WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”

On Monday, September 29, the Wall Street Journal (WSJ) published a story called “Why Peak Oil Predictions Haven’t Come True.” The story is written as if there are only two possible outcomes:

  1. The Peak Oil version of what to expect from oil limits is correct, or
  2. Diminishing Returns can and are being put off by technological progress–the view of the WSJ.

It seems to me, though, that a third outcome is not only possible, but is what is actually happening.

3. Diminishing returns from oil limits are already beginning to hit, but the impacts and the expected shape of the down slope are quite different from those forecast by most Peak Oilers.

Area of Confusion

In many people’s way of thinking, the economy is separate from resources and the extraction of those resources. If we believe economists, the economy can grow indefinitely, with or without the use of resources. Clearly, with this view, the price of these resources doesn’t matter very much. If one kind of resource becomes more expensive, we can substitute other resources, once the scarce resource becomes sufficiently high-priced that the alternative makes financial sense. Incomes can rise arbitrarily high–all it takes is for each of us to pay the other higher wages. And we can fix any problem with the financial system with more money printing and more debt.

This wrong version of how our economy works has been handed down through the academic world, through our system of peer review, with each academic researcher following in the tracks of previous academic researchers. As long as new researchers follow the same wrong thinking as previous researchers, their articles will be published. Economists were especially involved in putting together this wrong world-view, but politicians helped as well. They liked the outcomes of the models the economists produced, since it made it look like the politicians, with the help of economists, were all-powerful. All the politicians needed to do was tweak the financial system, and the world economy would grow forever. There was not even a need for resources!

Peak Oilers’ Involvement 

The Peak Oilers walked into a situation with this wrong world view, and started trying to fix pieces of it. One piece that was clearly wrong as the relationship between resources and the economy.  Resources, especially energy resources, are needed to make any of the goods and services we buy. If those resources started reaching diminishing returns, it would be harder for the economy to grow. The economy might even shrink. Dr. Charles Hall, recently retired professor from SUNY-ESF, came up with one measure of diminishing returns–falling Energy Returned on Energy Invested (EROEI).

How would shrinkage occur? For this, Peak Oilers turned to the work of M. King Hubbert, who worked in an area of geology. He wrote about how supply of a resource might be expected to decline with diminishing returns.

Hubbert was not concerned about what effect diminishing returns would have on the economy–presumably because that was not his area of specialization. He avoided the issue by only modeling the special case where no economic impact could be expected–the special case where a perfect substitute could be found and be put in place, in advance of the decline caused by diminishing returns.

Figure 1. Figure from Hubbert's 1956 paper, Nuclear Energy and the Fossil Fuels.

Figure 1. Figure from Hubbert’s 1956 paper, Nuclear Energy and the Fossil Fuels.

In the example shown above, Hubbert assumes cheap nuclear would take over, before the decline in fossil fuels started. Hubbert even talked about making cheap liquid fuels using the very abundant nuclear resources, so that the system could continue as before.

In this special case, Hubbert suggested that the decline in resources might follow a symmetric curve, slowly declining in a pattern similar to its original rise in consumption, since this is the pattern that often occurs in extracting a resource in nature. Many Peak Oilers seem to believe that this pattern will happen in the more general case, where no perfect substitute is available, as well. A perfect substitute would need to be cheap, abundant, and involve essentially no cost of transition.

In the special case Hubbert modeled, Hubbert indicated that production would start to decline when approximately 50% of reserves had been exhausted. Peak Oilers often used this approach or variations on it (so called “Hubbert Linearization“), to forecast future production, and to determine dates when oil production would “peak.” Of course, as technology improved, additional oil became accessible, raising reserves. Also, as prices rose, resources that had never been economically extractible became extractible. Production continued beyond forecast peak dates, again and again.

Peak Oilers got at least part of the story right–the fact that we are in fact reaching diminishing returns with respect to oil. For this they should be commended. What they didn’t figure out is, however, is (1) how the energy-economy system really works, and (2) which pieces of the system can be expected to break first. This issue is not really the Peak Oilers fault–it is the result of starting with a very bad model of the economy and not understanding which pieces of that model needed to be fixed.

How the Economic System Really Works 

We are dealing with a networked economy, one that is self-organized over time. I would represent it as a hollow network, built up of businesses, consumers, and governments.

Figure 2. Dome constructed using Leonardo Sticks

Figure 2. Dome constructed using Leonardo Sticks

This economic system uses energy of various kinds plus resources of many kinds to make goods and services. There are many parts to the system, including laws, taxes, and international trade. The system gradually changes and expands, with new laws replacing old ones, new customers replacing old ones, and new products replacing old ones. Growth in the number of consumers tends to lead to a need for more goods and services of all kinds.

An important part of the economy is the financial system. It connects one part of the system with another and almost magically signals when shortages are occurring, so that more of a missing product can be made, or substitutes can be developed.

Debt is part of the system as well. With increasing debt, it is possible to make use of profits that will be earned in the future, or income that will be earned in the future, to fund current investments (such as factories) and current purchases (such as cars, homes, and advanced education). This approach works fine if an economy is growing sufficiently. The additional demand created through the use of debt tends to raise the prices of commodities like oil, metals, and water, giving an economic incentive for companies to extract these items and use them in products they make.

The economy really can’t shrink to any significant extent, for several reasons:

  1. With rising population, there is a need for more goods and services. There is also a need for more jobs. A growing networked economy provides increasing numbers of both jobs and goods and services. A shrinking economy leads to lay-offs and fewer goods and services produced. It looks like recession.
  2. The networked economy automatically deletes obsolete products and re-optimizes to produce the goods needed now. For example, buggy whip manufacturers are pretty rare today. Thus, we can’t quickly go back to using horse and buggy, even if should we want to, if oil becomes scarce. There aren’t enough horses and buggies, and there aren’t enough services for cleaning up horse manure.
  3. The use of debt for financing depends on ever-rising future output. If the economy does shrink, or even stops growing as quickly as in the past, there tends to be a problem with debt defaults.
  4. If debt does start shrinking, prices of commodities like oil, gold, and even food tend to drop (similar to the situation we are seeing now). These lower prices discourage  investment in creating these commodities. Ultimately, they lead to lower production and job layoffs. If deflation occurs, debt can become very difficult to repay.

Under what conditions can the economy grow? Clearly adding more people to the economy adds to growth. This can be done by adding more babies who live to maturity. It can also be done by globalization–adding groups of people who had previously only made goods and services for each other in limited quantity. As these groups get connected to the wider economy, their older, simpler ways of doing things tend to be replaced by more productive activities (involving more technology and more use of energy) and greater international trade. Of course, at some point, the number of new people who can be connected to the global economy gets to be pretty small. Growth in the world economy lessens, simply because of lessened ability to add “underdeveloped” countries to the networked economy.

Besides adding more people, it is also possible to make individual citizens “better off” by making workers more efficient at producing goods and services. Most people think of greater productivity as happening through technological changes, but to me, it really represents a combination of technological changes, plus a combination of inexpensive resources of various kinds. This combination often includes low-cost fossil fuels; abundant, cheap water supply; fertile soil; and easy to extract metal ores. Having these available makes possible the development of new tools (like new agricultural equipment, sewing machines, and vehicles), so that workers can become more productive.

Diminishing returns are what tend to “mess up” this per capita growth. With diminishing returns, fossil fuels become more expensive to extract. Water often needs to be obtained by desalination, or by much deeper wells. Soil needs more amendments, to be as fertile as in the past. Metal ores contain less and less ore, so more extraneous material needs to be extracted with the metal, and separated out. If population grows as well, there is a need for more agricultural output per acre, leading to a need for more technologically advanced techniques. Working around diminishing returns tends to make many kinds of goods and services more expensive, relative to wages.

Rising commodity prices would not be a problem, if wages would rise at the same time as the price of goods and services. The problem, though, is that in some sense diminishing returns makes workers less efficient. This happens because of the need to work around problems (such as digging deeper wells and removing more extraneous material from ores). For many years, technological changes may offset the effects of diminishing returns, but at some point, technological gains can no longer keep up. When this happens, instead of wages rising, they tend to stagnate, or even decline. Figure 3 shows that per capita wages have tended to grow in the United States when oil was below about $40 or $50 barrel, but have tended to stagnate when prices are above that level.

Figure 3. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

Figure 3. Average wages in 2012$ compared to Brent oil price, also in 2012$. Average wages are total wages based on BEA data adjusted by the CPI-Urban, divided total population. Thus, they reflect changes in the proportion of population employed as well as wage levels.

What Effects Should We Be Expecting from Diminishing Returns With Respect to Oil Supply?

There are several expected effects of diminishing returns:

  1. Rising cost of extraction for oil and for other commodities subject to diminishing returns.
  2. Stagnating or falling wages of all except the most elite workers.
  3. Ultra low interest rates to try to make goods more affordable for workers stressed by stagnating wages and high prices.
  4. Rising governmental debt, in an attempt to stimulate the economy and in order to provide programs for the many workers without good-paying jobs.
  5. Increasing concern about debt defaults, as the amount of debt outstanding becomes increasingly absurd relative to wages of workers, and as all of the stimulus debt runs its course, in countries such as China.
  6. A two-way problem with the price of oil. On one side is recession, when oil prices rise to unaffordable levels. Economist James Hamilton has shown that 10 out of 11 post-World War II recessions were associated with oil price spikes. He has also shown that there is good reason to expect that the Great Recession was related to the run-up in oil prices prior to 2007. I have written a related paper–Oil Supply Limits and the Continuing Financial Crisis.
  7. The second problem with the price of oil is the reverse–price of oil too low relative to the cost of extraction, because wages are not high enough to permit workers to afford the full cost of goods made with high-priced oil. This is really a problem with inadequate affordability (called inadequate demand by economists).
  8. Eventual collapse of whole system.

There have been many studies of collapses of past economies. These collapses tended to occur when the economies hit diminishing returns after a long period of growth. The problems were often similar to ones we are seeing today: stagnating wages of common workers and growing debt. There were more and more demands on governments to fix the problems of workers, but governments found it increasingly difficult to collect enough taxes for all the needed programs.

Eventually, the economic systems have tended to collapse, over a period of years. The shape of resource use in collapses was definitely not symmetric. Figure 4 shows my view of the typical shape of the collapses in non-fossil fuel economies, based on the work of Peter Turchin and Surgey Nefedof.

Figure 4. Shape of typical Secular Cycle, based on work of Peter Turkin and Sergey Nefedov in Secular Cycles.

Figure 4. Shape of typical Secular Cycle, based on work of Peter Turchin and Sergey Nefedov in Secular Cycles.

In my view, the date of the drop in oil supply will be determined by what appear to on-lookers to be financial problems. One possible cause is that the oil price will be too low for producers (a condition that is occurring now). Governments will find it unpopular to raise oil prices, but at the same time, will be powerless to stop the adverse impacts the fall in price has on world oil supply.

Falling oil prices have especially adverse effects on oil exporters, because they depend on revenues from oil to fund their programs. We are already seeing this now, with the increased warfare in the Middle East, Russia’s increased belligerence, and the problems of Venezuela. These issues will tend to reduce globalization, leading to less world growth, and a greater tendency for the world economy to shrink.

Unfortunately, there are no obvious ways of fixing our problems. High-priced substitutes for oil (that is, substitutes costing more than $40 or $50 barrel) are likely to have as adverse an impact on the economy as high-priced oil. The idea that energy prices can rise and the economy can adapt to them is based on wishful thinking.

Our networked economy cannot shrink; it tends to break instead. Even well-intentioned attempts to reduce oil usage are likely to backfire because they tend to reduce oil prices and have other unintended effects. Furthermore, a use of oil that one person would consider frivolous (such as a vacation in Greece) represents a needed job to another person.

Should Peak Oilers Be Blamed for Missing the “Real” Oil Limits Story?

No! Peak oilers have made an important contribution, in calling the general problem of diminishing returns in oil supply to our attention. One of their big difficulties was that they started out working with a story of the economy that was very distorted. They understood how to fix parts of the story, but fixing the whole story was beyond their ability. The following chart shows a summary of some ways their views and my views differ:

Figure 5. Author's summary of some differences in views.

Figure 5. Author’s summary of some differences in views.

One of the areas that Peak Oilers tended to miss was the fact that an oil substitute needs to be a perfect substitute–that is, be available in huge quantity, cheaply, without major substitution costs–in order not to adversely affect the economy and in order to permit the slow decline rate suggested by Hubbert’s models. Otherwise, the problems with diminishing returns remain, leading to declining wages and rising costs of making goods and services.

One temptation for Peak Oilers has been to jump on the academic bandwagon, looking for substitutes for oil. As long as Peak Oilers don’t make too many demands on substitutes–only EROEI comparisons–wind and solar PV look like they have promise. But once a person realizes that our true need is to keep a networked economy growing, it becomes clear that such “solutions” are woefully inadequate. We need a way of overcoming diminishing returns to keep the whole system operating. In other words, we need a way to make wages rise and the price of finished goods fall relative to wages; there is no chance that wind and solar PV are going to do this for us. We have a much more basic problem than “new renewables” can solve. If we can’t figure out a solution, our economy is likely to reach what looks like financial collapse in the near term. Of course, the real reason is diminishing returns from oil, and from other resources as well.

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.
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1,114 Responses to WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True”

  1. Paul says:

    As ice vanishes, polar bears besiege Alaska town

    Without ice access, bears face fewer chances to hunt seal and instead turn to Kaktovik villagers’ whale scraps.

    http://projects.aljazeera.com/2014/kaktovik-polar-bears/index.html

    Time to put on a little Louis Armstrong to counter the negative thoughts (since I have no opium…) https://www.youtube.com/watch?v=A3yCcXgbKrE

  2. Paul says:

    Training for the End of the World as We Know It

    A visit to “prepper camp,” a four-day session on surviving super viruses, natural disasters, socioeconomic collapse, world war, and more

    http://www.theatlantic.com/national/archive/2014/10/welcome-to-prepper-camp/381351/

  3. tagio says:

    @John, Doyle,
    From IEA’s faq page:
    “How many barrels of oil are produced and consumed a day?

    As of 2011, approximately 89 million barrels of oil and liquid fuels were consumed per day worldwide. That works out to nearly 32 billion barrels a year.”

    Thus, 3.3 billion barrels works out to 37 days of world supply. We Are Saved!

    • Ive been banging on about this for years. A billion barrels of oil gives you around 10/12 days supply, this why I called my book The End of More, http://tinyurl.com/oa854gt because everybody keeps insisting that there’s always more, and more, and more.
      Oil is oil, no matter what the extraction/production cost, we will always have more of it.
      Right now, the USA is trumpeting that they are the ‘biggest world producer’
      That’s exactly like saying youre a big spender when you’re in hock to the bank. The US IS the biggest oil producer right now (just), at 10mbd+, but BURNS 18MBD. Whereas Russia produces the same amount but exports 7Mbd, Same with saudi. You only have an ”oil weapon” if you produce more than you burn.
      The USA would be oil (and fiscally) solvent if it cut oil use in half. If that happened the entire country would dissolve into anarchy. The solution? pretend theres no oil deficit by printing money to make up the difference.

  4. John Doyle says:

    Anyone seen this breathless item in The Washington Times today?
    Virtus Oil and Gas is touting a prospective 3.3 Billion barrel find in Utah
    “holds more oil than all of OPEC”
    is this for real or just another fantasy?

  5. Paul says:

    I think this demonstrates that nothing is off the table in terms of what the central banks will do to try to prop up the dead horse….

    I really don’t see how they can stand aside and allow any market to crash — if they allow that then the dominoes fall because the financial markets are intertwined so deeply…

    Of course one would think that this eventually reaches the pushing on a string stage… and they lose control…

    However who stands to gain from shorting the markets? If enough big players go short or just pull out — and they take the markets down — they don’t collect — because the global economy will completely collapse.

    Additionally if they go short the central banks just print more money — they go to war — and they own the presses so they win…

    Institutional money already knows this makes no sense — but so long as the central banks are lined up against them what is the point of ‘fighting the Fed’… you might as well just ride along on the coat tails…. dance while the music plays…

    It all ends badly no matter what you do.

    BoJ Invisible Hand (Briefly) Rescues Nikkei From Sub-15,000 Plunge (Again)

    UPDATE: That didn’t last long… NKY back under 15k as JPY collapses

    Heavy volume selling in Nikkei futures at the open sent the index down over 200 points and broke the oh-so-crucial 15,000 line. It appears – just as in August that 15,000 is the BoJ’s line in the sand as a miracle buyer turned up and lifted the index all the way back to 15,000 (whiule JPY remained lower and US futures saw no bounce). Of course, for those who prefer to ignore the fact that the BoJ is almost the biggest holder of Japanese stocks in the world and bought more stock ETFs than ever before in August, this is a clear signal of BTFD’ers back to save the world. For the rest of the sane rational fact-checking market participants, that ‘know’ the BoJ’s trigger to buy is a weak morning session, we wonder how much of this futures ramp is front-running… that will fade as JPY is not supportive at all.

    http://www.zerohedge.com/news/2014-10-12/boj-invisible-hand-rescues-nikkei-sub-15000-plunge-again

  6. MG says:

    OPEC is not able to influence the price of oil by lowering or increasing its production as much as it was in the past. It seems that when they lower the production, the demand destruction could undermine their profits even more:

    http://online.wsj.com/articles/opec-unlikely-to-cut-production-says-kuwaiti-minister-1413127322

    Now, they can sell their oil with better returns than in the future. The costly oil is not able to stimulate the economy anyway.

    Definitely, there is no way down, as regards the price increase due to lowering of the production. When the oil is not cheap anymore, the mechanisms on supply side have the diminishing influence, while the mechanisms on the demand side (stimuluses and more debt) gain on the importance.

    The situation complies with the Gail`s view.

  7. John Doyle says:

    Let’s all relax just for a few minutes;
    Watch this poem; “four more planets”

  8. Stilgar Wilcox says:

    http://www.cnn.com/2014/10/12/health/ebola/index.html

    Texas nurse who had worn protective gear tests positive for Ebola

    The deadly Ebola virus has been contracted by someone inside the United States for the first time.

    A nurse who had worn protective gear during her “extensive contact” at a Dallas hospital with an Ebola patient who died tested positive during a preliminary blood test, officials said Sunday.

    The woman had on a gown, gloves, mask and a shield during her multiple visits with Thomas Eric Duncan, but there was a breach in protocol, health officials said.

    “At some point, there was a breach in protocol, and that breach in protocol resulted in this infection,” he said at a news conference Sunday. “The (Ebola treatment) protocols work. … But we know that even a single lapse or breach can result in infection.”

    • ordinaryjoe says:

      Class A suits and standard decontamination procedures. No more breaches in protocol.

