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Information and Crude Complexity

This is a guest post by WebHubbleTelescope.

Scientific theories get selected for advancement much like evolution promotes the strongest species to survive. New theories have to co-exist with current ones, battling with each other to prove their individual worth [Ref 1]. That may partly explain why the merest mention of "theory" will tune people out, as it will remind them of the concept of biological evolution, which either they don't believe in, or consider debatable at best. Generalize this a bit further and you could understand why they could also reject the scientific method. If we admit to this as a chronic problem, not soon solved, the idea of accumulating knowledge seems to hold a kind of middle ground, and doesn't necessarily cause a knee-jerk reaction like pushing a particular theory would.¹ So, what kinds of things do we actually want to know? For one, I will assert that all of us would certainly want to know that we haven't unwittingly taken a sucker's bet, revealing that someone has played us. I suspect that many of the diehard TOD readers, myself included, want to avoid this kind of situation. In my mind, knowledge remains the only sure way to navigate the minefield of confidence schemes. In other words, you essentially have to know more than the next guy, and the guy after that, and then the other guy, etc. TOD does a good job of addressing this as we constantly get fed the unconventional insights to explain our broader economic situation.

Ultimately we could consider knowledge as a survival tactic -- which boils down to the adage of eat or be eaten. If I want to sound even more pedantic, I would suggest that speed or strength works to our advantage in the wild but does not translate well to our current reality. It certainly does not work in the intentionally complex business world, or even with respect to our dynamic environment, as we cannot outrun or outmuscle oil depletion or climate change without putting our thinking hats on.

This of course presumes that we know anything in the first place. Nate Hagens had posted on TOD earlier this year the topic "I Don't Know". I certainly don't profess to have all the answers, but I certainly want to know enough not to get crushed by the BAU machine. So, in keeping with the traditions of the self-help movement, we first admit what we don't know and build from there. That becomes part of the scientific method, which a few of us want to apply.

As a rule, I tend to take a nuanced analytical view to the way things may play out. I will use models of empirical data to understand nagging issues and stew over them for long periods of time. The stewing is usually over things I don't know. Of course, this makes no sense for timely decision making. If I morphed into a Thompson's gazelle with a laptop cranking away on a model under a shady baobob tree on the Serengeti, I would quickly get eaten. I realize that such a strategy does not necessarily sound prudent or timely.

Nate suggests that the majority of people use fast and frugal heuristics to make day-to-day decisions (the so-called cheap heuristic that we all appreciate). He has a point in so far as not always requiring a computatonal model of reality to map our behaviors or understanding. As Nancy Cartwright noted:

This is the same kind of conclusion that social-psychologist Gerd Gigerenzer urges when he talks about “cheap heuristics that make us rich.” Gigerenzer illustrates with the heuristic by which we catch a ball in the air. We run after it, always keeping the angle between our line of sight and the ball constant. We thus achieve pretty much the same result as if we had done the impossible—rapidly collected an indefinite amount of data on everything affecting the ball’s flight and calculated its trajectory from Newton’s laws.

This points out the distinction between conventional wisdom and knowledge. A conventionally wise person will realize that he doesn't have to hack some algorithm to catch a ball. A knowledgeable person will realize that he can (if needed) algorithmically map a trajectory to know where the ball will land. So some would argue that, from the point of timely decision making, whether having extra knowledge makes a lot of sense. In many cases, if you have some common sense and pick the right conventional wisdom, it just might carry you in your daily business.

But then you look at the current state of financial wheeling-dealings. In no way will conventional wisdom help guide us through the atypical set of crafty financial derivatives (unless you stay away from it in the first place). Calvin Trillin wrote recently in the NY Times that the prospect of big money attracted the smartest people from the Ivy Leagues to Wall Street during the last two decades, thus creating an impenetrable fortress of opaque financial algorithms, with the entire corporate power structure on board. Trillin contrasted that to the good old days, where most people aiming for Wall St careers didn't know much and didn't actually try too hard.

I reflected on my own college class, of roughly the same era. The top student had been appointed a federal appeals court judge — earning, by Wall Street standards, tip money. A lot of the people with similarly impressive academic records became professors. I could picture the future titans of Wall Street dozing in the back rows of some gut course like Geology 101, popularly known as Rocks for Jocks.

I agree with Trillin that the knowledge structure has become inverted; somehow the financial quants empowered themselves to create a world where no one else could gain admittance. And we can't gain admittance essentially because we don't have the arcane knowledge of Wall Street's inner workings. Trillin relates:

"That’s when you started reading stories about the percentage of the graduating class of Harvard College who planned to go into the financial industry or go to business school so they could then go into the financial industry. That’s when you started reading about these geniuses from M.I.T. and Caltech who instead of going to graduate school in physics went to Wall Street to calculate arbitrage odds."

“But you still haven’t told me how that brought on the financial crisis.”

“Did you ever hear the word ‘derivatives’?” he said. “Do you think our guys could have invented, say, credit default swaps? Give me a break! They couldn’t have done the math.”

If you can believe this, it appears that the inmates have signed a rent-controlled lease on the asylum and have created a new set of rules for everyone to follow. We have set in place a permanent thermocline that separates any new ideas from penetrating the BAU of the financial industry.

I need to contrast this to the world of science, where one can argue that we have more of a level playing field. In the most pure forms of science, we accept, if not always welcome, change in our understanding. And most of our fellow scientists won't permit intentional hiding of knowledge. Remarkably, this happens on its own, largely based on some unwritten codes of honor among scientists. Obviously some of the financial quants have gone over to the dark side, as Trillin's MIT and Caltech grads do not seem to share their secrets too readily. By the same token, geologists who have sold their soul to the oil industry have not helped our understanding either.

Given all that, it doesn't surprise me that we cannot easily convince people that we can understand finance or economics or even resource depletion like we can understand other branches of science. Take a look at any one of the Wilmott papers featuring negative probabilities or Ito calculus, and imagine a quant using the smokescreen that "you can't possibly understand this because of its complexity". The massive pull of the financial instruments, playing out in what Steve Ludlum calls the finance economy, does often make me yawn in exasperation out of the enormity of it all. Even the domain of resource depletion suffers from a sheen of complexity due to its massive scale -- after all, the oil economy essentially circles the globe and involves everyone in its network.

Therein lies the dilemma: we want and need the knowledge but find the complexity overbearing. Thus the key to applying our knowledge: we should not fear complexity, but embrace it. Something might actually shake out.

Complexity

The word complexity, in short order, becomes the sticking point. We could perhaps get the knowledge but then cannot breech the wall of complexity.

I recently came across a description of the tug-of-war between complexity and simplicity when I happened across a provocative book called "The Quark and the Jaguar : Adventures in the Simple and the Complex" by the physicist Murray Gell-Mann. I discovered this book while researching the population size distribution of cities. One population researcher, Xavier Gabaix, who I believe has a good handle on why Zipf's law holds for cities, cites Gell-Mann and his explanation of power laws. Gell-Mann's book came out fifteen years ago but it contains a boat-load of useful advice for someone that wants to understand how the world works (pretentious as that may sound).

I can take a couple of bits of general advice from Gell-Mann. First, when a behavior gets too complex, certain aspects of the problem can become more simple. We can rather counter-intuitively actually simplify the problem statement, and often the solution. Secondly, when you peel the onion, everything can start to look the same. For example, the simplicity of many power-laws may work to our advantage, and we can start to apply them to map much of our current understanding². As Gell-Mann states concerning the study of the simple and complex in the preface to the book:

It carries with it a point of view that facilitates the making of connections, sometimes between facts or ideas that seem at first glance very remote from each other. (Gell-Mann p. ix)

He calls the people that practice this approach "Odysseans" because they "integrate" ideas from those who "favor logic, evidence, and a dispassionate weighing of evidence", with those "who lean more toward intuition, synthesis, and passion" (Gell-Mann p. xiii). This becomes a middle ground for Nate's intuitive cognitive (belief system) approach and my own practiced analysis. Interesting in how Gell-Mann moved from Caltech (one of Trillin's sources for wayward quants) to co-founding the Santa Fe Institute where he could pursue out-of-the-box ideas³. He does caution that at least some fundamental and basic knowledge underlines any advancements we will achieve.

Specialization, although a necessary feature of our civilization, needs to be supplemented by integration of thinking across disciplines. One obstacle to integration that keeps obtruding itself is the line separating those who are comfortable with the use of mathematics from those who are not. (Gell-Mann p.15)

I appreciate that Gell-Mann does not treat the soft sciences as beneath his dignity and he seeks an understanding as seriously as he does deep physics. He sees nothing wrong with the way the softer sciences should work in practice, he just has problems with the current practitioners and their methods (some definite opinions that I will get to later).

For now, I will describe how I use Gell-Mann and his suggestions as a guide to understand problems that have confounded me. His book serves pretty well as a verification blueprint for the way that I have worked out my analysis. As it turns out, most of what Gell-Mann states regarding complexity I happily crib from, and allows me to use an appeal to authority card to rationalize my understanding. (For this TOD post I was told to not use math and since Gell-Mann claims that his book is "comparatively non-technical", I am obeying some sort of transitive law⁴ here) As a warning, since Gell-Mann deals first and foremost in the quantum world, his ideas don't necessarily come out intuitively.

That becomes the enduring paradox -- simplicity does not always relate to intuition. This fact weighs heavily on my opinion that cheap heuristics likely will not provide the necessary ammunition that we will need to make policy decisions.

BAU (business as usual) ranks as the world's most famous policy heuristic. A heuristic describes some behavior, and a simple heuristic describes it in the most concise language possible. So, BAU says that our environment will remain the same (as Nate would say "when NOT making a decision IS making a decision"). Yet we all know that this does not work. Things will in fact change. Do we simply use another heuristic? Let's try dead reckoning instead. This means that we plot the current trajectory (as Cartwright stated) and assume this will chart our course for the near future. But we all know that that doesn't work either as it will project CERA-like optimistic and never-ending growth.

Only the correct answer, not a heuristic, will effectively guide policy. Watch how climate change science works in this regard, as climate researchers don't rely on the Farmer's Almanac heuristics to predict climate patterns. Ultimately we cannot disprove a heuristic -- how can we if it does not follow a theory? -- yet we can replace it with something better if it happens to fit the empirical data. We only have to admit to our sunk cost investment in the traditional heuristic and then move on.

In other words, even if you can't "follow the trajectory" with your eye, you can enter a different world of abstraction and come up with a simple, but perhaps non-intuitive, model to replace the heuristic. So we get some simplicity but it leaves us without a perfectly intuitive understanding. The most famous example that Gell-Mann provides involves Einstein's reduction of Maxwell's four famous equations in complexity by 1/2 to two short concise relations; Einstein accomplishes this by invoking the highly non-intuitive notion of the space-time continuum. Gell-Mann specializes in these abstract realms of science, yet uses concepts such as "coarse graining" to transfer from the quantum world to the pragmatic tactile world, with the name partially inspired by the idea of a grainy photograph (Gell-Mann p.29). In other words, we may not know the specifics but we can get the general principles, like we can from a grainy photograph.

Hence, when defining complexity it is always necessary to specify a level of detail up to which the system is described, with finer details being ignored. (Gell-Mann p.29)

The non-intuitive connection that Gell-Mann triggers in me involves the use of probabilities in the context of disorder and randomness. Not all people understand probabilities, and in particular how we apply them in the context of statistics and risk (except for sports betting of course), yet they don't routinely get used in the practical domains that may benefit from their use. How probabilities work in terms of complexity I consider mind-blowingly simple, primarily due to our old friend Mr. Entropy.

Never mind that entropy ranks as a most anti-intuitional concept.

Simplicity

Reading Gell-Mann's book, I became convinced that applying a simple model should not immediately raise suspicions. Lots of modeling involves building up an artifice of feedback-looped relationships (see the Limits to Growth system dynamics model for an example), yet that should not provide an acid test for acceptance. In actuality, the large models that work consist of smaller models built up from sound principles, just ask Intel how they verify their microprocessor designs.

My approach consists of independent research and then forays into what I consider equally simple connections to other disciplines, essentially the Odyssean thinking that Gell-Mann supports.

I would argue that the fundamental trajectory of oil depletion provides one potentially simplifying area to explore. I get the distinct feeling that no one has covered this, especially in terms of exactly why the classical heuristic, i.e. Hubbert's logistic curve, often works. So I have merged that understanding with the fact that I can use it to also understand related areas such as:

I collectively use these to support the oil dispersive discovery model -- yet it does bother me that no one has happened across this relatively simple probability formulation. You would think someone would have discovered all the basic mathematical principles over the course of the years, but apparently this one has slipped through the cracks.

Gell-Mann predicted in his book that this unification among concepts would occur if you continue to peel the onion. To understand the basics behind the simplicity/complexity approach, consider the complexity of the following directed graphs of interconnected points. Gell-Mann asks us which graphs we would consider simple and which ones we would consider complex. His answer relates to how compactly or concisely we can describe the configurations. So even though (A) and (B) appear simple and we can describe them simply, the graph in (F) borders on ridiculously simple, in that we can describe it as "all points interconnected". So this points to the conundrum of a complex, perhaps highly disordered system, that we can fortunately describe very concisely. As humans, the fact that we can do some pattern recognition allows us to actually discern the regularity from the disorder.

Figure 1: Gell-Mann's connectivity patterns.
However, what exactly the pattern means may escape us. As Gell-Mann states:

We may find regularities, predict that similar regularities will occur elsewhere, discover that the prediction is confirmed, and thus identify a robust pattern: however, it may be a pattern that eludes us. In such a case we speak of an "empirical" or "phenomenological" theory, using fancy words to mean basically that we see what is going on but do not yet understand it. There are many such empirical theories that connect together facts encountered in everyday life. (Gell-Mann p.93)

That may sound a bit pessimistic, but Gell-Mann gives us an out in terms of always considering the concept of entropy and applying the second law of thermodynamics (the disorder in an isolated system will tend to increase over time until it reaches an equilibrium). Many of the pattens such as the graph in Figure 1(F) have their roots in disordered systems. Entropy essentially quantifies the amount of disorder, and that becomes our "escape hatch" in how to simplify our understanding.

In fact, however, a system of very many parts is always described in terms of only some of its variables, and any order in those comparatively few variables tends to get dispersed, as time goes on, into other variables where it is no longer counted as order. That is the real significance of the second law of thermodynamics. (Gell-Mann p.226)

One area that I have recently applied this formulation to has to do with the distribution of human travel times. Brockmann et al reported in Nature a few years ago a scalability study that provoked some scratching of heads (one follow-on paper asked the questions "Do humans walk like monkeys?"). The data seemed very authentic as at least one other group could reproduce and better it, even though they could not explain the mechanism. The general idea, which I have further described here, amounts to nothing more than tracking individual travel times over a set of distances, and thus deriving statistical distributions of travel time by either following the cookie trails of paper money transactions (Brockmann) or cell phone calls (Gonzalez). This approach provides a classic example of a "proxy" measurement; we don't measure the actual person with sensors but we use a very clever approximation to it. Proxies can take quite a beating in other domains, such as historical temperature records, but this set of data seems very solid. You will see this in a moment.

Figure 2: Human travel connectivity patterns, from Brockmann, et al.
Note that this figure resembles the completely disordered directed graph shown by Figure 1(f). This gives us some hope that we can actually derive a simple description of the phenomenon of travel times. We have the data, thus we can hypothetically explain the behavior. As the data has only become available recently, likely no one has thought of applying the simplicity-out-of-complexity principles that Gell-Mann has described.

So how to do the reduction⁵ to first principles? Gell-Mann brings up the concept of entropy as ignorance. We actually don't know (or remain ignorant of) the spread or dispersion of velocities or waiting times of individual human travel trajectories, so we do the best we can. We initially use the hint of representing the aggregated travel times -- the macro states -- as coarse-grained histories, or mathematically in terms of probabilities.

Now suppose the system is not in a definite macrostate, but occupies various macrostates with various probabilities. The entropy of the macrostates is then averaged over them according to their probabilities. In addition, the entropy includes a further contribution from the number of bits of information it would take to fix the macrostate. Thus the entropy can be regarded as the average ignorance of the microstate within a macrostate plus the ignorance of the macrostate itself. (Gell-Mann p.220)

In the way Gell-Mann stated it, I interpret it to mean that we can apply the Maximum Entropy Principle for probability distributions. In the simplest case, if we only know the average velocity and don't know the variance we can assume a damped exponential probability density function (PDF). Since the velocities in such a function follow a pattern of many slow velocities and progressively fewer fast velocities, but with the mean invariant, the unit normalized distribution of transit probabilities for a fixed distance looks like the figure to the right (see link for derivation). To me it actually looks very simple, although people virtually never look at exponentials this way, as it violates their intuition. What may catch your eye in particular is how slowly the curve reaches the asymptote of 1 (which indicates a power-law behavior). If normal statistics acted on the velocities, the curve would look much more like a "step" function, as most of the transits would complete at around the mean, instead of getting spread out in the entropic sense.

Further since the underlying exponentials describe specific classes of travel, such as walking, biking, driving, and flying, each with their own mean, the smearing of these probabilities leads to a characteristic single parameter function that fits the data as precisely as one could desire. The double averaging of the microstate plus the macrostate effectively leads to a very simple scale-free law as shown by the blue and green maximum entropy lines I added in Figure 3.

