it.

    Put another way, if there was a national will that pushed all concerns aside, energy could be diverted into producing intitial reactors which can produce other plants and the net energy gain to mine more thorium. There is no peak thorium in the sense that much of earth itself is thorium ore with a net energy gain. This of course would mean massive changes in infrastructure, and certainly much more, but nonetheless, we could have lots of net energy and growth. I make no arguments for what the Earth with a 100 billion humans would look like, but such a outcome is not impossible with enough energy.

    But most importantly, no matter what at this point, any attempt to go thorium will come on the downslope of peak oil, making it increasingly difficult to start politcally, as it will be a massive reduction of a fossil-fuel driven standard of living for a generation. If not, at some later point on the downslope, building enough plants will become thermodynamically impossible, and then it’s the far side of the Olduvai Gorge really long term.

    • Yes, being the source of the world’s reserve currency does have its benefits. I have never tried to quantify them, although adding the increase in the debt balance of payments each year to salaries may be a reasonable approximation. The fact the the debt balance of payments has been increasing less in recent years, as we are buying less oil outside, may be behind some of the “lack of growth” we are experiencing now.

      I am not sure that adding thorium would necessarily do all that much for us. The timing is late; we also need a source of liquid energy supply. If it were ready to go and very cheap now, it would be helpful. A few years from now, not so much.

  2. Gail,

    I wonder if the picture you present could be altered in a way that’s favorable to the human race by the development of Thorium reactors. I haven’t seen any discussion of that technology here, though I confess I haven’t read everything on the site.

    I would encourage some readers to look at Kirk Sorenson’s TED talk, and also Salim Zwain’s TED talk. According to Sorenson, LIFTR technology would make it possible to distill carbon neutral gasoline from the air, for instance.

    • Look harder, Brian! I posted on the topic yesterday, according to this blog’s timeline and there was another reference, but I forget who made it. Obviously, I agree with your views on thorium reactors!

    • Interesting on the development of Thorium reactors.

      I want to talk about Greed a bit more.

      You know what I think we are facing here is interesting because the corporations and infrastructure has chosen to grow up around oil and investments have been made that do not wish to be relinquished.

      Such things and Thorium (and the electric car was for many decades) will be held off as they threaten the oil monopoly cartel. Greed will likely lead the way to our demise as the oil barons and other greedy corporations that are in on it will not relent and allow such competition until such time collapse is upon us.

      As we have been discussing, these endeavors could have been started years ago and we would be better off for them if we had, but we have not.

      Once again, greed will shelve things – while the huge companies enact their game plan to strip us of our money. Only after they are shut and pumped out and extracted as much wealth for themselves from us of the world, will they relent to Thorium or other things that probably could have saved us if not for their greed. They are purposely running us lemmings over the cliff!
      But Gail speaks of overshoot, I wonder if they care that they are also killing their children families? Maybe not because greed is blind.

      It all goes back to the 99 percent and the 1 percent. Most of us are just considered commoners I guess. The evil oil machine will have to tumble under it’s own greed and power once it is time and they pumped wasted most of our resources and destroyed much of the planet in the name of profits and greed even though there is a better way like Thorium. Perhaps that could be a subject of one of Gail’s future articles? Did I mention GREED?


      • Scott,

        Your view is one with which I must disagree. It is a simplistic narrative which appeals to many for its simplicity, but I don’t think it comports with reality. My uncle retired as the executive Vice President of Exxon Coal and Mineral. He and I are not close by any means. I’m frankly not sure if we even like each other. but He is not a greedy and evil man who wants to kill everyone’s children to accumulate more.

        People do what they believe in their own self interest or the interest of their very near relations. I do. So do you. If you had an item for sale for $2000, and someone wanted it bad enough to offer you $3000 for some reason, I’m guessing you’d happily take the $3000, unless there was a compelling moral reason not to. That’s not greed. that’s simply sensible behavior.