    • not fazed says:

      “There was a breach in protocol. We don’t know what it was but we know that there was one.” Yes very reassuring?

  9. Yves says:

    Hello Gail,
    I do not comment often on your blog, but I follow you regularly and I think that, thanks to the process of answering to the cornucopians’ objections and them trying (sometimes) to answer back to the Peak Oiler’s assertions, you manage to build a realistic economic-resources model. The early Peak Oilers were a bit too fast in thinking that there is no room for technological innovations, no chance that it could extend a little bit our era of unprecedented prosperity, just out of an understandable reaction against dumb people who told them that if there is a problem with planet Earth we could as well colonize another planet.

    There is still technological progress going on, particularly in electronics and in genetics, while some other area of scientific research, like particles physics or controled nuclear fusion seem to be stalled. It seems that science too is subject to diminishing returns, when you think about the handfull of great scientists until 1900 who managed to make giant leaps in scientific knowledge without subventions and without doctorates and you compare them to the armies of today’s researchers (about 6 millions), who study 12 hours a day, for years after their doctorate and who manage to make small improvements like a new molecule for computer screens or a small change in the medication against a disease. Even musik seems to be subjected to the law of diminishing returns if you compare great composers (who had a strong tendency to die young) like Bach, Mozart, Beethoven, Schubert and Chopin with what we have today. I dont want to underestimate our song writers, but they dont come up with them. In the case of science, it is somewhat surprising, because a discovery should foster new ones, but besides the progesses that one can obtain from improved imaging or computing rapidly a big bunch of data, it seems that the chain reaction of scientific discoveries is slowly dying out.

    Also, I look a the fall in crude prices and I wonder if Saudi Arabia could not be trying to launch a price war against the shale oil producers in the United States and the syncrude producers in Alberta. They refused to diminish their production to sustain the price as they have done before. If the Brent and the WTI prices remain low for a long time, indirectly the Saudis can drag down some of these producers into bankrupcy. After that they can come back with higher prices and bigger profits for those who survived the war price.

    • dolph says:

      Yves,
      I don’t discount this possibility, but sometimes the simplest answer is the correct one.

      In this case, the answer might be this: oil prices have been too high for too long, and the global economy is beginning to roll over again, bringing oil prices down.

      However, this it not a blessing, because it points to the essential fact that oil is beginning to peak and become short in supply. As oil prices drop, it shuts in production, which furthers the economic decline. If the central banks print money to sustain the oil price, they will get more production, but it will be unaffordable to the masses.

      This is the dilemma that brings down our current system. The oil price cannot fall nor rise. It has to be “perfect” which is just about impossible.

      • ordinaryjoe says:

        Yes! When I try to communicate this very simple idea to people. , that as cheap fossil fuels (measured in energy to extract) become less available the economy must slow and this in turn is a positive feedback making less fossil fuels available. Cue the sound of a vacuum cleaner with the plug pulled Very few (none) will consider this. Some common responses I hear.

        “I earned what I got. Fred down the street smokes pot and chases tail all the time so he dont got nothing but I busted ass my whole life and earned what I got.”
        “theres plenty of oil if they would just let us drill”
        “They said that twenty years ago- oil is still around”
        “We should be going to wind and solar but xxx wont let us”
        “there is always positive solutions if you focus on them”

    • Paul says:

      I don’t think that is the case — because the Saudi’s are a US client state — if they went against the wishes of the Deep State in America they would find themselves in the same position as Saddam — and another proxy dictatorship would take their place.

      I suspect this is about hitting at Russia who need 100 buck oil to pay the bills. Of course it is a risky business because it risks the shale oil business. No doubt the analysts have worked out how close they can cut this without bankrupting the shale plays.

      What one cannot predict is how Putin will react… he surely will not sit idly by and be check-mated

    • not fazed says:

      Yes I am into Viennese classical and romanticism. The music of the common folk has always been simpler and I do not mind that, Arguably atonalism irrevocably trashed the Western classical tradition.

      This is my favourite “song” of 2014 so far, a sort of cross between indie rock and reggae. I am not sure what it means, if anything, which seems about right. Our music is of its age, which is probably coming to an end anyway, so we might as well take it for what it is.

      I came across the song in the episode Man on Fire of The Vampire Diaries where Enzo kills himself. He is an anti-heroic and terribly tragic vampire who was captured and dissected each day for 60 years in the pursuit of medical science. His best and only friend finally rescues him only for him to soon find out that the friend unknowingly killed his one love back in the 50s.

      • not fazed says:

        Hmmm, interesting.

        “Literary Romanticism in the 19th century helped popularize the antihero in ways such as the Gothic double.[citation needed] The antihero eventually became an established form of social criticism, a phenomenon often associated with the unnamed protagonist in Fyodor Dostoevsky’s Notes from Underground.[13] The antihero emerged as a foil to the traditional hero archetype, a process that Northrop Frye called the fictional “centre of gravity.”[14] This movement indicated a literary change in heroic ethos from feudal aristocrat to urban democrat, as was the shift from epic to ironic narratives.[14] The antihero became prominent in early 20th century existentialist works such as Franz Kafka’s The Metamorphosis (1915),[15] Jean-Paul Sartre’s La Nausée (1938) (French for: Nausea),[citation needed] and Albert Camus’ L’Étranger (1942) (French for: The Stranger).[citation needed] The protagonist in these works is an indecisive central character who drifts through his life and is marked by ennui, angst, and alienation.[16]”

        http://en.wikipedia.org/wiki/Antihero

        Arguably one can see this shift played out in the early Universal horror films.

      • not fazed says:

        This is where the dirty Babylon locks me up. Pray for them.

    • Thanks for writing. I pretty much agree with you on most of your points.

      Wit respect to Saudi Arabia, it probably thinks it can force some of its competitors into collapse (probably not bankruptcy). It also probably thinks it can come back with higher profits and less competition later. I am not sure whether this will work. All of the complex supply lines need to still be in place for Saudi Arabia to come back with higher profits and less competition later–otherwise Saudi Arabia’s extraction equipment will not be able to get replacement parts and other countries will not be able to afford the higher price. So even if Saudi Arabia thinks it can come back with higher prices later, I am not sure that it really can. It will depend on the ability of the world economy to continue as today.

  10. Rodster says:

    I encourage everyone to read this fine article. It eloquently states the predicament we now face.

    http://www.theautomaticearth.com/the-disgrace-of-sacrificing-a-generation/
    “The Disgrace of Sacrificing a Generation”

    Excerpt: ‘The fact of the matter is, we can continue our lifestyles, best as we can, because we are able to make our children pay for it. We allow ourselves to continue to kill more species, at home but mostly abroad, because we never get in touch with any of those species anyway. Other than mosquitoes, which we swat. We can drive our 3 cars per family because we only see the ice melt in the Arctic on TV.

    And we allow ourselves, and our governments, to get deeper into debt everyday, because we’ve been told that without – ever – more debt we would all die, that debt is the lifeblood of our very existence. We don’t understand what it means that our governments increase their debt levels by trillions every year, and we choose not to find out.

    That’s a matter for the next generation; we’re good with our oversized flatscreens and coal powered central heating and all of that stuff. We are better off than the generation of our parents, and isn’t life always supposed to be like that? ‘

    • John Doyle says:

      Actually there is a problem with this idea that we are indebting our children. Future generations never have to pay off debts incurred before their time. No one was burdened by debts brought about by the costs of WW2. In any event we can’t send money back in time. That’s the financial picture. In the real world we are using up real resources and they will not be available to future generations.
      So it’s not the debt so much as the debt financed consumption that we have to solve. We’ll never have to pay off the debt.

    • Paul says:

      Nice rant however consider this.

      Why did we get on this treadmill to hell in the first place?

      The average lifespan in the US a 100 years ago was under 50 http://demog.berkeley.edu/~andrew/1918/figure2.html

      Life was harsh.

      Cheap energy represented a way out of that brutal lifestyle. Effectively we all became slave masters with hundreds if not thousands of nearly free slaves to make life easier.

      But this was a deal with the devil (although nobody knew it because oil was so plentiful – we though we’d never run out) But we kicked off the exponential growth curve when we decided to harness these slaves. Once this started there was no turning back.

      And it all looked rosy as each generation did better than the last. Can you blame people for wanting easier lives – for wanting prosperity for themselves and their children?

      Unfortunately a system based on eternal growth was bound to fail. And being so smart instead of allowing it to fail we invented ways to keep that from happening. When consumption stalled we invented PR and advertising to convince people they had to buy the latest and greatest…. and when that was not enough we invented credit …

      These things were natural evolutions. We had no choice — either we keep growing or we crash back to pre 1900 living.

      The unfortunate thing that happened along the way was the green revolution. That resulted in 7B+ people living on the planet.

      And now — there is no going back — at least not without most of those people perishing.

      So the rant is much ado about nothing.

      We did what was expected of us – we tried to live our lives as far removed from our ancestors as possible. Nobody wants to live to 48 when then can live till 80 – nobody wants to suffer through diseases that can be cured… nobody wants to work at back breaking labour when they can have a cushy job … nobody wants to walk 20 miles a day when they can drive a car….

      None of us are to blame – or we are all to blame.

      • i agree with all you’ve said–except for the pre 1900 part
        most people are in denial that the party’s over, and so ww3 is just kicking off to prove that it can all go on forever. It’s rather in line with climate change denial, very similar thinking.
        without hydrocarbon fuels we go back to pre-1500—if we’re lucky
        if we’re unlucky, then the war over whats left will take us back to the 7th century, which is roughly what the muslim fundamentalists have in mind anyway

        • Paul says:

          Agree — my prognosis (because we have overshot so massively on population and resource usage) is for a situation somewhere between primitive man and Mad Max…

          Primitive man… maybe we should refer to those folks as enlightened man — and modern ‘progressive’ man as fools 🙂

      • alturium says:

        Exactly. Our leaders are actually doing everything possible to keep the BAU system going and growing. We’ve had chances to slow down like in the seventies, but when we saw the effects, we as a society decided To Hell With That, I’m going to buy an SUV!

        We like to think we’ve learned from history but we haven’t. The Vietnam war is a good example. We passed the war powers act and solemnly swore that we would never get into another dumb war, but look at Iraq and how people bought that one hook line and sinker.

        And the more I think about when the turning point should have been, …was it the seventies? No…, after WW2? No…, before oil? No…., before coal? Maybe…maybe before we discovered fire? (a point Gail has brought up). We are at the end of a industrial society bubble and there is no collective memory of this type of collapse because this will be the first and last!

        All of this behavior is baked into the cake. Reading the first chapter of Secular Cycles by Peter Turchin (well it’s free!) is proof that we are programmed to grow exponentially, overshoot, and collapse.

        Maybe we do learn after many mistakes … Look how long it took to figure out separation of church and state- a few thousand years. The next step would be separation of wealth/corporation/finance from state, but it won’t matter since there will not be another complex society for really, really long time, if ever.

        • alturium says:

          Oops… Did I just rant? Aw geez, I’ll try to justify my remarks next time.

        • Paul says:

          I am in the ‘ever’ camp. I cannot see how we ever advance from whatever is coming because we have consumed all the low hanging resource fruit.

          If we can’t now extract resources economically with the full force of BAU and modern technology – how would we do it in the future when this is completely collapsed?

          • alturium says:

            It’s scary when you realize that all the low hanging fruit is gone forever. The Simon Michaux video on peak mining was great, such as the example showing that 1 truck load (225tons) equals 3400 donkeys. As far as future societies, I can imagine a feudalistic system having the capability to continue some hi-tech development similar to military industrial projects. Or it could be similar to the movie and book The Hunger Games, where you have a ratio of 12 slave districts to one capital.

            Here is that video by Simon Michaux:

            https://m.youtube.com/#/watch?v=TFyTSiCXWEE&list=PLYD670eLhZ8u53w67oxmC05IvIqrEOt9o

          • alturium says:

            “Cheap energy represented a way out of that brutal lifestyle. Effectively we all became slave masters with hundreds if not thousands of nearly free slaves to make life easier.”

            Paul, that cannot emphasized enough! My father grew up on a farm and some of my best friends. Getting up to milk the cows before and after school, as a child, does not sound like fun. I truly admire those who live and thrive in that lifestyle, and I know a lot of commenters have made the decision to return to that organic, non-BAU lifestyle. I ponder small moves in that direction but, as a software programmer, my soft hands may be too delicate 🙂 I like having those thousands of virtual slaves (oil) pushing my car down the road every day.

            That is why slavery will return after the collapse. People revel in their idealistic and moralistic achievements but it was cheap energy that enabled generations to escape that brutal lifestyle. We praise democracy and ancient Athens but the ratio of slaves to free was 10 to 1!

            The first step toward slavery will be to provide the moral justifications. The targeted group will be described as lazy, dumb, abnormal, culturally backwards, violent, religious fanatics, poor, or blamed for being born in a slum or in a country that is a slum. It also helps when the enslaved are not co-located with us normal people. A good example is the British Raj and the East India Company in India.

          • alturium says:

            Ok, ok, ok. I can imagine the US as the Capitol from The Hunger Games and the 12 districts as other countries. The operative concept to justify such domination will be the word “security”. You can fit this word into about any context…energy security…food security…housing security…financial security…military security…fishing security…water security…land security…debt security…and so on. Vague concepts that somehow translate to moral justification for bombing and invading countries. There are of course other methods of domination, such as having the dollar as the worlds reserve currency.

            • Christian says:

              “I can imagine the US as the Capitol from The Hunger Games and the 12 districts as other countries.”

              This was happening until now, but it will be over pretty soon

            • alturium says:

              @Christian : dude *lower voice* Dude. You havent seen anything yet. I always wondered what would take the US into “empire mode”. It was 9/11. When we passed the Patriot Act I knew it would lead to the abuses. At least, I told my my cats. The requests for access by the government ( under Obama) are way out of proportion to the actual threat of terriorist acts. You Have Not See Anything Yet is my opinion. We are totally out of touch with the rest of the world. People believe ISIS is readying direct assaults on America. IMHO, ISIS is a Sunni organization that has primarily taken over…Sunni territory.

            • Christian says:

              Alturium

              “You havent seen anything yet. I always wondered what would take the US into “empire mode”.” Not so sure. To me, empire mode was set at Bretton Woods at the end of WW2 (and even before, as a continuation and extension of the British Empire), and now oil’s entropy guarantees it’s finalization. Terrorism Acts are intended to draw internal control rather than external, and ISIS is a US-SA-Israel creation in order to destabilize Iraq and Syria because US forces are rather leaving Middle East (fragmentation of enemies is cheaper than maintaining continued empire’s presence).

            • alturium says:

              Your right and great points. Somehow I am trying to describe how the psychological mindset of the people, with it’s set of cherished values and perceptions that allows the leaders full rein in “protecting”, has solidified. With the MSM they can pretty much do whatever they want with hardly any dissent, because it is framed in the context of national security or national interests or helping “freedom fighters”. We don’t stare at our belly buttons when things go wrong or when we do questionable acts, anymore.

              A good example for me is looking at the beliefs and attitudes of the young soldiers before WW I. It was a totally naive view of the world that was destroyed. Europe was riding the wave of prosperity, heavily dependent on the exploitation of colonial people. America 2014 is Europe 1914. Well, I see a lot of parallels. 🙂

              Btw, check out Dan Carlin’s Hardcore History (audio podcast)! He just released an excellent WWI series.

        • The next step would be separation of wealth/corporation/finance from state, but it won’t matter since there will not be another complex society for really, really long time, if ever.

          Good point! As wealth goes to corporations/finance, there is less for workers. The pull of more wealth seems to take the place of the view that the rule of the leader is endorsed by whatever local god is believed in, so citizens are required to follow the decrees of the leader. Now we follow the decrees of the leaders, because economists have decreed that the actions they recommend will give rise to economic growth (and will give profits to businesses).

          • alturium says:

            Lol! Definitely. The religious priesthood replaced by an economic order, with a high priestess casting bones to divine the future. The golden calf replaced by a bronze bull. The reading of scripture by market pundits…”hear ye, hear ye, the current trend reveals a structural weakness in the strength of the dollar. On the tenth month of the year, the harvest of easy money will give way to the floodgates releasing the torrent of cheap oil prices”. Well, something along those lines.

          • alturium says:

            I think I missed a few “really” by a factor of 10^5. 🙂

    • I don’t really agree that we are sacrificing a generation with our debt. What we are doing is keeping the economy from collapsing right now, by keeping demand up.

      If, back in the 1970s (or better yet, 1820) we had decided to ban debt and only use the amount of fossil fuels we could afford without debt, population would have stayed much lower. Growth would have stayed much lower. Most of the fossil fuels that have been burned to date would have stayed in the ground. With this long-term strategy, we may have had Malthusian population die-off because of lack of food rather early on, but we would not have the continual rapid ramping up of population and resource extraction.

      If we had held down debt for the long term, all we would need to do is continue to stay away from debt, to keep consumption low. I’m not sure what this would do to collapse. In theory, it might delay it (or if food supply was too low, it might actually move it up). But there would be some hope of a lower growth trajectory, and a longer period of ramp-up, especially if population is held low.

      At this point, there is little we can do, other than continue to borrow and spend to keep the economy from collapsing. In theory, if we spent more, our children would have a better chance of having jobs now. There is no chance our children will ever have to pay the debt back–these promises are un-repayable. Once the economy collapses, the resources that are in the ground will stay in the ground forever. They will not do our children any good (but neither will the debt do our children any harm).

      One group that will be harmed by collapse is the older generation, who has been promised social security. Once we have collapsed, the economy is likely to produce little in the way of surpluses, with respect to food, clothing, and housing. If there is barely enough to go around, the production should logically go to The people who produce the food, clothing, and housing. Thus, it is the older generation that is especially likely to be cut out by inadequate resources. Also, the stock and bond balances that the older generation has been holding for retirement will lose their value–although perhaps not all at once.

      The Automatic Earth makes the point that young people have not been taught the right skills. That is indeed true. But do we really know the right skills to teach them? The whole situation without fossil fuels is so different from today, it is hard to even think in those terms. We can’t just decide to adopt a 17th century lifestyle, for example. Everyone buying Priuses or plug in hybrids doesn’t work either.

      • Don Stewart says:

        Dear Gail
        I note the incessant belittling of the Prius and EV owners by you and several commenters. I think you are missing something important.

        I want to take a short detour through Personality psychology. At the present time, those who rate as more ‘disagreeable’ do better financially than those who rate as more ‘agreeable’. As in…you don’t rise to be the chief executive of a TBTF bank by being a nice guy. Yet research has uncovered SOME cases where agreeableness is an advantage. For example, in Key Account jobs, where long term good relationships are important.