Figure 3: Dispersion of mobility for human travel. The green line indicates agreement with a truncated Maximum Entropy estimate, and the blue dots indicate no truncation
I present the complete derivation here and the verification here. If you decide to read in more depth, keep in mind that it really boils down to a single-parameter fit -- and this over a good 5 orders of magnitude in one dimension and 3 orders in the other dimension. Consider this agreement in the face of someone trying to falsify the model; they would essentially have to disprove entropy of dispersed velocities.

It has often been empasized, particularly by the philosopher Karl Popper, that the essential feature of science is that its theories are falsifiable. They make predictions, and further observations can verify those predictions. When a theory is contradicted by observations that have been repeated until they are worthy of acceptance, that theory must be considered wrong. The possibility of failure of an idea is always present, lending an air of suspense to all scientific activity. (Gell-Mann p.78)

Further, this leads to a scale-free power law that looks exactly like the Zipf-Mandelbrot law that Gell-Mann documents, which also describes ecological diversity (the relative abundance distribution) and the distribution of population sizes of cities, from which I found Gell-Mann in the first place.

Since we invoke the name of Mandelbrot, we need to state that the observation of fractal self-similarity on different scales applies here. Yet Gell-Mann states:

Zipf's law remains essentially unexplained, and the same is true of many other power laws. Benoit Mandelbrot, who has made really important contributions to the study of such laws (especially their connection to fractals), admits quite frankly that early in his career he was successful in part because he placed more emphasis on finding and describing the power laws than on trying to explain them (In his book The Fractal Geometry of Nature he refers to his "bent for stressing consequences over causes."). (Gell-Mann p.97)

Gell-Mann of course made this statement before Gabaix came up with his own proof for city size, and obviously before I presented the variant for human travel (not that he would have read my blog or this blog in any case).

Barring the fact that it hasn't gone through a rigorous scientific validation, why does this formulation seem to work so well at such a concise level? Gell-Mann provides an interesting sketch showing how order/disorder relates to effective complexity, see Figure 4 below. At the left end of the spectrum, where minimum disorder exists, it takes very little effort to describe the system. As in Figure 1(a), "no dots connected" describes that system. In contrast, at the right end of the spectrum, where we have a maximum disorder, we can also describe the system very simply -- as in Figure 1(f), "all dots connected". The problem child exists in the middle of the spectrum, where enough disorder exists that it becomes difficult to describe and thus we can't solve the general problem easily.

Figure 4: Gell-Mann's complexity estimator. "the effective complexity of the observed system (can have) more to do with the particular observer's shortcomings than with the properties of the system observed." (Gell-Mann p.56)
So in the case of human transport, we have a simple grid where all points get connected (we can't control where cell phones go) and we have a maximum entropy in travel velocities and waiting times. The result becomes a simple explanation of the empirical Zipf-Mandelbrot Law [wiki]. The implication of all this is that through the use of cheap oil for powering our vehicles, we as humans have dispersed almost completely over the allowable range of velocities. It doesn't matter that we have one car that is of a particular brand and that an airliner is prop or jet, the spread in velocities while maximizing entropy is all that matters. Acting as independent entities, we have essentially reached an equilibrium where the ensemble behavior of human transport obeys the second law of thermodynamics concerning entropy.

Entropy is a useful concept only when a coarse graining is applied to nature, so that certain kinds of information about the closed system are regarded as important and the rest of the information is treated as unimportant and ignored. (Gell-Mann p.371)

Consider one implication of the model. As the integral of the distance-traveled curve in Figure 3 relates via a proxy to the total distance traveled by people, the only direction that the curve can go in an oil-starved country is to shift to the left. Proportionally more people moving slowly means that fewer proportionally will move quickly -- easy to state but not necessarily easy to intuit. That is just the way entropy works.

Figure 5: Assuming that human travel statistics follows the maximum entropy velocity dispersion model, a reduction in total travel will likely result in a shift as shown by the dotted blue curve.
But that does not end the story. Recall that Gell-Mann says all these simple systems have huge amounts of connectivity. Since one disordered system can look like another, and as committed Odysseans, we can make many analogies to other related systems. He refers to this process as "peeling the onion". Figuratively as one can peel a particular onion, another layer can reveal itself that looks much like the surrounding layer. I took the dispersive travel velocities way down to the core of the onion in a study I did recently on anomalous transport in semiconductors.

Often in physics, experimental observations are termed "anomalous" before they are understood.
-- Richard Zallen, "The physics of amorphous solids", Wiley-VCH, 1998

If you can stomach some serious solid-state physics take a peek at the results -- it's not like you will see the face of Jesus, but the anomalous behavior does not seem so anomalous anymore. Like Gell-Man states, these simple ideas connect all the way through the onion to the core.

Scaling

The big sweet Vidalia onion that I want to peel is oil depletion. All the other models I work out indirectly support the main premise and thesis. They range from the microscopic scale (semiconductor transport) to the human scale (travel times) and now to the geologic scale. I assert that in the Popper sense of falsifiability, one must disprove all the other related works to disprove the main one, which amounts to a scientific form of circumstantial evidence, not quite implying certainty but substantiating much of the thought process. It also becomes a nerve-wracking prospect; if one of the models fails, the entire artifice can collapse like a house of cards. Thus the "air of suspense to all scientific activity" that Gell-Mann refers to.

So consider rate dispersion in the context of oil discovery. Recall that velocities of humans become dispersed in the maximum entropy sense. Well, the same holds for prospecting for oil. I suggest that like human travel, all discovery rates have maximum dispersion subject to an average current-day-technology rate.

A real eye-opener to me occurred when I encountered Gell-Mann's description of depth of complexity. I consider this a rather simple idea because I had used it in the past, actually right here on TOD (see the post Finding Needles in a Haystack where I called it "depth of confidence"). It again deals with the simplicity/complexity duality but more directly in terms of elapsed time. Gell-Mann explains the depth of complexity by invoking the "monkeys typing at a typewriter" analogy. If we set a goal for the monkeys to type out the compleat works of Shakespeare, one can predict that due solely to probability arguments they would eventually finish their task. It would look something like the following figure with the depth D representing a crude measure of generating the complete string of letters that comprises the text.

Figure 6: Gell-Mann's Depth (d) is the cumulative Probability (P) that one can gain a certain level of information within a certain Time (T).
No pun-intended, Gell-Mann coincidentally refers to D as a "crude complexity" measure; I use the same conceptual approach to arrive at the model of dispersive discovery of crude oil. The connection invokes the (1) dispersion of prospecting rates (varying speeds of monkeys typing at the typewriters) and (2) a varying set of sub-volumes (different page sizes of Shakespeare's works). Again, confirming the essential simplicity/complexity duality, the fact that we see a connectivity lies more in the essential simplicity in describing the disorder than anything else.

The final connection (3) involves the concept of increasing the average rate of speed of the typewriting monkeys over a long period of time. We can give the monkeys faster tools without changing the relative dispersion in their collective variability⁶. If this increase turned out as an exponential acceleration in typing rates (see Figure 10), the shape of the Depth curve would naturally change. This idea leads to the dispersive discovery sigmoid shape -- as our increasing prospecting skill analogizes to a speedier version of a group of typewriting monkeys. See the figure to the right (click image to see larger version) for a Monte Carlo simulation of the monkeys at work [link].

It doesn't matter that we have one oil reservoir that has a particular geology and that this somehow deflects the overall trajectory, as we would have to if we considered a complete bottom-up accounting approach. I know this may disturb many of the geologists and petroleum engineers who hold to the conventional wisdom about such pragmatic concerns, but that essentially describes how a thinker such as Gell-Mann would work out the problem. The crude complexity suggests that we turn technology into a coarse grained "fuzzy" measurement and accelerate it to see how oil depletion plays out. So if you always thought that the oil industry essentially flailed away like various monkeys at a typewriter, you would approximate the reality more so than if you believed that they followed some predetermined Verhulst-generated story-line. So this model embraces the complexity inherent of the bottom-up approach, but ignoring the finer details and dismissing out of hand that determinism plays a role in describing the shape.

Luis de Sousa gives a short explanation of how the deterministic Verhulst equation leads to the Logistic here and it remains the conventional heuristic wisdom that one will find on wikipedia concerning the Hubbert Peak Oil curve. However, Verhulst generated determinism does not make sense in a world of disorder and fat-tail statistics, as only stochastic measures can explain the spread in discovery rates. This becomes the mathematical equivalent of "not seeing the forest for the trees". Pragmatically, the details of the geology do not matter, just like the details of the car or bicycle or aircraft you travel in does not matter for modeling Figure 3.

This approach encapsulates the gist of Gell-Mann's insights on gaining knowledge from complex phenomena. His main idea is the astounding observation that complexity can lead to simplicity. I am starting to venture onto very abstract ice here, but the following figure represents where I think some of the models reside on the complexity mountain.

Figure 7: Abstract representation of our understanding of resource depletion.
Notice that I place the "Limits to Growth" System Dynamics model right in the middle of the meatiest complexity region. That model has perhaps too many variables and so will mine the swamps of complexity without adding much insight (or in more jaded terms, any insight that you happen to require). Many people assume that the Verhulst equation, used to model predator-prey relationships and the naive Hubbert formula of oil depletion, is complex since it describes a non-linear relation. However the Verhulst actually proves too simple, as it includes no disorder, and doesn't really explain anything but a non-linear control law. The only reason that it looks like it works is that the truly simple model has a fortuitous equivalence to the simplified-complex model⁷, which exists as the dispersive discovery model on the other right-hand side of the spectrum. On the other hand, consider that the export land model (ELM) remains simple and starts to include real complexity, approaching the bottom-up models that many oil depletion analysts typically use.

Further to the left, I suggest that the naive heuristics such as BAU and dead reckoning don't fit on this chart. They assume an ordered continuance of the current state, yet one can't argue heuristics in the scientific sense as they have no formal theory to back them up⁸. The complementary effect way to the right suggests enough disorder that we can't even predict what may happen, the so-called Black Swan theory proposed by Taleb.

On the bulk of the right side, we have all the dispersive models that I have run up the flag-pole for evaluation. These all basically peel the onion, and follow Gell-Mann's suggestion that all reductive fundamental behaviors will show similarities at a coarse graining level. This includes one variation that refer to as the dispersive aggregation model for reservoir sizing. This has some practicality for estimating URR and it comes with its own linearization technique along the same lines as Hubbert Linearization (HL). You may ask if this is purely an entropic system, why would reservoirs become massive?

Sometimes people who for some dogmatic reason reject biological evolution try to argue that the emergence of more and more complex forms of life somehow violates the second law of thermodynamics. Of course it does not, any more than the emergence of more complex structures on a galactic scale. Self-organization can always produce local order. (Gell-Mann p.372)

Gell-Mann used the example of earthquakes and the relative scarcity of very large earthquakes to demonstrate how phenomenon can appear to "self-organize". Laherrere has used a parabolic fractal law, a pure heuristic to model the sizing of reservoirs (and eathquakes), whereas I use the simple dispersive model as shown below.

Figure 8: Dispersed velocities suggests a model of aggregation, much like Gabaix suggests for aggregation of cities. Very few large reservoirs and many small ones, just as in the distribution of cities.
These dispersive forms all fit together tighter than a drum. That essentially explains why I think we can use simple models to explain complex systems. I admit that I have tried to take this to some rather unconventional analogies, yet it seems to still work. I keep track of these models at http://mobjectivist.blogspot.com

Figure 9: Popcorn popping kinetics follows the same dispersive dynamics [link]

Discussion

I found many other insights in Gell-Mann's book that expand the theme of this post and so seem worthwhile to point out. I wrote this post with the intention of referencing Gell-Mann heavily because many of the TOD comments in the past have criticized not incorporating a popular science angle to the discussion. I consider Gell-Man close to Carl Sagan in this regard (w/o the "billions" of course). I essentially used the book as an interactive guide, trying to follow his ideas by comparing them to models that I had worked on.

Evidently, the main function of the book is to stimulate thought and discussion.
Running through the entire text is the idea of the interplay between the fundamental laws of nature and the operation of chance. (Gell-Mann p.367)

The role of chance, and therefore probabilities, seems to rule above all else. Not surprising from a quantum mechanic.

Gell-Mann has quite a few opinions on the state of multi-disciplinary research, with interesting insight in regards to different fields of study. He treats the problems seriously as he believes certain disciplines have an aversion to accommodating new types of knowledge. And these concerns don't sit in a vacuum, as he spends the last part of the book discussing sustainability and ways to integrate knowledge to solve problems such as resource depletion.

The lnformational Transition

Coping on local, national, and transnational levels with environmental and demographic issues, social and economic problems, and questions of international security as well as the strong interactions among all of them, requires a transition in knowledge and understanding and in the dissemination of that knowledge and understanding. We can call it the informational transition. Here natural science, technology behavioral science, and professions such as law, medicine, teaching, and diplomacy must all contribute, as, of course, must business and government as well. Qnly if there is a higher degree of comprehension, among ordinary people as well as elite groups, of the complex issues facing humanity is there any hope of achieving sustainable quality.

It is not sufficient for that knowledge and understanding to be specialized. Of course, specialization is necessary today But so is the integration of specialized understanding to make a coherent whole, as we discussed earlier. It is essential, therefore, that society assign a higher value than heretofore to integrative studies, necessarily crude, that try to encompass at once all the important features of a comprehensive situation, along with their interactions, by a kind of rough modeling or simulation. Some early examples of such attempts to take a crude look at the whole have been discredited, partly because the results were released too soon and because too much was made of them. That should not deter people from trying again, but with appropriately modest claims for what will necessarily be very tentative and approximate results.

An additional defect of those early studies, such as Limits to Growth, the first report to the Club of Rome, was that many of the critical assumptions and quantities that determined the outcome were not varied parametrically in such a way that a reader could see the consequences of altered assumptions and altered numbers. Nowadays, with the ready availability of powerful computers, the consequences of varying parameters can be much more easily explored. (Gell-Mann p. 362)

Gell-Mann singles out geology, archaelogy, cultural anthropology, most parts of biology for criticism, and many of the softer sciences, not necessarily because the disciplines lack potential, but because they suffer from some massive sunk-cost resistance to accepting new ideas. He gives the example of distinguished members of the geology faculty of Caltech "contemptuosly rejecting the idea of continental drift" for many years into the 1960's (Gell-Mann p. 285). This extends to beyond academics, as I recently I came across some serious arguments about whether geologists actually understand the theory behind geostatistics and the use of a technique called "kriging" to estimate mineral deposits from bore-hole sampling (just reporting the facts). And then Gell-Mann relates this story on practical modeling within the oil industry:

Peter Schwartz, in his book "The Art of the Long View", relates how the planning team of the Royal Dutch Shell Corporation concluded some years ago that the price of oil would soon decline sharply and recommended that the company act accordingly The directors were skeptical, and some of them said they were unimpressed with the assumptions made by the planners. Schwartz says that the analysis was then presented in the form of a game and that the directors were handed the controls, so to speak, allowing them to alter, within reason, inputs they thought were misguided. According to his account, the main result kept coming out the same, whereupon the directors gave in and started planning for an era of lower oil prices. Some participants have a different recollections of what happened at Royal Dutch Shell, but in any case the story beautifully illustrates the importance of transparency in the construction of models, As models incorporate more and more features of the real world and become correspondingly more complex, the task of making them transparent, of exhibiting the assumptions and showing how they might be varied, becomes at once more challenging and more critical. (Gell-Mann p. 285)

Trying to understand why some people tend to a very conservative attitude, Gell-Mann has an interesting take on the word "theory" and the fact that theorists in many of these fields get treated with little respect.

"Merely Theoretical" -- Many people seem to have trouble with the idea of theory because they have trouble with the word itself, which is commonly used in two quite distinct ways. On the one hand, it can mean a coherent system of rules and principles, a more or less verified or established explanation accounting for know facts or phenomena. On the other hand, it can refer to speculation, a guess or conjecture, or an untested hypothesis, idea or opinion. Here the word is used with the first set of meanings, but many people think of the second when they hear "theory" or "theoretics". (Gell-Mann p.90)

Unfortunately, I do think that this meme that marginalizes peak oil "theory" will gain momentum over time. Particularly, in terms of whether peak oil theory has any real formality behind it, as certainly no one in academic geology besides Hubbert⁹has really addressed the topic. Gell-Mann suggests that many disciplines simply believe that they don't need theorists. TOD commenter SamuM provided some well-founded principles to consider when mounting a theoretical approach, especially in responding to countervailing theories, i.e in debunking the debunkers. I am all for continuing this as a series of technical posts. ¹⁰

In the field of economics, Barry Ritholtz has also recently suggested a more scientific approach in The Hubris of Economists, yet he doesn't think that modeling necessarily works in economics (huh?). He might well consider that economics and finance modeling assumes absolutely no entropic dispersion. Taleb suggests that they should include fat-tails. The amount of effort placed in applying normal statistics has proven out as a colossal failure. We get buried daily in discussions on how to best to generate a course-correction within our economy, balanced between a distinct optimism and a bleak pessimism. At least part of the pessimism stems from the fact that we think the economy will forever stay conveniently complex beyond our reach. I would suggest that simple models may help just as well and that it allows us to understand when non-cheap heuristics and complex models work against our best interests (i.e. when we have been played).

The "cost of information" addresses the fact that people may not know how to make reasonable free market decisions (for instance about purchases) if they don't have the necessary facts or insights. (Gell-Mann p.325)

Above all, Gell-Man asks the right questions and provides some advice on how to move forward..