        The people who run oil companies behave as they behave ultimately because they believe what they choose is in their own self interest. That is the one true north of human behavior. It’s why liberals, conservatives, capitalists, socialists, black, white, Westerners, Easterners, rich, poor, etc do as they do. Since people desire different things, they might define self interest differently, but no one is wholly altruistic. Most of those who claim an altruistic motive are simply self deceived or intentionally deceptive. Probe deeply enough and you will find them acting in some way to benefit themselves.

        Thus our political process is one giant clamoring competition of competing self interests. This is the foundation for all clear thinking about ourselves and others. The sooner we admit that and try to find a way to identify what is truly in the common interest, and align it with the self interest of the major players, the sooner we can move forward. Generally that takes a deep and profound crisis or external threat which is plainly discernible to all. I suspect the process may not be wholly compatible with freedom and democracy and human rights

        • Thanks Brian,

          I understand your view.

          I have invested in stocks over the years and have participated in capitalism and that was the only game out there to play as an investor and I have found the markets to be difficult to predict due to perhaps unfair trading so I sold out my stocks some time ago.

          I love America and want to see my country more honest and I want to see fair markets but it seems that there are so many strange things going on unless you really understand them it is almost impossible for an individual to trade unless you invest in one thing you believe in and you win.

          But I was mostly talking about how this so called free market is being blocked by large corporate interests and not allowing the new things that are needed to be built. Large oil companies have been known to shelve ideas of Electric Cars and any project that could threaten there existence.
          Now that oil is getting shorter in supplies it is time to the markets work in a fair way do the right thing,

          We are fighting an age old problem of greed verses good.

          I just wish some things would get out of the way so we can build and change things in a way that would be fast enough to stave off this coming oil shortage.

          It may just take a crisis to get us moving again and that will be the part that tell whether we can or not manage the crisis. I still think we need to look at shelved ideas and allow them to be reviewed again and perhaps we can find something, but I do know it is late.

          We have built such a large network around oil it is very hard to abandon it, I have brought up ideas of using the existing pipelines if we could develop a new fuel that is liquid, but I liked the Idea of the small Thorium Reactors.

          I would like to see oil find a way to participate in something like Thorium or a new liquid power that could use existing pipelines, so they can stay in business. Boy, a tough change.

          • Then let’s find a way to allow the already rich and powerful to further enhance their riches and power by making these transitions. There is lots of money to be made reconfiguring the energy infrastructure of a planet. You will be amazed at how fast things get done then.

          • P.S. electric cars weren’t shelved by the oil companies out of a desire to protect market share. They were shelved because they suck. Even with the advances in battery chemistry, composites, and computer controls, they still suck.

            • I understand what you are saying about the electric cars, we have not been able to build a battery that would be ultimately desirable and I am hoping to see something on that because if we do switch over to something like Thorium power we would still need to charge batteries and that looks like a problem, most of them get 100 mile range which we could live with but traveling far would become difficult and time consuming sitting at charging stations. Americans are not used to that and may not have the patience, but if there was no alternative (i.e. Gas) then they would have to put up with the electric cars.

              I liked what Mel said about putting things on a war footing. If all the countries in the world recognized the approaching emergency and if they start telling us the truth, then a sort of Manhattan Project would need to undertaken by the entire world. I am I just dreaming? But, it would work, like it has been discussed the special interest groups, greens do control much of the west and are in the way. What Mel said about on War Footing, yes that would be the only way.

              Does the governments of the world not see the problem or are they just not talking about it?
              I am not hearing any talk about upcoming oil shortages from any levels of government right now and most people out there actually believe that oil will not run out for hundreds of years. I think see the warming problems from burning something 90 million barrels per day.

              From what it looks like right now it is going to take an emergency before most even find out there is a problem. Will it be too late by then. The governments of the world would have to speak out and first scare the citizens in order for this change to begin. Once all knew of the problem they could support a kind of war footing and all pitch in. Not likely so I think it is going to have to take and actual shortage and the governments may speak.

            • Scott,

              The discussion is going on in government if you know where to listen for it. The military is very concerned about these issues, and there are published writings on them. I would also say that just because we don’t hear the discussions where we’d like doesn’t mean they’re not going on. Energy security is, fundamentally, national security. We’re not privy to those discussions. As a matter of fact, I think that by the time the “discussion” is made public that the meaningful discussion is likely over, a course of action has pretty much been decided, and we’re in the propaganda and public opinion manipulation phase of the operation.