        In short, the hyper-capitalism where everything is reduced to money which characterizes our current economy rewards the pirates and penalizes those who try to cooperate.

        In a post-collapse world, which sort of behavior do you think will be more rewarded? Many people who comment here think that we are headed for a Mad Max world where only the ruthless will survive. But there is another possibility. We might end up in a world where ONLY those who can cooperate will survive. And it likely won’t be a cut-throat capitalist system…more like a joint production or sharing system.

        Humans are combinations of their biologically inherited proclivities on the agreeableness scale, their learned behaviors on that same scale, and the nature of their personal projects which require one behavior or the other. Can we just transport Jaime Dimon or Lloyd Blankfein into a post collapse world and expect them to behave productively? I don’t think so.

        Which implies that beginning to behave today in ways that may be productive post-collapse is probably a good survival strategy. Which means that developing habits of frugality are good survival strategies. Failing to develop frugal habits because some Chinese will just use up ‘your’ resources is very short sighted. Post-collapse, would you prefer a man who thinks he needs a Lamborghini?

        In one of Wendell Berry’s stories he tells of two men who prefer each other’s company when the weeds need hoeing. Perhaps all of us might aspire to learn to be the kind of person that others in our community would like to hoe weeds with…which is going to require a diverse set of behaviors, some of which will include frugality and humility.

        Don Stewart

        • Don Stewart says:

          Here is a comment by the sociologist Richard Gould which can be found on Chris Martenson’s site. Think about the different behaviors which are required when times are tough, and what sort of behavior now might enable one to make the transition….Don Stewart

          What impressed me the most about the Aborigines — and I know it to be true of many other hunter-gatherers, especially the ones living in stressed environments — is the idea of social networking.

          That is, instead of the “money in the bank” approach to security, where we in our culture aggrandize and accumulate surpluses, whatever it may be — money, goods, material wealth and so on — and rely on those for our long-term security, these people essentially give away everything they have, mostly to their relatives, but sometimes these relatives are quite distant relatives. And when they do, they are not just giving them away. They are expecting something in return. A kind of delayed reciprocity, so that years later, if they are in need, they can call on these relatives for support and aid.

          And that system of social networks is very, very robust in hunter-gatherer cultures. You find it in other kinds of societies, too, very poor societies, for example, that have not much in the way of material possessions. But because of this type of sharing, they are able to meet whatever needs come along. This is a tremendously powerful mechanism that I think we have kind of lost in our own culture. We do not appreciate the importance of this kind of social network. We are much more into securing our future based on accumulation rather than on sharing. And I think if you are asking for a kind of ‘take-home’, I would say that is probably the lesson that we need to learn. We need to pay attention to this type of social order.

          • This kind of networking has existed, even very recently, in small towns across America. Once we started using “cheaper” as the metric for why things were done a certain way, the network started to go away.

            For example, I went to grade school in a small town, where there was only a single class for each grade (one class of first graders, one class of second graders, etc.) With that size of town, it was possible to know the other students over the years, and to know the teachers outside of class. If a student was misbehaving, the information would pretty soon get back to the parents. Students were expected to respect their teachers.

            Now we have bigger schools, with many kids bussed in from a significant distance. Kids know their “rights,” and willingly talk back to teachers.

          • xabier says:

            Don

            When desperately poor, starving, men enlisted in a British army which went to fight in Spain in the 1830’s, – there was a severe agricultural and trade depression – it was noted how much they helped one another when in bad non-combat situations: they made their own order, and it was very altruistic. All in the same boat, albeit a sinking one. The same was noted during cholera epidemics. Comradeship can’t be bought.

        • Stefeun says:

          Bonjour Don and all,
          I fully agree with: “In short, the hyper-capitalism where everything is reduced to money which characterizes our current economy rewards the pirates and penalizes those who try to cooperate.”

          Some people -more and more, actually- are already trying to promote “cooperativism” based on shared knowledge, open source, commons, etc…
          I’ve recently been digging into P2P Foundation’s Wiki, which is much bigger and richer than I first thought (27,689 content pages with 88454 total editions.). They say their aim is:
          “We function as a clearinghouse for open/free, participatory/p2p and commons-oriented initiatives.
          We aim to be a pluralist network to document, research, and promote peer to peer alternatives. Our political aims could be summarized under the following maxims:
          1.ending the destruction of the biosphere by abandoning the dangerous conceptions of pseudo-abundance in the natural world (i.e. based on the assumption that natural resources are infinite);
          2.promoting free cultural exchange by abandoning the innovation-inhibiting conceptions of pseudo-scarcity in the cultural world (i.e. based on the assumption that the free flow of culture needs to be restricted through excessive copyrights etc…).”

          You can find a detailed summary on their homepage:
          http://p2pfoundation.net/Main_Page

          Of course, they have a chapter about sustainable agriculture and agri-food:
          http://p2pfoundation.net/Key_Concepts_and_Practices_from_the_P2P_Open_Agriculture_Revolution#
          http://p2pfoundation.net/Category:Agrifood

          I personally am not sure that such initiative will be of any use in the future, but 1.it’s already very positive today, and 2.it’s the only wise thing to do if you plan to survive the collapse phase ; seeds for the day after, like were the small mammals at the end of the dinosaurs’ reign.

          Regarding the Energy chapter, I’m a bit puzzled because although they gathered hundreds of documents (incl. JM Greer, D.Korowicz, N.Hagens, etc.. see eg at bottom of this page: http://p2pfoundation.net/Category:Energy ) they seem to think we could (all of us??) do well with “clean” and renewable ones. Maybe their purpose is to provide (rosy?) information, not to connect the dots.

          • Or maybe their funding comes from people who are interested in the renewable energy sector. It is hard to talk about a “solution,” unless you create a solution, no matter how flawed.

        • I think what we are objecting to is the, “If we all just use a little less, everything will be all right,” view. And the related view that we need to find solutions that use less oil, gas, and coal. What we need is to find solutions that work with local materials, without high-tech devices like computers and the electric grid. This is a fairly different problem.

          • Don Stewart says:

            Gail
            And I keep trying to point out two items of considerable importance:

            First, it is grossly unfair to characterize people who have chosen a Prius as they are frequently characterized on this site. ANYONE who makes it through the bottleneck is going to start with baby steps and then make progress toward where they need to be. The people doing the characterizations should be ashamed of themselves.

            Second, it is an exercise in futility to think that anyone right now has some solution for the problems that the steadily diminishing number of survivors are likely to face. Humans are a deeply social species, so rugged individualism isn’t the answer. Neither are plaintive cries to ‘feed 10 billion people’. A tough minded solution MUST be something that begins with baby steps and then progresses, and does not get sidetracked by emotional pleas to save those who cannot be saved, and welcomes the contribution of everyone. The ‘solution’, if there is one, is likely to be different for different people in different places and different circumstances. Furthermore, that hypothetical ‘ultimate solution’ would not work in 2014 in Atlanta. The ‘ultimate solution’ is likely to be found after some considerable trial and error and a steadily dimishing population density.

            Another point is the ‘rewiring’ of personality and behavior which will be required. I recommend Brian Little’s wonderful new book Me, Myself, and Us. Brian shows how the constructs that we use to understand others and ourselves and the world are interwoven in complex ways. (Much like your picture of the pick-up sticks.) When one of the constructs (sticks) is disproven by actual events, then the whole structure becomes shaky or collapses. We can expect a lot of personality collapses. When someone begins to conserve energy, and use simple tools rather than complex tools, and converts some lawn to garden, they have begun the process of constructing their new personality. Commenters here are ill-advised to make snide remarks for a restructing which will challenge the best of us.

            Don Stewart

          • You have made another fatal error. Reducing consumption is all about using local resources. Another error is your assumption that reducing consumption is not a mature position. It has been tested and vetted over 50 years. I suspect the antagonism towards living simply and reducing consumption comes from a subconscious epiphany that “Them dirty hippies was right.” [That saying has been one of my button campaigns, BTW.]

            • Another error is your assumption that reducing consumption is not a mature position. It has been tested and vetted over 50 years.

              I don’t care how many years the idea of reducing consumption has been vetted. If we are talking about reducing consumption of something that is not likely to be available, then we have a problem. We need to get along without. There are a lot of people who have assumed that (1) the current system will stay together and (2) all we have to do is use less. As far as I am concerned, this is non-sense. The issue is that they system breaks. Maybe for a little while the strategy of using less will work. But without a job, you will not be able to buy soil amendments and other needed materials.

            • Paul says:

              Koombaya Syndrome…. normalcy bias… delusional…. naivety

              People are so underestimating what is coming.

              Understandable — because the worst thing that has happened to most people in western countries is they missed the lotto ticket jackpot by one number causing them to throw a tantrum and pop 4 tabs of xanax.

              Word association:

              – Ethiopian famine
              – WW2
              – Iraq, Libya, Haiti
              – Cholera
              – gangsters
              – Great Depression
              – mega hurricane

              All of these is but exponentially worse — are coming your way — when the oil stops — Apocalypto begins.

            • ordinaryjoe says:

              “I don’t care how many years the idea of reducing consumption has been vetted. If we are talking about reducing consumption of something that is not likely to be available, then we have a problem. We need to get along without. There are a lot of people who have assumed that (1) the current system will stay together and (2) all we have to do is use less. As far as I am concerned, this is non-sense. The issue is that they system breaks. Maybe for a little while the strategy of using less will work. But without a job, you will not be able to buy soil amendments and other needed materials.”

              The fundamental problem is that humans as a species are unwilling to look at their consumptions affect on our relationship to the planet. Reducing consumption is not a the solution to maintaining BAU. Humans are addicted to consumption. A intervention is coming. Interventions are never painless. . When a intervention occurrs the addict can either look at his relationships and change his behavior or die. If you value your relationship to the planet you consume less. Thats our choice. We roar into the brick wall accelerating all the way with no accountability for our actions or try to find relationship to planet now. We have consciousness of our actions. To discard that clearly discards any claim we have to special species status. There is no excuse for discarding consciousness.

              Never trust a junkie.

        • not fazed says:

          Don, this song that I am listening to reminded me of your comment. I remember this one from long ago. I am not convinced that the world (usually) works the moral way that you suggest or that the “good” tends to be created in your way (or course we have to weigh good against evil.) Anyway, people who think like you may have your day yet and it may not be for the worst. Who knows mate?

          Live version:

          https://www.youtube.com/watch?v=taaeaWlI7is

          Crisper sound:

          • not fazed says:

            Yes perhaps it is a subtle paradox but what helps to destroy us now, charity, all that species selfishness, may, post-collapse, post- everyone? dying, may help us to survive? We are overpopulated, environment polluted, resource depleted but one day this world of things will be over and we will have to survive as best we can. When globalism is gone, and especially the twat Putin, old ways may not be new ways. All hail Don!

  11. Pingback: Comment on WSJ Gets it Wrong on “Why Peak Oil Predictions Haven’t Come True” by Paul | Latest News

  12. Paul says:

    Why Oil Is Plunging: The Other Part Of The “Secret Deal” Between The US And Saudi Arabia

    Two weeks ago, we revealed one part of the “Secret Deal” between the US and Saudi Arabia: namely what the US ‘brought to the table’ as part of its grand alliance strategy in the middle east, which proudly revealed Saudi Arabia to be “aligned” with the US against ISIS, when in reality John Kerry was merely doing Saudi Arabia’s will when the WSJ reported that “the process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority.”

    What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit.

    A glimpse of the answer was provided earlier in the article “The Oil Weapon: A New Way To Wage War”, because at the end of the day it is always about oil, and leverage.

    The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia…

    … which however is merely using “the oil weapon” to target the old slash new Cold War foe #1: Vladimir Putin.

    Saudi Arabia to pressure Russia, Iran with price of oil

    Saudi Arabia will force the price of oil down, in an effort to put political pressure on Iran and Russia, according to the President of Saudi Arabia Oil Policies and Strategic Expectations Center.

    Saudi Arabia plans to sell oil cheap for political reasons, one analyst says.

    To pressure Iran to limit its nuclear program, and to change Russia’s position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America, says Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center. The marked decrease in the price of oil in the last three months, to $92 from $115 per barrel, was caused by Saudi Arabia, according to Abanmy.

    With oil demand declining, the ostensible reason for the price drop is to attract new clients, Abanmy said, but the real reason is political. Saudi Arabia wants to get Iran to limit its nuclear energy expansion, and to make Russia change its position of support for the Assad Regime in Syria. Both countries depend heavily on petroleum exports for revenue, and a lower oil price means less money coming in, Abanmy pointed out. The Gulf states will be less affected by the price drop, he added.

    The Organization of the Petroleum Exporting Countries, which is the technical arbiter of the price of oil for Saudi Arabia and the 11 other countries that make up the group, won’t be able to affect Saudi Arabia’s decision, Abanmy maintained.

    The organization’s decisions are only recommendations and are not binding for the member oil producing countries, he explained.

    Today’s Brent closing price: $90. Russia’s oil price budget for the period 2015-2017? $100. Which means much more “forced Brent liquidation” is in the cards in the coming weeks as America’s suddenly once again very strategic ally, Saudi Arabia, does everything in its power to break Putin.

    http://www.zerohedge.com/news/2014-10-10/why-oil-plunging-other-part-secret-deal-between-us-and-saudi-arabia

    • VPK says:

      No doubt, Dick Cheney and Halliburton are in the mix here, I smell a RAT(s) (sacr)

    • Stilgar Wilcox says:

      “To pressure Iran to limit its nuclear program, and to change Russia’s position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America…”

      It’s an interesting idea, the secret deal between US & SA, however profits for US fracking would get so low tight oil extraction would grind to a stop. So I’m not sure why the US would be a party to such an idea. Also SA claims to need about $100. a barrel to meet fiscal needs, so that big of a drop in price would be quite a shock to their finances.

      Different people have different ideas, but I think oil price has probably gotten as low as it will get for a while.

      • kesar says:

        “It’s an interesting idea, the secret deal between US & SA, however profits for US fracking would get so low tight oil extraction would grind to a stop. So I’m not sure why the US would be a party to such an idea. Also SA claims to need about $100. a barrel to meet fiscal needs, so that big of a drop in price would be quite a shock to their finances.”

        It is really strange position. Price scissors are in progress for many countries. I don’t get the logic behind such moves, especially considering IOC’s cash flows, rising capex and upstream break-even.

        Interesting paragraph in Bundeswehr peak-oil report from 2012, below. Sorry for this long quotation. Based on these assumptions from this analysis I still can’t recognize who is having alliance with whom. And how are they trying to prolong BAU? These guys look desperate. I hope they are not plotting the war scenario to resolve some problems.

        “(1) Conditioned supply relationships and package deals
        In view of a decrease in production and the producing countries’ need to satisfy their own oil
        demands, it can be assumed that supply relationships would become increasingly selective,
        and thus attractive return services beyond net sales revenues would become more important
        as a criterion for selecting privileged recipient countries. Owing to this, the global oil market
        could adhere to free market rules only to a limited extent. Just as before the oil crises in the
        1970s, bilateral conditioned supply relationships and privileged partnerships would once
        again come to the fore.
        Buyers with the ability to submit appropriate offers or to meet the particular conditions
        would be in a position to undermine global market mechanisms and negotiate their own
        pricing and supply agreements. This situation could lead to an increase in package deals.
        In general, goods and services that – similar to oil – strengthen the economic power of the
        producer countries or its possibilities to exert political influence would be particularly
        suitable as compensations for such package deals. Producer countries could progressively
        demand material and/or political trade-offs that might aid them in closing their technology
        gap, in overcoming their economic stagnation or, in many cases, in emerging from their
        political isolation. In international negotiations, for example, importing countries that are
        represented in relevant bodies like the UN Security Council could act as an advocate for the
        interests of countries that are rich in resources and influence or block relevant decision
        processes in their favour. Even though such “deals” can be observed already, this trend might
        grow considerably. With regard to important oil-producing countries such as Sudan and Iran,
        China, for example, is already under suspicion of preventing sanctions and thus protecting
        the regimes in Khartoum and Tehran by its voting behaviour in the UN Security Council.
        Goods that cannot be freely acquired on the international market, possibly including even
        nuclear material, would be of particular interest for package deals. As a result of the
        significance that these sensitive goods would presumably gain, sanctions and restrictions
        with regard to these goods might be weakened, and alongside oil-exporting countries this
        would lead to a betterment in the international system of countries offering these goods.
        Importing countries could face another challenge if ideological aspects and differences also
        played an increasingly important role in the choice of selective oil supplies and privileged
        partnerships. Relations among oil-importing countries would not be characterised by straight interdependences, but would instead be in danger of being drawn even more into the
        slipstream of competition for limited resources (in this case, oil) as hitherto.

        (2) Intensifying energy diplomacy
        Investing in oil fields that are not profitably recoverable at current market prices does not fit
        in with the logic of private-sector actors. In view of the strategic goal of securing access to
        energy resources, countries could fill this gap in the private sector today with subsidies thus
        indirectly acquiring exploration rights in third countries. Such a strategically motivated
        energy policy is considered relatively cost-intensive today. On the one hand, investment
        decisions might possibly be made that would not have been made under purely private-sector
        conditions. Exploring newly discovered deposits may thus meet the demand, but exploration
        costs are often higher than the market price. On the other hand, hardly assessable political
        costs may be generated, for example by cooperating with regimes that are perceived as
        politically problematic by predominantly Western countries. However, peak oil would cause
        an increase in the market price which would make such state interventions more attractive.
        This calculation could thus change in favour of threshold countries that are already
        expansionary in terms of resource policy.
        The more this kind of resource security is perceived as a mercantilist zero-sum game (in
        which, given the absence of functioning market mechanisms, one country loses when the
        other wins), the more energy diplomacy, i.e. foreign policy activities in the service of national
        energy interests, would come into focus. It is debatable if China does pursue a neomercantilist
        approach with its external energy policy, as is often claimed. In view of peak
        oil, the spread of this point of view in energy policy would be a plausible development if, as
        described above, the amount of oil traded on the free market decreases relatively. Although,
        in light of peak oil, strengthening market forces and thus increasing the distribution
        efficiency of rare resources should be in the interest of the international community, the
        moral hazard behaviour known in this context would have to be expected for individual
        actors.
        Resulting uncertainty shared by all actors could have negative consequences for contractual
        fidelity and reliability in international energy relations. To protect oil supplies, for exampleby bilateral agreements, the intensification of secret diplomacy also seems plausible. In view
        of the developments outlined above, free and transparent access to national energy resources,
        to markets and to the trading of energy services would become increasingly difficult.
        Geopolitical implications: New strategic alliances and power shifts within
        international organisations
        With new strategic alliances such as the Shanghai Cooperation Organisation or the Gas
        Exporting Countries Forum, some geopolitical upheavals are already looming. In the face of
        peak oil triggered increased rivalry situation for oil and the rise of important threshold
        countries, this could not only contribute towards the formation of a countervailing power
        against Western organisations and the US as a regulatory power but also affect the supply
        security of Western industrialised countries.
        The growing number of countries that presumably have no more oil available or must or wish
        to consume their available oil exclusively for their own needs within the reviewed period
        could also bring changes to OPEC’s role and composition. Conceivable would be an
        accelerated drop out rate of countries that have reached and far exceeded their peak oil as
        well as the admittance of new members that could in future exploit non-conventional oil
        reserves such as heavy oil, extra-heavy oil, oil sands or oil sheal.
        Owing to the economic rise of large threshold countries and the accompanying increase in the
        global shaping will , continuous adaptation as to memberships, contribution, and voting
        weights are expected in international organisations and multilateral associations.
        In this context, countries such as Russia will be able to further consolidate and even increase
        this gain in influence due to their own wealth of resources because, against the backdrop of
        peak oil, gas in particular will rapidly become increasingly important for global energy
        supply.83 While wealth in natural resources alone does not yet make an influential
        international actor, it can be assumed that, against the backdrop of peak oil and under
        certain conditions, control over energy could increasingly be transformed into global shaping
        power and determining influence on international rules.
        As explained above, this applies even more the more successful the producer countries’
        national oil companies are with regard to the already evolving process of vertical integration of other value-added chain components in the oil sector and the smaller the
        share of oil traded on the global oil market becomes. As a conditio sine qua non for
        expanding economic supremacy, energy becomes considerably more important for global
        power shifts in the international system in light of peak oil.”