If the curves of population and resource depletion do flatten out, will they do so at levels that permit a reasonable quality of human life, including a measure of freedom, and the persistence of a large amount of biological diversity, or at levels that correspond to a gray world of scarcity, pollution, and regimentation, with plants and animals restricted to a few species that co-exist easily with mankind? (Gell-Mann p.349) We are all in a situation that resembles a fast vehicle at night over unknown terrain that is rough, full of gullies, with precipices not far off. Some kind of headlight, even a feeble and flickering one, may help to avoid some of the worst disasters. (Gell-Mann p.366)

I hope that I have illustrated how I have attempted to separate the simple from the complex. If this has involved too much math, I apologize.

I admit that we still don't understand economics though.

References

Murray Gell-Mann, "The Quark and the Jaguar : Adventures in the Simple and the Complex", 1995, Macmillan
Calvin Trillin, "Wall Street Smarts", NY Times, October 13, 2009
Nassim Nicholas Taleb, "The Black Swan: The Impact of the Highly Improbable", 2007, Random House
D. Brockmann, L. Hufnagel & T. Geisel, "The scaling laws of human travel", Nature, Vol 439|26, 2006.
Marta C. González, César A. Hidalgo & Albert-László Barabási,, "Understanding individual human mobility patterns", Nature, Vol 453, 779-782 (5 June 2008).

Figure 10: A damped exponential contains a maximum entropy amount of information, such as the decay of radioactive material. The rising exponential usually occurs due to a degree of feedback reinforcing some effect, such as technology advances.

Notes

¹The TV pundit Chris Matthews regularly asks his guests to "tell me something I don't know". That sounds reasonable enough until you realize that it would require beyond mind reading.
²Power laws are also fat-tail laws, which has importance wrt Black Swan theory.
³See this Google video of Gell-Mann in action talking about creative ideas. Watch the questions at the end where he does not suffer fools gladly.
⁴Unfortunately the transitive law is a mathematical law which means that we can never escape math.
⁵In terms of coarse graining, explaining the higher level in terms of the lower is often called "reduction".
⁶In marathon races, the dispersion in finishing times has remained the same fraction even as the winners have gotten faster.
⁷See this link with regard to Fermi-Dirac statistics. That also looks similar but comes about through a different mechanism.
⁸Excepting perhaps short-term Bayes. Bayesian estimates use prior data to update the current situation. BAU is a very naive Bayes (i.e. no change) whereas dead reckoning is a first order update, the derivative.
⁹Who was more of a physicist and did it more out of curiosity than anything else.
¹⁰I also see many TOD comments that show analogies to other phenomena that basically don't hold any water at all. We do need to continue to counter these ideas if they don't go anywhere, as they just add to the noise.

Summerside The Journal Pioneer: News | Kensington man charged in ...

Kensington man charged in oil tank accident Breaking News print this article. The Journal Pioneer. SUMMERSIDE – An 18-year-old Kensington man has been charged under the Highway Traffic Act in connection with an accident late Friday ...

Drumbeat: November 21, 2009

Permafrost thaw threatens Russia oil and gas complex: study

MOSCOW (AFP) – Thawing permafrost caused by global warming is costing Russian energy firms billions of dollars annually in damage control and shrinking Russia's territory, Greenpeace warned in a new study Friday.
According to the report by the environmental watchdog, up to 55 billion roubles (1.9 billion dollars) a year is spent on repairs to infrastructure and pipelines damaged by changes in the permafrost in western Siberia.
"For Russia, the biggest threat of the permafrost melt is to oil and gas company infrastructure," said Vladimir Chuprov, who heads Greenpeace's energy programme in Russia.

Natural gas prices fall 12 percent in November: U.S. natural gas inventories higher than at any point in the nation's history

The recession has kept natural gas demand low most of the year. With manufacturers shuttering factories and closing offices, the country is using less electricity and power plants are burning less natural gas.
Analyst Stephen Schork noted that with industrial production still weak, home heating would be the primary source of natural gas demand for the rest of the year.
"What does that say about the current recovery, or lack thereof?" Schork said in a research note.

Smaller oil and gas players 'on way to recovery'

The rising oil price has helped the UK's energy industry move towards recovery, a survey of smaller firms in the oil and gas sector suggests.
Ernst & Young's index of activity registered a strong gain of 35% in the third quarter of this year, and a rise of 114% since the start of this year.
The survey found more than half of oil and gas company bosses said they were looking at acquisitions.

Irish Government Urged To Resist Fossil Fuel Tax Increase

Many commentators in the Republic of Ireland are forecasting a general tax across all fossil fuels in the country's forthcoming Budget.
Ahead of the Budget, The Oil Firing Technical Association (OFTEC) has pointed out that many Irish consumers are already struggling to pay existing bills. In that context, a new carbon tax on home heating fuel would be most unwelcome, claims the training, standards and registration agency for the oil heating industry throughout the British Isles.

Next year looks brighter for Mexico's economy

MEXICO CITY — Rising oil prices and increased exports are slowly dragging Mexico's economy out of a severe recession, but the nation's financial system still confronts fundamental challenges, national leaders and experts say.

Outages dim Chavez popularity

Power failures, unpaid civil servants and falling oil revenue play havoc with support for the Venezuela leader.

Weak gas demand has refineries closing

WILMINGTON, Del. — Refineries from New Mexico to New Jersey are under severe economic pressure because of falling demand for fuel, with a number of facilities shutting down in recent months.
...Refineries in the Northeast are particularly vulnerable because many are older, operate less efficiently and must compete with gasoline imported from Europe.

Valero refinery shutdown punches another hole in Delaware's economy

The shutdown of Valero's refinery in Delaware City will have a devastating effect on the state and local economies while leaving a lingering question about whether a buyer could ever be found for the site, experts say.
While elected leaders clung to hope Friday that the 400-acre facility will not stay shuttered for long, economists offered a far less optimistic view -- at least for the next five to 10 years.

Delaware drivers to feel effect of Valero refinery closing at the pump

It takes drivers at Hillside Oil in Newark just 12 minutes to roll their 8,000-gallon heating oil trucks to the terminal at Valero's Delaware City refinery. Within a half hour of leaving, they're back.
Hillside gets 90 percent of its product from the refinery. But with it closing down for good, its drivers, and those serving similar area business, are going to have to prepare for a longer haul, said Bill Tuerke, the office manager there.
Will it drive up prices? Tuerke said he doesn't know, but having to send trucks to Philadelphia and back every day is bound to have an impact, he said.

Delaware environmental advocates saw Valero refinery as nemesis

Just about the time the federal Clean Air Act became law in 1963, Jake Kreshtool started checking up on the companies that spewed pollution in Delaware's air.
His industrial nemesis: the oil refinery at Delaware City.
"Their strategy was always delay, delay, delay," the longtime environmental advocate, former labor lawyer and former gubernatorial candidate said.

Dimock families say drilling harmed their health and homes

DIMOCK TWP. - In a field between Ronald Carter's trailer and the gas drilling site less than 500 feet from his front porch, a group of neighbors shared nightmarish stories Friday morning about the natural gas extraction they say has changed their lives and homes.
The 15 families were there to announce a lawsuit they filed Thursday against Cabot Oil and Gas Corp., the Texas-based natural gas operator that has drilled 63 wells in a 9-square-mile area around their homes in Susquehanna County, and has permits to drill about 60 more.

Henri Proglio Should Focus on EDF Rather Than Areva

Proglio called for a “rethink” of France’s nuclear industry, and especially of the shareholdings of reactor builder Areva, Les Echos reported two days ago, citing an interview. Proglio is “disappointed” by delays and safety concerns at two reactors being built by Areva and EDF and said France is “poorly represented” in a bid for a nuclear reactor contract in the Middle East.

2009 Vehicles sold were a Tad more efficient

U.S. consumers bought a slightly more fuel-efficient fleet of cars and trucks for 2009 than the model year before, but the vehicles Americans chose still burn considerably more fuel per mile and emit more greenhouse gases than the levels the government is targeting for 2016.

Buffett's advice on life: priceless

Goetgeluk asked what Buffett thought of the peak oil theory — that oil production has peaked and will only decline in the future — and what he believed would replace carbon fuel.
Buffett told him that in 20 years, he believes all the cars on the road will be electric. He's already invested in a Chinese company working on the technology to make it happen.

The Critical Unraveling of U.S. Society

Regardless of your beliefs, due to climate change, we are on the verge of experiencing major water shortages spreading “across the country. Sooner rather than later…” California has already been hit by extreme drought and water is in very short supply. As the Arctic continues to melt, California will continue to experience extreme drought. A new study revealed: “when Arctic sea ice disappears, the jet stream—high-altitude winds with a profound influence on climate—shifts north, moving precipitation away from California.” A recent “sweeping water-reform bill” in California temporarily eased public outcry, but the problem remains. The U.S. is confronted by a serious water crisis.

Study sees transit saving Californians' energy, cutting greenhouse gas

A new study says Californians could save billions each year and cut greenhouse gas emissions by developing neighborhoods within easy access of public transportation.

'Carbon tax' is sensible, and perhaps inevitable, advocate says

Dieter Helm of Oxford says climate change policy should focus not on carbon production, but carbon consumption. A tax on carbon-heavy activities places the emphasis where it belongs, he says.

Scientific evidence supports carbon storage technique

WHILE full carbon capture and storage systems have yet to be proven on an industrial scale, scientists say all the technology is in place for the technique to become a major player in the battle against climate change.
Dr Richard Pike, chief executive of the Royal Society of Chemists and a former oil industry consultant suggests fears about the "unproven" nature of CCS have been overblown, and the cost of installing the technology is likelier to be a bigger barrier than any risk of it not working.

Top U.N. Scientist Laments U.S. Pace on Climate Actions

The United Nations' top climate scientist does not expect any major breakthroughs on global warming next week when President Obama hosts Indian Prime Minister Manmohan Singh, because the United States has not acted to curb its greenhouse gas emissions.

Drowning in the Garden of Eden

In August, Seychelles presented a report about its fate to the United Nations that reads like a script for a science-fiction apocalypse. It says that if nothing is done to correct global warming, rising seas will submerge 60 percent of the country's islands by the end of this century, possibly sooner. Drought, disease and fire will scourge the land. People will fight to the death for water and food. And the inhabitants will find themselves, as the report puts it, "in the unprecedented situation of being citizens of a state that no longer has a territory."
Imagine your country disappearing underwater forever. Where do you belong? Where do you go?

Bill McKibben: Obama needs to feel the heat

Obama's excuse is that the Senate won't sign tough climate legislation, so there's no use pushing for it. (And he's right -- the Senate is tough. At 350.org, an organization I co-founded that is dedicated to solving the climate crisis, we're working to organize candlelight vigils at senators' offices around the country.) But that's conceding the game without taking a shot -- he hasn't done any of the things Nasheed has tried to rally his nation and other nations.

The Day Global Warming Stood Still

"I proudly declare 2009 as the 'Year of the Skeptic,' the year in which scientists who question the so-called global warming consensus are being heard," Inhofe said to Boxer in a Senate speech. "Until this year, any scientist, reporter or politician who dared raise even the slightest suspicion about the science behind global warming was dismissed and repeatedly mocked."
Inhofe added: "Today I have been vindicated."
The Ada (Oklahoma) Evening News quotes Inhofe: "So when Barbara Boxer, John Kerry and all the left get up there and say, 'Yes. We're going to pass a global warming bill,' I will be able to stand up and say, 'No, it's over. Get a life. You lost. I won,'" Inhofe said.

Global Warming Research Exposed After Hack

Judging from the data posted, the hack was done either by an insider or by someone inside the climate community who was familiar with the debate, said Robert Graham, CEO with the consultancy Errata Security. Whenever this type of incident occurs, "80 percent of the time it's an insider," he said.

Limbaugh distorts apparently stolen emails to falsely claim global warming is "made up"

Rush Limbaugh -- who had previously condemned the "thugs" who hacked then-Gov. Sarah Palin's email account -- joined right-wing bloggers in touting a series of emails that were apparently stolen from the UK's Climate Research Unit [CRU]. Limbaugh proceeded to distort at least one of the emails in order to falsely suggest that it is evidence that global warming is "made up" and that leading climate scientists have been engaged in "substantial fraud."

Lester R. Brown: A hotter planet means less on our plates

China is the world's leading producer of wheat. India is No. 2. These two countries also dominate the world's rice harvest. But unlike in the United States (the third-largest wheat producer), where wheat is watered largely by rainfall, most crops in China and India are irrigated. The vanishing of mountain glaciers in Asia therefore represents the biggest threat to the world food supply that we have ever seen.
Americans may be tempted to see melting glaciers on the Tibetan plateau as China's problem. And they are. But they are also our problem. We live in an era of fully integrated global food markets; a major harvest shortfall in one corner of the world will drive up prices everywhere.
If China can no longer grow enough wheat and rice to feed its 1.3 billion people and goes shopping for massive quantities of grain, global food costs will rise dramatically. When domestic food prices skyrocketed in the 1970s, the United States restricted exports of grain and soybeans. This time around, with China holding $800 billion in U.S. Treasury securities, we won't be in any position to limit exports. China is our banker. China's food shortage will be our shortage, too.

Enbridge and Renewable Energy Systems wind energy project to create 300 jobs

Enbridge Inc and Renewable Energy Systems Canada Inc. announced Thursday a partnership to develop a wind energy project in Ontario which would create 300 construction jobs.

Make Tea Not War.....

As the days tick away to Christmas and the temperature drops, time spent outside is less and less. W

Oil activity shows signs of more life in eastern Montana - Great Falls Tribune

Oil activity shows signs of more life in eastern Montana
Great Falls Tribune
"Oil drilling in Montana had never entirely gone away, but our rig count was down to about two or three, and right now we are up to four or five," said Tom ...

and more »

Nebraska ethanol plant fire produces lawsuit

The owners of a Lexington ethanol plant and their insurer are suing a subsidiary of a Houston-based natural gas provider they say is responsible for an explosion and fire that shut down the plant for weeks.

Attorney says oil companies in trouble if Oscar Wyatt to blame for suicide ... - Dallas Morning News

Attorney says oil companies in trouble if Oscar Wyatt to blame for suicide ...
Dallas Morning News
... said Friday that a pending lawsuit accusing Wyatt of indirectly funding Hamas terrorists could have wide-ranging ramifications for the US oil industry. ...

and more »

Fyi: Business - Tulsa World

Fyi: Business
Tulsa World
By FROM STAFF AND WIRE REPORTS The number of drilling rigs actively exploring for oil or gas in Oklahoma edged up by two this week to 79, Baker Hughes Inc. ...
Baker Hughes: US Oil, Gas Rig Count Up 12 To 1113 This WeekWall Street Journal
U.S. natural gas rig count falls for second weekReuters
US rigs increase for fifth weekOil & Gas Journal
Upstream Online
all 92 news articles »

Robert Murray fordwarded this..How much oil does the U.S. have in the ground?

Also if I may add, about 6 months ago I was watching a news program on oil and one of the Forbes Bro

550 to lose jobs as Valero Energy shuts Delaware refinery - Philadelphia Inquirer

Washington Post

550 to lose jobs as Valero Energy shuts Delaware refinery
Philadelphia Inquirer
Oil-refinery workers on the Delaware River yesterday received their second big blow in six weeks, ...
us oil refinery output seen clipped until springReuters
Options 'exhausted,' Valero shuts refineryGlobe and Mail
Valero Will Close Delaware RefineryWall Street Journal
The News Journal -MarketWatch -Purchasing.com
all 328 news articles »

Jeno Ortiz

by Jeno Ortiz from her flickr “Oil formation on sea” - Jeno Ortiz

Smuggling seen deterring future investments in RP oil industry - Manila Bulletin

Smuggling seen deterring future investments in RP oil industry
Manila Bulletin
The proliferation of smuggling activities in the domestic oil industry is emerging as the major factor to deter investment flows ...

Texas High Court Agrees to Rehear Exxon Case

The Texas Supreme Court on Friday said it will again hear arguments in the nearly 15-year legal battle over accusations that Exxon Mobil Corp.

A Short History of the Six Day War, part 3

Causes Finally, we come to the question, how did the war start? It is fair to say that the seeds for

Petroleum Ministry Renews ExxonMobil Oil Licences - THISDAY

Reuters South Africa

Petroleum Ministry Renews ExxonMobil Oil Licences
THISDAY
... negotiations between Nigeria and the IOCs have been hard fought, with China also seeking to gain a stronger foothold in the country's oil industry. ...
UPDATE 2-Nigeria renews three ExxonMobil oil licencesReuters

all 28 news articles »

U.S. Fears Iraq Development Projects May Go to Waste-NYT

This is a fact that should have been envisioned prior to investing, come to think of it before invad

Texas high court agrees to rehear Exxon case - The Associated Press

Texas high court agrees to rehear Exxon case
The Associated Press
Land Commissioner Jerry Patterson has asked the Texas Railroad Commission, which regulates the oil and gas industry, to levy fines on Exxon Mobil that could ...
Exxon Mobil Corp. v. Gill (Re: Plugging abandoned oil wells)Leagle, Inc.

all 108 news articles »

Threat of Rising Rates? - Commodities News - Oil - Gold - Metals ...

New data today showed Germany's wholesale price index holding flat in Oct., defying market expectations of a slight increase as the rising Euro undid crude oil's jump in Dollars. Eurozone interest rates now stand at 1.0%. ...