              It may well be that the car is assigned to the dustbin of history. Or we may get a quantum leap in battery technology. Or we may be able to bury the electric lines in the road and power the electric car with some variant if the technology that charges our cellphones now without plugging them in. No batteries required.

              Or we may be able to keep our cars just as they are. The point about distilling carbon neutral gasoline out of the air is not being understood. Imagine taking the harmful CO2 out of the atmosphere, breaking it into carbon and oxygen, taking the carbon and adding hydrogen and a few other elements to it to make synthetic gasoline. Burning that gasoline would put the carbon back into the air, but so what? That’s where we got the carbon to begin with. Just snatch it again and repeat the process. Thorium would make that possible. The Navy has just recently announced that it used a variant of this technology to make synthetic marine diesel oil from seawater in a ship while it was underway. How cool is that? Think Exxon would sign on for that gig with if they had regulatory clarity and a clear path to profitability? Me too. Do you think an adversarial stance, a hostile EPA, a punitive, confiscatory tax structure, and demonstrations in Central Park advocating class warfare will help that happen? Me either. Think they might actually hinder it? I do.

              Or we could just take the carbon out of the air and sequester it. Or make carbon fiber bike frames. Or synthetic diamonds. Or pencils for poor children. Or sustainable houses that don’t get termites. Or whatever. We could scrub the atmosphere of CO2.

              Of course someone will immediately use the word “panacea” to criticize my post. Then someone else piss and moan about methane and feedback loops how it’s too late to do anything. Someone else will propose giant windmills. I have to say I think this is a very exciting time to be alive, and I am quite optimistic. Great changes are upon us…. the kind that only come along every couple of centuries. What will we mend next, and what else will we mar while we’re doing it? It’s going to be fascinating to watch.

              I would also add that I’m a troglodytic Calvinistic Christian… a fundamentalist in the most historically accurate sense of the word. My theological views are basically straight out of the 17th century. I have an unshakeable conviction that human nature from birth is totally corrupt, and that Jeremiah was correct when he wrote that the human heart is deceitful above all things and desperately wicked, thus beyond understanding. I take it for granted that the world is a moral abyss that’s going to hell in a handbasket. Thus it always has been, thus it shall always be until it ceases to be.

              Therefore I’m not used to being the optimist in the room. It’s giving me vertigo.

              Sent from my iPad

          • Thanks! The way the carbon emission schemes seem to work today (not that the US is participating), only what a country burns itself counts against the country, not what it exports. This means that a country appears to be doing better if it burns less coal itself, and exports it to someone else. This is crazy, but the way it seems to work.

            Of course, buying goods made in China or India with coal does result in any tariff either. So the system seems to encourage counterproductive behavior.

            • Unwise supply lines…

              This supply line for coal and basic materials to China/Asia etc. sure is long then the return trip for goods doubles it. Bad enough to burn coal but they are doing a double whammy! What a wasteful system.

              That is that they are even buying raw uncut logs from the Northwest USA and shipping back finished product. That is their business plan, they ship stuff from everywhere and then ship it back as finished cut wood or furniture etc.

              In the Long Emergency and A World Made by Hand as James Howard Kunstler wrote, I do think we will see more localized trading which could be a good thing.

              But this scheme seems to be how they put all the millions in Asia and in the East to work since they left their farms and went to the cities. Looks like a trap for many that may not end well.

    • Timing (and cheap cost) are everything. At this point, I haven’t seem anything that says we can ramp up thorium usage now. The cost of developing thorium to the extent needed may also be a hurdle we can’t get over.

      • We can if we want to badly enough and are willing to divert enough resources to do so. The obstacles are not technological or energy. A thorium mine the size of a football field could supply current US electric needs for a year. The reactors can be built now using the petroleum energy we can access at the current price structure.