        From http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf

        • Stilgar Wilcox says:

          “Price scissors are in progress for many countries. I don’t get the logic behind such moves, especially considering IOC’s cash flows, rising capex and upstream break-even.”

          I agree kesar, particularly because as a world body every drop of oil that can make it to market is in the best interest of all governments, and is further illustrated by the very interesting quote.

          #1 is explaining how as time goes on oil becomes more scarce, negotiations for oil will take on a greater spectrum of important considerations.

          #2 is accepting that potential oil sources deemed unprofitable by the private sector will none the less need to be exploited via government intervention.

          #1 points out an inevitable trend, and #2 makes sense, except there is no way to get away from diminishing returns. If the source is deemed unprofitable by the private sector, how are governments going to derive much net energy from tapping it? It kicks the can down the road, but the predicament just gets more pronounced.

          • mooosstt says:

            Stilgar, I think the government has many options how to extract unprofitable resources. So far they play along the market rules, but one day when it won’t work anymore there will be plenty people working just for food and shelter, for repaying their college debts/mortgages or just to stay alive (i.e. not going to war on the opposite side of the globe – to keep oil pumping out there). Ask Stalin – find a man and we will find a paragraph on him – how he built the transsiberian railway. Peoples lives will be cheap again.

        • I don’t think that the people who wrote the Bundeswehr peak-oil report from 2012 really got the story correct. I can perhaps, for a while, see some parts of it–bilateral agreements that include helping with technology in return for oil production, for example, or grain for oil.

          But the writers have the same wrong idea about oil prices rising as most others. They don’t talk about the many broken supply lines that will make technology of any kind impossible within a rather short period, simply because technology uses so many resources from so many parts of the world. For example, I understand that a computer uses almost all of the elements of the periodic table. Recycling is not likely to produce a very big share of the materials that went into the computers, and it requires energy as well. Governments are likely to break up–something that is not mentioned at all.

          • kesar says:

            I don’t see the process of collapsing so fast. Between the system dynamic’s ‘tipping point’ and the complete destruction of governemental administration it will be years, IMO. Computers don’t break every day. There is some resilience and redundancy in the system. The governements can do a lot of things done in the past: change/devalue the currency, introduce martial law with all the consequences, ration food and medication, force people to work in strategic sectors of economy, etc.

            It will work until it won’t, but nevertheless it will be years, not weeks or months, as some claim here. Before that there will be a choice between implosion (revolution/change of the elites) or explosion (war conflicts). You say ‘financial systems will break prior to any other risk humanity faces. I agree. But I also claim that people/societies will break before the system’s technical capacity to support basic civilization. Yes, we already see decomplexification curve in progress. I just see it extended in longer period of time.

            • Paul says:

              If the central banks did not ride to the rescue the global economy would have collapsed within a few days in 2008.

              When credit stops — as it did — everything stops — trade, finance, oil extraction. The world would grind to a halt very quickly — it might hold for a few days maybe even weeks… but when the markets realized the central banks were powerless there would be a deluge of selling in the markets and complete and total panic. Perhaps they could close the stock markets but BAU cannot function if financial markets across the globe remain closed for long…

              The only question in my mind would be is can the central banks ride to the rescue again?

              I am very doubtful — they are already printing tens of trillions of dollars — and failing. So if things unravel what else could they do?

              Printing money has always been the last gasp for a collapsing economy.

              Yes the stuff of BAU (autos, planes, computers, etc…) would still be around — but the life blood of BAU — the financial markets – credit systems — they rely on confidence — if that goes then the body dies.

              I would like to be wrong but when I see the central banks artificially supporting stock markets I cannot help but think they know this is their last stand. They will fire every bit of ammo they have at this right now — and when the guns are empty — the hordes will come over the walls.

            • kesar0 says:

              What central banks are doing nowadays is scary, I admit. And I wonder if they have any ammunition left in the battle. Paulson’s Bazookas are gone, Gartner TARP is gone, Bernanke ZIRP is played, Yellen’s killing the QE lately. I still think they have some last resort weapons. EU is analyzing huge investment program (700-900 b€), there is the US-EU free trade treaty, negative interest rates, etc. This is desperate, but can kick the can a few years ahead.

            • I wonder if the US (and others) could send out checks to all citizens, to help stimulate the economies and help pay back debt. This would of course add to debt, but it might delay the day of reckoning a bit.

            • kesar says:

              I really doubt it. It breaks too many written (constitutions and law paragraphs) and unwritten rules (economics principles). The financial elites won’t be happy about this either – at the end of the day it’s their capital (power and access to resources) which will be destroyed this way. I guess this is THE LAST RESORT weapon. I can’t imagine it anyway. On the other hand, beyond the tipping point we are all dum.

            • John Doyle says:

              It was Ben Bernanke himself who suggested this helicopter idea.
              But I think private debts will just be put into a Jubilee, and those who took the risks will lose out, which is as it should be. It is just possible private savers will be protected, but that won’t solve the need for the banks to be wiped out of existence. Ellen Brown says we need a public bank.
              It’s remarkable how private banking adds to infrastructure costs;
              http://www.washingtonsblog.com/2014/06/infrastructure-sticker-shock-financing-costs-construction.html

            • Paul says:

              They are already effectively doing this — with student loans, subprime auto loans etc…. this cloaks what are effectively massive stimulus policies to make them appear as if they are not give-aways that are unlikely to be paid back.

              I think if the govt sent 10k in the mail to every household that would collapse the CONfidence game…. people are thick and / or full of hopium…. and like frogs slowly coming to a boil …. but I think cognitive dissonance has its limits…

              If you say ‘here – take 10k and go nuts’ — this could set off a panic as people would see this as a signal that there is no recovery — there will be no recovery — this would alert people to how desperate the situation truly is.

              And if that happened they might actually put the 10k under the mattress….

            • I think that the new give-aways would have to be “no-strings-attached” giveaways. People have figured out that they cannot really repay the debt they already have. Adding more debt won’t help the situation. Of course, this would seem to add to US debt, unless through QE the impact was made to “go away.”

            • John Doyle says:

              Makes one wonder where all this debt goes. It doesn’t have to be paid back [as far as sovereign governments are concerned] so is it just lost to entropy?
              Certainly debt costs resources. It’s far from free.

            • kesar0 says:

              Paul,
              Please read the link below. They are trying to prepare, which says a lot.

              US and UK to play financial ‘war game’
              Britain and the US will stage the first transatlantic simulation of a crisis in a large bank on Monday. It is a sign of growing confidence that the authorities can now deal with the failure of large institutions.
              All of the main players who would need to be involved in a failure of a company such as Bank of America, Goldman Sachs, Barclays or HSBC will gather in Washington DC to make sure they would know what to do, who to call and how to inform the public.
              The move reflects the authorities’ view that they are getting close to solving the “too big to fail” problem, even for cross-border banks, outside a full-blown system-wide crisis.

            • The collapse may well take a period of years. The fuel production/consumption graph I show pretty much assumes that the collapse will take place over a period of years.

              Tverberg estimate of future energy production

            • kesar0 says:

              I see this curve a little softer. But it might be just my hopium dose considering the economic news and forecasts lately. We’ll see.

            • Paul says:

              If you asked most people around the world…. the collapse started in 2008…. so in that respect it is a slow motion collapse that worsens by the day… the only thing that keeps it from totally collapsing would the stimulus policies the world over…

              So I do not dispute the slow collapse meme…

              What I do dispute is that we eventually hit a breaking point…. and slow turns to very fast indeed.

              I suspect the fast collapse occurs soon after total global oil production peaks.

              If it were not for fracking does anyone really believe we would be here right now having these discussions?

            • ordinaryjoe says:

              “I really doubt it. It breaks too many written (constitutions and law paragraphs) and unwritten rules (economics principles).: ”
              Bush did exactly that when the crisis hit. Sent everyone who had filed a income tax return a stimulus check for about $200. Wow that was a while ago.
              The problem is that we are way beyond that now. The reason they wont “stimulate” is not because its against the law or immoral or fear of more debt or any such thing. They would do it in a heartbeat if it would buy five years of boom. There is a reason that money velocity has fell to unprecedented levels and its because they want it there. They dont want the trillions of digital money in the hands of the common folk. The common folk want to spend it not shuffle it about in between different forms of imaginary digital debt instruments.

              There is not enough real stuff available to be bought by the trillions created.

              If they “Stimulated” enough to start the heart of a dead economy or even let some of the funny money bailout bonanza hit the public, the reality of infinite fiat and finite resources would be revealed. That particular bit of reality would dissolve too much. The public must believe that at least some of their purchasing power must be able to be maintained somewhere whether in stocks or etfs or munis or cash or pensions or SS or somewhere. The second the smelling salts awaken them to infinite fiat and finite resources and people start to run for the very limited exits of real goods the gig is up. Everything dissolves. Its reality is tenuous as it is. The vacuum left by the dissolution of what is perceived as value will not be pleasant and not easily replaced with some new form of digital imagination ala SDR once the gig is up. Thats why real estate must be propped up. Thats why the markets must be propped up. The digital imaginary money must stay there, The run for the exits must be postponed as long as possible. The job of postponement that they are doing is truly masterful! Masterful!
              The idea of buying is the concept that is so deeply imbedded that it is not challenged by any part of culture or language.. If you are at a yard sale just say to the guy “oh you are buying dollars with real goods”. A look of bewilderment will follow. Genuine bewilderment. Because sure as the sun rises in the morning there will always be infinite goods available to “BUY” and money will always work to “BUY” them. Supply and demand, we are weaned on it from birth we know the taste of nothing else.

            • kesar says:

              Sorry, I missed your conclusion…

          • kesar0 says:

            http://www.ft.com/cms/s/0/1dd4bca2-508c-11e4-9822-00144feab7de.html

            They even are simulating these things. They know what’s coming.

  13. Stilgar Wilcox says:

    http://www.bloomberg.com/markets/stocks/futures/
    Futures for Monday the 14th is:
    Dow -173
    & Nasdaq -117

    That doesn’t mean come Monday they will drop that far, because between now and then it can change significantly, however I personally have never seen futures on a Saturday for Monday expecting that much of a drop. I can’t remember the last time the Nasdaq lost over a 100 points in one day should that does occur Monday. Keep in mind that on TH & F of last week the Dow lost -335 & -117 = 452 points. So after big drops like that, for Monday to be slated to drop again by a wide margin is a sign the stock market is beginning to react to world recession concerns, following the oil traders, initiating a bear market or at least a similar correction. I have a sense that this coming Monday could be a massive sell off. We’ll see…

  14. Adam says:

    Pay squeeze worst since Victorian age, study finds

    British workers are suffering biggest slump in real wages since economic crises in the 1860s and 1870s, according to TUC (Trades Union Congress).

    http://www.theguardian.com/politics/2014/oct/11/british-pay-squeeze-worst-150-years-tuc-study

    • not fazed says:

      UKIP on 25%

      ‘The 25 per cent level represents a 22-point increase on the three per cent the party won in 2010. If that increase were to occur evenly in every constituency, they could still fail to pick up a single seat.

      ‘But today’s poll suggests Ukip’s support has increased much more in the South of England outside London than it has elsewhere in the UK – by a staggering 34 points.

      ‘If that level was recorded throughout the South, Ukip could win as many as 128 seats, with no less than 102 of them coming from the Conservatives, whose vote in the region is down 14 points. In that event, Cameron would be left with just 187 seats, almost as weak a position as the Conservatives were in after their calamitous defeat in 1997.

      http://www.dailymail.co.uk/news/article-2789512/record-poll-surge-gives-ukip-25-survey-hand-farage-astonishing-128-mps-puts-ed-miliband-new-low.html

  15. Dog Whisperer says:

    Interestingly, sustained lower oil prices would mean less oil produced over the long run.

    http://www.economist.com/news/business/21623694-price-oil-has-been-tumbling-cost-finding-it-has-not-unsustainable-energy

    http://finance.yahoo.com/news/heres-why-shale-oil-stocks-200009552.html

    http://www.cnbc.com/id/102078540?trknav=homestack:topnews:2

    http://www.cnbc.com/id/102050386

    There a re some folks conspiracy theorizing that the U.S. and KSA are manipulating oil prices to punish Russia, but I don’t buy that theory.

    Hopefully the U.S. will fill its SPR.

    There are posters here and at other PO sites who insist that any oil conserved in the U.S. and Europe will simply be bought and burned up right away by the folks climbing the economic ladder and consuming more and more in China and India…if that was the case, why are oil prices falling?

    I World oil demand really weak enough to depress oil prices significantly? Does anyone here know what is going on?

    • Paul says:

      I don’t discount the Russia angle however global growth is also an issue — Abenomics has failed – and Japan is a major importer of energy (particularly since they shuttered their nukes) — China is definitely faltering in it’s efforts to pave over the entire country and fill it with ghost towns (they continue to make up numbers – but just look at commodity prices for things like copper… as well as German export numbers… those point to problems in China) — the US remains stagnant at best in spite of massive stimulus and subprime policies…. the EU of course is a dead man walking…

      The global economy is on idle and approaching stall speed – in spite of massive infusions of stimulus…

    • Supply is up a little, and demand is down (probably lack-of-debt related). It doesn’t take a very big mismatch for prices to drop, especially if Saudi Arabia is offering oil on the market cheaper than others.

  16. Sylvia says:

    http://www.cnbc.com/id/102078976

    Article which illustrates the relationship of debt and oil prices and sustainability of a shale company. Maybe someone already mentioned it here, apologies if redundant. .

  17. Don Stewart says:

    Dear Gail and All
    One of Albert Bates’ colorful neighbors, Adam Turtle:
    https://www.youtube.com/watch?v=UoO21fUf4b8

    One of the things that is interesting in the video is how Turtle sounds very much like Masonobu Fukuoka…one has to be spiritually grounded in order to find one’s way in our crazy world, as well as in one’s garden.

    Supposing that one can find a spiritual ground to stand on, then David Kennedy offers this observation in Eat Your Greens:

    ‘Brokering a peace between the city and the wilderness, gardens offer a miniature template of how we might just be able to get along with the world. The complex interface that gardens create between a person and a place allows for the emergence, albeit on a tiny scale, of uniquely customized terrains. One of the best things about gardens and gardeners is that no two are alike.

    …I am convinced that there isn’t any can’t-fail, foolproof method. Fools are just too persistent to be continually outwitted.’

    Don Stewart

    • jeremy890 says:

      Thanks Don for the video of Adam Turtle. believe it or not, I remember him from decades past at Permaculture gatherings and his musings are always worth listening. He established a Bamboo nursery/ study site at his place in Tennessee. I am not sure if his publication is still being issued on Bamboo.

      • Don Stewart says:

        Dear jeremy890
        This may add a little to what you already know, and may be a wake up call to some of the doomsters.

        Brian Little, from Cambridge, has written a new book Me, Myself, and Us: The Science of Personality and the Art of Well-Being. One of the points he makes, on pages 128-9, is that measures of stress are only half the story. Those who experience stress but also have a high degree of control, commitment, and challenge in their personality, can do fine. You may remember my posting a link a few weeks ago to Kelly McGonigal’s TED talk about the new research on stress which indicates that a person who experiences stress, but approaches it with a positive mental outlook, my live long and prosper.

        The second reference is in the book The Best American Science and Nature Writing (2014), edited by Deborah Blum. On page 19 she reprints The Social Life of Genes. A few items from the article.

        Domestic honey bees and killer bees are closely related, but their behavior is very different (chimps, bonobos, and humans?). Some researchers opened hives of both kinds of bees in Mexico and switched some of the juvenile bees to the opposite kind of hive. They repeated the action over several weeks. Then the flash frozen brains of the bees were sent to the U of Illinois for analysis. The object of study was the genes which were being expressed…’genes don’t make you who you are. Gene expression does.’ The accepted wisdom at the time was that environment brightens or dims only a few genes at a time. But the study showed that gene expression changed quite dramatically in a short period of time. The killer bees began to act like honeybees and vice versa in response to environment…and the maps of gene expression clearly showed the difference. ‘These bees didn’t just act like different bees. They had pretty much become different bees….this spoke of a genome far more fluid–far more socially fluid–than previously conceived.’

        Researchers at Duke found that a female zebra finch bird’s genes changed within 15 minutes of hearing a mating call as opposed to a territorial call from a male zebra finch. Similar fast reactions have been observed in digestion and immunity.

        In 2005, a scientist was studying cichlid fish. Normally there is a dominate male who is brightly colored and very large who gets an inordinate amount of the food, territory, and sex than even the number two male. But, in the dark of night, the scientist removed the number one fish. When the light returned, the number 2 fish almost immediately changed into the dominant fish. His gene expression changed dramatically, and he became colorful and 20 percent larger very rapidly.

        There has been an explosion of interest in epigenetic factors and long term influences, such as children who were conceived during the terrible winter of 1944-5 in Holland, or children of drug addicts. But more recently, we have come to see that gene expression can change very rapidly in response to environment: ‘our social lives can change our gene expression with a rapidity, breadth, and depth perviously overlooked.’