Gold ETF Impact - Commodities News - Oil - Gold - Metals - Grains ...

Gold ETF Impact - Commodities News - Oil - Gold - Metals - Grains - Quotes - Managed Futures · Home · About CNC · Advertise With Us · News · Oil News · Gold News · Markets · Education · Introduction to Futures Trading · Glossary ...

Pa. residents sue Cabot Oil & Gas over polluted wells

DIMOCK, Pa. -- More than a dozen families have filed suit against one of the nation's largest natural gas drillers after the company polluted their water wells in northeastern Pennsylvania.

Angola Ignores Opec Target - Petroleum Intelligence Weekly (subscription)

Angola Ignores Opec Target
Petroleum Intelligence Weekly (subscription)
Cookies are disabled on your machine. This site requires cookies to be enabled. Thank You, EIG. The document you have requested requires a subscription or a ...

and more »

CNPC signs new agreements with Sudan

November 20,2009 --

China National Petroleum Corp., apparently shrugging off environmentalists’ concerns, has signed three oil and gas cooperation agreements with the government of Sudan.

....

Senate committee members trade barbs at OCS technology hearing

November 20,2009

Mexico eyes risk contracts to offset Cantarell downturn

November 20,2009 --

Mexico’s state-owned Petroleos Mexicanos and the Secretaria de Energia (Sener) are preparing risk contracts that will be offered to oil companies—international and domestic—in order accelerate the search for oil and gas, accor.......

US rigs increase for fifth week

November 20,2009 --

US drilling activity increased for the fifth consecutive week, up by 12 rotary rigs to 1,113 working but still well below the 1,941 units drilling during the comparable week a year ago, Baker Hughes Inc. reported.

....

US HOT STOCKS: Hershey, Cadbury Active In Late Trading - Wall Street Journal

US HOT STOCKS: Hershey, Cadbury Active In Late Trading
Wall Street Journal
Shares in offshore drilling contractors Noble Corp. (NE, $40.02, -$1.68, -4.03%) and Seahawk Drilling Inc. (HAWK, $22.57, -$3.78, -14.35%) fell after ...

and more »

Republican Senator Robert Bennett Seeks to Permanently Sunset TARP Program

Name: Sen. Robert Bennett (R-Utah)

Position: Born in Salt Lake City in 1933, Robert "Bob" Bennett hails from a well-connected Utah family. He is the grandson of the seventh president of the Church of Jesus Christ of Latter-Day Saints and the son of a former four-term U.S. senator. After graduating from the University of Utah and serving in the Utah Army National Guard as a Mormon chaplain for 12 years, he moved to Washington, D.C., where he led the Department of Transportation's congressional affairs in 1969 and then headed the lobbying firm Robert Mullen & Company from 1970 until 1972. The lobby shop reportedly served as a CIA front group and had previously employed one of the Watergate burglars. Some circles falsely speculated that he might be the Washington Post's "Deep Throat" source. Bennett has denied any wrongdoing or involvement with the Watergate scandal. He next spent several years working in public relations for eccentric billionaire Howard Hughes. Bennett ultimately returned to Utah and worked in the private sector until running for a U.S. Senate seat in 1992. Though he once promised to only serve two terms, he is now serving in his third term and seeking re-election again next fall. He sits on the Senate's Appropriations Committee; Banking, Housing, and Urban Affairs Committee; Energy and Natural Resources Committee and Rules and Administration Committee. On the rules committee, he is the ranking Republican member.

Money Summary: Since 1991, Bennett has raised about $12.3 million and spent $10.4 million. His campaign committee currently has $792,000 in cash on hand. Political action committees have accounted for the largest portion of his war chest over the years, with 37 percent of all his contributions coming from them. Individual donors account for 28 percent of his contributions. And he has also spent $3.6 million of his own money -- or 29 percent of his overall contributions. Residents of the Salt Lake City-Ogden metro area have been his top donors, followed by residents of the Washington, D.C., metro area. He also operates a leadership PAC, Snow PAC, which has raised about $902,000 since 2003. So far this year, he's doled out $57,500 in contributions to other Republican candidates through this committee.

Campaign Donors: Over his career, Bennett has raised 3.5 times as much from the finance, insurance and real estate sector than any other sector. Financial interests are his top career supporter, giving him $2.2 million. The top three industries to lend him financial support all hail from this sector: securities and investment companies ($599,300), commercial banks ($416,200) and insurers ($383,250). Real estate companies also rank in as the ninth most prolific industry to support Bennett, with $230,600 in contributions, and finance and credit companies rank tenth, with $225,350 in contributions. The energy and natural resources sector ranks second with about $633,800 in contributions since 1993.

Sixteen of Bennett's top 20 career contributors are companies associated with the finance, insurance and real estate sector. This includes seven of his top eight financial backers; the PACs and employees of Morgan Stanley, JPMorgan Chase, Citigroup, the American Bankers Association, Fannie Mae, Bank of America and American Express have all given him between $43,000 and $60,000 over the years.

On Financial Regulation: Originally a supporter of the Troubled Asset Relief Program (TARP) enacted by President George W. Bush in October 2008, Bennett only voted in favor of authorizing the first $350 billion of the $700 billion requested -- a vote he called one of the most difficult of his career. In January, he opposed the authorization of the second $350 billion, saying the emergency of the crisis had lessened and that taxpayers were not being provided with enough reassurances that the government would spend their money wisely. He now believes that the TARP program has served its purpose and should expire at the end of this year. Current law allows the secretary of the treasury to determine if the federal government will continue to spend TARP money in 2010, and Bennett has proposed legislation to eliminate this aspect of the treasury secretary's power. He also introduced legislation to require Congress to tie any future TARP authorizations to specific cuts in discretionary spending, which he argued would be the most fiscally responsible way to proceed. Bennett, like most of his Senate Republican colleagues, voted in February against President Barack Obama's stimulus legislation, known as the American Recovery and Reinvestment Act. He also opposed the Obama administration's use of TARP funds to bailout the auto industry.

Invests In: Bennett currently ranks as the 33rd wealthiest member of the Senate. According to his 2008 personal financial disclosure, he has 28 assets worth between $7.8 million and $36.9 million. He also lists two liabilities totaling between $6 million and $30 million of real estate debt. Because senators disclosure their financial assets and liabilities in broad ranges, the exact amounts are not known. Thus his net worth could be as high as $30.9 million in the black or as low as $22.2 million in the red. Among his 2008 transactions, in April, he sold between $15,000 and $50,000 of stock in Wells Fargo, a company that would later receive bailout money from the government. And in July, he purchased between $15,000 and $50,000 in Morgan Stanley bonds, another company that would later receive TARP funds. He also reported holding between $15,000 and $50,000 worth of stock in each of the following companies: IBM, regional airline Skywest and defense contractors Honeywell International and Lockheed Martin.

Industry Favors: As Congress debated limiting executive compensation at companies that received bailout funds in March, Bennett joined with fellow Republicans in expressing skepticism. An executive at a bank "is a free agent who can leave the bank and go to work someplace else," Bennett told the Huffington Post. "You run the risk of having a brain drain at the bank of their top talent." No matter how logical wage control measures such as those being considered by lawmakers then sounded, Bennett said, he didn't like the idea of government intervene so much in private business.

In His Own Words: "I strongly believe we did the right thing by passing the initial round of TARP to make credit available and avoid a collapse of the entire system," Bennett said in a statement last month. "TARP was intended to be timely and targeted, and we no longer need the Treasury to shovel out more money. It is in the best interest of American taxpayers that Congress terminate the program at the end of the year and work toward implementing the right tax and regulatory system that will allow businesses to solve their own problems."

Return to "Crossing Wall Street" series

NYMEX December WTI, Heating Oil Down, Gasoline Higher on Spread Reversals

November 20, 2009 3:41 PM ET The NYMEX December crude and heating oil contracts both ended today below yesterday's settles while December RBOB gasoline ended the day above Thursday's settle. The reason for today's mixed close is attributed to the e... [More]

Affordable energy isn’t only target of climate politics

November 20,2009 --

More will be needed if changes in human activity are to influence climate measurably. Recent events show what might be in store.

....

OPEC head says $75-80 a barrel a 'good price'

Tuesday, November 17, 2009 ABU DHABI: Seventy-five to 80 dollars a barrel is a satisfactory price for oil, the president of OPEC said on Monday, adding that the cartel may leave production unchanged at its meeting next month.

DEL STONE: Conservation can help cut back a little gulf drilling - The Northwest Florida Daily News

DEL STONE: Conservation can help cut back a little gulf drilling
The Northwest Florida Daily News
Maybe if we were all a little more vigilant, oil drilling in the eastern gulf wouldn't be an issue. Daily News Online Editor Del Stone Jr. can be reached at ...

Opec wants compensation if climate deal cuts oil use - Times Online

Opec wants compensation if climate deal cuts oil use
Times Online
The chief of the Opec oil cartel said that oil-producing countries should be compensated for lost revenues if UN climate talks in Copenhagen next month ...

Oil prices wobble on recovery concerns - AFP

The Money Times

Oil prices wobble on recovery concerns
AFP
Meanwhile, OPEC president Jose Maria Botelho de Vasconcelos has signalled that 75-80 dollar oil is an adequate level to allow for a global economic recovery ...
OIL FUTURES: Nymex Crude Drops As Economic Recovery LagsWall Street Journal
OPEC may keep output of crude unchanged in DecMoneycontrol.com
Oil prices rally on weak dollar, Opec commentsPeninsula On-line
Bloomberg -Daily FX -Channel News Asia
all 1,969 news articles »

Weak demand and rising crude prices lead to another refinery closing; 550 workers let go

Refineries from New Mexico to New Jersey are under severe economic pressure because of falling demand for fuel, with a number of facilities shutting down in recent months.

UPDATE 2-Pennsylvania residents sue over gas drilling - Reuters

Boston Globe

UPDATE 2-Pennsylvania residents sue over gas drilling
Reuters
... Nov 20 (Reuters) - Residents of a small rural Pennsylvania town sued Cabot Oil & Gas Corp (COG.N) on Friday, claiming the company's natural-gas drilling ...
Residents Take Action to Correct Conduct by Natural Gas Company in Dimock, PAWBGH
Pa. residents sue gas driller over polluted wellsThe Associated Press
Dimock Neighbors Sue Cabot Oil & GasWBNG-TV
WNEP-TV -Wilkes Barre Times-Leader -Pike County Courier
all 192 news articles »

Rig Activity - November 17, 2009

Terra Increases Production But Low Prices Drag Down Financial results

Despite increasing third quarter production by about 1,750 bbls of oil equivalent per day, Terra Energy Corp. couldn't overcome the weak commodity price environment and posted declines in earnings and cash flow.

Questerre Continues Quest For Utica Commercialization

Developments in Quebec over the last quarter have rekindled market interest in the Utica shale and the St. Lawrence Lowlands, says Questerre Energy Corporation, one of the landowners working to commercialize the play.

Peyto Seeks Production Engineer

Oilsands Costs Reduced For Now

While the current slowdown involving delays and cancellations of new oilsands projects, representing an estimated $150 billion potential investment, has brought down costs through an improved labour market and lower prices for equipment, it may be difficult to keep costs down, a recent conference heard.

NYMEX Oil Complex Lower on Renewed Concerns about Economy

November 20, 2009 8:18 AM ET The December NYMEX crude and RBOB gasoline and heating oil contracts are all expected to open below Thursday's settles. The lower opening is appears to be a continuation of yesterday's sell-off due to concerns that the ... [More]

The Renewables Gap: The Political Challenge of Affecting a Societal Transition to Renewable Sources of Energy

Below is a summary of my presentation, The Renewables Gap, from the ASPO 2009 conference. The intent of my presentation was to highlight the political challenge of affecting a societal transition to renewable sources of energy. In particular, I focus on wind and solar, though it seems to me that the problem will be largely the same (if not worse) if we attempt to rely on other “renewables.” My initial presentation focused on attempting to illustrate the Renewables Gap as an energy problem. While I briefly addressed the political aspects of this problem in my presentation, on reflection I’ve chosen to focus more carefully on this aspect of the Renewables Gap.

Frankly, I've never been very pessimistic about our theoretical ability to adapt to peak oil. It’s what I fear we will actually do in response—or, rather, what we won’t do—that concerns me. I feel the same way about our ability to transition to alternative sources of energy—the challenge that I’ve termed the Renewables Gap. I’m quite confident that we have the theoretical ability to deal with the problem. However, if you accept that “politics” is the process of allocating scarce resources in a society, then it is the political problem posed that appears most daunting. Like many things involving peak oil, we’re sure to have all the political will that we need to deal with the problem at only some point after our window of opportunity to act has closed. The challenge is figuring out how to spread awareness of the nature of the problem and willingness to commit scarce resources to its solution before there is a crisis. Here, again, my pessimism is grounded in what I fear we will not do. I don’t pretend to offer any easy solution (the desire for which gives much insight into the nature of this very problem). My goal here is only to provide a framework for thinking about this problem:

If we seek to mitigate peak oil with renewable energy, we need to first ask what do we need to mitigate. My answer: the decline in NET energy produced from oil, not the decline in overall production. If, hypothetically, 20 years from now we’re producing 100 million barrels of oil per day, but it requires 100 million barrels of oil worth of energy input to do so, we have ZERO energy left for the operation of society at large. From the perspective of a society attempting to maintain itself, this is functionally very similar to producing no oil at all. Therefore, we must remain focused on the NET energy available to society.

What I want to quantify is the amount of net-energy that we need to replace going forward. A “classic” peak oil decline graph shows a plateau, followed by a gradually accelerating decline. Let’s consider why that’s so. What happens when we hit a plateau—as we arguably have now? The existing fields are declining at rates between 3% and 15% per year. But, because we’re scrambling to bring new production on-line, the overall level of production is buoyed for some time. We’re compensating for this underlying decline with more expensive oil—both financially and energetically. That keeps the level of OVERALL oil production steady, but the rate of NET energy production from oil is falling.

For the purpose of exploring the solution space of society’s transition to alternative energy, I’ve decided to frame the issue with two simple, exponential rates of NET energy decline: 5% and 10% per year. The graph below shows these rates of decline starting from a hypothetical year zero (because, again, my goal here is not to state that global peak net energy occurred in 2002, 2020, etc.). I’ll call these the “low” and “high” range scenarios. Certainly this simple exponential function is overly simple, and these numbers may be higher or lower than many estimates. That’s fine—my goal here is to frame the issue, not to predict the future reality of global net energy production. I’ll be discussing the potential to use renewable wind and solar power to mitigate these rates of decline.

First, I’d like to note the systemic effects of solar and wind energy’s unique energy-return profiles: the vast majority of the energy invested in these sources comes up front, before they ever begin to generate. Between 80% and 90% of the total energy ever required to build, operate, and maintain these systems must be invested UP FRONT. I won’t discuss other renewables such as tidal, geothermal, nuclear, and biofuels at this time, though I welcome discussion of how these options may impact the solution space.

Next, it’s necessary to point out what is obvious to many: these renewables produce ELECTRICITY, not oil. I’m talking here about using them to replace oil, so it’s necessary to address conversion issues. How many GWh are needed to replace 1 mbpd of oil production?
A straight BTU-to-BTU conversion: replacing 1 million barrels of oil per day production, or 365 million barrels of oil per year, equates to 70.78 Giga-Watt-Years.

Clearly, however, oil and electricity are not the same thing. Some people have suggested that you only need 1/3 this much electricity to mitigate peak oil because oil fired electricity generation can be only 33% efficient. I think that modern oil-fired electricity is actually somewhere between 50% and 66% efficient, but we need to explain the validity of using the BTU-to-BTU conversion:

First, because we need to replace oil, not electricity, and because relatively little oil is used to generate electricity, it’s incorrect to use this oil-fired electricity efficiency number.

Second, our infrastructure is currently adapted to burning oil in many applications. Therefore, to the extent we want to use renewably-generated electricity to replace this oil, we need to adapt this oil-burning infrastructure to electricity. For example, if you want to replace transportation fuel with plug-in electric cars, you need to invest in significant new infrastructure in the form of cars, batteries, charging stations, etc.

Third, any form of mitigation using renewably-generated electricity will require significant additional investment in the transmission grid to handle higher loads and to balance or store electricity due to the variable availability of renewable generation.

I don’t know if it’s possible to calculate the exact energy balance here. However, I’ll assume for the present analysis that, in order to mitigate peak oil with renewably-generated electricity, we’ll need to generate effectively the same number of BTUs of electricity as we’re losing in oil. Maybe slightly more, maybe slightly less, but I think the BTU-to-BTU figure of 70.78 Giga-Watt-Years per million barrels of oil per day lost is pretty close.

Another argument is that we don’t need to produce as much energy renewably as we lose to peak oil because conservation and improved efficiency can largely make up the difference. There’s some truth here, but it’s only ½ the equation. That’s because two factors—population growth and the desire of the world’s poor to improve their standard of living—will cancel out some or all of the gains from efficiency and conservation. For example, if population increases by 30% over the next 20 years, that alone will negate a 23% reduction in global per capital oil consumption.