        The obstacles are psychological, sociological, and political. And it’s not Exxon and Shell who are the primary hindrances. It’s the green-damentalists and the B.A.N.A.N.A. (Build Absolutely Nothing Anywhere Near Anything) crowd who are manipulating a gullible public in order to accumulate political power and social prestige. Mel is right. A war footing would do it. But we won’t have that til there’s the danger of a war that everyone can see plainly.

        • Yes, our Government is very good at getting messages across to us if there is an emergency or perceived emergency, remember Yellow Orange and Red Alert system after 911?

          These alarm bells are not yet sounding.

          • I happen to believe they are. From my perspective in the industry, the government is trying to kill coal, promote, but carefully control natural gas, and begin to push us away from gasoline and diesel. I’ve been researching these issues from a monetary and credit perspective for a decade, and Gail’s research has enabled me to put a finger on some vague thoughts that have been rattling around on the edge of my consciousness for about a year now. I am very grateful to her for her labors.

            If Gail is correct (and I believe she is) then to try to address the economic issues with monetary policy tools will be ineffective at best, and counterproductive at worst. The existing world order is structured for petroleum burning, and is going to be totally upended. A very large war is a distinct possibility. The Chinese are in a very tight spot and Russia and their neighbors on the South China Sea have good cause to be very nervous. So do we. The Chinese aren’t developing a blue water navy, stealth aircraft, and the ability to shoot down satellites to be able to counter the threat posed by the French and the Canadians.

            Trillions of dollars are on the line, the economy is very dicey, and I’m not sure the causes of the weakness are fully understood yet, though the recent stock and commodity market actions may portend a moment of recognition on the part of some of the middling Powers That Be. Obama strolling to the podium and saying, “Hey everybody, we’re about to hit a brick wall. Let’s start gardening” would be highly counterproductive. Instead, the prudent thing to do would be to prepare to feed and shelter a lot of people and deal with civil unrest. Our leaders might do things preemptively end wars in the oil patch and redeploy strategic resources for domestic needs, while turning over oil extraction in the country we conquered to the Chinese so that they felt more secure about their energy needs. And if I were in charge, I’d probably send some teams over to China them with their own fracking projects. At the same time, I’d put them in a position where screwing with the US would ruin China, perhaps by becoming their biggest customer and conditioning their prosperity and social order on the exchanging of green pieces of paper with dead white people on them for real goods, and then selling them our government debt to get the green paper back again. Then anything that crashes the US economy will also crash theirs and make their fragile social order come apart at the seams, which terrifies the Chinese leadership in the wake of Tiennamin Square.

            I’d also make sure I followed Nelson Rockefeller’s advice by burning everyone elses’s oil first, and only THEN would I allow the US to extract it’s own oil. I could accomplish this by cozying up to the largest producer on the planet and directing them to flood the market with oil every time the price rises to the point where US exploration and extraction would become economically viable. I could support their military and their dissolute ruling family in exchange for this favor. When they could no longer do that, then I would know that the gig was up and it was time to start drilling in North Dakota, abandoning the dissolute ruling family to the tender mercies of their enraged, highly religious population who loathe them.

            I might also preposition supplies for FEMA camps to prepare to feed and shelter people who couldn’t care for themselves. And perhaps I might direct the state security apparatus to purchase insanely large amounts of ammunition, both to have it for themselves and to keep it out of the public’s hands without starting a civil war by trying to disarm them directly. I might also work to monitor all of the public’s communications and reading habits so that I could spot and neutralize troublemakers quickly.

            Oh. Wait. Ruh-roh Rastro. Maybe our leaders aren’t idiots after all. Let’s just hope they aren’t bent on totalitarianism in their hearts. I don’t think they are, but sometimes a person really doesn’t know what they will do until the hour of decision.

            • Gail wrote an excellent article about natural gas


              Yes it does seem as though we are pumping out places like the middle east and they will likely be left hungry and poor.

              I do think this long emergency will be an uneven emergency meaning that some places will hurt more at first and other places will remain normal for a time. That subject could be a topic of a whole new article.