        The concluding story includes the work of Steve Cole at UCLA. Cole extracted genetic material from 8 socially secure people and 6 socially insecure people. The patterns of gene expression were startlingly different.

        In Chicago, a similar study showed that lonely people have a disabled inflammatory response. In a well-adjusted person, the immune system both stimulates inflammation to deal with the intruder, and also activates an anti-inflammatory response to keep the inflammation under control. In the lonely people, the anti-inflammatory genes were silenced…leaving them to suffer the ravages of uncontrolled inflammation.

        Cole: ‘We typically think of stress as being a risk factor for disease. And it is, somewhat. But if you actually measure stress…, it can’t hold a candle to social isolation. Social isolation is the best-established, most robust social or psychological risk factor for disease out there. Nothing can compete.’

        In another study, Cole and colleagues teased apart the effects of income disparity and framing. Some poor children are able to frame ambiguous situations appropriately and thrive. Some rich children are not able to frame ambiguous situations appropriately and develop diseases.

        In a study of severely abused children, who also have a particular variant of a serotonin transporter gene which is associated with mental health problems. The study found that one contact per month with a trusted adult outside the home reduced the risk by 80 percent.

        Cole: ‘Two people may share the same environment but not the same experience. The experience is what you make of the environment….And you can shape all this by how you frame things. You can shape both your environment and yourself by how you act. It’s really an opportunity’.

        Compare the above science to many of the uber-doom slogans endlessly repeated on this blog.

        Don Stewart

        • jeremy890 says:

          Thank you Don, very interesting.
          I remember Adam Turtle telling a tale about how his troupe of Hippies from California arrived in the deep South with the superior attitude and hangups. The ones that dropped out were folks that could not relate to the locals, thinking they knew it all. He took the position, that he did not know it all, and listen to his neighbors and others in the surrounding communities. I still recall his line. “That guy might just have the one thing you need in his head to keep you alive, just listen and don’t judge”. the discriminating mind is the roadblock

  18. Paul says:

    Saudi Arabia to pressure Russia, Iran with price of oil

    Saudi Arabia will force the price of oil down, in an effort to put political pressure on Iran and Russia, according to the President of Saudi Arabia Oil Policies and Strategic Expectations Center.

    Saudi Arabia plans to sell oil cheap for political reasons, one analyst says.

    To pressure Iran to limit its nuclear program, and to change Russia’s position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America, says Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center. The marked decrease in the price of oil in the last three months, to $92 from $115 per barrel, was caused by Saudi Arabia, according to Abanmy.

    With oil demand declining, the ostensible reason for the price drop is to attract new clients, Abanmy said, but the real reason is political. Saudi Arabia wants to get Iran to limit its nuclear energy expansion, and to make Russia change its position of support for the Assad Regime in Syria. Both countries depend heavily on petroleum exports for revenue, and a lower oil price means less money coming in, Abanmy pointed out. The Gulf states will be less affected by the price drop, he added.

    The Organization of the Petroleum Exporting Countries, which is the technical arbiter of the price of oil for Saudi Arabia and the 11 other countries that make up the group, won’t be able to affect Saudi Arabia’s decision, Abanmy maintained.

    The organization’s decisions are only recommendations and are not binding for the member oil producing countries, he explained.

    More http://www.zerohedge.com/news/2014-10-10/why-oil-plunging-other-part-secret-deal-between-us-and-saudi-arabia

    http://www.zerohedge.com/news/2014-10-10/oil-weapon-new-way-wage-war

    • edpell says:

      Producers have long term fixed price agreements. The spot price is not the price everyone pays.

    • Creedon says:

      I have been suspicious that the price of oil is being manipulated down by the PTB. At some point there is the danger that the manipulations will back fire on the un-intented party.

    • I am having a hard time believing the US is collaborating with Saudi Arabia on the oil price drop. There are too many other prices dropping. We aren’t on all that good terms with Saudi Arabia. Saudi Arabia will put their own interests first, I expect.

  19. edpell says:

    I have been studying and doing research into cold fusion over the last two years. I would not get too excited by the report. There are many concerns about the method of calorimetry used in this study.

  20. Shuffling Along says:

    This article is sobering:

    ‘Here’s why shale oil stocks are tanking’

    http://finance.yahoo.com/news/heres-why-shale-oil-stocks-200009552.html

    KSA’s and Russia’s stock may be going up…

    The mirage of U.S. energy independence is evaporating…Gail, you will be proven correct…much of the F’s will stay in the ground.

  21. VPK says:

    Cold Fusion looks like a GAME CHANGER:
    http://fcnp.com/2014/10/09/the-peak-oil-crisis-cold-fusion-a-new-report/

    The report concludes: “In summary, the performance of the E-Cat reactor is remarkable. We have a device giving heat energy compatible with nuclear transformations, but it operates at low energy and gives neither nuclear radioactive waste nor emits radiation. From basic general knowledge in nuclear physics this should not be possible. Nevertheless we have to relate to the fact that the experimental results from our test show heat production beyond chemical burning, and that the E-Cat fuel undergoes nuclear transformations. It is certainly most unsatisfying that these results so far have no convincing theoretical explanation, but the experimental results cannot be dismissed or ignored just because of lack of theoretical understanding.”

    How fast this technology will be adopted is still an open question. Obviously it has the potential to replace most uses of fossil fuel, giving a massive boost to the global economy, and stopping nearly all carbon emissions if universally deployed. So far the U.S. and other governments seem to be holding to a position that this cannot be possible despite credible test results. Rapid deployment of this or a similar technology would, of course, be one of the most disruptive events in industrial history and would obviously meet resistance.

    • Paul says:

      I bet you it is not – I bet you if you asked a scientist with expertise in this area they would tell you it is not.

      How do I know that? Because if it were then when I open up an MSM site this would be a massive headline — kinda like how fracking was a big fat headline (and it wasn’t even really a game changer)

      And even if it were a game changer providing virtually unlimited free and clean energy — let’s think that through…

      We had enormous amounts of nearly free energy about 200 years ago — as we all know that resulted in a massive population spike — and this enormous population has chewed through the earth’s resources at a huge clip — we have water shortages, fish stocks depleting, wildlife being wiped out etc etc etc…

      And you are suggesting the solution is more cheap energy?

      It may seem as if it is — but in reality all it would do is push the can a little further down the road

      I am not sure why people keep posting these ‘solutions’ — there are no solutions when you have a system that MUST have infinite growth — and you live on a finite planet…

      The only ‘solution’ is for most of the 7B+ humans to be wiped out.

      • John Doyle says:

        Yes. Kicking the can down the road as you suggest cheap energy will do is not dealing with all the other resources coming to peaks at this time,or soon to do so.
        The best idea is for a “correction” to begin as soon as possible. At least we save some “furniture” for the future restart.

      • ordinaryjoe says:

        “The only ‘solution’ is for most of the 7B+ humans to be wiped out.”
        Well another solution would be for humans to start to feel, genuinely feel the effect their consumption and in particular the effect increasing population has and change their behavior. Paul dont start wailing and gnashing your teeth about how that would crash everything we have gone round that loop before. This thing we call consciousness is a unique trait but proving incomplete. The possibility of a leap forward- evolution -does exist. Evolution, divine intervention, a miracle there is a possibility. Most humans dont change, whatever there deplorable habits they keep them to the bitter end but once in a blue moon they do.

        Our species might change.

        There is a possibility.

        No I dint fill my cup with koombyah absinthe tonight. Based on our understanding AS WE KNOW IT NOW I agree with you “wiped out” is the most likely scenario. Paul you would be the first to point to our species limitations in terms of actions and understanding. Our understanding now is certainly not complete. That includes me and yes Paul is it possible it includes you as a member of the species or are you exempt? We know we are not what we were. Even within our lifes as individuals we can look back to our childhood when we were not what we are now. What we will be is
        1. more appropriate in terms of relationship to the planet
        2. or extinct.

        • Paul says:

          The planet cannot support anywhere near 7.2B people … when the oil stops… most — possibly all — will die.

          There is no way around this.

          • ordinaryjoe says:

            Unless my math is wrong if every two people voluntarily only have one child population will decrease. That this will happen seems very unlikely.

            • Paul says:

              Even if that happened it is not a solution. That would lead to a deflationary death spiral and the collapse of the global economy.

              A population reduction is not a solution.

              Consuming less is not a solution.

              Using less oil is not a solution.

              A new free and cheap energy source is not a solution.

              There is NO solution.

              The hamster must not only keep running — he must run a little bit faster every single year.

            • ordinaryjoe says:

              “A population reduction is not a solution.

              Consuming less is not a solution.

              Using less oil is not a solution.”

              If you would clarify something for me Paul please. Above you criticize “hipsters” for consumption. Yet here you stand in opposition to consuming less- which you have been very consistent in opposing. Your opposition to consuming less is also consistent with your actions, energy use traveling around the world, purchasing multiple bunkers, is New Zealand number 3 ? 4? and god knows what else.

              My question is this. If you are in opposition to reducing consumption why are the tesla buying hipsters subject to criticism? Is it that consumption is only desirable by those that believe “not a solution” ?. That percentage of human population is very tiny indeed so that cant be it. as “That would lead to a deflationary death spiral and the collapse of the global economy.” Im really curious. If you would favor me with a response I would appreciate it. How is it that you can advocate consumption yet ridicule “hipster” consumption? How is one consumption to be applauded yet another derided? Would not applauding all acts of consumption especially large ones be more consistent with your position? I think I know the answer . You support the act of massive consumption by individuals, all of them, from the common hipster to Jamie Diamonds Lamborghini’s but deride the philosophy on which the consumption is based. Is that correct? If Jamie Diamond was to start blogging as a Doomster here his consumption would no longer be subject to criticism. Is this correct?

            • Paul says:

              The reason I mock the hipsters is because they think that by driving a Tesla or a Prius they are saving the world.

              Now if one of these people were to say he unloaded his perfectly good petrol fueled car and bought a Tesla because he thought it was a cool car — and he needed to do his part as a consumer to keep the hamster running — I would have no problem with that.

              In fact I would applaud him!

              As I have stated I hope people will consume as much as possible – not because I agree with pointless consumerism…

              It is because if we slow down our consumption the global economy will collapse into a deflationary spiral. And that means billions die. Do you want billions to die? If not then you need to spend.

              Imagine if most people decided flying places on holiday was a waste of energy and bad for the environment.

              The airlines would collapse. The hotel industry would collapse. All sorts of other tourism businesses would collapse. Millions would be out of work … etc etc…

              Now imagine if people decided to only own two pairs of pants and 3 shirts — and to replace them only when those wore out… retails implodes, factories implode, shipping implodes … millions of jobs would be lost.

              This is not really a difficult concept.

              Consumption cannot stand still – it MUST grow — either by each of us buying more — or by new consumers entering the malls….

              A reduction in consumption = collapse.

              Whether your like it or not (I certainly don’t) that is the harsh reality.

              I laughed at George Bush when he said ‘everyone go shopping and things will be alright’ — but I know understand that his minders were right in having him say that…. shop or die….

              So off to the mall with all of you …

            • Unfortunately, there is truth to what you are saying. Reducing consumption, when demand is already too low, doesn’t really get us anywhere.

            • Gail – You have made a fatal error. Reducing consumption is not about making an impact on the system. It is about reducing consumption so there is more left for other people. The relevant soundbite is, “Live simply so others may simply live.”

            • Paul says:

              Unfortunately it doesn’t work that way. Oil usage correlates tightly with economic growth – i.e. dropping oil consumption would mean recession.

              Recession means fewer jobs — less consumption – which means more layoffs — even less consumption – less taxes paid so services get cut…. and you get an economic death spiral.

              As for the oil that does not get used because the economy is collapsing because there is no growth — well that oil will stay in the ground because the price of oil would plunge to a level where oil companies could not turn a profit from pumping it…. so they go bust …

              And all that oil that’s left for future generations — will never see the light of day.

              Gail is right.

            • In any given year, a certain amount of goods and services will be produced, using resources of various types. It takes a working economic system to produce these goods and services.

              There is a grain of truth in what you say. If we buy a Prius in 2007, it will allow someone in China or India to have more oil, so that they too can have some first world luxuries, like motorcycles. So the slogan is sort of right–perhaps the slogan should be, “Share your luxuries with third world countries.”

              The problem comes as we approach collapse. It takes more consumption, not less, to put off collapse, because the problem is lack of affordability. Once collapse comes–say in 2015 or 2016–the amount of goods and services produced will be way down. The extent to which they are down reflect the extent of collapse, not the extent of your or my cutting back. Once collapse comes, just getting basic food, clothing, and housing is likely to be a problem. The question then becomes how those limited resources are allocated. Is the solution, “Might makes right?” “or, “Live on 1200 calories a day, so that others can have their 1200 calories?”

              Clearly, 1200 calories is just going to delay the inevitable a little while. In fact, spreading the calories around may mean that no one can live. Those who live need enough calories to eat (plus enough fresh water, and enough fuel for cooking their food, and enough heat to keep warm). Nature’s way, permitting the selection of the best adapted to current conditions to live, might in fact be the best way.

            • You are spinning my point into logically absurd territory. Americans consume about 3800 kilocalories per day in their diet, wasting around 1100 and still eating around 2700. This is more than dietary requirements – 2500 for males and 2000 for females, or an average of 2250 since the population is roughly 50/50 males/females. Those of us preaching conservation and reduction in resource use for the past 45 years have never advocated starving ourselves, just reducing our energy intake. This can be accomplished by several means – going vegetarian or just cutting back on energy-dense meat.

              Your sentence: “The problem comes as we approach collapse. It takes more consumption, not less, to put off collapse, because the problem is lack of affordability.” This is the crux of the matter. You are heavily invested in the present system and so it is natural that you think in terms of preventing collapse. We will not be able to prevent recession, then depression and then collapse, no matter what we do. As some wags are now saying, “Collapse now and avoid the rush.”

              My farming methods are adaptable and certainly could be used to feed a lot more people than is possible with industrial agriculture. But the whole political and economic system would have to change and that is just NOT going to happen. So there we are. All roads leave to die-off. Giving people false hope is a sini.

            • I really don’t care to “Collapse now and avoid the rush.” There is too much chance this will lead to a permanent end. Putting off collapse is important.

            • Paul says:

              I think that anyone who can’t wait for this collapse to happen — will think differently when this hits.

              We have all seen pictures of the Depression — imagine that — but 1000 times worse — with no hope of a recovery.

              There will be no jobs.

              There will be no production of pretty much everything we take for granted.

              There will be mass starvation – mass disease – mass suffering.

              Billions will die. Possibly everyone.

            • ordinaryjoe says:

              I took your advise Paul! I bought a half gallon of soy sauce and a bag of apples today. 🙂
              I afraid we are in different camps on this,( as we both know). Were heading toward a brick wall. Impact is unavoidable. You say hit the gas I say try to brake. I think the difference may be is I hold the manifestation of a radical and rapid change in our species outside of our experience to be a possibility. I see radically reducing consumption as working toward a catalyst for a pivotal event. Perhaps I have a bit of koombyah in me after all. Is it correct that you see no possibility for a pivotal event that has occurred long ago but not in recent history along the lines of the concepts we know as evolution or divine intervention occurring? Have you never experienced anything in your life that would correspond to those concepts?
              Another difference may be that I just dont have the amount of wealth you have, If I had a million or even a half I imagine it would be much harder to keep to my practice of radically reducing consumption. In fact Im afraid if I had a million or so I would succumb to acts of large consumption.
              It also occurs to me that perhaps my ideas are as conflicted as yours. I have a rather poor opinion of those who feel that some religious entity will save us and our “way of life” a euphemism for consuming everything in our path. Yet I still believe that our consciousness, nature, and the life that inhabits this planet along with the planet itself has possibilities outside of what we know now. Perhaps we are irredeemable and will be scrapped. Perhaps we can be salvaged with a serious tweek or two.

            • Paul says:

              Joe — when I release an apple from my hand – it drops. 1 + 1 = 2 … always has. If I put my hand into the fire it will hurt.

              Slowing consumption will collapse the global economy and result in the death of billions. I see no silver lining on what you are suggesting.

              Some things just are.

            • I agree with you Joe. There is a lot we don’t know about the future. It is possible things will change in ways we can’t imagine.

            • ordinaryjoe says:

              “Joe — when I release an apple from my hand – it drops. 1 + 1 = 2 … always has. ”
              Ah a student of science. I have great fondness for science as it is based on natural law.

              “If I put my hand into the fire it will hurt.”
              Pain is a great teacher.

              “the global economy”
              Please dont mix faux imaginary science with legitimate natural science. Will you be quoting INGSOC next?

      • VPK says:

        Paul, don’t blame me…I am only posting the message.
        Obviously, you are correct. So is Stewart Brand of the Whole Earth Catalog. He said as soon as you go to the hardware store and purchase a shovel for your garden, you are knee deep in BAU.
        So are you Paul, so be careful what you wish for, as you always warn. You may very well be one of the first 7 Billion. As for myself, I don’t really mind at all. I told folks I refuse to kill to survive. I don’t care what my DNA has programed. Maybe ten years ago, before I hit fifty, but now approaching sixty…sorry….I had it made in the shade.
        As I report the Powers are going to surprise us all. You will see

        • Paul says:

          I am increasingly doubtful that the PTB have anything further up their sleeves… when you resort to money printing historically that has been the end of the road…

          I hope I am wrong.

      • alturium says:

        Hmmm…notice the last paragraph “Policymakers should note that the Chinese are well aware of this technology and are already in a contractual relationship with Industrial Heat to exploit it. If Washington is not ready to lead the world into the next age, then Beijing almost certainly is.”.

        Gee, that certainly sounds like a threat and speaks volumes for the article’s purpose. Maybe we can get the Chinese to invest in fracking?

    • ordinaryjoe says:

      Ohh the e-cat MREEEEEEOOOW.
      1/3 the people will swear that this is the gospel truth unlimited free energy
      1/3 of the people will swear its a commy plot
      1/3 of the people just dont give a frack

      Sorry new pivitol technologies is the last thing this species needs in its present form.

      • VPK says:

        Cold fusion reactor verified by third-party researchers, seems to have 1 million times the energy density of gasoline
        http://www.extremetech.com/extreme/191754-cold-fusion-reactor-verified-by-third-party-researchers-seems-to-have-1-million-times-the-energy-density-of-gasoline

        The researchers observed a small E-Cat over 32 days, where it produced net energy of 1.5 megawatt-hours, or “far more than can be obtained from any known chemical sources in the small reactor volume.” The researchers were also allowed to analyze the fuel before and after the 32-day run, noting that the isotopes in the spent fuel could only have been obtained by “nuclear reactions” — a conclusion that boggles the researchers: “… It is of course very hard to comprehend how these fusion processes can take place in the fuel compound at low energies
        …..
        To put this into perspective, the E-Cat tested by the researchers has an energy density of 1.6×109 Wh/kg and power density of 2.1×106 W/kg. This is orders (plural) of magnitude higher than anything else ever tested — somewhere in the region of 100 times more power than the best supercapacitors, and maybe a million times more energy than gasoline. In the words of the researchers, “These values place the E-Cat beyond any other known conventional source of energy.”
        This Bud’s for YOU!