Additionally, at least 5 Billion people and growing want to “improve” their level of energy consumption to Western levels. In India, car sales are up 26% over last year, to 120,000 cars per month. Admittedly, these cars tend to be more efficient than in America, but this is new demand, and it far more than cancels out the fact that the Tata Nano gets 56 miles per gallon. Similarly, on a global scale, Jeavons’ Paradox will reduce the effectiveness of energy efficiency as a tool to reduce demand. Finally, while markets or force may deny the world’s poor access to Western levels of energy consumption, the geopolitical consequences of such disparity will actually serve to accelerate energy scarcity.

Another key question is: how much up-front energy input will be required to build out enough renewables to mitigate the decline in net energy from oil production? We know how much energy must be produced to meet this target, so the answer to this question is a function of the EROI and the lifespan of our renewable options. Here, I’m only evaluating wind and solar photovoltaic. I recognize that many people hold the belief that wind and solar energy have very high EROI values on the order of 40 or 50, and energy payback times on the order of months, not years, I’ve chosen to use significantly lower EROI values for this analysis.

We could talk about this boundary and EROI calculation issue until we’re all blue in the face—my intent here is not to argue that some specific number is correct, but rather to point out the uncertainty and potential range. At the lower end of the range, I’ve proposed a proxy of price to account for ALL inputs and outputs. There are significant problems with this methodology, such as dealing with financing costs, but it has the distinct advantage of allowing us to account for all inputs—regressed infinitely—rather than drawing some sort of artificial boundary. IF you look at modern wind turbines using the price proxy, you get something like an EROI of 4. I’ll call that my “low” value.

Now let’s consider more conventional calculations. Wind seems to be most promising at the moment, and I’m looking specifically at a 2009 paper by Kubiszewski, Cutler, and Endres entitled “Meta-analysis of net energy return for wind power systems.” The authors review 50 different studies of wind EROI. In a section entitled “Difficulties in calculating EROI,” they make this statement:

“Studies using the input-output analysis [one method of calculating EROI] have an average EROI of 12 while those using process analysis [another method] an average EROI of 24. Process analysis typically involves a greater degree of subjective decisions by the analyst in regard to system boundaries, and may be prone to the exclusion of certain indirect costs compared to input-output analysis.”

What I take away from that is that there seems to be a range of 12-24, but the authors—a highly respected group—suggest that the “24” figure fails to account for many inputs. That suggests to me that an EROI of 12 is more accurate.

For our purposes, though, my intent is to explore the solution space, so I’ve selected what I think is an optimistic upper “high” EROI value of 20. I think this is unrealistically high—especially because this figure doesn’t even account for the intermittency, transmission, and storage energy costs that must be considered in such a large-scale societal transition—but for now let’s use 4 and 20. Feel free to recalculate using your own preferred numbers…

With apologies for the long introduction, here’s the reveal:

How much energy must we invest if we want to ramp up renewable generation to keep pace with declining net energy from oil? This graph answers that question using a 5% net energy decline and a renewable EROI of 20.

In this scenario, to mitigate the year-1 decline in net energy from oil, we’d need to invest 467 GWy of energy in year one without any production in return—that’s the equivalent of almost 7 million barrels per day. Then in year two it’s about 130 GWy more invested than cumulative production to that point, or about a 2 million barrel per day deficit. Not until year-three will the cumulative renewable generation be more than the investment deficit for that year—meaning that not until year 3 will we begin to have surplus energy available to mitigate the actual decline in oil production (which by this point leaves us 12 million barrels per day behind the peak oil decline curve.

That’s the “Renewables Gap.”

And here’s the pessimistic quadrant – 10% net energy decline, and a renewables EROI of 4:

In this pessimistic scenario, the up-front energy investment is more than 4,600 GWyears in year one. That’s 58 million barrels of oil per day diverted to renewable energy production. Plainly impossible. And the level of renewable energy production wouldn’t even catch up to the level of energy invested EACH YEAR until year 7.

Here you can see the boundaries of the Renewables Gap—the optimistic assumptions on top, pessimistic on the bottom. The lines represent, under each scenario, the net energy supplied by oil, minus the energy invested that year in building renewable energy production, plus the energy produced that year by the renewables brought on-line to date:

To be sure, we can slow the initial rate of investment in renewables in order to lessen this dramatic initial impact, but that option results in falling even further behind the net energy decline curve. We can also bootstrap the energy produced by renewables to provide the energy required for the next round of renewables—if the EROI is 20, this will work to some extent, but it will still have the effect of making us fall even further behind the decline curve. If the EROI is 4, it’s simply unworkable—we never catch up.

Is it theoretically possible to close this gap more quickly? Sure—by investing more energy up front, which actually serves to exacerbate the problem over the short term. We’ll be chasing our tail. It might be possible to catch up—to make a significant public sacrifice up front and kick start the program—IF the economy as a whole is healthy. The Renewables Gap puts us in a Catch-22 situation: using renewables to mitigate peak oil will make the situation worse before it makes it better. Our ability to absorb the up-front costs of transitioning across this gap is a function of our economic health, but to the extent that our economy remains healthy enough to do so we are unlikely to muster the political will to address the problem.

Just to provide some context for the size of this gap: Under the optimistic scenario, this is the equivalent of adding one new China to world oil demand immediately, and maintaining that for many years. Under the pessimistic scenario, this is the equivalent of adding more than 9 new China’s to world oil demand.

Now I recognize that there are energy conversion issues, there are calculation issues, there are timing issues—simply too many variables to make any definitive statements here. But what I hope I’ve highlighted here is this CONCEPT of the Renewables Gap problem, and the uncertainty of our ability to bridge that gap.

As a civilization, we still have a small and shrinking bank of net-energy surplus with which to build our future. We have to make tough choices about how to spend it. Perhaps our most fundamental choice will be this: do we spend it attempting to bridge the Renewables Gap—despite our uncertain ability to do so? Or do we consider whether that energy could be better spent building a fundamentally different future?

Hopefully this analysis provides a useful framework for further analysis. I recognize that some will dismiss this problem entirely with the argument that wind actually has an EROI of 75 and an energy payback time of 5 months. At the risk of being inflammatory, that reminds me of a bumper sticker that says “WARNING: In event of rapture, this car will be unmanned.” My point is that, at least here and now, my intent is not to proselytize or attack and defend issues of faith. Instead, I hope that, for some, this analysis highlights three important issues for further thought and debate:

1. The energy requirements of a massive transition to a society much like ours but powered by alternative sources of energy.

2. The political challenges of affecting such a transition.

3. If #1 or #2 make such a transition either physically or politically impracticable, what then?

Here are my Excel calculations for those who would like to plug in their own numbers...

Australian Senate: Peak Oil motion defeated 31:6

Senator Christine Milne:

Australia needs to kick the oil addiction before peak oil kicks it for us by driving prices sky high.

"We must start planning now to bring on the sustainable alternatives of renewably-powered electric vehicles, both public and private, and tackle the climate and peak oil crises together.

"The International Energy Agency whistleblower's report is shocking but unsurprising to those of us who have watched the refusal by Australian governments to acknowledge the peak oil threat."

Notice of motion

I move that the Senate:

a) Notes that:

i. Neither the former Howard government nor the Rudd government implemented the first recommendation of the 2007 Senate Rural and Regional Affairs and Transport Committee report into Australia’s future oil supply and alternative transport fuels, namely, that Geoscience Australia, ABARE and Treasury reassess both the official estimates of future oil supply and the 'early peak' arguments and report to the Government on the probabilities and risks involved, comparing early mitigation scenarios with business as usual.

ii. Of the nine recommendations of that Report, only recommendation 6 relating to incentives for fuel efficient vehicles have even been considered let alone addressed.

iii. In the week beginning 8 November 2009, the International Energy Agency issued its annual 'World Energy Outlook', predicting that global oil demand is forecast to rise from 85m barrels per day 2008 to 105m barrels per day in 2030.

iv. A whistleblower at the International Energy Agency has claimed "it has been deliberately underplaying a looming shortage for fear of triggering panic buying" and that a "senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves".

(b) Calls on the government to immediately develop a national plan to respond to the challenge of peak oil and Australia’s dependence on imported foreign oil.

The Motion was defeated 31:6 with the five Greens Senators supporting the motion and presumably South Australian independent Senator Nick Xenophon as the sixth supporting vote.

The major parties are not just ignorant of 'peak oil'. They are, with clarity of purpose, voting against any attempt to respond or even investigate further.

Offshore drilling near Santa Barbara brings energy debate home - Examiner.com

Examiner.com

Offshore drilling near Santa Barbara brings energy debate home
Examiner.com
It surprises many to know that Santa Barbara County has allowed offshore drilling, but many people aren't aware of the vigorous debate and opposition that ...

Drumbeat: November 20, 2009

Mexico oil output rises slightly in Oct from Sept

MEXICO CITY, Nov 20 (Reuters) - Mexican oil production increased slightly in October from the previous month, lending credence to the government's argument that a steep decline in output appears to be stabilizing.
Mexico produced 2.602 million barrels per day of crude oil in October, state oil monopoly Pemex said on Friday.
That was a decline of 5.6 percent from a year earlier but was a hair above the 2.599 million bpd produced in September. It was the second straight month showing a slight increase.
Mexican oil production is down by about a quarter from a 2004 peak because its once-largest field, Cantarell, is declining.

U.S. natural gas rig count falls for second week

NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States fell for a second straight week, dropping two to 726 this week, according to a report on Friday by oil services firm Baker Hughes in Houston.
The U.S. natural gas drilling rig count has gained in 14 of the last 18 weeks after bottoming at 665 on July 17, its lowest level since May 3, 2002, when there were 640 gas rigs operating.
But the rig count is still down sharply since peaking above 1,600 in September of last year, standing at 785 rigs, or 52 percent, below the same week in 2008.

Texas high court agrees to rehear Exxon case

DALLAS — The Texas Supreme Court has agreed to grant a rehearing in the nearly 15-year legal battle over accusations that Exxon Mobil Corp. sabotaged abandoned wells.

Saudi Arabia set for Asia crude benchmark switch, but when?

SINGAPORE: Saudi Arabia is all but certain to adopt the Dubai Mercantile Exchange's (DME) Oman crude oil futures contract as its benchmark one day, oil traders say. Now the main question is when, not if, it makes the switch. The growing confidence that state exporter Saudi Aramco will eventually abandon the Dubai/Oman crude assessment price as its basis for Asian exports is bolstered by two things: the tone of recent discussion between Aramco and its customers; and its abrupt switch to a Gulf sour crude benchmark for all US sales.

The 10-billion-barrel battle

Henry Lyatsky is a man on a mission.
The Calgary-based oil industry consultant is on a one-man campaign to lift the moratorium on offshore oil drilling on Canada’s West Coast.
While his message gets a sympathetic ear in in his home town, the centre of Canada’s oil industry, his mission is more of an uphill battle in British Columbia.

U.S. Fears Iraq Development Projects May Go to Waste

BAGHDAD — In its largest reconstruction effort since the Marshall Plan, the United States government has spent $53 billion for relief and reconstruction in Iraq since the 2003 invasion, building tens of thousands of hospitals, water treatment plants, electricity substations, schools and bridges.
But there are growing concerns among American officials that Iraq will not be able to adequately maintain the facilities once the Americans have left, potentially wasting hundreds of millions of dollars and jeopardizing Iraq’s ability to provide basic services to its people.

The Oil Casino: SEC Heading for Monte Carlo, Part III

Let's examine a simple idea. In every producing oil well, formation, or field there is a finite quantity of recoverable hydrocarbons. This so-called Ultimately Recoverable Resource is definitively known in retrospect after secondary injection, infill and flank development, or fracturing, chemical or steam enhancements that lifted every drop that makes economic sense.
In a mature field, where reservoir performance is fully understood, no sane person will spend more than $1 to recover less than $1 of oil & gas. Wells are abandoned, rigs withdrawn, and the field is sold. Smaller operators might be able to eke out a bit more value from "sub-prime" acreage or strata. They have lower overheads and more leisure to search for crumbs.

Chris Nelder. logi Energy-China: The Vampire Squid of Commodities. Part Two

Rodgers has no doubt that China understands peak oil and expects future supply disruptions, which is why it’s accumulating foreign assets and diversifying its import options.
Peter Dea, the president of oil and gas exploration and production company Cirque Resources LP, made the same point a bit more obliquely, rhetorically asking if China had no doubts about the future of oil, why would they have recently outbid Exxon Mobil for new drilling in Ghana?

America's Pending Collapse

In an essay, written by Richard Heinberg entitled “Should We Prop-up a Dying Economy” (19 October 2009), he argues that the economists and the people who follow physical science disagree sharply about where this economy is going. Peak Oil, whether it is present now or just years away, will mean that the economy will contract. The economists state that growth can happen in any environment, yet it is apparent that when oil prices spiked in 2008, the auto industry and the airline industry almost went belly-up. Shrinkage of energy means shrinkage in the economy, we have all been under the notion that we can borrow against a growing economy. The facts are that if the economy does not grow, there will be very little in the growth of capital to repay debts that are leveraged at an average of an average of 350% of debt to GDP ratio. Where will new capital come from?

Valero Closes Delaware Plant, the Third Shut in U.S.

(Bloomberg) -- Valero Energy Corp. said it will permanently close its Delaware City, Delaware, refinery because of “very poor economic conditions.” The 190,200 barrel-a-day plant is the third U.S. refinery to shutter because of weak fuel demand.
The plant was losing $1 million a day this year, Bill Day, a spokesman for Valero said in a telephone interview. Valero considered strategic alternatives for the plant, including shutdowns of certain processing units, and a sale.
Western Refining Inc. said Nov. 9 it would close its 16,600 barrel-a-day Bloomfield refinery in New Mexico and use the plant as a terminal. Sunoco Inc.’s Eagle Point refinery in New Jersey stopped production earlier this month and was idled indefinitely because of low demand and increased foreign competition, according to Chief Executive Officer Lynn Elsenhans.
Petroplus Holdings AG suspended operations at its 117,000 barrel-a-day refinery in northeast England and is converting the site into storage and a terminal, CEO Jean-Paul Vettier said Nov. 5.
The table below shows refineries that are slated for sale, closure or conversion, and units idled for economic reasons.

Recovery over a barrel

After a fall in demand during the depths of the crisis, the IEA now expects global demand for oil to be 84.2 million barrels a day this year and more than 86.2 million barrels a day next year.
Then there is the looming problem of Peak Oil - the stage when demand outstrips the world's capacity to produce it.
In September, a Macquarie Bank report found we had already hit that wall. Report author Iain Reid says production capacity will peak at 89.6 million barrels a day this year. By 2012, demand will exceed this.

Utility shut-offs soar for poor PG&E customers

The report's authors aren't sure why the number of disconnected customers is growing so quickly at PG&E, compared with other utilities in the state. PG&E rate hikes last fall and this spring may have played a role. So may the utility's new SmartMeters.
The advanced electricity and gas meters, being installed throughout Northern and Central California, allow PG&E to shut off service via a wireless signal, without sending an electrician to the home. The easier process may be leading to more shut-offs, said Dana Appling, director of the utility commission's Division of Ratepayer Advocates, which issued the report.
"All they have to do is flip a switch," she said, adding that her division doesn't have solid proof that the meters are leading to more disconnections.

Consolidation to hit solar in 2010: BP Solar

LOS ANGELES (Reuters) - More consolidation could hit the solar power industry in 2010, as tough competition and falling prices whittle away companies that are sitting on high cost assets and loaded with debt, the chief executive of BP Solar told Reuters on Thursday.
BP Solar, a unit of BP Plc, and other solar companies are seeing demand for the renewable energy systems pick up after a dismal year of difficult financing and a tumble in panel prices, but panel prices will continue to drop.

Vermont Yankee nuclear plant critics renew campaign to block 20-year license extension

BURLINGTON, Vt. (AP) — Hoping to sway lawmakers, two of the state's most famous residents and one of its former governors joined groups opposed to the Vermont Yankee nuclear power plant in announcing a push for Town Meeting Day votes on whether the plant should keep operating past 2012.
Ice cream icons Ben Cohen and Jerry Greenfield and former Gov. Phil Hoff lent their voices to those who want the Legislature to turn thumbs down on Vermont Yankee's request for a 20-year license extension.

What Peak Oil Can Do for Climate Change

With all eyes focused on the Copenhagen climate summit in less than three weeks, perhaps its time for the peakists to find a new purpose.
The reason is simple. Money isn't interested in problems; it's only interested in solutions. And wherever capital goes is where the changes will be made.

Industrialized Nations Unveil Plans to Rein in Emissions

With less than three weeks remaining before negotiators gather in Copenhagen to hammer out a global response to climate change, a rapid-fire succession of countries are unveiling national plans that serve as opening bids for reining in heat-trapping emissions.

U.N. Report Calls for More Environmental Protection in Wartime

A report released this month by the United Nations Environment Program and the Environmental Law Institute calls for stronger international laws to protect the environment during times of war.
The report found that although existing laws of war — including aspects of the Geneva Convention — address environmental protection, their wording is imprecise. Strengthening, enforcing and clarifying existing legislation could help protect “natural assets” during wars, the study says.

Cuba tries to keep the lights on: Cuba gets plenty of oil from Venezuela. So why is it adopting "extreme measures" to avoid blackouts?