              I have noticed that the USA is not exporting much gas and people I have spoken with that work in the field talk about many capped natural gas wells out there. I do hope that there is much of it there but that is only hope as we really do not know. I do believe we have a pretty good supply of it but few cars will run on it and supply system is not there. But run propane today pretty easily and get fill ups almost anywhere. Nat gas is just a bit different.

              What you said about the FEMA camps, I am concerned about that and I do believe that is not a place I want to end up and I am not convinced their plans there are to help or to imprison many of us or even trim the herd sort to speak. Not a place I plan to end up, they have bought up all of the available ammo to the point that I cannot even find a box of 22 long rifle shells anywhere online unless I pay a huge price.

              I listened to Gerald Celente this morning and he speaks about the crooks running wild and the greed. Here is the link if you want to hear it.


              On last thing, yes we are going to need the help of these big money people like Goldman to make things happen since actually do control the game and the money. Last time I checked my bank balance, I do have the funds to fund a new thorium reactor… Buy you know how the game is played, they will have to see money from oil in it’s sunset years, and if they see money to be made in a thorium reactor business then things will get done. We can talk about this all day, but the truth is we do not have the money needed to funds these huge projects that will be needed in order to attempt to save the world, I guess that is unless we can beat up Goldman, and the Federal Reserve and the likes of them and take away their money and gold!

              My point is oil will have to run its course and the planet will suffer, but will it be too late, maybe…
              Because of greed they will milk it to the point as far as they can, overshooting point where we should have done something at great cost of human life and the planet and only when they see something better they will change gears. Well they control the money so we are basically helpless to watch the show, but we can talk about it as we are doing here.

              Kind regards to all,


            • There are two kinds of gas well. Associated gas is gas plus oil and liquids. Unassociated gas is just gas. The wells that are capped are unassociated gas. Unless there’s oil in the hole with the gas, it’s not generally economical to extract the gas by itself. We’re not exporting it because there are precisely zero liquifaction plants in existence for that purpose. Cheniere is trying to build one in Louisiana, but it’s had a lot of regulatory hurdles.

              The two main markets for LNG are Europe and east Asia. Israel, Turkey, and Cyprus all share a giant recently discovered deposit in their territorial waters in the Med. The bulk of that will go to Europe, much to the chagrin of the Russians. Western Europe has been trying to uncouple from nat gas dependency on the Russians for quite awhile now. Chinese, Indonesian, and Aussie gas will probably be liquified and sold to Japan and India.

              I think the US will get left out of the LNG export business altogether. You have to burn your boil off gas to run the transport ship and keep the LNG cold. The farther the journey, the more of your own cargo you are consuming. There are closer sources to the main markets. It will be hard to compete.

              Fuel cells turn hydrogen into electricity. They are pretty neat. They are zero emission. But they are also expensive, glitchy, and temperature sensitive. There’s a reason all the cool hydrogen fuel cell Hondas are residing in LA and not Fargo. I doubt there’s an economical and space efficient way to take an already space inefficient fuel (natural gas), split the hydrogen off the molecule and throw away 80% of it, and only use the hydrogen to generate electricity in a fuel cell all on board the car.

            • Perhaps another dream, but… Once again we are back to Hydrogen, it seems everything else is so dirty. Seems like the best option to get away from oil if it can be made cheaply with thorium reactors.

              I think the seal problems with the tanks may be able to be overcome, I know there are Hydrogen cars out there, such clean burning machines no pollution. If these little hydrogen cars can be made cheaply, could that reverse the damages we are seeing, who knows with the overshoot situation. And these cars are not affordable to the world.

              If we could make Hydrogen in huge amounts with thorium reactors and a build a new distribution system, and fleet. No small order, but would get things revved up if Wall Street got on board perhaps our last chance that is if they saw money in it for themselves and would be profitable, well perhaps. The next few years should be interesting to watch, perhaps hopeful and also fearful in this regard.

            • Maybe so. It would be a worthy thing for you to dedicate the rest of your life to pursuing.

              I studied economics and monetary theory for about ten years, concluded that I could do something useful and profitable at the nexus of energy and agriculture. Now I can make an 18 wheeler run on pig manure or rotting garbage. I saved a Nebraska farmer $40,000 in diesel fuel last year on two irrigation engines during the worst drought in 75 years. And I’m having a ball while I do it.