        • Paul says:

          And why don’t I see this on the front page of the NYT… or any other MSM?

          This surely is right up there with ‘AND JESUS CHRIST 2 APPEARED IN LONDON THIS AFTERNOON’

          That said, I do wish this were real — because I would love to get another 30 years of BAU.

        • ordinaryjoe says:

          Producing about 100 watts of energy net an hour with 50 watts input( electric?) according to the link. These are very hard amounts of heat energy to measure. . Accuracy isnt really needed here what is needed is confirmation of gain. What was the means of calorimetry Ed Pell? Usually the way calorimetry is done is to dump the heat in a larger known volume of water and measure heat rise. It could be real. It could be another green scam. Stilgar PDF wouildnt load for me file corrupted.
          Sarcasm hat back on.

          E -cat definitely proves that we are the most special mama jamas evah. Im going down to target to shop to celebrate. Onward to 20 billion population! It is our destiny!

      • Paul says:

        That said… we are doomed no matter what … so a new source of energy is exactly what the doctor ordered… if a cheap source of energy can take the pressure off of oil that would help kick the can further… and I get to LIVE – we call get to LIVE!!!!

        Of course it changes nothing in terms of the macro picture… a finite world is… finite

        • Stilgar Wilcox says:

          Since the world economy has to constantly grow or it will collapse, would the E-Cat in the near term simply be another energy source added to the other energy source categories, not necessarily replacing very much FF? It’s a poignant question, because it starts to become a race to see what comes first – large scale deployment of E-Cat’s or collapse from the momentum of diminishing returns from oil. We’re talking about an incredible amount of infrastructure change. For one, how is the E-Cat going to work for transportation? It produces heat, so do we then put one in a car, hook it up to a steam tank, turn a turbine and charge a bank of batteries? But then we have to keep filling up with water? Doesn’t that put yet another burden on water supplies? Or do we replace ICE’s with EV’s that get powered by E-Cat utility power plants via the grid? Keep in mind all this has to take place while the economy is continuing to be stretched via diminishing returns on oil. Is there time for the transition? – are there the resources for that many EV’s available? – is the economy’s available capitol sufficient to build in a whole new infrastructure? – are the automotive companies willing to make this big of a change? On the surface it seems simple – evidently the E-Cat works per the results of the independent study, but how does it shake out? That’s the big question.

          • N. George says:

            Guys….Relax …The all Rossi Focardi E-cat thing is a scam. I have been following the news about this thing since 2010 when it first came out….The scam has a long history of contradictory declarations, lack of scientificall deep tests moreover, the “savior”-engineer Rossi has a long history of a fraud in his past (one called Petrodragon was a presumptive technology that claimed it can transform toxic substances in oil, with net energy gain) and he served some years in prison because of that.

            I am an engineer, I work in Middle East for oil&gas industry and I have worked in the past for nuclear industry. If you really want to know what is the “secret” thing that can save humankind from total collapse, and bring some hope for a gradual reduction to sustainable levels, is the nuclear fission in gen IV fast reactors with complete uranium cycle….like IFR..
            It is a proven technology by EBR II, Phenix and BN 600, therefore US, France and Russia have broken the code….the rest of the world will probably spectate their future energy prosperity behind the fence while enjoying some “solyent green” soup…

            • Stilgar Wilcox says:

              Thanks N. George for the heads up on Rossi’s past. Petrodragon, bet he had fun making that one up.

            • VPK says:

              Dr. James Hansen has been a big promoter of the new generation fusion reactors to curb emissions. I’ve been following this since at least 2007. Seems that it will be too little, too late. The forecasts still show the vast energy used will come from fossil fuels.
              I suppose we can wish all we want for a miracle solution.

            • Paul says:

              A replacement for oil would be a miracle solution?

              I don’t see that as a solution at all — all it would do is kick the can down the road a bit further — until we ran out of some other critical resource.

            • VPK says:

              Paul, I’ve been even hearing on NPR about the development of “mini nuclear power plants” that will be fast tracked production on assembly lines and able to be self contained. A lot of pie in the sky ideas running out there.

  22. Paul says:

    http://www.aljazeera.com/indepth/inpictures/2014/10/pictures-decline-philippine-tun-201410693837628541.html

    http://www.huffingtonpost.com/2014/09/30/wildlife-population-decline_n_5905834.html

    http://www.zerohedge.com/news/2014-06-19/25-shocking-facts-about-earths-dwindling-water-resources

    BUT!

    If I prance about in a Tesla with a cravat round my neck as I race silently to the Whole Foods Store to sip my low fat latte, read the Huffington Post on my latest generation iphone, then purchase those delicious organic mangoes from the Philippines and the succulent mussels flown in direct from New Zealand…..

    The world will be saved.

    Koombaya my lord, Koombaya…. (while thumping on my $2500 drum imported from the Congo and made from the penis skins of 150 young antelope) … Koombaya…

    • not fazed says:

      I will keep the car LOL

      • not fazed says:

        http://gas2.org/wp-content/uploads/2014/04/jay-z-tesla.jpg

        (WordPress really need to sort out their image code. Videos yes, images no. What?)

        • not fazed says:

          Ode to easier images on Gail’s blog

          To see a World in a Grain of Sand
          And a Heaven in a Wild Flower,
          Hold Infinity in the palm of your hand
          And Eternity in an hour.

          A Robin Redbreast in a Cage
          Puts all Heaven in a Rage.
          A dove house fill’d with doves and pigeons
          Shudders Hell thro’ all its regions.
          A Dog starv’d at his Master’s Gate
          Predicts the ruin of the State.
          A Horse misus’d upon the Road
          Calls to Heaven for Human blood.
          Each outcry of the hunted Hare
          A fiber from the Brain does tear.

          He who shall train the Horse to War
          Shall never pass the Polar Bar.
          The Beggar’s Dog and Widow’s Cat,
          Feed them and thou wilt grow fat.
          The Gnat that sings his Summer song
          Poison gets from Slander’s tongue.
          The poison of the Snake and Newt
          Is the sweat of Envy’s Foot.

          A truth that’s told with bad intent
          Beats all the Lies you can invent.
          It is right it should be so;
          Man was made for Joy and Woe;
          And when this we rightly know
          Thro’ the World we safely go.

          Every Night and every Morn
          Some to Misery are Born.
          Every Morn and every Night
          Some are Born to sweet delight.
          Some are Born to sweet delight,
          Some are Born to Endless Night.

          • not fazed says:

            “Worlds” are “interconvertible” depending on the way that history goes. This world and my own existence is a hypothesis dependant on the intelligence limited and the decisions (or not) determinate of people. Reality is more or less random with a few natural laws chucked in occasionally for better or for worse,

        • Agreed. I can put up images though.

          Tesla

  23. Paul says:

    Fracking Firms Get Tested by Oil’s Price Drop

    Further Declines Risk Making Expensive Shale Drilling Unprofitable

    Tumbling oil prices are starting to frighten energy companies around the globe, especially drillers in North America, where crude is expensive to pump.

    Global oil prices have fallen about 8% in the past four weeks. The European oil benchmark closed Thursday at $90.05 a barrel, its lowest point in 29 months. The price of a barrel in the U.S. closed at $85.77, its lowest since December 2012.

    http://online.wsj.com/articles/fracking-firms-get-tested-by-oils-price-drop-1412899027

  24. Don Stewart says:

    Dear Gail and All
    Here is a wonderful video from Geoff Lawton showing the potential in the Sonoran Desert near Tucson, AZ:

    http://www.geofflawton.com/fe/73485-an-oasis-in-the-american-desert?r=y

    The video begins with an examination of the dead end facing the current system, and examples of the gross waste of water which characterizes the American Southwest. Then we see historical footage of the construction of swales during the Depression. Now neglected for 80 years, the swales have created a sort of paradise in the midst of relatively unproductive desert.

    Geoff points out two shortcomings:
    A. The WPA should haver made larger swales back in the 1930s to expand the scale.
    B. There has never been any design involved which would increase the value to humans, such as planting fruit trees.

    Let me point out something about the leaf Amaranth that Geoff walks through. Quoting from Eat Your Greens:
    ‘Amaranth leaves are good sources of protein, calcium, iron, vitamin A, vitamin C, and folate. Although the seeds have more protein than any of the staple grains, on a dry-weight basis, the leaves are richer still, with three times as much protein as the seeds. Amaranth is also rich in lysine, which is commonly in short supply in our cultivated grains.’

    Thus, Geoff is walking through a wild field which was a historical food of the Aztecs and Hopi, which is far more nutrient dense than the grains we commonly grow today.

    I’ll point out one more thing. Aztec children were put to work sorting out white seeds. The white seeds gave birth to plants with lower levels of tannin, which improves the taste and digestibility. These wild plants may have reverted to the norm, unless they are descended from the seeds selected by the Hopi and Aztecs.

    So what Geoff is advocating is not ‘the rewilding of the desert’, but instead the ‘intelligent and sustainable cultivation of the desert’. (Note his comment about 4000 years of gravity flow irrigation before Tucson became a gleam in the eyes of the real estate developers.)

    Suppose, incredibly, that we did substitute sustainable food production for golf courses. Could the surrounding desert and river valley feed the people currently living in Tucson? My guess is that the answer to that is No. But the important point is that it would feed a lot more people than the current system in a post-collapse world. Could you be elected Governor of Arizona with a ‘sustainable agriculture’ platform? I sincerely doubt it. Someone will promote bringing water down from the melting Greenland ice sheet, first.

    Don Stewart

  25. Creedon says:

    WTI crude at the end of day 9 October 14 84.26.

  26. Stilgar Wilcox says:

    All hell is breaking loose today! Now some guy who flew from the UK to Macedonia has died in a hospital having suffered Ebola type symptoms. HE NEVER WENT TO A WESTERN AFRICAN COUNTRY. That’s what he’s claiming.

    http://rt.com/news/194640-briton-ebola-macedonia-dead/

    A Macedonian government spokesman told the BBC that a companion of the late Briton told the local authorities that they had travelled straight from the UK and had not visited countries affected by Ebola.

    A Briton with symptoms of Ebola has died in Macedonia, local authorities said. The hotel in Skopje where he was staying has been sealed off, while another Briton and hotel staff are being kept inside to prevent possible spreading of infection.

    According to Macedonian authorities the man came to Skopje from London on October 2 and was taken to hospital on Thursday where he died several hours later.

    The tests have been carried out to see if he had Ebola and have been sent to Germany’s Frankfurt to confirm the disease.

    • Adam says:

      Well, you most certainly are the harbinger of bad news today. If you have personally dreamed into being the End of Days, then you could go to prison, you know?

      • Stilgar Wilcox says:

        Or maybe the blood red full Moon was a harbinger of bad mojo to come. The ancients would have claimed it so, and just after we discovered last night we have free Amazon streaming of movies to our big screen Vizio thanks to being members of Amazon’s Prime. I sure am going to miss this stuff some day when it’s gone – LOL!

  27. Stilgar Wilcox says:

    Breaking News:
    http://www.bloomberg.com/energy/

    BRENT OIL HAS GONE SUB 90 ALL THE WAY DOWN -2.86 TO 88.70

    WTI TAKES ONE ON THE CHIN AT –2.85 TO SUB 95 AT 84.46

    DOW DUMPS 336 PTS.

    TOMORROW MAY BE ONE HELL OF AN INTENSE DAY – HOLD ON TO YOUR BUTTS!

    OUCH!

  28. Oelsen says:

    Actually, the Problem as I see it is the attitude that world is indeed flat. Oil is priced in Dollars, but Dollars say how much you can buy on the world market of any commodity. Notice the difference. One is a number, the other a function.
    If the price ticker would add three other variables (median wage, hourly minimum wage and median household income per tonne of discussed commodity), the discussion about falling or rising prices would be over. Everybody would see with their eyes how prices stay circa constant but all other variables grow and grow. If you see your income first above and then below those statistics on the screen, you know you’ve fallen under a certain threshold.

    In fact, this would be my only law I would make. Everything else follows out of this “perception management”.

    Either you get a mandated increase in minimum wage in the formal economy to pay for the additional costs you cause or you fall out of it into an informal economy. Not to say there aren’t any laws regulating the informal economy. What our states have to implement are separate ways of looking at a human. E.g. “traffic laws” being totally different from “money laws”. Sphere of energy influence shouldn’t be lawfully interconnected.

    • I am not sure I am understanding what you are saying. All of the people in the world make a certain amount of finished (final) goods and services, and a variety of intermediate goods and services. What is of interest to consumers is the final goods and services. When oil prices are low, and other resources are easy to extract, it is easy for finished goods and services per capita to rise. Technology helps, and there is a low cost of making new and better products.

      Once diminishing returns sets in, more and more of total effort must be put into intermediate products that aren’t what we are really looking for–fracking for oil and gas, more pollution control, desalination plants to produce water. What we really are looking for are things like gasoline (no matter how produced), fresh water, and clean air, whether or not a large amount of GDP went into producing these products.

      Once we start putting a lot of effort into the intermediate products, we produce less final products per worker. The economy tends to shrink. In this case, each worker can buy less oil production and other products they desire. To some extent this occurs through job loss. People without jobs can’t afford much of anything.

  29. lazybbill says:

    Latest on fracking – no surprise here, except that it’s published: Paul – probably posting same, huh end game nigh.

    http://www.bloomberg.com/news/2014-10-09/ceos-tout-reserves-of-oil-gas-revealed-to-be-less-to-sec.html.

  30. Ann says:

    This news about how long the Ebola virus can live in semen has made me wonder. When they say someone “survived” the infection and they get to go home from the hospital, can they still infect others through sex? If so, we have some serious problems ahead.

    • Paul says:

      I bet Putin is behind this Ebola thing… (sarc)

      • Adam says:

        Oh, that sperm of the devil, the most evil midget since Joseph Goebbels. Yet the Russians just can’t get enough of him – that’s the trouble with short men.

      • ordinaryjoe says:

        The media repeats what they are told. There are so many instances of this that this is not disputed. It is not disputed by anybody that the media exists to repeat what they are told. If I was to go down to the 7-11 and there was guy getting a slurpee and he told me dude told him blah blah blah should I believe him? Well its possible hes telling the truth. Its possible hes not. He himself doesnt know he is only repeating whats been told to him. Either way Im not going to invest a lot of energy in it because there IS ABSOLUTELY NO WAY TO DETERMINE THE ACCURACY OF MEDIA. That includes secret squirrel internet sites. Now I suppose you could become your own investigative reporter. That would make you possibly the only investigative reporter on the planet. Lots of actors playing investigative reporters. Can you move your eyebrows up and down a lot? A career as a reporter might be very lucrative for you. The media will repeat what they are told and that include total fabrications. The media will repeat what they are told and that includes accurate narrations of events. Now if dude runs in the 7-11 and says “some guys vomiting blood down the street” and hes freaked that has some credibility. Eye witness testimony is credible within the ability of a human to perceive and their honesty. If you try to piece together world events using television and secret squirrel web sites your getting played. Or not. If I got on a pro football field how long would I last 2 seconds 5? You know what I dont think I will suit up for that game. Human CPUs are notoriously inaccurate in their ability to express accurate models of the world yet people suit up and think they can go pro every day. They are all suited up from the FOX viewer, to the HUFFPO reader to the Zero hedge reader. Their all excited” Im a freakin pro!” The pros are on madison avenue. All these people thinking they are pros and they have been hooked landed and gutted by the greatest manipulator of human nature that has ever existed. The pros are good. Thats why they are pros.
        Now I believe Gail to be a true visionary and someone driven to convey the truth as she perceives it. Her analysis is the only one that makes sense to me. But do I know Gail, did I grow up with her, know her character. Nope. Is my own CPU capable of 100% or even 50% accurate Models nope. Today was a nice bike ride. When the neighbor lady is puking blood on the porch my ears will perk up.

  31. Stilgar Wilcox says:

    Breaking news on oil and stocks!!!

    http://www.bloomberg.com/energy/

    Oil dumping!

    WTI -1.48 to 86.67
    Brent –1.13 to 90.25

    Brent close to going sub 90 !!!

    https://www.google.com/?gws_rd=ssl#q=dow

    Dow DUMPING as we speak, –336.93 !!!

  32. Stilgar Wilcox says:

    https://www.google.com/?gws_rd=ssl#q=dow

    Dow is down 261.63 pts. at the moment. On the above linked graph click on the 5 day – that’s a lot of fluctuation? I think we are at a threshold point in which more arrows are pointing down than up, with the tide beginning to shift to bear market. Often when the numbers gyrate from day to day this much there is a huge one day dump. I’m wondering if that could be tomorrow or on Monday. Should be exciting to watch if you don’t have stocks.

  33. Pingback: Why Peak Oil doesn't look like it happened - Centrifugal Bumble-Puppy

  34. Pingback: Wall Street Journal Gets it Wrong on “why peak oil predictions haven’t come true” | Peak Energy & Resources, Climate Change, and the Preservation of Knowledge

  35. not fazed says:

    Ebola may already be loose among the US population. I have my doubts that the US could cope with a serious outbreak of ebola, especially spread around a city. That would be really interesting to watch as humanitarian piety gave way to panic measures. They may conclude that it has been insane to keep travel going.

    The UK is sending 750 soldiers to help with ebola. Have they been ordered to go under threat of dishonourable discharge or do they have a choice? Will they ever return?

    http://www.dailymail.co.uk/news/article-2785514/Second-person-rushed-hospital-Ebola-symptoms-contact-patient-zero-Thomas-Duncan.html

    BREAKING: Texas sheriff’s deputy rushed to hospital with Ebola symptoms after attending apartment of ‘patient zero’ who died today

    A second man with Ebola symptoms is reportedly a Dallas County sheriff’s deputy who visited the apartment of first patient Thomas Duncan.

    He was identified as Sgt Michael Monning, WFAA reported. The deputy, along with two Texas health officials went into the Dallas home where Duncan had been staying when he fell sick to deliver a quarantine order to the sick man’s family members.

    Neither Sgt Monning, nor the other two officials, were wearing protective clothing or masks.

    • Adam says:

      A cure was found for Ebola 60 years ago and is 100% effective. Scroll to 1:03 minutes in:

      https://www.youtube.com/watch?v=r0dUIq8gHgc

      In a way, it’s just an adaptation of Viagra.