But just as Cuba’s petroleum trade has soared, revenue is plummeting from other key exports like nickel, pharmaceuticals and tobacco products. Foreign trade is down 36 percent this year, as the global recession and $10 billion in damage from three 2008 hurricanes have drained Cuba’s finances.
Thus, analysts say, the more oil Cuba can save, the more it can sell abroad.
“I think it is actually a prudent effort on the part of the government that acknowledges the reality that Cuba is in dire need of hard currency,” said Jonathan Benjamin-Alvarado, a U.S. expert on Cuban energy at the University of Nebraska at Omaha.
“The extent to which they can conserve or curb consumption in order to reserve refined fuels for re-export is logical, but yet another hardship for the people,” he added.

Valero to Permanently Close Delaware City Refinery as Demand Declines

(Bloomberg) -- Valero Energy Corp. said it will permanently close its Delaware City, Delaware, refinery because of losses at the plant.

Pennsylvania residents sue over gas drilling

DIMOCK, Pennsylvania (Reuters) - Residents of a small rural Pennsylvania town sued Cabot Oil & Gas Corp (COG.N) on Friday, claiming the company's natural-gas drilling has contaminated their water wells with toxic chemicals, caused sickness and reduced their property values.
The lawsuit, filed in U.S. District Court in Pennsylvania, accuses the company of violating state environmental laws by allowing drilling chemicals to escape from gas wells, where they are used in a technique called hydraulic fracturing.

Total Says Shtokman Natural Gas Start Delayed 2 Years

Shtokman, a natural gas field in Russia's Arctic waters that is one of the world's largest gas deposits, will start producing two years later than OAO Gazprom's planned launch date, according to one of the partners in the megaproject.

Shell seeks to reassure analysts on major projects

Royal Dutch Shell Plc will aim to reassure investors on the costs and profitability of its Pearl gas-to-liquids and QatarGas projects during a field trip for analysts.

Moscow’s Leash

Many analysts think that Gazprom’s “grip” on Europe has loosened. The company has been battered by the economic crisis, while the Continent is now coping with a glut of natural gas rather than scrambling for resources. But this is a cyclical crisis, not a structural one. Europe still needs gas, and Gazprom still wants to sell it. And although the times have changed, Europe’s energy challenges have not gone away.

China refiners agree 12 pct rise in 2010 Saudi imports

BEIJING/SINGAPORE (Reuters) - Chinese oil firms have agreed to buy a total of about 1.04 million barrels per day of crude from Saudi Arabia under a term pact finalised for 2010, roughly 12 percent above the 2009 contract level, trading sources told Reuters.
The pace of growth quickens from a rate of under 10 percent seen this year over 2008, as demand in the world's No.2 oil consumer looks poised to recover more on the back of China's solid economic expansion.

FACTBOX - India's crude imports by country in Apr-Sept 2009

(Reuters) - India imported 68.3 percent of its crude oil requirements during April-September from the Middle East, with Iran topping the chart followed by Saudi Arabia, government data showed on Friday.

BP, ConocoPhillips Reduce 2010 Spending Plans in Alaska

BP and ConocoPhillips have reduced their capital spending and developmental budgets for Alaska in 2010 because of higher costs to produce mature fields, disappointing exploratory results and the state's new tax regime, the companies said.

Energy's the topic of the week

If I could sum up one theme that spoke for the entire week of events, it would be this: innovation.
Dr Yergin, chairman of the IHS Cambridge Energy Research Associates and author of a prize-winning book on the history of the oil industry aptly noted that while the 20th century was the century of oil, the 21st century will be the century of energy innovation.
"This intense push for innovation is drive by two powerful forces - the quest for clean energy and the need to provide energy for economic growth," he said.

Electricity imports hit France's energy autonomy

France has for decades been fiercely proud of its world-beating nuclear industry but is now having to import electricity from its neighbours and could face blackouts this winter.
News of the imports prompted the environmental group Greenpeace to say Wednesday that this was further proof that France's policy of producing three quarters of its electricity from nuclear power was a big mistake.
France decided after the 1970s oil crises to rapidly expand its nuclear power capacity in order to build up reliable energy supplies, and has long exported power to its neighbours.
But ever-rising demand for electricity combined with ageing nuclear reactors have brought that policy under increasing scrutiny.

El Nino intensifies Latin America drought

MONTEVIDEO — From a devastating food crisis in Guatemala to water cuts in Venezuela, El Nino has compounded drought damage across Latin America this year.

Blackout in Brazil: The Problems With Hydropower

It’s everyone’s worst nightmare: being caught in an underground subway in the midst of a power outage. Yet, that is exactly what happened recently when Brazilian commuters in the city of São Paulo were trapped inside trains and literally had to be pulled out of subway cars. In addition to sparking problems in public transport, the blackout or apagão led to hospital emergencies and the shutting down of several airports. In all the power outage darkened approximately half of the South American nation, affecting sixty million people.
In recent years Brazil has become an economic powerhouse yet the blackout exposed vulnerabilities in the country’s infrastructure. In the wake of the power outage, government officials intent on sustaining high economic growth have tried to figure out what might have gone wrong with the country’s electrical grid. Initial reports blamed the power outage on the massive Itaipu hydroelectric dam though a spokesperson for the facility said there had been no problem at the plant.

Sustainability and Social Justice: Do the Math

According to data compiled by the UN, the Global Footprint Network, and Dr. William Rees at the University of British Columbia, total human consumption already exceeds the Earth's capacity by 30 per cent. This is known as biological 'overshoot'. The UN estimates that most natural services to human societies - forests, fish, fresh water and clean air - decline annually. As human population and consumption grow, our collective overshoot increases.
Meanwhile, the wealthy 15 per cent use about 85 per cent of the resources - the total energy and materials - the 'stuff' - that Earth provides. The 'wealthy' includes anyone who has a home, job, transport, access to education, hot showers, convenient fuel and food every day: people in the so-called 'developed' world. If you have those things, you live among the wealthy 15 per cent who use most of the world's resources.

In Kiribati, a way of life is being washed away

''The contamination of the groundwater started in the late '70s, and after that erosion started and houses started to fall into the sea,'' recalls Aata Maroieta, the 64-year-old village chief.
''The force of erosion was stronger than the sea walls and eventually the Government said, 'All you can do is relocate.' ''

Peak Oil Files: Why Is Saudi Aramco Building Supercomputers?

The biannual list of the world’s 500 fastest computers was released on Tuesday and Aramco had two new entries at No. 119 and No. 134. Both are Dell clusters, running Intel processors and both are very, very fast.
The oil industry uses Concorde-jet speed computing to aid it understanding underground reservoirs and to look for new sources of oil and gas. Aramco used another computer cluster to build a “full field model” of the Safaniya oilfield in 2008.
Clearly, Aramco is taking a sophisticated approach to understanding its remaining oil resources. And peak oilers will likely argue that Aramco’s interest in teraflops is a sign that it needs all the help it can get to ensure oil keep flowing out of its once mighty fields. After all, why bother throwing so much muscle into understanding the reservoir if there were no worries about its future performance.

IEA provides a rosy supply of crude

The International Energy Association (IEA) released its World Energy Outlook to controversy on Nov. 10. The U.K.-based Guardian newspaper quotes IEA sources admitting the agency's figures for future oil production were inflated because of U.S. pressure. The two separate sources within the IEA want to remain anonymous because they feared reprisals. Now why does this matter?
Put simply, future oil shortages are being downplayed. In 2005, the IEA predicted daily oil production would rise to 120 million barrels by 2030. But harsh criticism forced the agency to cut this estimate a number of times until finally, in 2008, the IEA claimed the world oil production would be 105 million barrels a day by 2030.

Crude prices follow world markets downward: Still, with oil near $80 per barrel, consumers are starting to feel the pinch

NEW YORK - A global sell-off on equity markets dragged down crude prices by nearly 3 percent Thursday, the first decline this week.
..."Bottom line, the race is on; between falling demand and falling production," analyst Stephen Schork said. "Regardless of the outcome, one result is almost guaranteed ... the consumer will lose. And, given that consumer spending is responsible for more than two-thirds of the U.S. economy, that does not bode well for the strength of the incipient recovery."

Macquarie Says Crude Oil May Fall to About $60 Next Quarter

(Bloomberg) -- Crude oil prices may fall to about $60 a barrel in this and next quarter on weak demand from developed countries and growing inventories, Macquarie’s oil economist Jan Stuart said today.

Analysts Split on Direction of Crude Oil Prices, Survey Shows

(Bloomberg) -- Analysts surveyed by Bloomberg News were split over whether crude oil prices will fall or be little changed next week amid a weak dollar and ample fuel supplies.
Ten of 27 analysts, or 37 percent, said futures will drop through Nov. 27. Ten more respondents predicted that oil will be little changed. Seven said futures will rise. Last week, 50 percent of those surveyed said prices would fall.
“I think we’re still in a very well-defined trading range when it comes to oil,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Oil just can’t stay above $80 a barrel, but by the same token it can’t seem to stay below $77.”

Russia Waives Ukraine Gas Fine, Easing Threat of Supply Cuts

(Bloomberg) -- Russia agreed to waive fines on Ukraine for consuming less gas than contracted and said it would renegotiate volumes for next year, easing a threat to shipments of the fuel to Europe.
“We made a decision not to impose penalties, and I want to confirm it in public,” Russian Prime Minister Vladimir Putin said at a meeting with his Ukrainian counterpart Yulia Timoshenko yesterday in Yalta, Ukraine. “Despite agreements reached earlier on volumes, to avoid sanctions next year it was decided that OAO Gazprom and NAK Naftogaz Ukrainy will agree on new volumes.”

Russian transit gas via Ukraine down 26.4%

Transit of Russian gas via Ukraine to Europe fell by 26.4% 74.5 billion cubic metres in the January to October 2009 period from 101.2 Bcm in the same period in 2008, Ukraine's Fuel and Energy Ministry said today.
European countries have cut energy consumption as industrial activity has fallen due to a global economic slowdown.

Obama administration pauses on Alaska drilling

WASHINGTON – The Obama administration has delayed a decision on a request by Shell Oil Co. to drill for oil and gas in Alaska's rugged Chukchi Sea. The delay came after the oil company asked for time to respond to criticism of its plan to drill in the icy sea, a prime habitat for threatened polar bears.
Marvin Odum, president of Shell Oil Co., the U.S. unit of Royal Dutch Shell, denied Thursday that the oil company had requested the delay.
But a letter from the Minerals Management Service, an arm of the Interior Department, says Shell asked for a chance to respond to a deluge of public comments submitted to the agency about the proposal to drill off Alaska's Northwest coast.

Kazakh Credit Risk Drops Most in World as Oil Revives Economy

(Bloomberg) -- Kazakhstan is regaining bond investor confidence faster than any other country as rising oil prices spur an economic rebound.

Angola sees boost in oil money

Angola's oil revenues from taxes and fees charged to oil companies operating in the African nation are expected to rise to $16.6 billion in 2010 from $15.7 billion this year, according to the country's draft budget plan.
Angola, which rivals Nigeria as Africa's biggest oil producer, has calculated the oil revenues based on an average oil price of $58 dollars per barrel for 2010.

Angola: Senator Lugar Hails New Chapter in U.S.-Angolan Relations

Lugar noted that Angola is an important trading partner for the United States, primarily because of its oil and gas. He said Angola has now eclipsed Nigeria as the largest oil and gas producer in Africa. "Angola has demonstrated the vitality of its petroleum industries, which operate on the cutting edge of technology in deep-water oil fields off coast. On the strength of this oil extraction, Angola has maintained an average GDP growth of more than 14 percent per year since 2002. Nonetheless," he said, "Angola remains near the bottom of the U.N.'s Human Development Index," which tracks the economic well-being of a country's population.
He cited estimates that Angola may be within five to 10 years of reaching peak oil production and, therefore, he stressed the need for diversifying the country's economy in the long term, to establish alternative sources of income. Angola's success in diversifying its economy, he said, will depend on "expanding the important progress already made towards deepening democratic governance, improving public transparency, creating a business environment that is unambiguous in its law and its practice."

Housing bust halts growing suburbs

The recession and housing collapse have halted four decades of double-digit growth for nearly half of the nation's biggest rapidly expanding suburbs.
Twenty-four of the 53 cities of 100,000 or more that grew by at least 10% every decade since 1970 lost population in the last two years.

Cargill warns on self-sufficiency

The drive towards self-sufficiency in response to last year's food crisis will fail, a top executive at Cargill has warned, adding that the idea that countries "can be self-sufficient in every single food is a nonsense".
The warning by the world's largest trader of agricultural commodities comes ahead of next Monday's UN World Summit on Food Security in Rome, the first since 2002. The summit was prompted by the surge in the price of staples such as rice and wheat, which last year hit record highs, sparking food riots in countries from Bangladesh to Haiti.

LCC threats: The Environment, fuel prices, aircraft financing and fees & taxes

Inevitably, fuel prices are critical to the shape of the industry. For the lower cost carriers, fuel constitutes a higher proportion of costs and LCCs are consequently more sensitive to substantial input price increases. As jet fuel prices went through USD170 a barrel last year and rising, many LCCs were becoming seriously compromised. Peak oil promises to threaten the basic model again, as economies recover.
Even at today’s depressed levels of economic activity, oil prices are hovering around USD70, partly on speculation, partly due to production and refining issues. Once prices rise above these levels, there is a steep reduction in the value proposition of LCCs vs full service airlines.

Gold Investing Expert: Bob Moriarty Goes on Record Part II

Peak oil is real and the only thing preventing $200 a barrel oil right now is a recession that is morphing into a depression. Energy of all sorts is good.
Food is an analog of energy so agriculture is good.
Uranium is the only reasonable replacement for oil but we have waited for too long to recognize peak oil and we are going to pay for that error of judgment.

Chris Nelder, logi Energy-China: The Vampire Squid of Commodities, Part One

In his presentation on China’s oil and gas balance, Michael Rodgers of PFC Energy made one thing abundantly clear: China’s domestic oil production has nearly peaked, while its demand for oil is only going up.

CBI boss's memo to Gordon Brown: when you're in a fiscal hole, stop digging

While sanguine about the possibility that the world has passed the point of peak oil, Lambert says the CBI is concerned that action will be needed to prevent energy shortages by 2016-17. "It won't happen because people can see it coming."

Even in a season of apocalyptic films, these facts are really, really scary

In Collapse, Ruppert connects the dots between peak oil, essential human services, alternate energy sources, agricultural production, governments, money interests and strategies for survival. All power points from his recent book, A Presidential Energy Policy, Ruppert delivers them in a plain-spoken vocabulary peppered with imaginative analogies. But this is not merely an activist doc intended to support Ruppert's treatise. Smith gives us something much more: a subtle portrait of a man whose sense of duty has affected his personal life.

Water and Energy Crisis Looms on Horizon

Ocean Energy Institute founder and energy investment banker Matthew Simmons gave an hour-long keynote address at the Island Institute's 2009 Sustainable Island Living conference on Saturday morning at the Strand Theatre in Rockland. Simmons titled his talk "The Gulf of Maine: What Lies Beyond the Fossil Fuel Horizon," but his presentation ranged far outside the Gulf to encompass the globe.
Sporting a delicate windmill as a lapel pin, Simmons started off by reflecting on the concept of sustainability, a current buzzword among energy development experts. "More and more people around the world are beginning to wonder, "Does the globe have a sustainable strategy?'" Simmons said. "It's all about sustainability. Sustainability means protecting or improving our living standards. And without abundant water and energy, we are not sustainable," he said. "There's no question that our oceans are energy's last frontier."

Who cares about peak oil when you have corn cobs?

The nation's biggest ethanol firm says costs for corn-cob biofuel are coming down. But what happens to the soil?

SAfrica plans new nuclear power station by 2020

PRETORIA (Reuters) - South Africa, plagued by chronic power shortages, plans to have the country's new nuclear power plant up and running by 2020, Energy Minister Dipuo Peters told a nuclear conference on Friday.
State-owned power utility Eskom, which operates Africa's sole nuclear power plant with a total capacity of 1,800 MW, cancelled plans to build a new facility at the end of last year, citing financial constraints.

Doubts raised on nuclear industry viability

(PhysOrg.com) -- The investment in nuclear power has been growing around the world over the last few years, being viewed as a means for countries to control their energy security, avoid the price fluctuations of other energy sources, and reduce their carbon dioxide emissions, but concerns are now being raised.
A scientist from the Swiss Federal Institute of Technology predicts that supplies of uranium are running out and countries relying on imports of uranium may face shortages by 2013, while a New York Times journalist suggests new nuclear power plants are an "abysmal" investment that will never pay for itself without government financial support.

BP Invests $3 Billion in Alternative Energy Globally

(Bloomberg) -- BP Plc, Europe’s second-biggest oil company, has invested $3 billion in alternative energy globally and is on course to meet its commitment made in 2005 to spend $8 billion, said a company official.
London-based BP will focus mainly on wind power projects in the U.S., solar in India and China and biomass in Brazil, BP China President Chen Liming said at a Beijing conference today.

Beijing to Boost Alternative Energy, Electric Cars

(Bloomberg) -- Beijing plans to build a 70 megawatt solar power plant and a 50 megawatt biomass power plant as part of the city’s focus on expanding the use of alternative energy, the capital’s Development and Reform Commission said today.
The government will also develop wind power, nuclear power and geothermal power, according to a statement by the commission issued before a news briefing.

China May Lead Mergers in Asia Clean Energy, Stanchart Says

(Bloomberg) -- Asia’s renewable business led by China may see mergers and acquisitions because of overcapacity, declining raw material prices and multiple players, an official from Standard Chartered Plc said.
“There will be consolidation in the wind and solar sector in the near future, predominantly in China,” said Brad Sterley, director, renewable energy and environmental finance. “The renewable energy market is very fragmented in the manufacturing sector.”