              You can learn about anything you want to learn if you’re motivated, and you can learn a whole lot of it for free while you’re doing your regular job. I don’t have a chemistry or engineering background. I have a BS in education and a Masters Degree in Divinity. I learned what I needed to know by self study and finding people to talk to who knew what I wanted to know. My father is a retired government scientist, so that helped me. But there are plenty of others who will do the same.

              Turn off your TV. Don’t waste another minute of your life playing video games or farting around with golf and fantasy football. Open your eyes and think about what you see. watch what people do, not what they say.

              We have access to the most amazing information repository in the history of mankind. Most people use it to look at porn and funny cat pictures, or to try to pose as millionaires who want to wire you a bunch of money if you’ll only kindly provide your bank info. Use it to learn what you need to know instead.

              Find out if there’s a fab lab near you and make use of it if there is.


              I’d give my right arm for one near me, but I live in the middle of nowhere.

              Don’t give in to the sense of helplessness and the doom porn that pervades these discussions. Make something happen. If it doesn’t work and it all goes to hell, at least you went down like a man. That’s something worth doing all by itself. The noblest people on the Titanic were the musicians who played on as the ship sank underneath them. Better to go down like that than huddling in the corner shaking and pissing yourself.

            • You are spot-on about saying to turn off your TV, and to work on keeping learning. We still can make every day a very good one–far better than one where we spend our whole time watching TV or playing video games.

            • Did I really say that I had the funds to fund a new Thorium Reactor Project?

              That was a typo, I do not and few do!

              And, think that is one of Gail’s main points to the group.

  3. As usual, the analysis is definitely sensible but reading the comments section is very depressing, I shall admit.
    Such a mix of mortal fear of future cataclysmic events, total confusion of how exactly things are going to unravel and how to prepare for them and, most of all, overwhelming desire to save their skins at all cost, whatever it takes, at any event….. The last thing I find particularly repellent.

    At the beginning of WW2 German Ministry of Propaganda did radio-broadcasting on England where in friendly manner people were given thoughtful advice on how to prepare themselves for inevitable collapse, how to grow their own food, warm their dwellings, protect their neighborhoods from crime, save money etc etc. The demoralizing effect on population of such broadcasts was profound and lasting, much stronger then any propaganda hitherto employed. There was no internet those days, otherwise the effect would had been much stronger.

    I cannot stop thinking: if someone would want to put US on its knees there wouldn’t be any need to explode anything. Just spreading that sort of ideas through modern means of communication would completely demoralize the society.

    I found Dmitri Orlov writings amusing, his advices at times quite reasonable, at times outright crazy (selling the house and living on the boat) but I always wonder: what does the guy want to achieve with his writings ? How exactly does he finance his life/activities ? Through selling his books ? Making public appearances ? What if he is getting paid from some external sources (so to say) ?
    What is his source of income ? Life on the boat is not particularly cheap,where does he get money ? Who might be very interested in spreading his ideas ?

    Just a food for thought guys,

    Adik H.

    • You hit the nail squarely on the head, Adik. See my comment below about doom porn.

    • I don’t know about Dmitry’s situation. I know some writers have spouses who have “regular” jobs. I believe Dmitry is married as well.

      I don’t think anyone could make a living from speaking appearances. Perhaps selling books is helpful to supplement income.

      There isn’t a good answer. I can see that the radio broadcasting you describe would be demoralizing. That is probably a reason why the topic is not discussed much.

      • Sure, your assumption is : Dmitry’s wife is working full time in order to pay for the yacht, insurance (which is enormous), trips to Russia and prolonged stay here, etc. etc. In the meantime, Dmitry is writing his new book which will never generate any profit, doing postings and spreading his ideas of doom and gloom free of charge, of course. I’d love to have such a wife…. 😉

        On the serious note: The yearly budget of RussiaToday is 300M dollars, so Max Keiser is paid handsomely for broadcasting his ideas of financial Armageddon. I see no reason why Dmitry should do his job for free.