      • Stilgar Wilcox says:

        I think what they should do is quarantine the Ebola patients with no medical assistance, other than what they can do for each other. Send in materials and information, but do not send in anyone in that is not infected. Survivors remain quarantined to care for the sick for a period of time, like 3-6 months. As time moves on the illness would dissipate to zero.

        • Adam says:

          If I were to get infected (and I live in London, so I’d say that puts me at high risk), I’d of course want to be quarantined, but with some “Swiss clinic” type pills shoved thru to me, so that I had the choice. Yes, I might be condemning myself when I might in fact survive, but even the survivors have weakened internal organs, but the odds against survival are low, and the suffering must be grim.

          • not fazed says:

            Sky tv news at 14:02 is reporting that there is a case of ebola in the UK, one in France and Norway, two in Germany and five in the US. I cant find any mention of this on Google news.

            • Stilgar Wilcox says:

              The article below seems to open the possibility of transmission from droplets at close quarters.

              http://www.zerohedge.com/news/2014-10-07/cdc-forced-admit-ebola-might-be-spread-through-coughing-and-sneezing

              “We know for a fact that the virus occurs in sputum and no one has ever done a study [disproving that] coughing or sneezing is a viable means of transmitting,” he said. Unqualified assurances that Ebola is not spread through the air, Bailey said, are “misleading.”

              Peters, whose CDC team studied cases from 27 households that emerged during a 1995 Ebola outbreak in Democratic Republic of Congo, said that while most could be attributed to contact with infected late-stage patients or their bodily fluids, “some” infections may have occurred via “aerosol transmission.”

              “I’m not going to sit here and say that if a person who is highly viremic … were to sneeze or cough right in the face of somebody who wasn’t protected, that we wouldn’t have a transmission,” Skinner said.

              Then there’s this:

              http://www.washingtonsblog.com/2014/10/new-york-times-may-carry-ebola-without-showing-symptoms.html

              “The Ebola virus, which has caused deaths from high fever and bleeding in African outbreaks, can also infect without producing illness, according to a new finding by African and European scientists.

              The possibility of asymptomatic infection was only suggested in earlier studies, they said in last week’s issue of The Lancet, a medical journal published in London. Now they said they had documented such infections for the first time. They found that the Ebola virus could persist in the blood of asymptomatic infected individuals for two weeks after they were first exposed to an infected individual. How much longer the virus can persist is unknown.”

              It’s starting to sound like this virus is much more complex in it’s capability to transmit from one host to another.

              Now we get this article from yesterday:

              http://time.com/3482193/ebola-cases-8000/

              Over 8,000 people in Liberia, Guinea and Sierra Leone have been infected with Ebola, according to new data from the World Health Organization (WHO).

              The numbers show there were 2,799 new cases in the last 21 days. Of the 8,011 people infected, 3,857 people have died.

              The WHO cites problems gathering data in Liberia, and says it should be emphasized that “the reported fall in the number of new cases in Liberia over the past three weeks is unlikely to be genuine. Rather, it reflects a deterioration in the ability of overwhelmed responders to record accurate epidemiological data.”deteriorate, with widespread and persistent transmission of [Ebola],” says the WHO in a statement.

              There’s a video on Ebola in the latter part of this article I was not able to paste in, and also
              information on tobacco plants are being grown in Quebec to have anti-bodies to Ebola. We’ll see if it works.

        • not fazed says:

          750 soldiers sent to ebola land. OK, we will not put up with the virtuous getting killed and the vicious rewarded for much longer. We need to structure our societies different. Late afternoon session on OFW.

        • Most of the folks would starve, though. Quarantine cuts them off from their ability to do work, and thus pay for food. Outside agencies are unlikely to get enough food to these folks–problems with paying for food, transporting it, distributing it, and exposure of distribution workers to ebola. A weakened population is more prone to catching epidemics of other sorts as well, such as malaria.

  36. Michael says:

    Isn’t your analysis just a restatement of the old Malthusian argument for the subsistence trap?

    While Malthusian conditions controlled human population growth for much of human existence, the industrial revolution ended it. Since the mid 18th C, humanity has been on the longest known escape path with living standard rising and spreading beyond subsistence inexorably. There is no precedent for it in history.

    Your thesis is that energy supply limitations will return humanity to Malthusian conditions. Based on what? Limited supplies of oil? The industrial revolution started on water and wind power, migrated to coal, then to oil and gas. There were switching costs for each subsequent migration, they are factored into the relative costs of using each resource, and are manageable over time. As coal locomotives wore out, they were replaced by diesel and electric. Natural gas, electric, and hydrogen powered cars are a reality, the infrastructure is available for each (except hydrogen) up to the point of consumption. Nuclear fission still remains a possible and nearly inexhaustible source of power, if we can overcome the fear of it, and fusion power still beckons.

    The trouble with your thesis is that, while it acknowledges “substitutes”, it presumes too little role for the human ingenuity that powered the industrial revolution and continues to power the networked economy you describe. Just the term “networked economy” brings up one other way ingenuity is reducing the need for energy: communications. I work from home, that is a growing trend. Most of my work interactions is through online connection, consuming only the power needed for my workstation.

    A further problem with your theory and Malthus is that past “breakthroughs” were accompanied by population growth that consumed the resulting surplus, returning humanity to the subsistence trend-line. But whenever and wherever industrialization spreads, population growth falls to roughly zero, due to the premium on raising knowledge ready children. Past breakthroughs required more people to support. The current requires more information. The IT revolution supplies it rather than human birthrates.

    Malthus has been proven wrong by events during the 200 years since he wrote his thesis “An Essay on the Principle of Population”, despite repeated claims that we’re doomed to return to that wretched state. Your formulation appears no better than past attempts to reassert the Malthusian subsistence trap.

    • B9K9 says:

      Jesus loves me, this I know, for the Bible tells me so.

      You see, with that little ditty above, I can also practice similar logic to demonstrate the (in)effectiveness of tautological reasoning.

      I think most people around here are either too tired, or most likely, too bored to bother deconstructing your analysis. Rather, like cunning Las Vegas sharks, they see a rube like you coming down the sidewalk and start dry washing their hands in eager anticipation of a most excellent fleecing.

      Cannibalization is what is going to be on the menu for survivors; if you remain clueless, someone else who realizes the true nature of what is occurring will be quicker on the draw to get you quartered, salted & preserved.

      The zombie hordes won’t be zombies, nor will they want survivalist stores or fields.

      • DownToTheLastCookie says:

        “I think most people around here are either too tired, or most likely, too bored to bother deconstructing your analysis.”

        Or too lazy and would prefer to bully

      • Paul says:

        Recall the scene from The Road — the movie did not portray this because as we can see from this forum (and many others) nobody wants to face reality — they get infected by Koombaya Syndrome —- anyway — remember in the book when they stumble into that house … and beneath the trap door there are people chained up ….

        And the bad guys have been hacking pieces off those people and putting them into a pot and making stew.

        Holy mother of god — turn up the music — Koombaya my lord koombaya!!!!!! —- happy thoughts… happy happy thoughts…. I am walking on a path in the woods — it is spring time — the air is fresh — the flowers are in bloom — happy thoughts happy thoughts — koombaya… koombaya…. where is my drum — damn it where is my drum!!!!

        • alturium says:

          Paul – my sides hurt from laughing…My appetite for post-apocalyptic movies was about filled (why do i watch these movies …when I saw the house I should have stopped watching…OMG…).

    • Javier says:

      Malthus lived before the fossil fuel revolution. You can’t hardly blame him for not taking it into account. So not a valid precedent for current discussions. All energy migrations have taken place from less energetic to more energetic (EROEI), and therefore took place spontaneously. But oil is the more energetic (except nuclear) than all the rest. The transition will not take place spontaneously at it will come at a huge loss. It is likely to be too little, too late. Should have started it in 1985 with favourable economic winds and plenty of cheap oil to build and install the turbines and Solar PV panels.

      Spain did the biggest experiment on solar PV in the world. So now we have real data instead of calculations, and it came as a total disaster ( http://www.amazon.com/Spains-Photovoltaic-Revolution-Investment-SpringerBriefs/dp/144199436X ). So much for one of the biggest attempts to cut down on oil consumption. Even if successful, it would have meant more cheaper oil for the third world.

      What you call “the longest known escape path with living standard rising and spreading beyond subsistence inexorably,” is called overshooting due to exponential growth by biologists. Once it goes over carrying capacity it is just a question of time before it enters a death phase and falls below carrying capacity. Every biological system that undergoes it ends the same way, from bacteria to lemmings.

      With diminishing oil comes diminishing agrifood. Instead of Green revolution we will have the opposite, Green involution, and people will start dying by the millions, and they (us) will not dye quietly.

      Javier

      • Paul says:

        Some might say that it is really unfortunate that Malthus was wrong — because if we would have run up against the limits earlier — before we wrecked the land with the green revolution — we would not now have 7B+ people on the planet — and facing a potential extinction moment…

        • Malthus wasn’t wrong.
          He just couldn’t possibly foresee the effect of steam power on the human race and growth.
          He was just off by 200 years.
          Just like the doomsters in here–we know we’re right, but just can’t put a finger on the date thats all

          • Paul says:

            Agree.

            And when you think of it — 200 years in terms of the history of the man is rather insignificant… so he won’t end up being that far out on his prediction.

      • alturium says:

        The Solyent Green revolution?

    • In the past, we have mostly added to energy resources, not replaced them. We are still using biomass–in fact more than ever with ethanol. We are still using coal–the largest amount every. We are still using hydroelectric. So the idea of “replacing” has never really happened in the past.

      The issue we are talking about is collapse. In many ways it is not the same as inadequate food for rising population, which was the Malthusian concern. It is more like the Collapse of the Former Soviet Union and an unending version of the US depression.

      The situation with oil is different from what most people expect. What happens is recent high oil prices puts a squeeze on the world economy, leading to lower production of the final goods and services people buy (but leads to more intermediate costs, related to pollution control, higher cost of extraction, etc). Lower production of final goods leads to lower inflation-adjusted wages, and lower ability to incur debt to purchase goods such as new homes and cars. The price of all commodities collapses, making their production not economic. (This is like the Depression in the 1930s, except we don’t have a way out this time.) There was a big run-up in debt in the “roaring 20s.” Part of the problem then, as now, was a collapse in this debt bubble. It was possible to get out of the Depression through lots of borrowing and World War II, together with the availability of cheap fossil fuels. We could put huge numbers of citizens to work, with the benefit of cheap fossil fuels.

      I don’t see this option for escape now.

  37. Gene Frenkle says:

    The next Chevy Volt will be the best selling car in California in 2016 so EVs are only going to get more affordable and accesable (Tesla already proved they can be better). Peak oil is not an issue as long as we have cheap natural gas. The only reason peak oil was an issue in the 2000s was because we thought we were also running out of natural gas–remember how we were going to import LNG if we could ever get the terminals built?

    • Oil and natural gas are separate issues, because of the huge changeover cost. Also, no one thinks we have enough natural gas to cover both our oil and natural gas needs. We can add a little more natural gas (perhaps, if the price can get up high enough) but not enough for Europe too, and not enough to replace oil too.

      • Gene Frenkle says:

        The changeover cost will not be huge, people will simply start buying more EVs over the next 10 years. If most passenger cars were PHEVs with even 10 kWh of storage we would put a huge dent in oil demand. Once batteries cost around $200 kWh then electrifying cars will be an affordable option like leather seating. Remember, electricity can come from wind, solar, nuclear, etc. and EVs are much more efficient than ICEs, 66 kWh of electricity will take one over 200 miles whereas 66 kWh of gas might get one 50 miles.

        • Paul says:

          http://en.wikipedia.org/wiki/Electric_car_use_by_country

          82 million cars were sold globally last year – of these 500,000 we EV.

          Plug in vehicles represent 0.2% of world stock

          http://en.wikipedia.org/wiki/Electric_car_use_by_country#Global_outlook

          Kinda like solar panels eh http://reneweconomy.com.au/wp-content/uploads/2014/04/bernstein-energy-supply.jpg

          Amusing toys for a few….

          • Gene Frenkle says:

            Do you live in Cuba? You do know Americans buy new cars and old cars are taken out of service.

            • Paul says:

              Yes America is of course all that matters… it is the centre of the universe…

              The fact of the matter is that EVs are barely registering in terms of global auto sales — and you are claiming they will save the world…

              As I have pointed out already even if EVs and solar panels grew on trees and the EVs could run on sea water that solves NOTHING.

              Free cheap energy would only worsen the depletion of other resources.

              Oh wait — maybe we can find a new technology that can make unlimited everything — like water, fish, copper, nitrogen etc etc etc…

              We can then change the name of this site to infiniteworld.com

              And people wonder why my comments turn to sarcasm …

        • Jarvis says:

          FYI I consistently go350 miles with 66KWH in my Nissan Leaf. I get just over 5.2 miles per KW H. But Paul is right – it doesn’t make a dam bit of difference and never will.

        • J says:

          No point in changing over if oil prices keeps dropping. Then it’s clear that running the Cheap Kia will always be cheaper than the EV version. And it will last 2x as long considering EVs needs new batteries every 10 years.

        • edpell says:

          Taking in to account the 2/3 lost at the electric generating station that is 66 miles per 66KWh EV and 50 miles per kWh gas.

        • We still need to run the rest of our economy on oil. For example, oil is needed for paving roads and keeping our electric transmission lines repaired. Oil is also needed for agricultural equipment.

    • ordinaryjoe says:

      You want to conserve? Take the bus. As a nation we want to conserve? Legalize low load four wheel vehicles on the street with suspension designed for pavement say about 250cc 300 lbs.
      IF YOU WANT TO CONSERVE STOP CONSUMING SO FREAKIN MUCH

      Im sorry off to koombyah camp for me.

      Energy consumption is infinite
      We are the smartest mama jamas evah and very special.
      Every smart mama jama must be surrounded with a ton of steel for safety (we are very special) while transporting using infinite energy
      Teslas are a the best way to conserve. Tesla after all had cracked infinite energy. He was a double plus special mama jama. Its the evil oil companies suppressing his specialness that are keeping us from rightfully deserved infinite consumption. Soon mankind will be in its golden age.

      • Paul says:

        Yes – take the goddam bus – dead on.

        But suggest that to any member of the green brigade and they’ll look at you like they would an unwashed bum asking them for a cup of coffee

        And can you imagine if you shouted that at a Tesla owner as he stepped out of his flashy new car at the Whole Foods Store proud as a peacock — a hipster pleased to demonstrate his success and green cred all at the same time.

        Heaven forbid!

        • ordinaryjoe says:

          “And can you imagine if you shouted that at a Tesla owner as he stepped out of his flashy new car at the Whole Foods Store proud as a peacock — a hipster pleased to demonstrate his success and green cred all at the same time”

          .Whats the most dangerous creature cornered
          Badger?
          Wolverine?
          Brown bear?

          Nope

          The most dangerous creature cornered is a wounded consumption model. When the wounded consumption model is cornered all other subroutines are dropped such as ethics, morality, politics and logic. Consumption model will do anything, anything to survive. Apparently some consumption models don’t realize that they are pretty much guaranteed to live in some form as long as the host lives. It may have to adapt, maybe even a radical adaption but it will live. Some consumption models inhabit hosts that dont have conflicting subroutines. These consumption models are much less dangerous as, there is no possibility of wounding them via subroutines and they know it. Not that they wont cause you harm if you confronted as a general practice of harming adversaries even if a threat is not posed.

          Thats why I believe consumption model to be the core component of most modern humans. When threatened consumption model overrides all other models in the vast majority of humans.

          Wound and corner consumption model at your own peril.

          • Stilgar Wilcox says:

            “Wound and corner consumption model at your own peril.”

            I agree, ordinaryjoe. I whole heartedly expect all sorts of wild mayhem to ensue once the system bogs down to the point of non-consumption, because they will turn on one another to take whatever they can to fill the consumption void.

      • Gene Frenkle says:

        I assume you support Megabus over the California High Speed Rail? Megabus is cheap and barely emits any carbon on a per passenger basis and it is currently running in between cities in California.

        • Bandits says:

          Deepwater and ultra deepwater, tar sands, shale fracking, heavy contaminated oil, artic exploration. Oil consumption is at maximum, we are doing EVERYTHING possible to keep it flowing to maintain BAU and you think electric cars are a solution. Name anything renewable including electric vehicles that has reduced that demand. Unless you sequester either the oil itself or the carbon pollution you WOULD have used, you are simply leaving it for Joe down the road, who will happily use that what you do not.

          If you want to witness vehicle reality, stand on a freeway overpass, notice the variety of vehicles and trucks, look at the arterials, look at the specialist vehicles, look at the service vehicles, look at busses and tow trucks and ambulances, police cars, fire trucks, plumbers, electricians, dog catchers do you get the picture, notice the speed and distances they travel. Are you able to see even the little picture but there is a big picture too. Can you imagine the peripherals that keep this system turning all requiring liquid energy.

          Grease, coolants, tyres, electronics and so on. The ICE vehicle has a myriad of separate components that bring it all together, as in little things like fuel injectors, computer chips, fuel caps and gauges, they require businesses and people to employ, they need distribution services and to supply spare parts. The point being we have created a world far, far different than the world of even 70 years ago. Population has more than doubled since the 1970’s, there is no going back for everyone, there is no BAU lite. We have overshot the liveable world by an enormous margin and future generations who we have been stealing from will pay the ultimate price.

          • InAlaska says:

            Wow. Way to stomp on my buzz and ruin my day. Complexity is a serious bummer.

          • Paul says:

            You have smashed a major hole in the matrix with that post. Most excellent!

          • We need to use a huge number of elements from the periodic table to produce the high-tech goods we produce today. We have to have international trade working very well for this to happen.

    • Paul says:

      Oh hurrah! Do Chevy Volts grown on trees? What do they run on – air?

      Let’s do a little matrix busting. Let’s say we had unlimited free and clean energy (Chevy Volts are most definitely not clean or free — unless you think they grow on trees and run on air) — do you think this would be a panacea?

      I bet you do. Like all the green brigade that is the holy grail. Cheap free energy.

      But let’s think. Because we are humans and not donkeys we can do that…

      What happens if we had unlimited free energy? Well for one – we would desalinate the oceans and grow more food with all that water – cheap food – hurrah! hurrah! Cheap quality food for all 7 billion!!! hurrah – we are so smart – we are humankind!

      But wait. What are the implications of cheap plentiful food?