China May Increase Wind Turbine Exports, Morgan Stanley Says

(Bloomberg) -- China may increase wind turbine sales to the U.S. and Europe because of lower domestic demand and an overcapacity in manufacturing, threatening global makers, an official at Morgan Stanley said.
Power grid constraints in China may leave as much as 4 gigawatts of wind power generation capacity lying idle, slowing further additions in producing electricity from wind, said Sunil Gupta, managing director for Asia and head of clean energy at Morgan Stanley in Singapore. As much as 40 percent of China’s wind power generating capacity may be unutilized, he said.

Md. regulators approve Garret County wind farm

BALTIMORE – The Maryland Public Service Commission has approved an application to build a 50-megawatt wind energy farm atop Backbone Mountain near Oakland in Garrett County.

Geothermal Needs Support: Industry

Indonesia needs to relax its laws to make it easier to explore for geothermal energy in protected forests if it is going to meet a target of lifting electricity demand from renewables, an industry official says.

Cabinet approves solar power programme

NEW DELHI (Reuters) – India's cabinet on Thursday approved its first solar power plan, pledging to boost output from near zero to 20 gigawatts (GW) by 2020 as part of its plan to fight global warming.

Shun beef to stop climate change, says India

NEW DELHI (AFP) – India, a stronghold of vegetarianism where the cow is a sacred animal for the majority Hindu population, has urged the rest of the world to give up eating beef to help reduce global warming.
"The single most important cause of (carbon) emissions is eating beef," Environment Minister Jairam Ramesh said during a speech on Thursday, his office told AFP.

Sex, food, and climate change

Roughly two centuries ago, British thinker Thomas Malthus famously predicted that human overpopulation would result in food shortages and mass famine. “The power of population is indefinitely greater than the power in the earth to produce subsistence for man,” he said. For a long time, his idea that mass famine would overtake humanity was rejected out of hand by those who pointed to industrial agriculture and vastly increased crop yields. Industrial agriculture proved him wrong, or so the textbooks said.
Malthus’s ideas are now back in vogue as global food futures are uncertain, due to a devastating combination of fresh water depletion; drought caused by climate change; the collapse of the world’s oceans; an increase in fuel prices (as global oil supplies peak); soil erosion caused by excessive pesticide use; and the replacement of agricultural lands by biofuel crops.

NY AG: AES Corp. agrees to pollution disclosures

NEW YORK – AES Corp., which operates several coal-fired power plants in the U.S., has agreed to put more information about global warming in its public financial disclosures.
New York Attorney General Andrew Cuomo said Thursday that AES, based in Arlington, Va., is the latest power company to agree to give investors more information about pollution.

Energy leaders back climate change deal

GENEVA (AFP) – Energy industry leaders on Thursday called for an international deal on climate change to tackle financial uncertainty and prevent potentially catastrophic global warming.
"The climate framework is the top long term issue," World Energy Council (WEC) Secretary General Christoph Frei told a UN conference on energy security.

Harvard Finds Kidney Stones, Malaria Among Global-Warming Risks

(Bloomberg) -- Kidney stones, malaria, Lyme disease, depression and respiratory illness all may increase with global warming, researchers at Harvard Medical School said.
Climate change from the burning of fossil fuels will add to risks to public health, said Paul Epstein, associate director of Harvard’s Center for Health and the Global Environment in Boston. The center and groups led by the American Medical Association are presenting data at a briefing today in Washington as a call for action to curb emissions.

Scientists baffled by global warming's time-out

Temperatures haven't risen this decade, as climatologists expected. Is it sunspots? Ocean currents? Secret volcano?

Melting sea ice dilutes water, endangers sea life

HONG KONG (Reuters) – Melting of the Arctic sea ice due to global warming is diluting surface waters and this is endangering some species of shellfish which need minerals in the water to form their shells and skeletons, scientists have found.
In a paper published in Science, they warned that this has serious implications for ecosystems in the Arctic.

OPEC Basket Price for November 19 down $1.10 at $76.77

November 20, 2009 7:03 AM ET The price of the OPEC basket of thirteen crudes stood at $76.77 per barrel on Thursday, down $1.10 from Wednesday, November 18, according to OPEC Secretariat calculations. The basket of OPEC crude grades is made up of th... [More]

Capital Eye Opener: Friday, November 20

Your daily dose of news and tidbits from the world of money in politics:

PALIN'S BOOK TOUR DE FORCE: Folks in Michigan waited in line for hours to see former Republican vice presidential nominee Sarah Palin on tour for her new book, Going Rogue. The former governor of Alaska also offered to provide a signed copy to anyone who donates at least $100 to the Republican Governors Association -- the same offer she is making to people who contribute $100 or more to her political action committee. On Saturday, Dec. 5, she'll be in the D.C. metro area, signing books at a shopping center in Fairfax, Virginia, according to her Facebook page. Commercial groups, too, are trying to cash in on the Palin tour. In a press release, mobile music service provider mSpot.com touted the top eight "rogue movies" to watch on their mobile movie service while waiting in line to see Palin. Their list: Patriot Games, Braveheart, Mission: Impossible, The Hunt for Red October, American Gangster, The Sum of All Fears, How the Grinch Stole Christmas and Van Helsing. What "rogue" movies would be on your list?

SMACKDOWN CONTINUES IN NUTMEG STATE: A former professional wrestler is airing complaints against former World Wrestling Entertainment chief executive Linda McMahon. McMahon is seeking the Republican nomination in the U.S. Senate race in Connecticut as the GOP attempts to oust incumbent Democratic Sen. Chris Dodd. Eldridge Wayne Coleman, who wrestled under the name Superstar Billy Graham, is upset with McMahon. So he's getting involved with politics for the first time in his career, supporting former Republican Rep. Rob Simmons over his former boss. Graham says McMahon should be held accountable for the sexism in professional wrestling. He also says the WWE encouraged wrestlers, including him, to cut themselves with razors to bleed in the ring and to beef up using steroids -- and then didn't offer pensions or continuing health coverage. McMahon's campaign and the WWE write off Graham as a disgruntled former employee with a history of lying about the McMahons. "That rhetoric is so over the top and so outrageous that it's not credible and not believable," McMahon spokesman Ed Patru told the Hartford Courant. And the wrestling company told the paper: "Superstar Billy Graham has a pattern of making false statements about WWE and Vince McMahon when he's no longer on WWE's payroll." Graham doesn't deny that he's disgruntled. "I am disgruntled," he told the Courant. "I am bitter. I am mad at Vince McMahon for not having health care."

GEOGRAPHY AWARE: Today marks the close of Geography Awareness Week. To celebrate the importance of this subject, National Geographic asked all 100 senators to draw a picture of their home state and label at least three important places. A handful of senators responded to the challenge. "The maps reveal home-state pride, personal history, and even some geographic humor," National Geographic writes on their website gallery of the maps. For instance, Sen. James Risch (R-Idaho) praised the great elk hunting in a northern part of his state. Sen. Saxby Chambliss (R-Ga.) praised the beauty of the mountains in the northern part of Georgia. Sen. Dick Durbin (D-Ill.) noted that Metropolis in southern Illinois is the home of Superman. Sen. Al Franken (D-Minn.) noted that his hometown of St. Louis Park in the suburbs of Minneapolis is also the home of Nobel Laureate and New York Times columnist Thomas Friedman, the Coen Brothers and Norman Ornstein, a resident scholar at the American Enterprise Institute. For his part, Franken has also been known to draw the entire United States as a trick at fund-raisers and other events (such as the Minnesota State Fair). You can also use this map on OpenSecrets.org to track the money flowing into congressional races across the country, or use this one to find campaign contributions by state or zip code.

Have a news tip or link to pass along? We want to hear from you! E-mail us at press@crp.org.

ODAC Newsletter - Nov 20

Oil prices fluctuated in the high $70’s this week reflecting the ups and downs of the dollar. Higher oil prices are loosening the discipline around the implementation of OPEC oil quotas as producers cash in...

Nordic gets new exploration well license in Lloydminster ...

Nordic Oil and Gas has received the first of its anticipated 10 new well licenses in Lloydminster, Alberta.

Penn Virginia Corporation declares organizational changes ...

Penn Virginia Corporation says that to better position itself for growth opportunities in its oil and gas business, as well as to improve corporate efficiency,

Central Asia's Most Precious Resource - Water, Not Oil

In every drop of water there is a grain of gold. - Aral proverb Since the 1991 collapse of the USSR, foreign investors have looked at the former Soviet space as a land rich in underdeveloped resources waiting for Wester

Hayward: U.S. gasoline consumption peaked in 2007

BP CEO Tony Hayward said Thursday that the petroleum industry will never sell more gasoline than it did in 2007, when demand -More-

Obama should go to Copenhagen climate discussions, Sen. Kerry says

Sen. -More-

API RP 752 and 753: Facility Siting Regulations and Compliance, April 12, Houston

This course is a management-level overview and addresses the regulatory requirements for facility siting, a review of API RP -More-

Marathon announces oil find at North Sea prospect

Marathon Oil and its partners, ConocoPhillips and Sweden's Lundin Petroleum, made a "small oil discovery" at the Viper site i -More-

ConocoPhillips, BP to cut 2010 investments in Alaska

London-based BP unveiled plans to cut its 2010 capital spending for Alaska by 15%, saying that the state's new tax system dri -More-

OPEC may hike output, says Lukman - NEXT

Reuters South Africa

OPEC may hike output, says Lukman
NEXT
OPEC could decide to raise oil output slightly at its ministerial meeting next month if there were to be a substantial rise both in oil demand and prices, ...
Qatar oil minister: no output quota changes at OPEC meetReuters
OPEC should hold output steady at Dec meeting: LibyaReuters South Africa
OPEC: world oil demand to rise slightly in 2010Oil & Gas Journal
HeatingOil.com -Tehran Times -guardian.co.uk
all 26 news articles »

CNPC, Sudan Sign Oil Refining, Asset Swap Agreements

EXCO Resources Declares Fourth Quarter Dividend

EXCO Resources' Board of Directors declared a fourth quarter cash dividend of $0.025 per share payable on December 15, 2009 to holders of record on November 30, 2009.

Total Says Shtokman Natural Gas Start Delayed 2 Years

Oilex Spuds First Well in Timor Sea Drilling Program

The Lore-1 well, the first well of a 2 well program in the Timor Sea contract area JPDA 06-103, was spudded on November 20, 2009.

Scorpion Offshore Posts Financial Results for 1st Quarter 2010

Scorpion Offshore's revenues for the first quarter 2010 totaled $107.9 million, including $4.9 million mobilization revenue and $3.8 million revenue booked as a reversal of a credit memo issued last quarter.

Foreign investment in Russia down

Analysis: Offshore BOP Companies Play It Safe

According to the RigLogix team, Cameron leads the pack of BOP companies with approximately 422 BOPs working on offshore rigs.

API: U.S. Crude Oil Production Continues at Four-Year Highs

Macquarie Says Crude Oil May Fall

Brinx, Partners Spy Additional Hydrocarbon Shows at OK Project

Brinx Resources reports that the second well from the 09-2 Oklahoma Project drill program appears to be another new discovery well.

NYMEX Oil Complex Falters on Economic Data, Strong Dollar

November 19, 2009 3:38 PM ET The NYMEX December crude and RBOB gasoline and heating oil contracts all ended the day below yesterday's settles. We attribute the solidly lower settles to two major factors. The first was less than stellar economic new... [More]

Chavez blames Venezuela economic drop on OPEC cut

Venezuelan President Hugo Chavez said on Wednesday the South American oil producer's economic slide was largely due to its compliance with OPEC-mandated production cuts.

Senate Panel Debates Offshore Drilling - Wall Street Journal

Boston Globe

Senate Panel Debates Offshore Drilling
Wall Street Journal
WASHINGTON -- A Senate panel on Thursday battled over whether the country could expand oil and gas drilling in coastal waters without ...
Big Oil to Congress: Expand offshore drillingReuters
Energy companies defend their offshore workHouston Chronicle
Senate committee members trade barbs at OCS technology hearingOil & Gas Journal
The Associated Press -SolveClimate -Morning Star Online
all 176 news articles »

Crude prices fall on dollar, equities

Crude oil prices fell Thursday as the US dollar strengthened and on declines in global equities markets. December contracts for West Texas Intermediate crude were down $2.12 to $77.46 per barrel on the New York Mercantile Exchange while, with December contracts expiring at the end of floor trade on Friday, January WTI contracts dropped $2.05 to [...]

Daimler's Curious Love Affair With Tesla Motors

The mighty Daimler is falling for tiny Tesla's battery technology.

NYMEX Oil Complex Falls on Lack of Positive Economic News, Dollar Rally

November 19, 2009 11:00 AM ET The December NYMEX crude, RBOB gasoline and heating oil contracts are under heavy pressure at midday on what we believe is a lack of any real positive economic news. This lack of good news has caused equity traders t... [More]

Ireland and Kentucky: Contrasting Biofuel and Energy Plans

Ireland and Kentucky have a surprising amount in common, but they’re charting very different courses for their energy future. Ireland is a moderate energy consumer with a plan to reduce its energy use. Kentucky is a profligate energy user planning to increase its consumption. Biofuels play a big part in the energy plans for both, but will likely have different impacts.

Staking Out the Middle Ground

In my view, the Uppsala study is unduly pessimistic, implying an immediate crisis (in 2010 and thereafter) which is not in accord with reasonable expectations about future production levels both within OPEC and outside the cartel. In alerting the public to the peak oil issue, the Guardian is doing good work. But not knowing any bettter, they picked the wrong study in my view. The false choice the Guardian offers us, the IEA or Uppsala, amounts to a kind of all or nothing proposition.

Finance and Credit Companies Lobby Lawmakers As Congress Moves to Aggressively Regulate Them

Total to Current Members of Congress since 1989: $23.3 million (53 percent to Republicans)

Total Lobbying Expenditures since 1998: $264.2 million

The U.S. economy faltered after the subprime mortgage meltdown, but these investments weren't the only obligations that many consumers defaulted on. Credit card companies, private student loan providers and payday lenders -- all groups within the finance and credit industry -- saw customers become more and more squeezed for cash.

While many people have used the extra money from the Obama tax cuts and the stimulus bill to pay down personal debt, Democratic lawmakers say new regulation is also necessary to protect constituents from predatory behavior. Some, too, blame the credit rating agencies for their role in the meltdown and want to see new measures enacted to prevent inflated values from being attached to mortgages and other assets.

The various companies and trade groups within the finance and credit industry have contributed about $62.4 million to federal candidates, committees and leadership PACs since 1989, with 62 percent of that sum going to Republicans.

In the 2008 election cycle, however, the employees and political action committees of these organizations directed a majority of their money to Democrats for the first time since the 1990 election. During 2008, these groups contributed $8.7 million to federal candidates, committees and leadership PACs, with 54 percent going to Democrats.
Here are the top 15 finance and credit industry groups to give money to the leadership PACs and candidate committees of current lawmakers since 1989:

Donor	Total	% Dem	% GOP
SLM Corp	$2,883,045	52	48
Bank of America	$2,827,318	23	77
Capital One Financial	$1,832,528	50	50
American Express	$1,744,956	57	42
HSBC Holdings	$1,704,842	46	53
Household International	$966,161	48	53
American Financial Services Association	$826,490	35	65
NelNet Inc	$821,251	34	67
Cash America International	$629,229	44	57
Mastercard Inc	$565,931	53	46
General Electric	$522,707	63	37
Advanta Corp	$454,940	32	68
Washington Mutual	$336,350	59	41
Advance America Cash Advance Centers	$335,275	74	26
QC Holdings	$305,569	62	38

Private companies offering student loans fall within the finance and credit industry -- particularly Sallie Mae (a subsidiary of SLM Corp), which is perennially one of the biggest donors to federal candidates and committees within this industry. These companies oppose congressional efforts -- backed by President Barack Obama -- to reduce federal subsidies to these lenders and instead put those dollars toward direct federal loans to students.

The House passed a measure to do just this in September, but the Senate has yet to act on it.

Lawmakers are also targeting credit card companies' high interest rates, numerous fees and their sometimes-aggressive outreach to low-income consumers and people with poor credit scores. In August, Obama signed one bill into law that would grant the Federal Trade Commission new authority to seek civil penalties from companies that engage in "unfair and deceptive" practices.

Known as the Credit CARD Act, the bill, sponsored by Sen. Chris Dodd (D-Conn.), aims to give credit card customers more protections. It requires companies to give more advance notice before making significant changes to a contract and mail bills earlier. It further allows customers to reject changes to their contracts, including interest rate increase.

Under the measure, credit card companies will also be prohibited from offering college students free merchandise in exchange for opening a credit card account and from issuing cards to students who have not applied for one. College students, on the other hand, will be required to present proof of income and a financial history when applying for a credit card. They'll additionally have new, lower credit limits, tied to their annual income -- unless there is a co-signer on the account.

Also in this industry? Payday lenders, such QC Holdings, Cash America International, Advance America Cash Advance Centers and the Online Lenders Alliance.