        • I really don’t know Dmitry’s financial arrangement. I know John Michael Greer and Guy MacPherson both have wives with fairly conventional jobs. I am sure each of the peak oil writers have some income from books and from speaking, but it is hard to know how each family’s finances are arranged.

          I have a husband with a teaching job too, so I shouldn’t say anything in this respect. It is pretty common that someone in a household has a conventional job.

    • THanks for the suggestion. The author doesn’t realize that timing is extremely important and so is cost. Also, that the current financial problems grow out of our high cost fuel situation.

  4. Michael,

    I am in the alternative fuel business, specifically natural gas and LPG fumigation of agricultural diesels, mostly irrigation equipment. I also do both LPG and CNG conversions for both gasoline powered and turbo diesel powered vehicles. I’m also live in western South Dakota, just south of all the action in the Bakken. So I know people in the gas industry, the oilfield services industry, etc.

    I believe Gail is correct in her analysis of the Goldilocks Zone of oil prices. If oil drops to the high $60’s, drilling and well completion in ND stops. If it goes much below that, pumping stops because extraction and transportation are uneconomic with current infrastructure. The Keystone pipeline would help with that, but that may not get built.

    In one sense, I believe that those who say we will never run out of oil are correct. It’s just that it will take so so much energy to extract it, that it’s hard to see an economic model for doing so. For instance, could we build a thorium reactor next to a super deep well and use the energy produced by the reactor to extract the oil, but why do so? The amount of energy you would expend to get the petroleum is far in excess of the energy in the petroleum. Better to use it for other purposes.

    The problem with methane is that it is not very energy dense. It takes a lot of space to get a significant amount of it in one place. Everyone knows what a 5 gallon gas can looks like, right? Imagine three five gallon gas cans full of gasoline.

    Now, here is a picture of the compressed natural gas tank on my truck, which holds the same amount of energy as those three 5 gallon gas cans:


    It’s 16″ (40.6 cm) diameter and 6 feet (2m) long. The natural gas contained in the tank is compressed to 3600 psi (which takes a bit of electrical energy) the tank is plastic wrapped with carbon fiber. When that tank is full it holds as much natural gas as my my 1800 square foot house with a gas powered boiler for heat and a gas powered water heater for hot water uses in a month. It weighs 175 lbs empty and costs $6000 new. If it were made of steel it would weigh well over 400 lbs and cost around $2000 new. A tank that would fit in the trunk of a Toyota Camry or Honda Accord could hold a maximum of 8 gallons of gasoline energy. I compress my gas off my home line for about 75 cents a gasoline gallon equivalent. I sell the compressors. They compress a gallon worth of natural gas an hour. They cost around $6500 plus installation. The engineering necessary to make a 3600 psi compressor run off of household voltage and do so reliably and safely is a significant part of that expense. So we’re not going to see a huge price drop in the near future.

    Methane, or natural gas, can be liquified. Energy densities become more acceptable then. There are 80,000 btu in a gallon of liquified natural gas (LNG). For comparison, there are 90,000 btu’s in a liquid gallon of propane. A gallon of gasoline has around 114,000 btu’s. a gallon of diesel is 139,500 btu. It takes basically a fixed amount of btu’s to a vehicle down the road, no matter what fuel you burn doing it.

    To liquefy natural gas you have to chill it to -260 degrees Fahrenheit and keep it there. The only way to keep it cold without energy inputs is by autorefrigeration, which basically means allowing somewhere between 5 and 15% of it to revaporize each day, at a minimum. Therefore you can’t fill a car tank with LNG and let it sit in the driveway for a week. This makes it suitable only for large vehicles that run more or less constantly. Hence the majority of the natural gas vehicle infrastructure is LNG for trucks and busses. Ships, tugs, and locomotives have been done. Aircraft are being contemplated.

    Because of the poor energy densities and high recovery energy expenditures, methane hydrate would only be economical in places where there is no other choice. I do not think the Japanese project will work. The Chinese apparently have more tight shale gas than we do. Shell is drilling and completing test wells in Sichuan Province, and the results are apparently very promising. Australia and Indonesia also have vast reserves of tight gas. Cheaper to extract that and sell it to Japan. I think you’ll see the price of gas crash from $18+ per million btu in Asia to $8-10 in the next 5 years.