      YES – of course — the billions will produce more offspring who will be healthier who will produce more offspring etc etc etc…

      Keep in mind this is EXACTLY what happened the last time we discovered a cheap source of energy – oil. Yep – population did this http://www.triumf.info/wiki/pwalden/images/2/2e/World.population.history.gif

      Of course the problem is that if technology ‘solves’ the energy problem it only causes worse problems — because if we have more people they will eat more fish and cut more trees and use more copper etc etc etc…. so that means you create a whole new series of problems…

      You see where I am going? You still think the Chevy Volt thing is a hurrah moment?

      I am thinking of changing my handle on the forum to Matrix Buster….

    • Our problem is keeping the system operating. We need oil, natural gas, and electricity among other things. Substitution is slow and expensive. If we have a shortage of one, it can bring the whole system down. For example, oil problems can lead to financial problems, which brings the banks down.

  38. Stilgar Wilcox says:

    http://www.bloomberg.com/news/2014-09-29/sumitomo-to-probe-1-8-billion-in-shale-and-coal-losses.html

    Sumitomo to Probe $1.8 Billion in Shale And Coal Losses

    Sumitomo Corp. (8053) will set up a special investigation into how it lost almost $1.8 billion in Texas shale oil and Australian coal mining.

    The probe comes after the company, Japan’s fourth-biggest trading house, cut its annual profit forecast by 96 percent after writing down the value of the two investments. Most of the losses were incurred at the shale oil project it shares with Devon Energy Corp. (DVN) of the U.S.

    “I didn’t expect the loss could reach this level at all,” said Jiro Iokibe, a senior analyst at Daiwa Securities in Tokyo, adding that the next threat for shareholders is a possible cut to the company’s dividend.

  39. Stilgar Wilcox says:

    http://www.bloomberg.com/news/2014-10-07/shale-boom-tested-as-sub-90-oil-threatens-u-s-drillers.html

    Shale Boom Tested as Sub-$90 Oil Threatens U.S. Drillers

    “If prices go to $80 or lower, which I think is possible, then we are going to see a reduction in drilling activity,” Ralph Eads, vice chairman and global head of energy investment banking at Jefferies LLC, which advised 38 percent of U.S. energy mergers and acquisitions this year, said in an Oct. 1 interview. “It will be uncharted territory.”

    • justeunperdan says:

      The deflationary forces are huge and driving down the prices of the natural resources down. Here in Quebec the government is doing big budget cuts into the heath care and educations sytems. They are desperate for money. Once they start cutting drilling and refineries activities, shortage and disruption of the supply chain is a real possibility. It seems that the next step is oil supply shortage follow by supply chain disruption and finally chaos and collapse.

      Look at the chart of gasoline. The drop in price is huge. Click on graph.

      http://www.cmegroup.com/trading/energy/refined-products/rbob-gasoline.html

      • Stilgar Wilcox says:

        Interesting information, justeunperdan. From most posts of Canadians I had the impression everything was doing great there, so to get a more informed view helps to understand the situation better.

      • Yes, budget cuts in Quebec are the kind of thing that contribute to the problem.

        The US budget was in a bigger deficit in the past than it is now. The cutback in the deficit means less stimulus for the economy here, too.

  40. Don Stewart says:

    Dear Gail and All

    Few comments about surviving in a crash. These things have come to my attention recently.

    First, I listened to Scott Hunt speak last evening on the Survival Summit. He seems like a very level headed guy. Here is his web site:
    https://practicalpreppers.com
    A particular subject he talked about last evening, which has been discussed here, is water catchment from the roof. He said virtually everyone in the US should be doing it. The water can be filtered on the way to the tank or just before use. In any event, filtration can turn some awful stuff into drinkable water. He has drunk water with cow manure in it through a filter as a demonstration.

    Scott is also a big fan of solar water pumps. There are no batteries or inverters involved. Just a slow but steady stream of water being pumped from a well or tank at ground level up to an elevated tank which can then distribute the water by gravity.

    As a matter of trivia. the New York City water system was initially designed as a hydraulic system. When electricity came along, they abandoned the hydraulics for the electric pumping of water. (They may use diesel now…I don’t know).

    Second and Third, I will give you some information about dealing with trauma and stress. Kelly McGonigal has put together a DVD called The Neuroscience of Change. It is an excellent discussion and demonstration of the methods of ancient wisdom practices and the latest in neuroscience. One important takeaway is in her Session 6, where she reviews a scientific experiment and gives you a practical demonstration. If something unpleasant is happening to us, and we try every way we can think of to drive the unpleasantness out of our consciousness, we fail on two counts. We suffer even more and we fail to get rid of the unpleasant thoughts. If we apply the practice of mindfulness, paying close attention to what our body is actually experiencing, we experience less suffering and we get more control over our bodies. For example, in an experiment, people were asked to plunge their arm and hand into icy water and keep it there as long as possible. One group was asked to try to exclude the unpleasant feelings from their consciousness. The second group was asked to practice mindfulness…paying attention to how the icy water actually felt. The first group reported more suffering and kept the arms and hands in the icy water only half as long as the second group.

    Third, as I mentioned a couple of days ago, Ruth Bucynski has put together a series of interviews with experts on trauma and stress:

    ‘The primary goal of trauma therapy hasn’t changed since my early days as a practitioner . . .

    . . . and that is, empowering patients to reclaim a sense of safety, reduce their reactivity, and see their lives begin to open back up.

    But recent advances in trauma therapy – many of which have been made in just the past year alone – require a fundamental shift in how we think about the treatment of trauma.

    I’m talking about techniques that are informed by the most up-to-date understanding of what’s going on in the body and brain of someone with unresolved trauma.

    That’s why we’ve put together a new webinar series – to bring you these leading-edge interventions, straight from the pioneers in the field.’

    Disclosure: I am in no way financially connected with this project. Nor do I have any opinion as to whether it is better or worse or perhaps just different from Jan Steadman’s prescription of Holy Basil.

    Fourth, the issue of food keeps coming up, with considerable heat but maybe not too much light in the discussions. I heartily recommend a new book by David Kennedy: Eat Your Greens: The Surprising Power of Home Grown Leaf Crops.

    Green leaves are the first contact between solar energy and plants, which means they are the origin of all the terrestrial food we eat (oceans are different). Any terrestrial calories which are eventually consumed had their origins in photosynthesis in a green leaf. When a leaf subsequently makes a seed (such as wheat or sunflower) or a fruit (such as a tomato or apple), there is necessarily fewer calories in the seed or fruit than was originally present in the green leaf. It’s like a trophic level. Similarly, when an animal grazes a green leaf and we eat the animal, there is necessarily fewer calories in the animal than was present in the green leaves.

    But humans are ill equipped to live entirely on green leaves. Our cousins the gorillas do fine, but we do not. Although it is not the focus of his book, Kennedy explains how humans got into the situation we are in. Fire opened up many new food stuffs for us, because many plants make toxins to deter animal foraging, and fire detoxifies many of these plants. Most plant productivity around the world occurs during a favorable 3 month period when sunlight and water are ideal. Bears, which are about our size, stuff themselves and then hibernate to conserve calories during the lean season. Many birds migrate, chasing the most productive seasons. But humans tend to stay put and we remain active. We also developed very big and calorie hungry brains, so we need calorie dense foods such as fruits and seeds and animal meat.

    Consequently, any survival plan has to consider three keystone problems:
    A. How to maximize calories harvested
    B. How to preserve food for the lean season or grow food in the lean season
    C. How to grow or make or hunt more calorie dense foods

    Kennedy gives much practical advice on all the essential issues. For example, he identifies sweet potatoes as perhaps the most productive edible plants. Both the leaves and the tubers can be eaten. The leaves can be eaten throughout the growing season, and the tubers can be stored for winter. Another exceptionally productive plant is cowpeas (black eyed peas), which is also edible both as the leaves and as the seeds. Amaranth is a very quickly maturing hot summer plant which thrives in dry conditions, and yields both edible leaves and seeds.

    I won’t try to give an encyclopedic tour of the contents of the gardening advice…buy the book and see for yourself.

    Kennedy also deals with the issues of preservation and concentrating calories. Solar drying is the simplest way to preserve food and concentrate calories. The drying reduces the water content sufficiently that microbes cannot degrade the dried leaves. And since the water is removed, the remainder is calorically dense.

    For example, here are the protein, iron, calcium, and vitamin A content of several foods:
    Alfalfa concentrate 51; 54; 3380; 3835
    Beef 29; 2; 22; 0
    Eggs 15; 2; 66; 182
    Dried beans 21; 5; 113; 0

    Kennedy’s second method is producing leaf concentrates, which involves making a curd with heat, and harvesting the curd and squeezing the water out of it. The semi-dry curd is calorie dense because most of the water has been squeezed out. Making leaf concentrate is more dependent on tools such as grinding and the more modern magicians such as Vita-Mix blenders.

    Leaf concentrates can be made with primitive tools such as grinding stones, but they are a lot easier to make with some electricity and electric grinders and blenders or at least metal meat or grain grinders. European leaf concentrates date back over 200 years, so fossil fuels are not essential. As Kennedy says, preparing leaf concentrate is ‘either hard work, or good exercise, depending on how you look at it’. (Which loops us back around to Kelly McGonigal.)

    The final topic for your consideration is a new, gorgeous coffee table book Animal Architecture by photographer Ingo Arndt. For example, Arndt shows us:

    ‘Northern Australia’s compass termites, for example, build evenly spaced 10-foot towers that, from Arndt’s aerial views, look like tombstones. Wide and plat on two sides, thin on the others, the towers take advantage of the movement of the sun. Morning and evening light strikes the wide sides of the towers, warming the nest. At midday, the hot sun hits only the narrowest side, keeping the nest from overheating.’

    Sometimes we fall into the pattern of thinking that the only alternative to industrial civilization is utter collapse. None of the animals and their structures in Arndt’s book have access to fossil fuels. But neither are they living in what a careful observer would label ‘utter collapse’. They are building with natural materials the structures which help them thrive in the world. That loops us back to Scott Hunt and his mechanical apparatus and to David Kennedy and his suggestions on the architecture of a garden in the perennial zone. Thinking in either/or is not likely to be our friend in a collapse.

    Don Stewart

    • Don Stewart says:

      I see that the links in Ruth Bucynski’s email did not translate. As I mentioned a few days ago, she wants you to visit her sight and sign up. The sign up is free, but you will have to pay for the extensive webinars.

      Don Stewart

  41. Stilgar Wilcox says:

    http://www.reuters.com/article/2014/10/08/us-markets-global-idUSKCN0HX01F20141008
    ‘Growth worries grip world’s stock, oil markets’

    “European stock markets fell for a second day on Wednesday, pushing world share indices back toward their lowest in six months as concern mounts over global economic growth.

    New York markets were set to open flat to higher and currency markets were mixed, with attention turning to Federal Reserve minutes due at the end of the U.S. business day. DJc1 SPc1

    But data and forecasts from China, Spain and Germany all supported the picture painted by the International Monetary Fund on Tuesday: a world economy struggling to end a cycle of low growth and financial trauma it has been stuck in since 2008.

    “The mood is darkening rapidly,” said Kit Juckes, a currency strategist at Societe Generale in London. “I’m not sure we should read too much into spot forecasts, but the suffocation of the IMF’s optimism is pretty striking. Within the G7, 2015 forecasts have been cut in Germany, France, Italy and Japan.”

    A flood of new dollars printed by the U.S. Federal Reserve has allowed stock markets to ignore shaky economic prospects for much of the developed world over the past three years. But the Fed is set to end its bond-buying this month, and the outlook for the Japanese, Chinese and European economies is less than optimistic. Prices of stocks and other more growth-dependent assets have fallen accordingly since mid-August.

    “We are back to a traditional correlation when the equity market is going down, the bond market is going up.”

    The dollar has gained more than 10 percent against the euro since early May and around 8.5 percent against a basket of currencies .DXY. That should hold down the price of imports and slow U.S. inflation, and it may make U.S. policymakers reluctant to boost the dollar further by raising interest rates.”

    What is interesting about this article is all the information is there to see the fiscal ramifications of diminishing returns from oil, but they fail to make that connection. It is a case of two possible scenarios; either 1) they know the connection, but purposefully do not include it because that would unfavorable to the meme of continued growth, and worse still, spreading fear of eventual collapse, or 2) they simply have not connected the dots yet, in which case we have to ask ourselves is it really that difficult a task?

    We can also see here the ramifications of QE tapering to zero later this month. It’s not hard to understand that the net energy in oil no longer supports growth like it did when it was cheap, thus fiscal stimulus like QE has to take its place to push BAU forward. For this reason I keep thinking the Fed will be forced to return to QE, but then the inevitable conclusion of that is rising interest rates when the bonds are sold causing widespread defaults, and eventually it all collapses anyway via hyper-inflation. So collapse is inevitable as EROEI descends, it’s just a matter of deciding whether to buck up and not do anymore QE and face collapse earlier, or go for QE again and stave it off for a while longer. The Fed will make the call.

    • Folks don’t seem to be able to make obvious connections, so that may be the author’s problem.

      The QE tapering issue may already be making a difference. I don’t see that the QE to zero is necessarily a special point, unless the Fed also starts selling the securities it owns (which will be a big problem). One way the QE tapering may be affecting the situation now may be by making the dollar rise higher relative to other currencies. The excess liquidity provide by QE was going into emerging markets, among other things. Removing QE pulled back the support for these other economies. See this article http://www.dailyreckoning.com.au/link-between-oil-us-dollar/2014/10/06/

  42. Stilgar Wilcox says:

    http://www.bloomberg.com/energy/
    Oil starts trading somewhere in the world, in the evening US time.
    WTI down another .88 to 87.91
    Brent down the same, .88 to 91.23

  43. Paul says:

    Why is the price of oil dropping?

    The ten biggest threats to the global economy

    Is the IMF right to think there is only a 1pc chance of a global recession over the next year?

    n its latest World Economic Outlook, the International Monetary Fund (IMF) puts the chances of growth in global output falling below the recession threshold of 2pc next year at just one in a hundred. Is this too sanguine a view?

    Global recessions are quite rare events, so if you had to put money on it, you’d go with the IMF. Even when one part of the world is in recession, it is more than likely that others will be growing quite strongly, leading to aggregate growth overall.

    More http://www.telegraph.co.uk/finance/economics/11146273/The-ten-biggest-threats-to-the-global-economy.html

  44. edpell says:

    Duke Energy proposes an eight billion dollar renewable project that builds wind turbines in Wyoming send the electric to Utah, storage the energy as compressed air in salt domes, then sends it via more long distance transmission lines to downtown LA. All three components generation, storage, transmission. From tornado alley to LA.

  45. VPK says:

    Real news
    The “Park Service” plans to slaughter nearly a thousand Buffalo to appease the White Man again:
    http://motherboard.vice.com/read/yellowstone-buffalo-being-in-demand-cant-keep-them-from-getting-culled

    Still,First Nations and Native American tribes are looking at re-introducing buffalo to land on both sides of the United States-Canada border. Yellowstone buffalo are the most genetically pure American bison specimen, having never been bred for their meat, so there’s been a lot of interest broadly in acquiring buffalo from a select group of brucellosis-free animals.

    For much of the last decade, a population of Yellowstone bison has been raised in Montana, carefully monitored to eliminate brucellosis, as a pilot program to eliminate brucellosis from whole population. Now Montana is looking to unload 145 animals.

    Reuters reported Wednesday that the state reviewed 10 requests for donations of the buffalo, “but narrowed its choices to groups demonstrating the iconic, hump-shouldered animals would be used for conservation purposes or to augment existing herds,” according to the plan. Proposed recipients include the Utah Division of Wildlife Resources, the Cherokee Nation in Oklahoma, the Queens and Bronx zoos in New York, the Wilds Conservation Park in Ohio, and the Fort Peck Assiniboine and Sioux Tribes in Montana.”

    As a New York-resident, I might be a little biased when I root for at least a few buffalo to find their way to the Queens or Bronx zoo, but New York City also has the advantage of very few cattle farmers around to object to their presence.

  46. Stilgar Wilcox says:

    Dow down 272 points

    CNBC right now talking about a shale boom in 2030. LOL!

    • ordinaryjoe says:

      Stilgar. As a friend I advise you to take your television to the backyard and hit it with a suitably heavy instrument. CNBC – thats stuff is nasty!

      • Stilgar Wilcox says:

        Oh, I’m completely aware of CNBC as a cheerleader of BAU. That’s why I ended the post with LOL. We use the TV mostly to watch Netflix streaming of independent, foreign, documentary type movies. I still try to take in an NFL game now and then but usually lose my patience with excessive ads. I was tuning in to see what they were saying about the Dow losing so much today, and instead they were cheerleading shale oil as booming in 2030.

        • James says:

          Keeping informed of enemy troop movements through (relatively) freely available public channels is always a smart choice. Of course, a large grain of informed salt is also advised.

        • Paul says:

          Watching CNBs is like observing a parallel universe. It bears 0 resemble to the world that most humans live in.

          Unfortunately when the real world collides with the CNBs bubble world…. we all know what is going to happen.

          Just saying that everything is awesome – does not make it awesome.

  47. I track the WTI and Brent prices every day on Bloomberg and have data back to November 2012. The WTI price hasn’t been this low since late December 24, 2012. However the Brent price on that date was $108.70, a $20.19 difference. The dip in the Brent is what is driving the downturn now. It is likely due to the European recession and money problems killing demand.

    Your point about trying to break Russia is well taken, but I suspect it is more of a structural problem with the financial sector.

  48. Stilgar Wilcox says:

    http://www.bloomberg.com/energy/
    Here are the current trading prices for oil:
    WTI -1.56 to 88.78
    Brent -.75 to 92.04

    88.78 is the lowest I’ve seen it for WTI.

    • Stilgar Wilcox says:

      Maybe not the lowest ever, but certainly for a long time.

    • Paul says:

      I wonder if this is being manipulated to try to break Russia with low oil prices?

      If so – it is a dangerous game because it also breaks others…

      If it is not – and this is all about growth collapsing — then this is very dangerous – and potentially out of control

      • Stilgar Wilcox says:

        Paul, I don’t think it is being manipulated, however it is having the consequence of pressuring Russia on reduced oil revenue. I have a feeling this winter has all the makings of a disaster in the making, from Russia not supplying the Ukraine with NG until they are paid past due amounts and get what they want for NG, to the stock market corrected or crashing, to oil dropping so low marginal plays go offline, to Ebola rising in numbers, pro-democracy movement in Hong Kong, ISIS undeterred by random occasional air strikes, Japan over minus 7% GDP contraction, EU contraction via Germany manuf. slowdown along with France and Italy in recession, China slowdown, ending of QE and other stimulus programs for the developed countries, it should be quite a show!

        • James says:

          We’ve certainly got the makings for some market fun around the New Year, don’t we? Most of it conveniently manipulated to be so well ahead of time of course!

        • Paul says:

          Could be. 2015 could be pivotal….

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