Lawmakers are taking aim at these lenders, too, for alleged predatory practices. People with little money or poor credit scores often turn to these companies for cash. Yet the loans they receive may carry interest rates of up to 400 percent, creating a nearly impossible hole of debt for them to climb out from. Consumer advocates and some politicians say payday loan interest rates should be capped -- closer to the tune of 36 percent, a rate Congress mandated for payday loans to members of the military in 2006. Reformers are also pushing to limit finance charges by these groups.

The payday lending industry, meanwhile, argues such regulations and rate caps could put them out of business. They also suggest that their fees are cheaper than the alternative: overdraft fees from a bank.

"The focus on overdraft protection on the Hill has helped legislators to understand that payday lending can be looked at as a cheaper alternative to overdraft charges," said Steven Schlein, a spokesman the payday lending trade group, the Community Financial Services Association, as quoted by the Washington Independent.

Furthermore, the big credit rating agencies of Standard & Poor's, Moody's and Fitch Ratings, fall, in part, within the finance and credit industry. According to many market observers and economists, the inflated ratings of risky securities helped precipitate the economic meltdown in the United States. Official at the Securities and Exchange Commission (SEC) and many Democratic lawmakers, including Obama, are calling for new measures to prevent inflated credit scores and lessen conflicts of interest.

Some reformers are calling for an upheaval of the credit rating industry's common business practice of charging the entity seeking the credit rating (known as the "issuer") to pay for the rating -- a move the major industry players say is unnecessary. Others are calling for investors to become less dependent on credit ratings altogether. There are also calls for the rating practices of all agencies to become more transparent.

All told, current congressional lawmakers have collected $23.3 million from the industry since 1989, with 53 percent of that flowing to Republicans. With the Democrats now in control of the White House and Congress, finance and credit companies contributed $1.7 million to the leadership PACs and candidate committees of all current lawmakers during the first nine months of this year. Of that, 53 percent has gone to Democrats.

Here are the top 20 current lawmakers to bring in cash from finance and credit companies through their leadership PACs and candidate committees since 1989:

Member	Amount
Rep. John Boehner (R-Ohio)	$716,795
Rep. Michael N. Castle (R-Del)	$580,465
Sen. Richard C. Shelby (R-Ala)	$553,979
Rep. Howard P. (Buck) Mckeon (R-Calif)	$507,526
Rep. Spencer Bachus (R-Ala)	$485,508
Sen. Chris Dodd (D-Conn)	$442,080
Sen. Tom Carper (D-Del)	$409,982
Sen. Tim Johnson (D-SD)	$395,400
Rep. Pete Sessions (R-Texas)	$374,588
Rep. Paul Kanjorski (D-Pa)	$339,896
Sen. Olympia Snowe (R-Maine)	$332,700
Rep. Eric Cantor (R-Va)	$308,409
Sen. Charles Schumer (D-NY)	$302,734
Sen. Harry Reid (D-Nev)	$298,868
Sen. Arlen Specter (D-Pa)	$278,034
Rep. Jeb Hensarling (R-Texas)	$272,861
Sen. John McCain (R-Ariz)	$267,019
Rep. Roy Blunt (R-Mo)	$260,800
Sen. John Kerry (D-Mass)	$257,041
Rep. Dennis Moore (D-Kan)	$252,861

For a list of how much all current lawmakers have brought in from this industry, check out our finance policy tools.

Additionally, the companies and organizations within the finance and credit industry have spent $264 million on federal lobbying since 1998. During the first nine months of this year, finance and credit groups spent $25.5 million on federal lobbying and hired 397 lobbyists.

If the industry continues to spent at this pace, it will break the record $32.8 million it spent last year.

CRP Senior Researcher Douglas Weber and Lobbying Researcher Matthias Jaime contributed to this report.

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The Preferred Play On FPL

If you think that FPL is a good stock to own down the road, get paid while you wait to own it.

Spencer Bachus: 'No More Bailouts'

Name: Rep. Spencer Bachus (R-Ala.)

Position: Although Bachus isn't new to the House Financial Services Committee, he's relatively new to the committee's ranking member position, which he assumed in 2007. Bachus competed with Rep. Richard Baker (R-La.) for the spot and won after arguing that he has a better working relationship with interest groups and with chairman Barney Frank (D-Mass.), according to the Almanac of American Politics. Prior to that time, Bachus had been the chairman of the committee's financial institutions and consumer credit subcommittee.

Money Summary: There's no doubt that Bachus is a favorite back home. His largest career cash haul ($1.8 million) is from residents in Birmingham, Ala. Washington, D.C., is a far second at $246,400. Bachus has also generally run unopposed, bringing in at least $1 million each election cycle since 2002. Since he was elected to Congress in 1992, Bachus has raised $8.8 million, 55 percent of which has come from the political action committees of corporations, unions and other organizations. He has also been relatively generous with the money he's brought in through his leadership PAC, Growth & Prosperity PAC: Since 2003, other lawmakers received 61 percent of the $2.5 million Bachus collected through the PAC. And only seven other Republicans brought in more money through their leadership PACs during the first nine months of this year.

Campaign Donors: Bachus has occupied powerful posts that the finance, insurance and real estate sector clearly has not overlooked. Since 1992, employees and political action committees associated with the financial sector have given Bachus $4 million -- exponentially more than any other sector during that time. His top five most generous industry donors are all finance-related: commercial banks ($977,550), insurers ($709,350), real estate companies ($707,650), securities and investment companies ($608,200) and finance and credit companies ($345,750). In the 2008 election cycle, Bachus brought in more money from commercial banks than all other members of the House. He was also an industry favorite of mortgage bankers and brokers, who gave him $50,500.

Although the financial sector is Bachus' primary backer, his No. 1 donor over the years is actually Drummond Co., a mining outfit headquartered in -- you guessed it -- Birmingham, Ala. Drummond's employees and political action committee have donated $98,600 to the Republican during his congressional career. But note some of the other donors who make Bachus' top 20 list: JPMorgan Chase, National Association of Realtors, Credit Suisse Group, Citigroup, UBS AG and Bank of America. At least 12 of Bachus' top 20 donors are finance-related. They're watching carefully as his committee in particular proposes and votes on legislation that could change the way they do business.

On Financial Regulation: Bachus seems to consider the word "bailout" an expletive, even if he's introduced a measure with the word in the title: "The No More Bailouts Act." The congressman said in a statement about the legislation: "The government must stop rewarding failure and picking winners and losers. Taxpayers must never again be asked to pick up the tab for bad bets on Wall Street. Market discipline must be restored so financial firms will no longer expect the government to rescue them from the consequences of imprudent decisions." Last week Bachus sent a letter to President Barack Obama asking that Congress also not bail out the Federal Housing Administration, which is struggling financially, according to Reuters.

Bachus led the charge against a bill that would create a Consumer Financial Protection Agency to regulate a number of financial products, including credit cards, insurance, hedge funds, mortgages and the financial instruments known as derivatives. "It's not about protecting consumers; it's about a new government bureaucracy making decisions for us," he said, as reported by the Los Angeles Times. Despite opposition from Bachus and other Republicans, the House Financial Services Committee passed the bill. Bachus has also criticized the Obama administration's plan to give the government power to dismantle floundering financial firms. He's furthermore voiced concern for small businesses that may struggle if new rules dictating credit companies' practices took effect sooner than originally planned. And the congressman defended the commercial bank and credit card industries' practice of charging overdraft fees, arguing that it helped consumers, rather than hurt them.

Invests In: Although Bachus' personal funds may have slipped a little in 2008 compared to 2007, the recession certainly didn't hit his bank account as severely as it did those of many Americans. In 2008, Bachus was worth between $468,000 and $1.5 million. (Because lawmakers report the value of their investments in ranges, it is impossible to determine their exact wealth.) Bachus' assets included between $1,000 and $15,000 in Citigroup, between $1,000 and $16,000 in Fidelity Investments and between $100,001 to $250,000 in a Smith Barney IRA. Since 2005, when he reported 25 financial transactions, he's been much more active, clocking 367 total transactions in 2008. Nearly all of these transactions involved him selling assets.

Industry Favors: During the 110th Congress, Bachus was awarded the National Association of Manufacturers' Award for Manufacturing Legislative Excellence. "On behalf of Altec and our employees, I thank Congressman Bachus for championing the causes that will help U.S. manufacturers thrive," said Lee Syslinger, chief executive officer of Altec, who presented the award. The manufacturers organization recently took special interest in one measure before the House Financial Services Committee that would enhance government regulation of the financial derivatives market, which has been blamed, in part, for last year's economic downslide. NAM, the U.S. Chamber of Commerce and other organizations teamed up to express concern that some derivatives, which are meant to help manage and reduce financial risk, are tailored to specific businesses that rely on them. "By insulating companies from risk, customized over-the-counter derivatives provide businesses with access to lower cost capital -- enabling them to grow, make new investments and retain and create new jobs," NAM, the Chamber and 170 other organizations wrote the committee, The Hill reports. Bachus seemed to agree.

In His Own Words: "Derivatives allow companies to hedge against risk, deploy capital effectively, lower costs and offer protection against fluctuating prices. Congress must take steps to ensure increased transparency and enhanced oversight of this market," Bachus said in a hearing about the government's role in regulating the derivatives market. "Legislation in this area should seek to facilitate and, where appropriate, codify these market-based solutions, while not subjecting U.S. companies that operate far from Wall Street to damaging new regulatory burdens."

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Capital Eye Opener: Thursday, November 19

Your daily dose of news and tidbits from the world of money in politics:

WILL THEY OR WON'T THEY: Senate Majority Leader Harry Reid (D-Nev.) revealed his version of a health-care reform package last night, hoping to win over three moderate Democrats who are on the fence -- Sens. Ben Nelson of Nebraska, Mary Landrieu of Louisiana and Blanche Lincoln of Arkansas. Reid's extensive measure includes a public insurance option with an opt-out option for states, would require individuals to buy coverage and insurance companies to provide coverage in spite of preexisting conditions, according to the Washington Post. The health sector has contributed $1.3 million, on average, to the leadership PACs and candidate committees of current senators since 1989. The three undecided senators have each brought in at least the average from the sector. Both Nelson and Landrieu have collected $1.3 million, while Lincoln's total haul comes to $2.1 million. Fourteen other senators have had more health care sector cash in their coffers than Lincoln, including Reid, who has brought in $2.3 million. As the debate continues, don't forget to check out our health care policy tools to do some calculations of your own.

THE SWEETEST DEAL: If you're a sweet-tooth, it's a battle that'll make you salivate -- Hershey Co. and Kraft Foods are duking it out to buy Britain's Cadbury PLC, maker of York peppermint patties, Almond Joy and, of course, the popular Cadbury creme eggs you see in the stores every springtime. If the American companies are looking to sweeten the deal, they might mention their political influence on Capitol Hill -- efforts often aimed at preventing measures that could result in loss of revenue. This would put Kraft at a clear advantage. The company has spent $2.4 million on lobbying so far this year, while Hershey, which may be teaming up with Italian Ferarro, maker of Nutella, to make this bid, has spent a mere $290,000 so far this year. Despite Kraft's lobbying prowess, Cadbury, which has spent $80,000 on influence peddling this year, has rejected the company's original bid, the Associated Press reports.

20,775 DAYS: Sen. Robert Byrd (D-W.Va.) celebrated a milestone Wednesday, when he became the longest-serving member of the Congress. "Today ... is more than a commemoration of the length of service of one U.S. senator," Byrd said on the Senate floor in honor of the day, according to USA Today. "Today also celebrates the great people of the great and mighty state of West Virginia, who have honored me by repeatedly placing their faith in me." His biggest fans -- or at least those with the deepest pockets -- appear to be in Washington, D.C., however. Residents in the District have contributed $419,200 to Byrd since 1989, which is more than those in any other metro area. Charleston, W.Va., is second on the list, giving the senator $279,690 during that time. Byrd has raised $8 million in the last two decades, with lawyers and law firms giving him the largest chunk of that at $358,950.

Have a news tip or link to pass along? We want to hear from you! E-mail us at press@crp.org.

Peak oil notes - Nov 19

A weekly review including:
- Production and prices
- Cambridge Energy’s new report

Review: The Ecotechnic Future by John Michael Greer

John Michael Greer has officially established himself as an institution within the peak oil community. Truly one of the finest minds working on the predicament of modern-day industrial civilization, he is so well-read in so many fields that he regularly gains access to insights that utterly elude his contemporaries. For this he is treasured by a growing number of loyal readers—and, I suspect, hated by equally many fellow bloggers who wish that they could be half as good.

UPDATE 2-Chavez blames Venezuela economic drop on OPEC cut - Reuters

Inside Costa Rica

UPDATE 2-Chavez blames Venezuela economic drop on OPEC cut
Reuters
"But the drop in the oil GDP is the (OPEC) cut." Oil GDP slid 9.5 percent in the third quarter data released by the Central Bank on Tuesday. ...
Venezuela oil co.: Jan-June profits down 67 pcteTaiwan News
Venezuela PDVSA profits fall 67 pct first half 2009Reuters UK
PDVSA Profit Falls 67% on Price Drop, OPEC TargetsBloomberg
Wall Street Journal -Poder 360 -El Universal
all 36 news articles »

Qatar's Al-Attiyah Says He Doesn't Think OPEC Will Boost Output at Meeting

Qatara s energy minister Abdullah bin Hamad al-Attiyah said he doesna t expect OPEC to decide to increase crude oil production at its next meeting in December.

EIA: Crude, gasoline, distillates inventories all lower last week

Crude oil prices were lower in early afternoon trade in New York after the US Energy Information Administration reported that US inventories of crude oil, gasoline and distillates all dropped last week. At around 1:30 p.m. in New York, December contracts for West Texas Intermediate crude were down 38 cents to $78.76 per barrel on the [...]

The Hidden Costs of Energy Production: $120 billion a year +

Yes, $120 billion a year: That’s the final tally of the negative effects of energy production and use. And thats just a partial estimate, because it doesn’t include damages from climate change, harm to ecosystems, effects of some air p

News Update - Wednesday, November 18th

Devon Energy international assets - Nexen shale play - Ivanhoe to merge Mongolian subsidiary - Flint awarded Suncor contract - Calvalley Q3

Senate candidates vie to show their green credentials - Boston Globe

Boston Globe

Senate candidates vie to show their green credentials
Boston Globe
All four candidates said they opposed offshore drilling; Coakley was the only one open to providing federal subsidies for nuclear power, saying “nuclear ...
Senate Candidates Face Off on EnvironmentBU Today
Rep. Capuano: Democratic rivals "haven't got a clue"NECN
Senate Candidates Spar Over 'Green' IssuesWBUR
Boston Globe
all 143 news articles »

IEA says sees little OECD oil demand recovery

Oil demand in wealthy countries has not improved much and the patchy state of global recovery could prompt OPEC to keep output steady at its next meeting, the International Energy Agency said on Tuesday.

Crude in slight gains on dollar, data

Crude oil prices were up slightly Tuesday, held back by a stronger US dollar and questions about demand growth raised by new economic data from the United States. December contracts for West Texas Intermediate crude were up 24 cents to $79.14 per barrel on the New York Mercantile Exchange, while at last report December Brent crude [...]

Critical Alerts for Freeport-McMoRan, First Solar, Diamond Offshore Drilling ... - PR Newswire (press release)

Critical Alerts for Freeport-McMoRan, First Solar, Diamond Offshore Drilling ...
PR Newswire (press release)
... Inc. (Nasdaq: FSLR), Diamond Offshore Drilling Inc. (NYSE: DO), Symantec Corporation (Nasdaq: SYMC), and National Semiconductor Corporation ( NSM). ...

and more »

Yemen buys Airbus A320s; Boeing, Abu Dhabi team up

Emirati officials watch planes performing overhead during the Airshow in Dubai, United Arab Emirates, Sunday Nov.

Crude oil prices gain over $2 in New York, London

The price of crude oil was higher Monday as the US dollar weakened and equities markets saw gains, and after comments from officials of member nations of the Organization of Petroleum Exporting Countries said that production quotas will probably remain steady. December contracts for West Texas Intermediate crude added $2.55 to $78.90 per barrel on the [...]

Slimmer Devon Could Set Exxon Salivating

With the business environment worsening overseas, U.S.-focused Devon could be a tasty prize for the energy giant.

China's Energy Priorities

Considerable investment is being pledged to renewable energy projects.

Big Oil - A Look at The Worlds Most Powerful Companies

The term "Big Oil," which initially was coined with derisive and derogatory connotations, has since come to designate those proverbial Titans and veritable leaders of the oil industry, now, once again, being dutifully appreciate

News Update - Monday November 16th

UTS Energy losses increase â€“ Harvest Energy quarterly results â€“ OPTI strategic review â€“ Rig numbers rise â€“ Chevron Amazon

News Update - Friday November 13th

EnCana plans to spend in 2010 â€“ Suncor prepares for growth â€“ Enerflex bid turns hostile â€“ Savanna Energy quarterly results

Turkey and Russia - Tender Relations Over Nuclear Power

The recent announcement of a stay of execution on three of the clauses of the legislative framework for the building of Turkey’s first ever nuclear power plant has reinforced doubts about the viability of the project and threatens to strain Turke

EIA: Oil, gasoline, distillates stockpiles all up last week

Crude oil prices were lower Thursday after the US Energy Information Administration released its latest report on US stockpiles, which showed that inventories of crude oil, gasoline and distillates all rose last week. The EIA said that crude oil stockpiles added 1.8 million barrels in the week ending 6 November, against an expected gain of a [...]