    Gas and liquids like LPG will have a part to play, but it is very hard to replace gasoline. It’s even harder to replace diesel fuel. Diesel fuel is the most important substance on the planet right now. LNG and LPG are probably the best bets within reasonable reach.

    • Thanks for your comments on the some of the details that underly the problems related to converting to using natural gas rather than gasoline. I wrote an article not too long ago called, Why Natural Gas Isn’t Likely to be the World’s Energy Savior.

      I would point out too that the cost of building pipelines for natural gas is always disproportionately higher than for oil, because natural gas is not very energy dense. Also, it always has to be piped the full distance, such as to your house, not to a gasoline station, which is more central.

      For a long time, natural gas was a waste product, because it was so difficult to use. We have some stationary uses for it figured out, but it is still a problem as a transportation fuel. Some countries do use CNG as a fuel more than we do–India and Iran come to mind. If there is a lot of natural gas, it is possible to put in refueling stations and run taxis off of them. I don’t see it happening soon in the US though.

      One of the reason why oil prices are high is because of taxes charged that are ultimately supposed to pay for road repairs, etc. We still need those taxes. In fact, we need a lot more than we are collecting now. My guess is that if we started using natural gas much as a vehicle fuel, soon taxes would be added to it as well.

      • Gail,

        CNG is already taxed at a rate similar to gasoline when sold to the public. A tax credit was included in the fiscal cliff bill in January, but most sellers are pocketing that to pay for their million dollar compressor stations.

        Propane has properties of transportation and storage much like gasoline, but engine combustion properties similar to natural gas. The tanks are cheaper, and so is the dispensing equipment. Some minimal infrastructure is already in place thanks to its use as a heating fuel and, to a lesser extent, a motor fuel. It’s a better bridge fuel for the way most of us use our vehicles.

        • Well, Propane is easier to handle than Hydrogen gas which has such tiny molecules that want to leak past tank seals I have read.

          • Yes. It’s the simplest atom and thus the smallest molecule. That makes it very slippery. It also makes many metals brittle upon prolonged contact. And Hydrogen is quite energy intensive to produce. The best way of doing so is from natural gas or sea water. It’s just not viable as a widespread fuel technology.

            • What about natural gas fueled Fuel Cells? Perhaps that could get us some extended use of the remaining gas supplies and perhaps clean up the air. I have read the fuel cells can be very clean but it takes much resources to build one I think I read also.

              I have not really looked into that but wonder what is in a fuel cell, what does it take to build one, they seem kind of passive unlike the combustion engine.

      • Yes taxes would be added to natural gas if more widely used, here in Oregon they are trying to put a special road tax on Electric and Hybrid cars because of loss of gas taxes.

  5. What you say about natural gas pipelines is true. The upside is that a leaky pipeline won’t pollute the groundwater.

    • Thanks! Very interesting article. It looks increasingly like we are already at peak debt, in the traditional sense. In the household sector, rising government supported student loans have helped push up lending. I need to look at the links on this, and make sure I understand exactly what is happening.

  6. Pingback: Flow Rate by Kurt Cobb at Resource Insights | Peak Energy & Resources, Climate Change, and the Preservation of Knowledge

  7. Pingback: The only true metric of energy abundance: The rate of flow — Financial Press

  8. Anyone who hopes that climate change will be significantly curtailed by the reduction in oil consumption brought about by Peak Oil should listen to very last segment of this podcast of an interview with Professor Peter Wadhams, Professor of Ocean Physics, and Head of the Polar Ocean Physics Group in the Department of Applied Mathematics and Theoretical Physics, at the University of Cambridge.

    It goes without saying that the rest of the interview is also very interesting, if a little peturbing. (The strange ‘musical’ interludes are, thank goodness, mercifully short.)

    (If the link fails, as it does sometimes for me, copy and past this into your browser: http://fromalpha2omega.podomatic.com/entry/2013-04-20T02_57_20-07_00)

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